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:
II-A: 0-16388 II-D: 0-16980 II-G: 0-17802
II-B: 0-16405 II-E: 0-17320 II-H: 0-18305
II-C: 0-16981 II-F: 0-17799
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP II-A
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP II-B
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP II-C
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP II-D
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP II-E
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP II-F
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP II-G
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP II-H
---------------------------------------------------------
(Exact name of Registrant as specified in its Articles)
II-A 73-1295505 II-B 73-1303341
II-C 73-1308986 II-D 73-1329761
II-E 73-1324751 II-F 73-1330632
Oklahoma II-G 73-1336572 II-H 73-1342476
- ---------------------------- -------------------------------
(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 II-A
GEODYNE PRODUCTION PARTNERSHIP II-A
COMBINED BALANCE SHEETS
(Unaudited)
ASSETS
September 30, December 31,
2004 2003
------------- ------------
CURRENT ASSETS:
Cash and cash equivalents $1,550,286 $1,428,609
Accounts receivable:
Oil and gas sales 948,775 761,616
---------- ----------
Total current assets $2,499,061 $2,190,225
NET OIL AND GAS PROPERTIES, utilizing
the successful efforts method 2,148,179 2,232,731
DEFERRED CHARGE 647,465 650,100
---------- ----------
$5,294,705 $5,073,056
========== ==========
LIABILITIES AND PARTNERS' CAPITAL (DEFICIT)
CURRENT LIABILITIES:
Accounts payable $ 194,167 $ 264,588
Accrued liability - other (Note 1) 26,672 26,672
Gas imbalance payable 74,981 91,463
Asset retirement obligation -
current (Note 1) 15,007 9,874
---------- ----------
Total current liabilities $ 310,827 $ 392,597
LONG-TERM LIABILITIES:
Accrued liability $ 211,277 $ 207,595
Asset retirement obligation
(Note 1) 270,111 268,040
---------- ----------
Total long-term liabilities $ 481,388 $ 475,635
PARTNERS' CAPITAL (DEFICIT):
General Partner ($ 195,657) ($ 232,071)
Limited Partners, issued and
outstanding, 484,283 units 4,698,147 4,436,895
---------- ----------
Total Partners' capital $4,502,490 $4,204,824
---------- ----------
$5,294,705 $5,073,056
========== ==========
The accompanying condensed notes are an integral part of
these combined financial statements.
-2-
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP II-A
GEODYNE PRODUCTION PARTNERSHIP II-A
COMBINED STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2004 AND 2003
(Unaudited)
2004 2003
---------- ----------
REVENUES:
Oil and gas sales $1,504,390 $1,309,670
Interest income 2,633 1,993
---------- ----------
$1,507,023 $1,311,663
COSTS AND EXPENSES:
Lease operating $ 250,642 $ 262,604
Production tax 80,778 75,340
Depreciation, depletion, and
amortization of oil and gas
properties 47,147 59,426
General and administrative
(Note 2) 133,468 143,626
---------- ----------
$ 512,035 $ 540,996
---------- ----------
NET INCOME $ 994,988 $ 770,667
========== ==========
GENERAL PARTNER - NET INCOME $ 103,479 $ 82,216
========== ==========
LIMITED PARTNERS - NET INCOME $ 891,509 $ 688,451
========== ==========
NET INCOME per unit $ 1.84 $ 1.42
========== ==========
UNITS OUTSTANDING 484,283 484,283
========== ==========
The accompanying condensed notes are an integral part of
these combined financial statements.
-3-
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP II-A
GEODYNE PRODUCTION PARTNERSHIP II-A
COMBINED STATEMENTS OF OPERATIONS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2004 AND 2003
(Unaudited)
2004 2003
---------- ----------
REVENUES:
Oil and gas sales $4,345,158 $4,355,746
Interest income 5,814 5,244
---------- ----------
$4,350,972 $4,360,990
COSTS AND EXPENSES:
Lease operating $ 821,266 $ 780,795
Production tax 240,414 255,475
Depreciation, depletion, and
amortization of oil and gas
properties 143,790 166,456
General and administrative
(Note 2) 425,933 428,937
---------- ----------
$1,631,403 $1,631,663
---------- ----------
INCOME BEFORE CUMULATIVE EFFECT
OF ACCOUNTING CHANGE $2,719,569 $2,729,327
Cumulative effect of change in
accounting for asset retirement
obligations (Note 1) - 5,849
---------- ----------
NET INCOME $2,719,569 $2,735,176
========== ==========
GENERAL PARTNER - NET INCOME $ 284,317 $ 287,448
========== ==========
LIMITED PARTNERS - NET INCOME $2,435,252 $2,447,728
========== ==========
NET INCOME per unit $ 5.03 $ 5.05
========== ==========
UNITS OUTSTANDING 484,283 484,283
========== ==========
The accompanying condensed notes are an integral part of
these combined financial statements.
-4-
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP II-A
GEODYNE PRODUCTION PARTNERSHIP II-A
COMBINED STATEMENTS OF CASH FLOWS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2004 AND 2003
(Unaudited)
2004 2003
------------ ------------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $2,719,569 $2,735,176
Adjustments to reconcile net
income to net cash provided
by operating activities:
Cumulative effect of change in
accounting for asset retirement
obligations (Note 1) - ( 5,849)
Depreciation, depletion, and
amortization of oil and gas
properties 143,790 166,456
Increase in accounts receivable -
oil and gas sales ( 187,159) ( 149,882)
Decrease in deferred charge 2,635 -
Decrease in accounts payable ( 91,944) ( 88,161)
Decrease in gas imbalance payable ( 16,482) -
Increase in accrued liability 3,682 -
---------- ----------
Net cash provided by operating
activities $2,574,091 $2,657,740
---------- ----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures ($ 35,173) ($ 86,629)
Proceeds from sale of oil and
gas properties 4,662 -
---------- ----------
Net cash used by investing
activities ($ 30,511) ($ 86,629)
---------- ----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Cash distributions ($2,421,903) ($2,042,418)
---------- ----------
Net cash used by financing
activities ($2,421,903) ($2,042,418)
---------- ----------
NET INCREASE IN CASH AND CASH
EQUIVALENTS $ 121,677 $ 528,693
CASH AND CASH EQUIVALENTS AT
BEGINNING OF PERIOD 1,428,609 794,035
---------- ----------
CASH AND CASH EQUIVALENTS AT
END OF PERIOD $1,550,286 $1,322,728
========== ==========
The accompanying condensed notes are an integral part of
these combined financial statements.
-5-
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP II-B
GEODYNE PRODUCTION PARTNERSHIP II-B
COMBINED BALANCE SHEETS
(Unaudited)
ASSETS
September 30, December 31,
2004 2003
------------- ------------
CURRENT ASSETS:
Cash and cash equivalents $1,117,231 $ 933,790
Accounts receivable:
Oil and gas sales 675,430 546,637
---------- ----------
Total current assets $1,792,661 $1,480,427
NET OIL AND GAS PROPERTIES, utilizing
the successful efforts method 1,594,298 1,683,184
DEFERRED CHARGE 247,727 238,135
---------- ----------
$3,634,686 $3,401,746
========== ==========
LIABILITIES AND PARTNERS' CAPITAL (DEFICIT)
CURRENT LIABILITIES:
Accounts payable $ 139,584 $ 154,705
Gas imbalance payable 17,724 47,276
Asset retirement obligation -
current (Note 1) 16,434 13,046
---------- ----------
Total current liabilities $ 173,742 $ 215,027
LONG-TERM LIABILITIES:
Accrued liability $ 64,613 $ 48,773
Asset retirement obligation
(Note 1) 190,876 189,095
---------- ----------
Total long-term liabilities $ 255,489 $ 237,868
PARTNERS' CAPITAL (DEFICIT):
General Partner ($ 230,678) ($ 254,807)
Limited Partners, issued and
outstanding, 361,719 units 3,436,133 3,203,658
---------- ----------
Total Partners' capital $3,205,455 $2,948,851
---------- ----------
$3,634,686 $3,401,746
========== ==========
The accompanying condensed notes are an integral part of
these combined financial statements.
-6-
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP II-B
GEODYNE PRODUCTION PARTNERSHIP II-B
COMBINED STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2004 AND 2003
(Unaudited)
2004 2003
---------- --------
REVENUES:
Oil and gas sales $1,116,621 $929,557
Interest income 1,784 1,216
---------- --------
$1,118,405 $930,773
COSTS AND EXPENSES:
Lease operating $ 184,346 $194,275
Production tax 63,056 53,481
Depreciation, depletion, and
amortization of oil and gas
properties 40,752 46,078
General and administrative
(Note 2) 100,015 107,534
---------- --------
$ 388,169 $401,368
---------- --------
NET INCOME $ 730,236 $529,405
========== ========
GENERAL PARTNER - NET INCOME $ 76,512 $ 56,966
========== ========
LIMITED PARTNERS - NET INCOME $ 653,724 $472,439
========== ========
NET INCOME per unit $ 1.81 $ 1.31
========== ========
UNITS OUTSTANDING 361,719 361,719
========== ========
The accompanying condensed notes are an integral part of
these combined financial statements.
-7-
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP II-B
GEODYNE PRODUCTION PARTNERSHIP II-B
COMBINED STATEMENTS OF OPERATIONS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2004 AND 2003
(Unaudited)
2004 2003
---------- ----------
REVENUES:
Oil and gas sales $3,194,701 $2,967,617
Interest income 4,006 3,272
---------- ----------
$3,198,707 $2,970,889
COSTS AND EXPENSES:
Lease operating $ 599,340 $ 549,821
Production tax 190,141 188,768
Depreciation, depletion, and
amortization of oil and gas
properties 112,977 134,837
General and administrative
(Note 2) 323,758 325,562
---------- ----------
$1,226,216 $1,198,988
---------- ----------
INCOME BEFORE CUMULATIVE EFFECT
OF ACCOUNTING CHANGE $1,972,491 $1,771,901
Cumulative effect of change in
accounting for asset retirement
obligations (Note 1) - 4,347
---------- ----------
NET INCOME $1,972,491 $1,776,248
========== ==========
GENERAL PARTNER - NET INCOME $ 207,016 $ 189,042
========== ==========
LIMITED PARTNERS - NET INCOME $1,765,475 $1,587,206
========== ==========
NET INCOME per unit $ 4.88 $ 4.39
========== ==========
UNITS OUTSTANDING 361,719 361,719
========== ==========
The accompanying condensed notes are an integral part of
these combined financial statements.
-8-
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP II-B
GEODYNE PRODUCTION PARTNERSHIP II-B
COMBINED STATEMENTS OF CASH FLOWS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2004 AND 2003
(Unaudited)
2004 2003
------------ ------------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $1,972,491 $1,776,248
Adjustments to reconcile net
income to net cash provided
by operating activities:
Cumulative effect of change in
accounting for asset retirement
obligations (Note 1) - ( 4,347)
Depreciation, depletion, and
amortization of oil and gas
properties 112,977 134,837
Increase in accounts receivable -
oil and gas sales ( 128,793) ( 76,141)
Increase in deferred charge ( 9,592) -
Decrease in accounts payable ( 28,900) ( 24,245)
Decrease in gas imbalance payable ( 29,552) -
Increase in accrued liability 15,840 -
---------- ----------
Net cash provided by operating
activities $1,904,471 $1,806,352
---------- ----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures ($ 5,143) ($ 12,676)
Proceeds from sale of oil and gas
properties - 1,084
---------- ----------
Net cash used by investing
activities ($ 5,143) ($ 11,592)
---------- ----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Cash distributions ($1,715,887) ($1,398,721)
---------- ----------
Net cash used by financing
activities ($1,715,887) ($1,398,721)
---------- ----------
NET INCREASE IN CASH AND CASH
EQUIVALENTS $ 183,441 $ 396,039
CASH AND CASH EQUIVALENTS AT
BEGINNING OF PERIOD 933,790 478,067
---------- ----------
CASH AND CASH EQUIVALENTS AT
END OF PERIOD $1,117,231 $ 874,106
========== ==========
The accompanying condensed notes are an integral part of
these combined financial statements.
-9-
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP II-C
GEODYNE PRODUCTION PARTNERSHIP II-C
COMBINED BALANCE SHEETS
(Unaudited)
ASSETS
September 30, December 31,
2004 2003
------------- ------------
CURRENT ASSETS:
Cash and cash equivalents $ 528,729 $ 467,560
Accounts receivable:
Oil and gas sales 320,132 267,786
---------- ----------
Total current assets $ 848,861 $ 735,346
NET OIL AND GAS PROPERTIES, utilizing
the successful efforts method 735,028 786,821
DEFERRED CHARGE 122,506 123,244
---------- ----------
$1,706,395 $1,645,411
========== ==========
LIABILITIES AND PARTNERS' CAPITAL (DEFICIT)
CURRENT LIABILITIES:
Accounts payable $ 51,280 $ 69,889
Gas imbalance payable 8,624 25,952
Asset retirement obligation -
current (Note 1) 10,460 8,575
---------- ----------
Total current liabilities $ 70,364 $ 104,416
LONG-TERM LIABILITIES:
Accrued liability $ 42,239 $ 35,434
Asset retirement obligation
(Note 1) 62,817 62,598
---------- ----------
Total long-term liabilities $ 105,056 $ 98,032
PARTNERS' CAPITAL (DEFICIT):
General Partner ($ 96,873) ($ 106,418)
Limited Partners, issued and
outstanding, 154,621 units 1,627,848 1,549,381
---------- ----------
Total Partners' capital $1,530,975 $1,442,963
---------- ----------
$1,706,395 $1,645,411
========== ==========
The accompanying condensed notes are an integral part of
these combined financial statements.
-10-
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP II-C
GEODYNE PRODUCTION PARTNERSHIP II-C
COMBINED STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2004 AND 2003
(Unaudited)
2004 2003
-------- --------
REVENUES:
Oil and gas sales $525,483 $433,234
Interest income 816 622
-------- --------
$526,299 $433,856
COSTS AND EXPENSES:
Lease operating $ 72,863 $ 89,819
Production tax 33,085 28,614
Depreciation, depletion, and
amortization of oil and gas
properties 16,021 20,844
General and administrative
(Note 2) 43,495 46,570
-------- --------
$165,464 $185,847
-------- --------
NET INCOME $360,835 $248,009
======== ========
GENERAL PARTNER - NET INCOME $ 37,444 $ 26,615
======== ========
LIMITED PARTNERS - NET INCOME $323,391 $221,394
======== ========
NET INCOME per unit $ 2.10 $ 1.43
======== ========
UNITS OUTSTANDING 154,621 154,621
======== ========
The accompanying condensed notes are an integral part of
these combined financial statements.
-11-
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP II-C
GEODYNE PRODUCTION PARTNERSHIP II-C
COMBINED STATEMENTS OF OPERATIONS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2004 AND 2003
(Unaudited)
2004 2003
---------- ----------
REVENUES:
Oil and gas sales $1,542,920 $1,468,547
Interest income 1,876 1,688
---------- ----------
$1,544,796 $1,470,235
COSTS AND EXPENSES:
Lease operating $ 260,207 $ 259,113
Production tax 101,446 101,523
Depreciation, depletion, and
amortization of oil and gas
properties 55,076 66,728
General and administrative
(Note 2) 151,138 150,924
---------- ----------
$ 567,867 $ 578,288
---------- ----------
INCOME BEFORE CUMULATIVE EFFECT
OF ACCOUNTING CHANGE $ 976,929 $ 891,947
Cumulative effect of change in
accounting for asset retirement
obligations (Note 1) - 74
---------- ----------
NET INCOME $ 976,929 $ 892,021
========== ==========
GENERAL PARTNER - NET INCOME $ 102,462 $ 95,024
========== ==========
LIMITED PARTNERS - NET INCOME $ 874,467 $ 796,997
========== ==========
NET INCOME per unit $ 5.66 $ 5.15
========== ==========
UNITS OUTSTANDING 154,621 154,621
========== ==========
The accompanying condensed notes are an integral part of
these combined financial statements.
-12-
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP II-C
GEODYNE PRODUCTION PARTNERSHIP II-C
COMBINED STATEMENTS OF CASH FLOWS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2004 AND 2003
(Unaudited)
2004 2003
---------- ----------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $976,929 $892,021
Adjustments to reconcile net
income to net cash provided
by operating activities:
Cumulative effect of change in
accounting for asset retirement
obligations (Note 1) - ( 74)
Depreciation, depletion, and
amortization of oil and gas
properties 55,076 66,728
Settlement of asset retirement
obligation - ( 91)
Increase in accounts receivable -
oil and gas sales ( 52,346) ( 39,804)
Decrease in deferred charge 738 -
Decrease in accounts payable ( 19,157) ( 910)
Decrease in gas imbalance payable ( 17,328) -
Increase in accrued liability 6,805 7,433
-------- --------
Net cash provided by operating
activities $950,717 $925,303
-------- --------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures ($ 631) ($ 18,654)
Proceeds from sale of oil and gas
properties - 465
-------- --------
Net cash used by investing
activities ($ 631) ($ 18,189)
-------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Cash distributions ($888,917) ($710,600)
-------- --------
Net cash used by financing
activities ($888,917) ($710,600)
-------- --------
NET INCREASE IN CASH AND CASH
EQUIVALENTS $ 61,169 $196,514
CASH AND CASH EQUIVALENTS AT
BEGINNING OF PERIOD 467,560 250,767
-------- --------
CASH AND CASH EQUIVALENTS AT
END OF PERIOD $528,729 $447,281
======== ========
The accompanying condensed notes are an integral part of
these combined financial statements.
-13-
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP II-D
GEODYNE PRODUCTION PARTNERSHIP II-D
COMBINED BALANCE SHEETS
(Unaudited)
ASSETS
September 30, December 31,
2004 2003
------------- ------------
CURRENT ASSETS:
Cash and cash equivalents $1,083,980 $ 908,655
Accounts receivable:
Oil and gas sales 663,763 559,179
---------- ----------
Total current assets $1,747,743 $1,467,834
NET OIL AND GAS PROPERTIES, utilizing
the successful efforts method 1,393,127 1,539,915
DEFERRED CHARGE 348,814 352,392
---------- ----------
$3,489,684 $3,360,141
========== ==========
LIABILITIES AND PARTNERS' CAPITAL (DEFICIT)
CURRENT LIABILITIES:
Accounts payable $ 117,737 $ 167,028
Gas imbalance payable 46,190 43,698
Asset retirement obligation -
current (Note 1) 25,370 17,137
---------- ----------
Total current liabilities $ 189,297 $ 227,863
LONG-TERM LIABILITIES:
Accrued liability $ 97,710 $ 98,630
Asset retirement obligation
(Note 1) 166,264 168,853
---------- ----------
Total long-term liabilities $ 263,974 $ 267,483
PARTNERS' CAPITAL (DEFICIT):
General Partner ($ 177,906) ($ 190,287)
Limited Partners, issued and
outstanding, 314,878 units 3,214,319 3,055,082
---------- ----------
Total Partners' capital $3,036,413 $2,864,795
---------- ----------
$3,489,684 $3,360,141
========== ==========
The accompanying condensed notes are an integral part of
these combined financial statements.
-14-
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP II-D
GEODYNE PRODUCTION PARTNERSHIP II-D
COMBINED STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2004 AND 2003
(Unaudited)
2004 2003
---------- --------
REVENUES:
Oil and gas sales $1,091,156 $938,668
Interest income 1,613 1,093
---------- --------
$1,092,769 $939,761
COSTS AND EXPENSES:
Lease operating $ 163,645 $208,376
Production tax 68,710 61,078
Depreciation, depletion, and
amortization of oil and gas
properties 35,306 53,905
General and administrative
(Note 2) 87,234 93,751
---------- --------
$ 354,895 $417,110
---------- --------
NET INCOME $ 737,874 $522,651
========== ========
GENERAL PARTNER - NET INCOME $ 76,803 $ 57,008
========== ========
LIMITED PARTNERS - NET INCOME $ 661,071 $465,643
========== ========
NET INCOME per unit $ 2.10 $ 1.48
========== ========
UNITS OUTSTANDING 314,878 314,878
========== ========
The accompanying condensed notes are an integral part of
these combined financial statements.
-15-
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP II-D
GEODYNE PRODUCTION PARTNERSHIP II-D
COMBINED STATEMENTS OF OPERATIONS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2004 AND 2003
(Unaudited)
2004 2003
---------- ------------
REVENUES:
Oil and gas sales $3,199,311 $2,982,439
Interest income 3,780 3,003
---------- ----------
$3,203,091 $2,985,442
COSTS AND EXPENSES:
Lease operating $ 586,032 $ 585,133
Production tax 204,749 189,487
Depreciation, depletion, and
amortization of oil and gas
properties 163,623 205,540
General and administrative
(Note 2) 284,704 286,054
---------- ----------
$1,239,108 $1,266,214
---------- ----------
INCOME BEFORE CUMULATIVE EFFECT
OF ACCOUNTING CHANGE $1,963,983 $1,719,228
Cumulative effect of change in
accounting for asset retirement
obligations (Note 1) - ( 2,344)
---------- ----------
NET INCOME $1,963,983 $1,716,884
========== ==========
GENERAL PARTNER - NET INCOME $ 210,746 $ 190,004
========== ==========
LIMITED PARTNERS - NET INCOME $1,753,237 $1,526,880
========== ==========
NET INCOME per unit $ 5.57 $ 4.85
========== ==========
UNITS OUTSTANDING 314,878 314,878
========== ==========
The accompanying condensed notes are an integral part of
these combined financial statements.
-16-
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP II-D
GEODYNE PRODUCTION PARTNERSHIP II-D
COMBINED STATEMENTS OF CASH FLOWS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2004 AND 2003
(Unaudited)
2004 2003
------------ ------------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $1,963,983 $1,716,884
Adjustments to reconcile net
income to net cash provided
by operating activities:
Cumulative effect of change in
accounting for asset retirement
obligations (Note 1) - 2,344
Depreciation, depletion, and
amortization of oil and gas
properties 163,623 205,540
Settlement of asset retirement
obligation - ( 1,044)
Increase in accounts receivable -
oil and gas sales ( 104,584) ( 83,077)
Decrease in deferred charge 3,578 -
Increase (decrease) in accounts
payable ( 52,133) 42,699
Increase in gas imbalance payable 2,492 -
Decrease in accrued liability ( 920) -
---------- ----------
Net cash provided by operating
activities $1,976,039 $1,883,346
---------- ----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures ($ 8,349) ($ 137,873)
---------- ----------
Net cash used by investing
activities ($ 8,349) ($ 137,873)
---------- ----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Cash distributions ($1,792,365) ($1,474,861)
---------- ----------
Net cash used by financing
activities ($1,792,365) ($1,474,861)
---------- ----------
NET INCREASE IN CASH AND CASH
EQUIVALENTS $ 175,325 $ 270,612
CASH AND CASH EQUIVALENTS AT
BEGINNING OF PERIOD 908,655 561,177
---------- ----------
CASH AND CASH EQUIVALENTS AT
END OF PERIOD $1,083,980 $ 831,789
========== ==========
The accompanying condensed notes are an integral part of
these combined financial statements.
-17-
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP II-E
GEODYNE PRODUCTION PARTNERSHIP II-E
COMBINED BALANCE SHEETS
(Unaudited)
ASSETS
September 30, December 31,
2004 2003
------------- ------------
CURRENT ASSETS:
Cash and cash equivalents $ 743,283 $ 638,668
Accounts receivable:
Oil and gas sales 436,915 363,426
---------- ----------
Total current assets $1,180,198 $1,002,094
NET OIL AND GAS PROPERTIES, utilizing
the successful efforts method 1,202,178 1,412,445
DEFERRED CHARGE 207,414 207,890
---------- ----------
$2,589,790 $2,622,429
========== ==========
LIABILITIES AND PARTNERS' CAPITAL (DEFICIT)
CURRENT LIABILITIES:
Accounts payable $ 81,647 $ 82,154
Gas imbalance payable 43,424 43,424
Asset retirement obligation -
current (Note 1) 24,164 2,397
---------- ----------
Total current liabilities $ 149,235 $ 127,975
LONG-TERM LIABILITIES:
Accrued liability $ 9,863 $ 8,153
Asset retirement obligation
(Note 1) 77,038 95,923
---------- ----------
Total long-term liabilities $ 86,901 $ 104,076
PARTNERS' CAPITAL (DEFICIT):
General Partner ($ 120,002) ($ 129,173)
Limited Partners, issued and
outstanding, 228,821 units 2,473,656 2,519,551
---------- ----------
Total Partners' capital $2,353,654 $2,390,378
---------- ----------
$2,589,790 $2,622,429
========== ==========
The accompanying condensed notes are an integral part of
these combined financial statements.
-18-
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP II-E
GEODYNE PRODUCTION PARTNERSHIP II-E
COMBINED STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2004 AND 2003
(Unaudited)
2004 2003
-------- --------
REVENUES:
Oil and gas sales $708,149 $657,561
Interest income 1,235 924
Gain sale of oil and gas
properties 1,166 -
-------- --------
$710,550 $658,485
COSTS AND EXPENSES:
Lease operating $108,533 $105,677
Production tax 50,460 49,150
Depreciation, depletion, and
amortization of oil and gas
properties 41,538 43,663
General and administrative
(Note 2) 63,747 68,413
-------- --------
$264,278 $266,903
-------- --------
NET INCOME $446,272 $391,582
======== ========
GENERAL PARTNER - NET INCOME $ 48,180 $ 42,995
======== ========
LIMITED PARTNERS - NET INCOME $398,092 $348,587
======== ========
NET INCOME per unit $ 1.74 $ 1.52
======== ========
UNITS OUTSTANDING 228,821 228,821
======== ========
The accompanying condensed notes are an integral part of
these combined financial statements.
-19-
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP II-E
GEODYNE PRODUCTION PARTNERSHIP II-E
COMBINED STATEMENTS OF OPERATIONS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2004 AND 2003
(Unaudited)
2004 2003
---------- ----------
REVENUES:
Oil and gas sales $2,127,571 $2,184,324
Interest income 2,798 2,465
Gain on sale of oil and gas
properties 9,419 -
---------- ----------
$2,139,788 $2,186,789
COSTS AND EXPENSES:
Lease operating $ 327,431 $ 334,855
Production tax 141,668 150,292
Depreciation, depletion, and
amortization of oil and gas
properties 230,376 104,230
General and administrative
(Note 2) 213,922 215,289
---------- ----------
$ 913,397 $ 804,666
---------- ----------
INCOME BEFORE CUMULATIVE EFFECT
OF ACCOUNTING CHANGE $1,226,391 $1,382,123
Cumulative effect of change in
accounting for asset retirement
obligations (Note 1) - 3,090
---------- ----------
NET INCOME $1,226,391 $1,385,213
========== ==========
GENERAL PARTNER - NET INCOME $ 142,286 $ 147,377
========== ==========
LIMITED PARTNERS - NET INCOME $1,084,105 $1,237,836
========== ==========
NET INCOME per unit $ 4.74 $ 5.41
========== ==========
UNITS OUTSTANDING 228,821 228,821
========== ==========
The accompanying condensed notes are an integral part of
these combined financial statements.
-20-
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP II-E
GEODYNE PRODUCTION PARTNERSHIP II-E
COMBINED STATEMENTS OF CASH FLOWS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2004 AND 2003
(Unaudited)
2004 2003
------------ ------------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $1,226,391 $1,385,213
Adjustments to reconcile net income
to net cash provided by operating
activities:
Cumulative effect of change in
accounting for asset retirement
obligations (Note 1) - ( 3,090)
Depreciation, depletion, and
amortization of oil and gas
properties 230,376 104,230
Gain on sale of oil and gas
properties ( 9,419) -
Increase in accounts receivable -
oil and gas sales ( 73,489) ( 56,468)
Decrease in deferred charge 476 -
Decrease in accounts payable ( 719) ( 22,438)
Increase (decrease) in accrued
liability 1,710 ( 3,148)
---------- ----------
Net cash provided by operating
activities $1,375,326 $1,404,299
---------- ----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures ($ 15,473) ($ 20,850)
Proceeds from the sale of oil and
gas properties 7,877 -
---------- ----------
Net cash used by investing
activities ($ 7,596) ($ 20,850)
---------- ----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Cash distributions ($1,263,115) ($1,118,101)
---------- ----------
Net cash used by financing
activities ($1,263,115) ($1,118,101)
---------- ----------
NET INCREASE IN CASH AND CASH
EQUIVALENTS $ 104,615 $ 265,348
CASH AND CASH EQUIVALENTS AT
BEGINNING OF PERIOD 638,668 388,042
---------- ----------
CASH AND CASH EQUIVALENTS AT
END OF PERIOD $ 743,283 $ 653,390
========== ==========
The accompanying condensed notes are an integral part of
these combined financial statements.
-21-
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP II-F
GEODYNE PRODUCTION PARTNERSHIP II-F
COMBINED BALANCE SHEETS
(Unaudited)
ASSETS
September 30, December 31,
2004 2003
------------- ------------
CURRENT ASSETS:
Cash and cash equivalents $ 698,165 $ 604,369
Accounts receivable:
Oil and gas sales 447,240 354,719
---------- ----------
Total current assets $1,145,405 $ 959,088
NET OIL AND GAS PROPERTIES, utilizing
the successful efforts method 1,198,424 1,318,881
DEFERRED CHARGE 33,553 32,899
---------- ----------
$2,377,382 $2,310,868
========== ==========
LIABILITIES AND PARTNERS' CAPITAL (DEFICIT)
CURRENT LIABILITIES:
Accounts payable $ 92,349 $ 66,133
Gas imbalance payable 3,390 3,555
Asset retirement obligation -
current (Note 1) 5,316 4,566
---------- ----------
Total current liabilities $ 101,055 $ 74,254
LONG-TERM LIABILITIES:
Accrued liability $ 16,884 $ 16,945
Asset retirement obligation
(Note 1) 95,668 93,600
---------- ----------
Total long-term liabilities $ 112,552 $ 110,545
PARTNERS' CAPITAL (DEFICIT):
General Partner ($ 84,249) ($ 91,417)
Limited Partners, issued and
outstanding, 171,400 Units 2,248,024 2,217,486
---------- ----------
Total Partners' capital $2,163,775 $2,126,069
---------- ----------
$2,377,382 $2,310,868
========== ==========
The accompanying condensed notes are an integral part of
these combined financial statements.
-22-
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP II-F
GEODYNE PRODUCTION PARTNERSHIP II-F
COMBINED STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2004 AND 2003
(Unaudited)
2004 2003
-------- --------
REVENUES:
Oil and gas sales $758,316 $595,801
Interest income 1,133 890
Gain on sale of oil and gas
properties 2,852 -
-------- --------
$762,301 $596,691
COSTS AND EXPENSES:
Lease operating $121,722 $ 65,077
Production tax 48,916 36,964
Depreciation, depletion, and
amortization of oil and gas
properties 102,759 40,679
General and administrative
(Note 2) 47,777 51,225
-------- --------
$321,174 $193,945
-------- --------
NET INCOME $441,127 $402,746
======== ========
GENERAL PARTNER - NET INCOME $ 53,095 $ 43,846
======== ========
LIMITED PARTNERS - NET INCOME $388,032 $358,900
======== ========
NET INCOME per unit $ 2.27 $ 2.09
======== ========
UNITS OUTSTANDING 171,400 171,400
======== ========
The accompanying condensed notes are an integral part of
these combined financial statements.
-23-
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP II-F
GEODYNE PRODUCTION PARTNERSHIP II-F
COMBINED STATEMENTS OF OPERATIONS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2004 AND 2003
(Unaudited)
2004 2003
---------- ----------
REVENUES:
Oil and gas sales $2,227,315 $2,066,022
Interest income 2,675 2,471
Gain on sale of oil and gas
properties 24,162 -
---------- ----------
$2,254,152 $2,068,493
COSTS AND EXPENSES:
Lease operating $ 267,892 $ 283,172
Production tax 144,651 131,464
Depreciation, depletion, and
amortization of oil and gas
properties 157,307 111,162
General and administrative
(Note 2) 164,907 165,729
---------- ----------
$ 734,757 $ 691,527
---------- ----------
INCOME BEFORE CUMULATIVE EFFECT
OF ACCOUNTING CHANGE $1,519,395 $1,376,966
Cumulative effect of change in
accounting for asset retirement
obligations (Note 1) - 4,938
---------- ----------
NET INCOME $1,519,395 $1,381,904
========== ==========
GENERAL PARTNER - NET INCOME $ 163,857 $ 147,503
========== ==========
LIMITED PARTNERS - NET INCOME $1,355,538 $1,234,401
========== ==========
NET INCOME per unit $ 7.91 $ 7.20
========== ==========
UNITS OUTSTANDING 171,400 171,400
========== ==========
The accompanying condensed notes are an integral part of
these combined financial statements.
-24-
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP II-F
GEODYNE PRODUCTION PARTNERSHIP II-F
COMBINED STATEMENTS OF CASH FLOWS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2004 AND 2003
(Unaudited)
2004 2003
------------ ------------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $1,519,395 $1,381,904
Adjustments to reconcile net income
to net cash provided by operating
activities:
Cumulative effect of change in
accounting for asset retirement
obligations (Note 1) - ( 4,938)
Depreciation, depletion, and
amortization of oil and gas
properties 157,307 111,162
Gain on sale of oil and gas
properties ( 24,162) -
Increase in accounts receivable -
oil and gas sales ( 92,521) ( 32,897)
Increase in deferred charge ( 654) -
Increase (decrease) in accounts
payable 25,311 ( 22,116)
Decrease in gas imbalance payable ( 165) -
Decrease in accrued liability ( 61) -
---------- ----------
Net cash provided by operating
activities $1,584,450 $1,433,115
---------- ----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures ($ 30,710) ($ 37,729)
Proceeds from sale of oil and
gas properties 21,745 890
---------- ----------
Net cash used by investing
activities ($ 8,965) ($ 36,839)
---------- ----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Cash distributions ($1,481,689) ($1,225,413)
---------- ----------
Net cash used by financing
activities ($1,481,689) ($1,225,413)
---------- ----------
NET INCREASE IN CASH AND CASH
EQUIVALENTS $ 93,796 $ 170,863
CASH AND CASH EQUIVALENTS AT
BEGINNING OF PERIOD 604,369 453,233
---------- ----------
CASH AND CASH EQUIVALENTS AT
END OF PERIOD $ 698,165 $ 624,096
========== ==========
The accompanying condensed notes are an integral part of
these combined financial statements.
-25-
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP II-G
GEODYNE PRODUCTION PARTNERSHIP II-G
COMBINED BALANCE SHEETS
(Unaudited)
ASSETS
September 30, December 31,
2004 2003
------------- ------------
CURRENT ASSETS:
Cash and cash equivalents $1,490,786 $1,284,869
Accounts receivable:
Oil and gas sales 949,618 752,979
---------- ----------
Total current assets $2,440,404 $2,037,848
NET OIL AND GAS PROPERTIES, utilizing
the successful efforts method 2,570,841 2,841,346
DEFERRED CHARGE 72,471 71,238
---------- ----------
$5,083,716 $4,950,432
========== ==========
LIABILITIES AND PARTNERS' CAPITAL (DEFICIT)
CURRENT LIABILITIES:
Accounts payable $ 195,840 $ 139,590
Gas imbalance payable 13,503 10,091
Asset retirement obligation -
current (Note 1) 11,648 10,082
---------- ----------
Total current liabilities $ 220,991 $ 159,763
LONG-TERM LIABILITIES:
Accrued liability $ 32,047 $ 31,668
Asset retirement obligation
(Note 1) 204,111 199,686
---------- ----------
Total long-term liabilities $ 236,158 $ 231,354
PARTNERS' CAPITAL (DEFICIT):
General Partner ($ 72,847) ($ 87,509)
Limited Partners, issued and
outstanding, 372,189 Units 4,699,414 4,646,824
---------- ----------
Total Partners' capital $4,626,567 $4,559,315
---------- ----------
$5,083,716 $4,950,432
========== ==========
The accompanying condensed notes are an integral part of
these combined financial statements.
-26-
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP II-G
GEODYNE PRODUCTION PARTNERSHIP II-G
COMBINED STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2004 AND 2003
(Unaudited)
2004 2003
---------- ----------
REVENUES:
Oil and gas sales $1,607,190 $1,262,790
Interest income 2,493 1,925
Gain on sale of oil and gas
properties 5,963 -
---------- ----------
$1,615,646 $1,264,715
COSTS AND EXPENSES:
Lease operating $ 259,284 $ 140,542
Production tax 104,258 78,758
Depreciation, depletion, and
amortization of oil and gas
properties 233,199 88,464
General and administrative
(Note 2) 102,577 110,340
---------- ----------
$ 699,318 $ 418,104
---------- ----------
NET INCOME $ 916,328 $ 846,611
========== ==========
GENERAL PARTNER - NET INCOME $ 112,053 $ 92,431
========== ==========
LIMITED PARTNERS - NET INCOME $ 804,275 $ 754,180
========== ==========
NET INCOME per unit $ 2.16 $ 2.03
========== ==========
UNITS OUTSTANDING 372,189 372,189
========== ==========
The accompanying condensed notes are an integral part of
these combined financial statements.
-27-
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP II-G
GEODYNE PRODUCTION PARTNERSHIP II-G
COMBINED STATEMENTS OF OPERATIONS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2004 AND 2003
(Unaudited)
2004 2003
---------- ----------
REVENUES:
Oil and gas sales $4,731,606 $4,388,272
Interest income 5,808 5,340
Gain on sale of oil and gas
properties 50,598 -
---------- ----------
$4,788,012 $4,393,612
COSTS AND EXPENSES:
Lease operating $ 574,445 $ 604,882
Production tax 309,150 280,598
Depreciation, depletion, and
amortization of oil and gas
properties 350,549 238,823
General and administrative
(Note 2) 332,274 335,057
---------- ----------
$1,566,418 $1,459,360
---------- ----------
INCOME BEFORE CUMULATIVE EFFECT
OF ACCOUNTING CHANGE $3,221,594 $2,934,252
Cumulative effect of change in
accounting for asset retirement
obligations (Note 1) - 10,247
---------- ----------
NET INCOME $3,221,594 $2,944,499
========== ==========
GENERAL PARTNER - NET INCOME $ 349,004 $ 314,488
========== ==========
LIMITED PARTNERS - NET INCOME $2,872,590 $2,630,011
========== ==========
NET INCOME per unit $ 7.72 $ 7.07
========== ==========
UNITS OUTSTANDING 372,189 372,189
========== ==========
The accompanying condensed notes are an integral part of
these combined financial statements.
-28-
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP II-G
GEODYNE PRODUCTION PARTNERSHIP II-G
COMBINED STATEMENTS OF CASH FLOWS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2004 AND 2003
(Unaudited)
2004 2003
------------ ------------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $3,221,594 $2,944,499
Adjustments to reconcile net income
to net cash provided by operating
activities:
Cumulative effect of changes in
accounting for asset retirement
obligations (Note 1) - ( 10,247)
Depreciation, depletion, and
amortization of oil and gas
properties 350,549 238,823
Gain on sale of oil and gas
properties ( 50,598) -
Increase in accounts receivable -
oil and gas sales ( 196,639) ( 72,199)
Increase in deferred charge ( 1,233) -
Increase (decrease) in accounts
payable 54,287 ( 46,820)
Increase in gas imbalance payable 3,412 -
Increase in accrued liability 379 -
---------- ----------
Net cash provided by operating
activities $3,381,751 $3,054,056
---------- ----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures ($ 67,130) ($ 84,426)
Proceeds from sale of oil and
gas properties 45,638 1,510
---------- ----------
Net cash used by investing
activities ($ 21,492) ($ 82,916)
---------- ----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Cash distributions ($3,154,342) ($2,607,642)
---------- ----------
Net cash used by financing
activities ($3,154,342) ($2,607,642)
---------- ----------
NET INCREASE IN CASH AND CASH
EQUIVALENTS $ 205,917 $ 363,498
CASH AND CASH EQUIVALENTS AT
BEGINNING OF PERIOD 1,284,869 959,481
---------- ----------
CASH AND CASH EQUIVALENTS AT
END OF PERIOD $1,490,786 $1,322,979
========== ==========
The accompanying condensed notes are an integral part of
these combined financial statements.
-29-
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP II-H
GEODYNE PRODUCTION PARTNERSHIP II-H
COMBINED BALANCE SHEETS
(Unaudited)
ASSETS
September 30, December 31,
2004 2003
------------- ------------
CURRENT ASSETS:
Cash and cash equivalents $ 353,100 $ 305,096
Accounts receivable:
Oil and gas sales 225,816 179,434
---------- ----------
Total current assets $ 578,916 $ 484,530
NET OIL AND GAS PROPERTIES, utilizing
the successful efforts method 609,294 673,170
DEFERRED CHARGE 18,230 18,580
---------- ----------
$1,206,440 $1,176,280
========== ==========
LIABILITIES AND PARTNERS' CAPITAL (DEFICIT)
CURRENT LIABILITIES:
Accounts payable $ 46,484 $ 34,033
Asset retirement obligation -
current (Note 1) 2,899 2,522
---------- ----------
Total current liabilities $ 49,383 $ 36,555
LONG-TERM LIABILITIES:
Accrued liability $ 9,609 $ 10,035
Asset retirement obligation
(Note 1) 49,980 48,857
---------- ----------
Total long-term liabilities $ 59,589 $ 58,892
PARTNERS' CAPITAL (DEFICIT):
General Partner ($ 47,391) ($ 51,046)
Limited Partners, issued and
outstanding, 91,711 Units 1,144,859 1,131,879
---------- ----------
Total Partners' capital $1,097,468 $1,080,833
---------- ----------
$1,206,440 $1,176,280
========== ==========
The accompanying condensed notes are an integral part of
these combined financial statements.
-30-
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP II-H
GEODYNE PRODUCTION PARTNERSHIP II-H
COMBINED STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2004 AND 2003
(Unaudited)
2004 2003
-------- --------
REVENUES:
Oil and gas sales $381,538 $299,711
Interest income 525 430
Gain on sale of oil and gas
properties 1,379 -
-------- --------
$383,442 $300,141
COSTS AND EXPENSES:
Lease operating $ 62,041 $ 34,443
Production tax 24,914 18,877
Depreciation, depletion, and
amortization of oil and gas
properties 55,636 21,385
General and administrative
(Note 2) 26,025 27,750
-------- --------
$168,616 $102,455
-------- --------
NET INCOME $214,826 $197,686
======== ========
GENERAL PARTNER - NET INCOME $ 26,364 $ 21,651
======== ========
LIMITED PARTNERS - NET INCOME $188,462 $176,035
======== ========
NET INCOME per unit $ 2.05 $ 1.92
======== ========
UNITS OUTSTANDING 91,711 91,711
======== ========
The accompanying condensed notes are an integral part of
these combined financial statements.
-31-
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP II-H
GEODYNE PRODUCTION PARTNERSHIP II-H
COMBINED STATEMENTS OF OPERATIONS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2004 AND 2003
(Unaudited)
2004 2003
---------- ----------
REVENUES:
Oil and gas sales $1,129,619 $1,044,495
Interest income 1,311 1,178
Gain on sale of oil and gas
properties 11,749 -
---------- ----------
$1,142,679 $1,045,673
COSTS AND EXPENSES:
Lease operating $ 138,904 $ 145,395
Production tax 74,416 67,269
Depreciation, depletion, and
amortization of oil and gas
properties 83,744 56,629
General and administrative
(Note 2) 98,468 98,506
---------- ----------
$ 395,532 $ 367,799
---------- ----------
INCOME BEFORE CUMULATIVE EFFECT
OF ACCOUNTING CHANGE $ 747,147 $ 677,874
Cumulative effect of change in
accounting for asset retirement
obligations (Note 1) - 2,536
---------- ----------
NET INCOME $ 747,147 $ 680,410
========== ==========
GENERAL PARTNER - NET INCOME $ 81,167 $ 72,792
========== ==========
LIMITED PARTNERS - NET INCOME $ 665,980 $ 607,618
========== ==========
NET INCOME per unit $ 7.26 $ 6.63
========== ==========
UNITS OUTSTANDING 91,711 91,711
========== ==========
The accompanying condensed notes are an integral part of
these combined financial statements.
-32-
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP II-H
GEODYNE PRODUCTION PARTNERSHIP II-H
COMBINED STATEMENTS OF CASH FLOWS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2004 AND 2003
(Unaudited)
2004 2003
---------- ----------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $747,147 $680,410
Adjustments to reconcile net income
to net cash provided by operating
activities:
Cumulative effect of change in
accounting for asset retirement
obligations (Note 1) - ( 2,536)
Depreciation, depletion, and
amortization of oil and gas
properties 83,744 56,629
Gain on sale of oil and gas
properties ( 11,749) -
Increase in accounts receivable -
oil and gas sales ( 46,382) ( 18,531)
Decrease in deferred charge 350 -
Increase (decrease) in accounts
payable 11,967 ( 10,145)
Decrease in accrued liability ( 426) -
-------- --------
Net cash provided by operating
activities $784,651 $705,827
-------- --------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures ($ 16,778) ($ 21,914)
Proceeds from sale of oil and
gas properties 10,643 195
-------- --------
Net cash used by investing
activities ($ 6,135) ($ 21,719)
-------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Cash distributions ($730,512) ($595,460)
-------- --------
Net cash used by financing
activities ($730,512) ($595,460)
-------- --------
NET INCREASE IN CASH AND CASH
EQUIVALENTS $ 48,004 $ 88,648
CASH AND CASH EQUIVALENTS AT
BEGINNING OF PERIOD 305,096 224,669
-------- --------
CASH AND CASH EQUIVALENTS AT
END OF PERIOD $353,100 $313,317
======== ========
The accompanying condensed notes are an integral part of
these combined financial statements.
-33-
GEODYNE ENERGY INCOME PROGRAM II LIMITED PARTNERSHIPS
CONDENSED NOTES TO THE COMBINED FINANCIAL STATEMENTS
SEPTEMBER 30, 2004
(Unaudited)
1. ACCOUNTING POLICIES
-------------------
The combined balance sheets as of September 30, 2004, combined statements
of operations for the three and nine months ended September 30, 2004 and
2003, and combined statements of cash flows for the nine months ended
September 30, 2004 and 2003 have been prepared by Geodyne Resources, Inc.,
the General Partner of the limited partnerships, without audit. Each
limited partnership is a general partner in the related Geodyne Production
Partnership in which Geodyne Resources, Inc. serves as the managing
partner. Unless the context indicates otherwise, all references to a
"Partnership" or the "Partnerships" are references to the limited
partnership and its related production partnership, collectively, and all
references to the "General Partner" are references to the general partner
of the limited partnerships and the managing partner of the production
partnerships, collectively. In the opinion of management the financial
statements referred to above include all necessary adjustments, consisting
of normal recurring adjustments, to present fairly the combined financial
position at September 30, 2004, the combined results of operations for the
three and nine months ended September 30, 2004 and 2003, and the combined
cash flows for the nine months ended September 30, 2004 and 2003.
Information and footnote disclosures normally included in financial
statements prepared in accordance with generally accepted accounting
principles have been condensed or omitted. The accompanying interim
financial statements should be read in conjunction with the Partnerships'
Annual Report on Form 10-K filed for the year ended December 31, 2003. The
results of operations for the period ended September 30, 2004 are not
necessarily indicative of the results to be expected for the full year.
The Limited Partners' net income or loss per unit is based upon each $100
initial capital contribution.
RECLASSIFICATION
----------------
Certain prior year balances have been reclassified to conform with current
year presentation.
-34-
OIL AND GAS PROPERTIES
----------------------
The Partnerships follow the successful efforts method of accounting for
their oil and gas properties. Under the successful efforts method, the
Partnerships capitalize all property acquisition costs and development
costs incurred in connection with the further development of oil and gas
reserves. Property acquisition costs include costs incurred by the
Partnerships or the General Partner to acquire producing properties,
including related title insurance or examination costs, commissions,
engineering, legal and accounting fees, and similar costs directly related
to the acquisitions, plus an allocated portion, of the General Partner's
property screening costs. The acquisition cost to the Partnerships of
properties acquired by the General Partner is adjusted to reflect the net
cash results of operations, including interest incurred to finance the
acquisition, for the period of time the properties are held by the General
Partner.
Depletion of the costs of producing oil and gas properties, amortization
of related intangible drilling and development costs, and depreciation of
tangible lease and well equipment are computed on the unit-of-production
method. The Partnerships' depletion, depreciation, and amortization
includes estimated dismantlement and abandonment costs and estimated
salvage value of the equipment.
When complete units of depreciable property are retired or sold, the asset
cost and related accumulated depreciation are eliminated with any gain or
loss (including the elimination of the asset retirement obligation)
reflected in income. When less than complete units of depreciable property
are retired or sold, the proceeds are credited to oil and gas properties.
ACCRUED LIABILITY - OTHER
-------------------------
The Accrued Liability - Other at September 30, 2004 and December 31, 2003
for the II-A Partnership represents a charge accrued for the payment of a
judgment related to plugging liabilities, which judgment is currently
under appeal.
-35-
ASSET RETIREMENT OBLIGATIONS
----------------------------
In July 2001, the FASB issued FAS No. 143, "Accounting for Asset
Retirement Obligations", which is effective for fiscal years beginning
after June 15, 2002 (January 1, 2003 for the Partnerships). On January 1,
2003, the Partnerships adopted FAS No. 143 and recorded an increase in
capitalized cost of oil and gas properties, an increase (decrease) in net
income for the cumulative effect of the change in accounting principle,
and an asset retirement obligation in the following approximate amounts
for each Partnership:
Increase
(Decrease)
Increase in
in Net Income
Capitalized for the
Cost of Oil Change in Asset
and Gas Accounting Retirement
Partnerships Properties Principle Obligation
------------ ----------- ---------- ----------
II-A $292,000 $ 6,000 $286,000
II-B 212,000 4,000 208,000
II-C 68,000 100 68,000
II-D 181,000 ( 2,000) 183,000
II-E 98,000 3,000 95,000
II-F 101,000 5,000 96,000
II-G 218,000 10,000 208,000
II-H 54,000 3,000 51,000
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 II-A, II-B, II-C, II-D, II-E,
II-F, II-G, and II-H Partnerships recognized approximately $8,000, $5,000,
$2,000, $7,000, $4,000, $4,000, $8,000 and $2,000, respectively, of an
increase in depreciation, depletion, and amortization expense, which was
comprised of accretion of the asset retirement obligation and depletion of
the increase in capitalized cost of oil and gas properties.
The components of the change in asset retirement obligations for the three
and nine months ended September 30, 2004 and 2003 are as shown below.
-36-
II-A Partnership
----------------
Three Months Three Months
Ended Ended
9/30/2004 9/30/2003
------------ ------------
Total Asset Retirement
Obligation, July 1 $282,712 $291,842
Additions and revisions 78 -
Accretion expense 2,328 2,713
-------- --------
Total Asset Retirement,
Obligation, End of Quarter $285,118 $294,555
======== ========
Nine Months Nine Months
Ended Ended
9/30/2004 9/30/2003
------------ ------------
Total Asset Retirement
Obligation, January 1 $277,914 $286,238
Additions and revisions 78 -
Accretion expense 7,126 8,317
-------- --------
Total Asset Retirement,
Obligation, End of Period $285,118 $294,555
======== ========
Asset Retirement Obligation -
Current $ 15,007 $ -
Asset Retirement Obligation -
Long-Term 270,111 294,555
-37-
II-B Partnership
----------------
Three Months Three Months
Ended Ended
9/30/2004 9/30/2003
------------ ------------
Total Asset Retirement
Obligation, July 1 $205,612 $212,371
Accretion expense 1,698 2,001
-------- --------
Total Asset Retirement,
Obligation, End of Quarter $207,310 $214,372
======== ========
Nine Months Nine Months
Ended Ended
9/30/2004 9/30/2003
------------ ------------
Total Asset Retirement
Obligation, January 1 $202,141 $208,259
Accretion expense 5,169 6,113
-------- --------
Total Asset Retirement,
Obligation, End of Period $207,310 $214,372
======== ========
Asset Retirement Obligation -
Current $ 16,434 $ -
Asset Retirement Obligation -
Long-Term 190,876 214,372
-38-
II-C Partnership
----------------
Three Months Three Months
Ended Ended
9/30/2004 9/30/2003
------------ ------------
Total Asset Retirement
Obligation, July 1 $72,606 $69,593
Accretion expense 671 717
------- -------
Total Asset Retirement,
Obligation, End of Quarter $73,277 $70,310
======= =======
Nine Months Nine Months
Ended Ended
9/30/2004 9/30/2003
------------ ------------
Total Asset Retirement
Obligation, January 1 $71,173 $68,318
Settlements and disposals - ( 243)
Accretion expense 2,104 2,235
------- -------
Total Asset Retirement,
Obligation, End of Period $73,277 $70,310
======= =======
Asset Retirement Obligation -
Current $10,460 $ -
Asset Retirement Obligation -
Long-Term 62,817 70,310
-39-
II-D Partnership
----------------
Three Months Three Months
Ended Ended
9/30/2004 9/30/2003
------------ ------------
Total Asset Retirement
Obligation, July 1 $189,766 $184,096
Accretion expense 1,868 1,912
-------- --------
Total Asset Retirement,
Obligation, End of Quarter $191,634 $186,008
======== ========
Nine Months Nine Months
Ended Ended
9/30/2004 9/30/2003
------------ ------------
Total Asset Retirement
Obligation, January 1 $185,990 $182,622
Settlements and disposals - ( 2,546)
Accretion expense 5,644 5,932
-------- --------
Total Asset Retirement,
Obligation, End of Period $191,634 $186,008
======== ========
Asset Retirement Obligation -
Current $ 25,370 $ -
Asset Retirement Obligation -
Long-Term 166,264 186,008
-40-
II-E Partnership
----------------
Three Months Three Months
Ended Ended
9/30/2004 9/30/2003
------------ ------------
Total Asset Retirement
Obligation, July 1 $100,357 $97,122
Settlements and disposals ( 132) -
Accretion expense 977 1,017
-------- -------
Total Asset Retirement,
Obligation, End of Quarter $101,202 $98,139
======== =======
Nine Months Nine Months
Ended Ended
9/30/2004 9/30/2003
------------ ------------
Total Asset Retirement
Obligation, January 1 $ 98,320 $95,050
Settlements and disposals ( 132) -
Accretion expense 3,014 3,089
-------- -------
Total Asset Retirement,
Obligation, End of Period $101,202 $98,139
======== =======
Asset Retirement Obligation -
Current $ 24,164 $ -
Asset Retirement Obligation -
Long-Term 77,038 98,139
-41-
II-F Partnership
----------------
Three Months Three Months
Ended Ended
9/30/2004 9/30/2003
------------ ------------
Total Asset Retirement
Obligation, July 1 $100,278 $98,412
Settlements and disposals ( 322) -
Accretion expense 1,028 1,065
-------- -------
Total Asset Retirement,
Obligation, End of Quarter $100,984 $99,477
======== =======
Nine Months Nine Months
Ended Ended
9/30/2004 9/30/2003
------------ ------------
Total Asset Retirement
Obligation, January 1 $ 98,166 $96,226
Settlements and disposals ( 322) -
Accretion expense 3,140 3,251
-------- -------
Total Asset Retirement,
Obligation, End of Period $100,984 $99,477
======== =======
Asset Retirement Obligation -
Current $ 5,316 $ -
Asset Retirement Obligation -
Long-Term 95,668 99,477
-42-
II-G Partnership
----------------
Three Months Three Months
Ended Ended
9/30/2004 9/30/2003
------------ ------------
Total Asset Retirement
Obligation, July 1 $214,245 $212,179
Settlements and disposals ( 673) -
Accretion expense 2,187 2,297
-------- --------
Total Asset Retirement,
Obligation, End of Quarter $215,759 $214,476
======== ========
Nine Months Nine Months
Ended Ended
9/30/2004 9/30/2003
------------ ------------
Total Asset Retirement
Obligation, January 1 $209,768 $207,505
Settlements and disposals ( 673) -
Accretion expense 6,664 6,971
-------- --------
Total Asset Retirement,
Obligation, End of Period $215,759 $214,476
======== ========
Asset Retirement Obligation -
Current $ 11,648 $ -
Asset Retirement Obligation -
Long-Term 204,111 214,476
-43-
II-H Partnership
----------------
Three Months Three Months
Ended Ended
9/30/2004 9/30/2003
------------ ------------
Total Asset Retirement
Obligation, July 1 $ 52,511 $51,950
Settlements and disposals ( 156) -
Accretion expense 524 565
-------- -------
Total Asset Retirement,
Obligation, End of Quarter $ 52,879 $52,515
======== =======
Nine Months Nine Months
Ended Ended
9/30/2004 9/30/2003
------------ ------------
Total Asset Retirement
Obligation, January 1 $ 51,379 $50,790
Settlements and disposals ( 156) -
Accretion expense 1,656 1,725
-------- -------
Total Asset Retirement,
Obligation, End of Period $ 52,879 $52,515
======== =======
Asset Retirement Obligation -
Current $ 2,899 $ -
Asset Retirement Obligation -
Long-Term 49,980 52,515
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:
-44-
Direct General Administrative
Partnership and Administrative Overhead
----------- ------------------ --------------
II-A $6,025 $127,443
II-B 4,825 95,190
II-C 2,806 40,689
II-D 4,371 82,863
II-E 3,531 60,216
II-F 2,672 45,105
II-G 4,633 97,944
II-H 1,890 24,135
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
----------- ------------------ --------------
II-A $43,604 $382,329
II-B 38,188 285,570
II-C 29,071 122,067
II-D 36,115 248,589
II-E 33,274 180,648
II-F 29,592 135,315
II-G 38,442 293,832
II-H 26,063 72,405
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.
-45-
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
USE OF FORWARD-LOOKING STATEMENTS AND ESTIMATES
- -----------------------------------------------
This Quarterly Report contains certain forward-looking statements. The
words "anticipate", "believe", "expect", "plan", "intend", "estimate",
"project", "could", "may" and similar expressions are intended to identify
forward-looking statements. Such statements reflect management's current
views with respect to future events and financial performance. This
Quarterly Report also includes certain information, which is, or is based
upon, estimates and assumptions. Such estimates and assumptions are
management's efforts to accurately reflect the condition and operation of
the Partnerships.
Use of forward-looking statements and estimates and assumptions involve
risks and uncertainties which include, but are not limited to, the
volatility of oil and gas prices, the uncertainty of reserve information,
the operating risk associated with oil and gas properties (including the
risk of personal injury, death, property damage, damage to the well or
producing reservoir, environmental contamination, and other operating
risks), the prospect of changing tax and regulatory laws, the availability
and capacity of processing and transportation facilities, the general
economic climate, the supply and price of foreign imports of oil and gas,
the level of consumer product demand, and the price and availability of
alternative fuels. Should one or more of these risks or uncertainties
occur or should estimates or underlying assumptions prove incorrect,
actual conditions or results may vary materially and adversely from those
stated, anticipated, believed, estimated, and otherwise indicated.
GENERAL
- -------
The Partnerships are engaged in the business of acquiring and operating
producing oil and gas properties located in the continental United States.
In general, a Partnership acquired producing properties and did not engage
in development drilling or enhanced recovery projects, except as an
incidental part of the management of the producing properties acquired.
Therefore, the economic life of each Partnership, and its related
Production Partnership, is limited to the period of time required to fully
produce its acquired oil and gas reserves. The net proceeds from the oil
and gas operations are distributed to the Limited Partners and the General
Partner in accordance with the terms of the Partnerships' partnership
agreements.
-46-
LIQUIDITY AND CAPITAL RESOURCES
- -------------------------------
The Partnerships began operations and investors were assigned their rights
as Limited Partners, having made capital contributions in the amounts and
on the dates set forth below:
Limited
Date of Partner Capital
Partnership Activation Contributions
----------- ------------------ ---------------
II-A July 22, 1987 $48,428,300
II-B October 14, 1987 36,171,900
II-C January 14, 1988 15,462,100
II-D May 10, 1988 31,487,800
II-E September 27, 1988 22,882,100
II-F January 5, 1989 17,140,000
II-G April 10, 1989 37,218,900
II-H May 17, 1989 9,171,100
In general, the amount of funds available for acquisition of producing
properties was equal to the capital contributions of the Limited Partners,
less 15% for sales commissions and organization and management fees. All
of the Partnerships have fully invested their capital contributions.
Net proceeds from the 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.
The Partnerships would have terminated on December 31, 2001 in accordance
with the partnership agreements for the Partnerships. However, such
partnership agreements provide that the General Partner may extend the
term of each Partnership for up to five periods of two years each. The
General Partner has extended the terms of the Partnerships for their
second two-year extension thereby extending their termination date to
December 31, 2005. As of the date of this Quarterly Report, the General
Partner has not yet determined whether to further extend the term of any
Partnership.
-47-
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 than complete units of depreciable property are retired or sold,
the proceeds are credited to oil and gas properties.
The Partnerships evaluate the recoverability of the carrying costs of
their proved oil and gas properties for each oil and gas field (rather
than separately for each well). If the unamortized costs of oil and gas
properties within a field exceeds the expected undiscounted future cash
flows from such properties, the cost of the properties is written down to
fair value, which is determined by using the estimated discounted future
cash flows from the properties. The risk that the Partnerships will be
required to record impairment provisions in the future increases as oil
and gas prices decrease.
The Deferred Charge on the Balance Sheets represents costs deferred for
lease operating expenses incurred in connection with the Partnerships'
underproduced gas imbalance positions. Conversely, the Accrued Liability
represents charges accrued for lease operating expenses incurred in
connection with the Partnerships' overproduced gas imbalance positions.
The rate used in calculating the Deferred Charge
-48-
and Accrued Liability is the annual average production costs per Mcf.
The Partnerships' oil and condensate production is sold, title passed, and
revenue recognized at or near the Partnerships' wells under short-term
purchase contracts at prevailing prices in accordance with arrangements
which are customary in the oil and gas industry. Sales of gas applicable
to the Partnerships' interest in producing oil 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:
-49-
Increase
(Decrease)
Increase in
in Net Income
Capitalized for the
Cost of Oil Change in Asset
and Gas Accounting Retirement
Partnerships Properties Principle Obligation
------------ ----------- ---------- ----------
II-A $292,000 $ 6,000 $286,000
II-B 212,000 4,000 208,000
II-C 68,000 100 68,000
II-D 181,000 ( 2,000) 183,000
II-E 98,000 3,000 95,000
II-F 101,000 5,000 96,000
II-G 218,000 10,000 208,000
II-H 54,000 3,000 51,000
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 II-A, II-B, II-C, II-D, II-E,
II-F, II-G, and II-H Partnerships recognized approximately $8,000, $5,000,
$2,000, $7,000, $4,000, $4,000, $8,000, and $2,000, respectively, of an
increase in depreciation, depletion, and amortization expense, which was
comprised of accretion of the asset retirement obligation and depletion of
the increase in capitalized cost of oil and gas properties.
PROVED RESERVES AND NET PRESENT VALUE
- -------------------------------------
The process of estimating oil and gas reserves is complex, requiring
significant subjective decisions in the evaluation of available
geological, engineering, and economic data for each reservoir. The data
for a given reservoir may change substantially over time as a result of,
among other things, additional development activity, production history,
and viability of production under varying economic conditions;
consequently, it is reasonably possible that material revisions to
existing reserve estimates may occur in the future. Although every
reasonable effort has been made to ensure that these reserve estimates
represent the most accurate assessment possible, the significance of the
subjective decisions required and variances in available data for various
reservoirs make these estimates generally less precise than other
estimates presented in connection with financial statement disclosures.
The following tables summarize changes in net quantities of the
Partnerships' proved reserves, all of which are located in the United
States, for the periods indicated. The proved reserves were estimated by
petroleum engineers employed by affiliates of the Partnerships, and are
annually reviewed by
-50-
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.
II-A Partnership
----------------
Crude Natural
Oil Gas
(Barrels) (Mcf)
--------- -----------
Proved reserves, Dec. 31, 2003 578,339 6,602,791
Production ( 17,623) ( 162,681)
Extensions and discoveries 3,093 1,740
Revisions of previous
estimates 25,662 16,575
------- ---------
Proved reserves, March 31, 2004 589,471 6,458,425
Production ( 17,229) ( 179,580)
Extensions and discoveries - 34
Revisions of previous
estimates 35,658 77,563
------- ---------
Proved reserves, June 30, 2004 607,900 6,356,442
Production ( 15,639) ( 152,494)
Extensions and discoveries 274 121
Revisions of previous
estimates 56,472 55,182
------- ---------
Proved reserves, Sept. 30, 2004 649,007 6,259,251
======= =========
-51-
II-B Partnership
----------------
Crude Natural
Oil Gas
(Barrels) (Mcf)
--------- -----------
Proved reserves, Dec. 31, 2003 450,386 5,031,097
Production ( 11,835) ( 124,571)
Extensions and discoveries - 99
Revisions of previous
estimates 16,479 ( 787)
------- ---------
Proved reserves, March 31, 2004 455,030 4,905,838
Production ( 10,439) ( 154,801)
Revisions of previous
estimates 13,740 112,485
------- ---------
Proved reserves, June 30, 2004 458,331 4,863,522
Production ( 10,226) ( 113,757)
Revisions of previous
estimates 38,013 5,904
------- ---------
Proved reserves, Sept. 30, 2004 486,118 4,755,669
======= =========
-52-
II-C Partnership
----------------
Crude Natural
Oil Gas
(Barrels) (Mcf)
--------- -----------
Proved reserves, Dec. 31, 2003 166,878 3,471,332
Production ( 4,506) ( 72,221)
Revisions of previous
estimates 3,589 2,730
------- ---------
Proved reserves, March 31, 2004 165,961 3,401,841
Production ( 3,694) ( 86,749)
Revisions of previous
estimates 3,479 170,517
------- ---------
Proved reserves, June 30, 2004 165,746 3,485,609
Production ( 3,587) ( 65,885)
Revisions of previous
estimates 10,546 3,403
------- ---------
Proved reserves, Sept. 30, 2004 172,705 3,423,127
======= =========
-53-
II-D Partnership
----------------
Crude Natural
Oil Gas
(Barrels) (Mcf)
--------- -----------
Proved reserves, Dec. 31, 2003 205,493 8,820,151
Production ( 7,389) ( 173,189)
Revisions of previous
estimates 6,907 ( 94,156)
------- ---------
Proved reserves, March 31, 2004 205,011 8,552,806
Production ( 5,855) ( 163,105)
Revisions of previous
estimates 15,572 282,953
------- ---------
Proved reserves, June 30, 2004 214,728 8,672,654
Production ( 6,060) ( 164,451)
Revisions of previous
estimates 11,473 51,298
------- ---------
Proved reserves, Sept. 30, 2004 220,141 8,559,501
======= =========
-54-
II-E Partnership
----------------
Crude Natural
Oil Gas
(Barrels) (Mcf)
--------- -----------
Proved reserves, Dec. 31, 2003 185,726 4,993,342
Production ( 5,116) ( 113,320)
Revisions of previous
estimates 1,450 ( 101,967)
------- ---------
Proved reserves, March 31, 2004 182,060 4,778,055
Production ( 4,476) ( 103,692)
Revisions of previous
estimates 6,525 199,399
------- ---------
Proved reserves, June 30, 2004 184,109 4,873,762
Production ( 4,080) ( 108,497)
Revisions of previous
estimates 3,336 13,860
------- ---------
Proved reserves, Sept. 30, 2004 183,365 4,779,125
======= =========
-55-
II-F Partnership
----------------
Crude Natural
Oil Gas
(Barrels) (Mcf)
--------- -----------
Proved reserves, Dec. 31, 2003 294,371 3,805,394
Production ( 7,519) ( 123,018)
Sale of minerals in place ( 63) -
Revisions of previous
estimates ( 4,418) ( 7,353)
------- ---------
Proved reserves, March 31, 2004 282,371 3,675,023
Production ( 6,001) ( 91,744)
Revisions of previous
estimates 36,234 353,113
------- ---------
Proved reserves, June 30, 2004 312,604 3,936,392
Production ( 5,762) ( 113,565)
Extensions and discoveries 3,161 2,896
Revisions of previous
estimates 413 ( 35,646)
------- ---------
Proved reserves, Sept. 30, 2004 310,416 3,790,077
======= =========
-56-
II-G Partnership
----------------
Crude Natural
Oil Gas
(Barrels) (Mcf)
--------- -----------
Proved reserves, Dec. 31, 2003 618,052 8,180,541
Production ( 15,750) ( 262,468)
Sale of minerals in place ( 134) -
Revisions of previous
estimates ( 9,228) ( 14,416)
------- ---------
Proved reserves, March 31, 2004 592,940 7,903,657
Production ( 12,588) ( 194,394)
Extensions and discoveries 6,476 5,914
Revisions of previous
estimates 69,552 741,428
------- ---------
Proved reserves, June 30, 2004 656,380 8,456,605
Production ( 12,081) ( 241,799)
Extensions and discoveries 139 141
Revisions of previous
estimates 6,994 ( 80,279)
------- ---------
Proved reserves, Sept. 30, 2004 651,432 8,134,668
======= =========
-57-
II-H Partnership
----------------
Crude Natural
Oil Gas
(Barrels) (Mcf)
--------- -----------
Proved reserves, Dec. 31, 2003 144,069 1,990,234
Production ( 3,652) ( 63,116)
Sale of minerals in place ( 35) -
Revisions of previous
estimates ( 2,142) ( 2,552)
------- ---------
Proved reserves, March 31, 2004 138,240 1,924,566
Production ( 2,924) ( 47,729)
Revisions of previous
estimates 17,620 177,037
------- ---------
Proved reserves, June 30, 2004 152,936 2,053,874
Production ( 2,808) ( 57,858)
Revisions of previous
estimates 1,564 ( 23,690)
------- ---------
Proved reserves, Sept. 30, 2004 151,692 1,972,326
======= =========
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
-58-
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
----------- ------- ------- ------- --------
II-A $25,046 $21,116 $20,313 $20,047
II-B 18,568 15,638 14,950 15,116
II-C 11,148 10,133 9,578 9,758
II-D 23,461 21,972 21,351 21,845
II-E 14,036 12,984 12,188 12,588
II-F 14,072 12,778 11,524 11,766
II-G 30,351 27,691 25,027 25,545
II-H 7,129 6,533 5,898 6,023
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;
-59-
* The ability of the members of the Organization of Petroleum
Exporting Countries ("OPEC") to agree to and maintain oil prices and
production quotas;
* Political instability or armed conflict in oil-producing regions or
around major shipping areas;
* The level of consumer demand and overall economic activity;
* The competitiveness of alternative fuels;
* Weather conditions;
* The availability of pipelines for transportation; and
* Domestic and foreign government regulations and taxes.
It is not possible to predict the future direction of oil or natural gas
prices or whether the above discussed trends will remain. Operating costs,
including General and Administrative Expenses, may not decline over time
or may experience only a gradual decline, thus adversely affecting net
revenues as either production or oil and natural gas prices decline. In
any particular period, net revenues may also be affected by either the
receipt of proceeds from property sales or the incursion of additional
costs as a result of well workovers, recompletions, new well drilling, and
other events.
II-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 $1,504,390 $1,309,670
Oil and gas production expenses $ 331,420 $ 337,944
Barrels produced 15,639 17,987
Mcf produced 152,494 180,852
Average price/Bbl $ 41.38 $ 26.32
Average price/Mcf $ 5.62 $ 4.62
As shown in the table above, total oil and gas sales increased $194,720
(14.9%) for the three months ended September 30, 2004 as compared to the
three months ended September 30, 2003. Of this increase, approximately
$236,000 and $152,000, respectively, were related to increases in the
average prices of oil and gas sold. These increases were partially offset
by decreases of approximately $62,000 and $131,000, respectively, related
to decreases in volumes of oil and gas sold. Volumes of oil and gas sold
decreased 2,348 barrels and 28,358 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) a positive prior period volume
adjustment made by the operator on one
-60-
significant well during 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.
Oil and gas production expenses (including lease operating expenses and
production taxes) decreased $6,524 (1.9%) 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
22.0% for the three months ended September 30, 2004 from 25.8% 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
decreased $12,279 (20.7%) 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) 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
decreased to 3.1% for the three months ended September 30, 2004 from 4.5%
for the three months ended September 30, 2003. This percentage decrease
was primarily due to (i) the dollar decrease in depreciation, depletion,
and amortization of oil and gas properties and (ii) the increase in oil
and gas sales.
General and administrative expenses decreased $10,158 (7.1%) 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 8.9% for the three months ended September 30, 2004 from 11.0%
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.
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 $4,345,158 $4,355,746
Oil and gas production expenses $1,061,680 $1,036,270
Barrels produced 50,491 56,555
Mcf produced 494,755 556,504
Average price/Bbl $ 35.72 $ 27.68
Average price/Mcf $ 5.14 $ 5.01
As shown in the table above, total oil and gas sales remained relatively
constant for the nine months ended
-61-
September 30, 2004 and 2003. Decreases of approximately $168,000 and
$310,000, respectively, related to decreases in volumes of oil and gas
sold were substantially offset by increases of approximately $406,000 and
$61,000, respectively, related to increases in the average prices of oil
and gas sold. Volumes of oil and gas sold decreased 6,064 barrels and
61,749 Mcf, respectively, for the nine months ended September 30, 2004 as
compared to the nine months ended September 30, 2003. The decrease in
volumes of oil sold was primarily due to (i) normal declines in production
and (ii) a positive prior period volume adjustment made by the operator on
one significant well during the nine months ended September 30, 2003. The
decrease in volumes of gas sold was primarily due to (i) normal declines
in production and (ii) a positive prior period volume adjustment made by
the operator on one significant well during the nine months ended
September 30, 2003.
Oil and gas production expenses (including lease operating expenses and
production taxes) increased $25,410 (2.5%) 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
24.4% for the nine months ended September 30, 2004 from 23.8% for the nine
months ended September 30, 2003.
Depreciation, depletion, and amortization of oil and gas properties
decreased $22,666 (13.6%) for the nine months ended September 30, 2004 as
compared to the nine months ended September 30, 2003. This decrease was
primarily due to (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
decreased to 3.3% for the nine months ended September 30, 2004 from 3.8%
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 remained constant at 9.8% for the nine months
ended September 30, 2004 and 2003.
The Limited Partners have received cash distributions through September
30, 2004 totaling $60,166,357 or 124.24% of Limited Partners' capital
contributions.
-62-
II-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 $1,116,621 $929,557
Oil and gas production expenses $ 247,402 $247,756
Barrels produced 10,226 11,170
Mcf produced 113,757 135,853
Average price/Bbl $ 43.73 $ 28.99
Average price/Mcf $ 5.88 $ 4.46
As shown in the table above, total oil and gas sales increased $187,064
(20.1%) for the three months ended September 30, 2004 as compared to the
three months ended September 30, 2003. Of this increase, approximately
$151,000 and $162,000, respectively, were related to increases in the
average prices of oil and gas sold. These increases were partially offset
by decreases of approximately $27,000 and $99,000, respectively, related
to decreases in volumes of oil and gas sold. Volumes of oil and gas sold
decreased 944 barrels and 22,096 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.
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. A decrease in production expenses primarily
due to workover expenses incurred on one significant well during the three
months ended September 30, 2003 was substantially offset by (i) an
increase in production taxes associated with the increase in oil and gas
sales, (ii) workover expenses incurred on two significant wells during the
three months ended September 30, 2004, and (iii) an increase in salt water
disposal expenses on two significant wells during the three months ended
September 30, 2004 as compared to the three months ended September 30,
2003. As of the date of this Quarterly Report, management anticipates that
saltwater disposal expenses will remain at their current levels. As a
percentage of oil and gas sales, these expenses decreased to 22.2% for the
three months ended September 30, 2004 from 26.7% for the three months
ended September 30, 2003. This percentage decrease was primarily due to
the increase in oil and gas sales.
-63-
Depreciation, depletion, and amortization of oil and gas properties
decreased $5,326 (11.6%) 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) 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
decreased to 3.6% for the three months ended September 30, 2004 from 5.0%
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 depreciation, depletion, and amortization of oil and
gas properties.
General and administrative expenses decreased $7,519 (7.0%) 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 9.0% for the three months ended September 30, 2004 from 11.6%
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 $3,194,701 $2,967,617
Oil and gas production expenses $ 789,481 $ 738,589
Barrels produced 32,500 31,015
Mcf produced 393,129 424,464
Average price/Bbl $ 37.25 $ 28.95
Average price/Mcf $ 5.05 $ 4.88
As shown in the table above, total oil and gas sales increased $227,084
(7.7%) for the nine months ended September 30, 2004 as compared to the
nine months ended September 30, 2003. Of this increase, approximately (i)
$270,000 and $67,000, respectively, were related to increases in the
average prices of oil and gas sold and (ii) $43,000 was related to an
increase in volumes of oil sold. These increases were partially offset by
a decrease of approximately $153,000 related to a decrease in volumes of
gas sold. Volumes of oil sold increased 1,485 barrels, while volumes of
gas sold decreased 31,335 Mcf for the nine months ended September 30, 2004
as compared to the nine months ended September 30, 2003.
-64-
Oil and gas production expenses (including lease operating expenses and
production taxes) increased $50,892 (6.9%) 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
24.7% for the nine months ended September 30, 2004 from 24.9% for the nine
months ended September 30, 2003.
Depreciation, depletion, and amortization of oil and gas properties
decreased $21,860 (16.2%) for the nine months ended September 30, 2004 as
compared to the nine months ended September 30, 2003. This decrease was
primarily due to (i) upward revisions in the estimates of remaining oil
reserves since September 30, 2003 and (ii) the decrease in volumes of gas
sold. As a percentage of oil and gas sales, this expense decreased to 3.5%
for the nine months ended September 30, 2004 from 4.5% for the nine months
ended September 30, 2003. This percentage decrease was primarily due to
(i) the dollar decrease in depreciation, depletion, and amortization of
oil and gas properties and (ii) the increase 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 decreased to 10.1% for the nine months ended
September 30, 2004 from 11.0% for the nine months ended September 30,
2003.
The Limited Partners have received cash distributions through September
30, 2004 totaling $43,261,916 or 119.60% of Limited Partners' capital
contributions.
II-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 $525,483 $433,234
Oil and gas production expenses $105,948 $118,433
Barrels produced 3,587 3,903
Mcf produced 65,885 74,009
Average price/Bbl $ 44.23 $ 29.12
Average price/Mcf $ 5.57 $ 4.32
As shown in the table above, total oil and gas sales increased $92,249
(21.3%) for the three months ended September 30, 2004 as compared to the
three months ended September 30, 2003. Of this increase, approximately
$54,000 and $82,000, respectively, were related to increases in the
average prices of oil and gas sold. These increases were partially offset
by decreases of approximately $9,000 and $35,000, respectively, related to
decreases in volumes of
-65-
oil and gas sold. Volumes of oil and gas sold decreased 316 barrels and
8,124 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 normal declines in production.
Oil and gas production expenses (including lease operating expenses and
production taxes) decreased $12,485 (10.5%) 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
two significant wells during the three months ended September 30, 2003 and
(ii) a decrease in lease operating expenses associated with the decrease
in volumes of oil and gas sold. 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 20.2% for the three months ended September 30, 2004 from 27.3% 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 oil and gas production expenses.
Depreciation, depletion, and amortization of oil and gas properties
decreased $4,823 (23.1%) 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) the decreases in volumes of oil and gas sold and (ii)
upward revisions in the estimates of remaining oil and gas reserves since
September 30, 2003. As a percentage of oil and gas sales, this expense
decreased to 3.0% for the three months ended September 30, 2004 from 4.8%
for the three months ended September 30, 2003. This percentage decrease
was primarily due to (i) the dollar decrease in depreciation, depletion,
and amortization of oil and gas properties and (ii) the increase in oil
and gas sales.
General and administrative expenses decreased $3,075 (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, this expense
decreased to 8.3% for the three months ended September 30, 2004 from 10.7%
for the three months ended September 30, 2003. This percentage decrease
was primarily due to the increase in oil and gas sales.
-66-
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 $1,542,920 $1,468,547
Oil and gas production expenses $ 361,653 $ 360,636
Barrels produced 11,787 10,941
Mcf produced 224,855 245,335
Average price/Bbl $ 37.21 $ 29.13
Average price/Mcf $ 4.91 $ 4.69
As shown in the table above, total oil and gas sales increased $74,373
(5.1%) for the nine months ended September 30, 2004 as compared to the
nine months ended September 30, 2003. Of this increase, approximately (i)
$95,000 and $50,000, respectively, were related to increases in the
average prices of oil and gas sold and (ii) $25,000 was related to an
increase in volumes of oil sold. These increases were partially offset by
a decrease of approximately $96,000 related to a decrease in volumes of
gas sold. Volumes of oil sold increased 846 barrels, while volumes of gas
sold decreased 20,480 Mcf 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) remained relatively constant for the nine months ended
September 30, 2004 and 2003. Increases in production expenses primarily
due to (i) an increase in salt water disposal expenses on two significant
wells during the nine months ended September 30, 2004 as compared to the
nine months ended September 30, 2003 and (ii) workover expenses incurred
on two other significant wells during the nine months ended September 30,
2004 were substantially offset by decreases in production expenses
primarily due to workover expenses incurred on several other wells during
the nine months ended September 30, 2003. As of the date of this Quarterly
Report, management anticipates that saltwater disposal expenses will
remain at their current levels. As a percentage of oil and gas sales,
these expenses decreased to 23.4% for the nine months ended September 30,
2004 from 24.6% for the nine months ended September 30, 2003.
Depreciation, depletion, and amortization of oil and gas properties
decreased $11,652 (17.5%) 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) the decrease in volumes of gas sold, (ii) the
abandonment of one significant well during the nine months ended September
30, 2003 due to severe mechanical problems, and (iii) upward revisions in
the estimates of remaining oil reserves since September 30, 2003. As a
percentage of oil and gas sales, this expense decreased to 3.6% for the
nine
-67-
months ended September 30, 2004 from 4.5% 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, this expense decreased to 9.8% for the nine months ended
September 30, 2004 from 10.3% for the nine months ended September 30,
2003.
The Limited Partners have received cash distributions through September
30, 2004 totaling $20,312,686 or 131.37% of Limited Partners' capital
contributions.
II-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 $1,091,156 $938,668
Oil and gas production expenses $ 232,355 $269,454
Barrels produced 6,060 4,672
Mcf produced 164,451 180,894
Average price/Bbl $ 40.58 $ 27.77
Average price/Mcf $ 5.14 $ 4.47
As shown in the table above, total oil and gas sales increased $152,488
(16.2%) for the three months ended September 30, 2004 as compared to the
three months ended September 30, 2003. Of this increase, approximately (i)
$78,000 and $110,000, respectively, were related to increases in the
average prices of oil and gas sold and (ii) $38,000 was related to an
increase in volumes of oil sold. These increases were partially offset by
a decrease of approximately $74,000 related to a decrease in volumes of
gas sold. Volumes of oil sold increased 1,388 barrels, while volumes of
gas sold decreased 16,443 Mcf for the three months ended September 30,
2004 as compared to the three months ended September 30, 2003. The
increase in volumes of oil sold was primarily due to an increase in
production on one significant well following the successful workover of
that well during late 2003.
Oil and gas production expenses (including lease operating expenses and
production taxes) decreased $37,099 (13.8%) 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) a positive prior period lease
operating expense adjustment made by the operator on one significant well
during the three months ended September 30, 2003, (ii) lower workover
expenses incurred on one significant well
-68-
during the three months ended September 30, 2004 than similar expenses
incurred on the same well during the three months ended September 30,
2003, and (iii) workover expenses incurred on several other wells during
the three months ended September 30, 2003. 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 21.3% for the three months ended September 30, 2004 from
28.7% 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 oil and gas production expenses.
Depreciation, depletion, and amortization of oil and gas properties
decreased $18,599 (34.5%) 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) an increase in depletable oil and gas properties
primarily due to recompletion activities on one significant well during
the three months ended September 30, 2003, (ii) upward revisions in the
estimates of remaining oil reserves since September 30, 2003, and (iii)
the decrease in volumes of gas sold. As a percentage of oil and gas sales,
this expense decreased to 3.2% for the three months ended September 30,
2004 from 5.7% 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 $6,517 (7.0%) 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 8.0% for the three months ended September 30, 2004 from 10.0%
for the three months ended September 30, 2003. This percentage decrease
was primarily due to the increase in 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 $3,199,311 $2,982,439
Oil and gas production expenses $ 790,781 $ 774,620
Barrels produced 19,304 14,574
Mcf produced 500,745 563,675
Average price/Bbl $ 36.17 $ 29.05
Average price/Mcf $ 4.99 $ 4.54
As shown in the table above, total oil and gas sales increased $216,872
(7.3%) for the nine months ended September 30, 2004 as compared to the
nine months ended September 30, 2003. Of this increase, approximately (i)
$137,000 and $228,000, respectively, were related to increases in the
-69-
average prices of oil and gas sold and (ii) $138,000 was related to an
increase in volumes of oil sold. These increases were partially offset by
a decrease of approximately $286,000 related to a decrease in volumes of
gas sold. Volumes of oil sold increased 4,730 barrels, while volumes of
gas sold decreased 62,930 Mcf for the nine months ended September 30, 2004
as compared to the nine months ended September 30, 2003. The increase in
volumes of oil sold was primarily due to (i) the successful workover of
one significant well during late 2003 and (ii) a negative prior period
volume adjustment made by the operator on another significant well during
the nine months ended September 30, 2003. The decrease in volumes of gas
sold was primarily due to (i) positive prior period volume adjustments
made by the operator on two significant wells during the nine months ended
September 30, 2003 and (ii) normal declines in production.
Oil and gas production expenses (including lease operating expenses and
production taxes) increased $16,161 (2.1%) 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 decreased to
24.7% for the nine months ended September 30, 2004 from 26.0% for the nine
months ended September 30, 2003.
Depreciation, depletion, and amortization of oil and gas properties
decreased $41,917 (20.4%) 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) the decrease in volumes of gas sold, and (iii) upward revisions in
the estimates of remaining oil reserves since September 30, 2003. These
decreases were partially offset by one significant well being fully
depleted during the nine months ended September 30, 2004 due to the lack
of remaining reserves. As a percentage of oil and gas sales, this expense
decreased to 5.1% for the nine months ended September 30, 2004 from 6.9%
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 decreased to 8.9% for the nine months ended
September 30, 2004 from 9.6% for the nine months ended September 30, 2003.
The Limited Partners have received cash distributions through September
30, 2004 totaling $42,507,903 or 135.00% of Limited Partners' capital
contributions.
-70-
II-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 $708,149 $657,561
Oil and gas production expenses $158,993 $154,827
Barrels produced 4,080 4,824
Mcf produced 108,497 119,454
Average price/Bbl $ 40.59 $ 31.43
Average price/Mcf $ 5.00 $ 4.24
As shown in the table above, total oil and gas sales increased $50,588
(7.7%) for the three months ended September 30, 2004 as compared to the
three months ended September 30, 2003. Of this increase, approximately
$37,000 and $83,000, respectively, were related to increases in the
average prices of oil and gas sold. These increases were partially offset
by decreases of approximately $23,000 and $46,000, respectively, related
to decreases in volumes of oil and gas sold. Volumes of oil and gas sold
decreased 744 barrels and 10,957 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) positive prior period volume
adjustments made by the operators on two significant wells during the
three months ended September 30, 2003.
Oil and gas production expenses (including lease operating expenses and
production taxes) increased $4,166 (2.7%) 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
several 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. These increases were partially offset by a positive prior period
lease operating expense adjustment made by the operator on one significant
well during the three months ended September 30, 2003. As a percentage of
oil and gas sales, these expenses decreased to 22.5% for the three months
ended September 30, 2004 from 23.5% for the three months ended September
30, 2003.
Depreciation, depletion, and amortization of oil and gas properties
decreased $2,125 (4.9%) 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, this expense decreased to 5.9% for the three months
ended September 30, 2004 from 6.6% for the three months ended September
30, 2003. This percentage decrease was primarily due to (i) the increase
in oil and gas sales and (ii) the
-71-
dollar decrease in depreciation, depletion, and amortization of oil and
gas properties.
General and administrative expenses decreased $4,666 (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 9.0% for the three months ended September 30, 2004 from 10.4%
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.
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 $2,127,571 $2,184,324
Oil and gas production expenses $ 469,099 $ 485,147
Barrels produced 13,672 15,035
Mcf produced 325,509 355,822
Average price/Bbl $ 35.99 $ 29.51
Average price/Mcf $ 5.02 $ 4.89
As shown in the table above, total oil and gas sales decreased $56,753
(2.6%) for the nine months ended September 30, 2004 as compared to the
nine months ended September 30, 2003. Of this decrease, approximately
$40,000 and $148,000, respectively, were related to decreases in volumes
of oil and gas sold. These decreases were partially offset by increases of
approximately $88,000 and $43,000, respectively, related to increases in
the average prices of oil and gas sold. Volumes of oil and gas sold
decreased 1,363 barrels and 30,313 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 $16,048 (3.3%) 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) positive prior period lease
operating expense adjustments made on two significant wells during the
nine months ended September 30, 2003 and (ii) a decrease in production
taxes associated with the decrease in oil and gas sales. These decreases
were partially offset by workover expenses incurred on several wells
during the nine months ended September 30, 2004. As a percentage of oil
and gas sales, these expenses decreased to 22.0% for the nine months ended
September 30, 2004 from 22.2% for the nine months ended September 30,
2003.
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Depreciation, depletion, and amortization of oil and gas properties
increased $126,146 (121.0%) for the nine months ended September 30, 2004
as compared to the nine months ended September 30, 2003. This increase was
primarily due to one significant well being fully depleted during the nine
months ended September 30, 2004 due to the lack of remaining reserves. As
a percentage of oil and gas sales, this expense increased to 10.8% for the
nine months ended September 30, 2004 from 4.8% 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, these expenses increased to 10.1% for the nine months ended
September 30, 2004 from 9.9% for the nine months ended September 30, 2003.
The Limited Partners have received cash distributions through September
30, 2004 totaling $29,831,574 or 130.37% of Limited Partners' capital
contributions.
II-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 $758,316 $595,801
Oil and gas production expenses $170,638 $102,041
Barrels produced 5,762 6,106
Mcf produced 113,565 108,194
Average price/Bbl $ 39.44 $ 29.19
Average price/Mcf $ 4.68 $ 3.86
As shown in the table above, total oil and gas sales increased $162,515
(27.3%) for the three months ended September 30, 2004 as compared to the
three months ended September 30, 2003. Of this increase, approximately (i)
$59,000 and $93,000, respectively, were related to increases in the
average prices of oil and gas sold and (ii) $21,000 was related to an
increase in volumes of gas sold. Volumes of oil sold decreased 344
barrels, while volumes of gas sold increased 5,371 Mcf for the three
months ended September 30, 2004 as compared to the three months ended
September 30, 2003.
-73-
Oil and gas production expenses (including lease operating expenses and
production taxes) increased $68,597 (67.2%) 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 22.5% for the three months ended September 30, 2004 from
17.1% 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 $62,080 (152.6%) for the three months ended September 30, 2004
as compared to the three months ended September 30, 2003. This increase
was primarily due to 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 increased to
13.6% for the three months ended September 30, 2004 from 6.8% 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 $3,448 (6.7%) 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 6.3% for the three months ended September 30, 2004 from 8.6%
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 $2,227,315 $2,066,022
Oil and gas production expenses $ 412,543 $ 414,636
Barrels produced 19,282 19,621
Mcf produced 328,327 331,363
Average price/Bbl $ 34.58 $ 28.57
Average price/Mcf $ 4.75 $ 4.54
As shown in the table above, total oil and gas sales increased $161,293
(7.8%) for the nine months ended September 30, 2004 as compared to the
nine months ended
-74-
September 30, 2003. Of this increase, approximately $116,000 and $69,000,
respectively, were related to increases in the average prices of oil and
gas sold. Volumes of oil and gas sold decreased 339 barrels and 3,036 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) remained relatively constant for the nine months ended
September 30, 2004 and 2003. Decreases in production expenses primarily
due to (i) workover expenses incurred on several wells during the nine
months ended September 30, 2003 and (ii) a decrease in lease operating
expenses associated with the decreases in volumes of oil and gas sold were
substantially offset by (i) workover expenses incurred on two significant
wells during the nine 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 decreased to 18.5% for
the nine months ended September 30, 2004 from 20.1% for the nine months
ended September 30, 2003.
Depreciation, depletion, and amortization of oil and gas properties
increased $46,145 (41.5%) for the nine months ended September 30, 2004 as
compared to the nine months ended September 30, 2003. This increase was
primarily due to one significant well being fully depleted during the nine
months ended September 30, 2004 due to the lack of remaining reserves,
which increase was partially offset by upward revisions in the estimates
of remaining oil and gas reserves since September 30, 2003. As a
percentage of oil and gas sales, this expense increased to 7.1% for the
nine months ended September 30, 2004 from 5.4% 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 decreased to 7.4% for the nine months ended
September 30, 2004 from 8.0% for the nine months ended September 30, 2003.
The Limited Partners have received cash distributions through September
30, 2004 totaling $24,648,051 or 143.80% of Limited Partners' capital
contributions.
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II-G 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 $1,607,190 $1,262,790
Oil and gas production expenses $ 363,542 $ 219,300
Barrels produced 12,081 12,803
Mcf produced 241,799 230,579
Average price/Bbl $ 39.43 $ 29.18
Average price/Mcf $ 4.68 $ 3.86
As shown in the table above, total oil and gas sales increased $344,400
(27.3%) for the three months ended September 30, 2004 as compared to the
three months ended September 30, 2003. Of this increase, approximately (i)
$124,000 and $198,000, respectively, were related to increases in the
average prices of oil and gas sold and (ii) $43,000 was related to an
increase in volumes of gas sold. Volumes of oil sold decreased 722
barrels, while volumes of gas sold increased 11,220 Mcf for the three
months ended September 30, 2004 as compared to the three months ended
September 30, 2003.
Oil and gas production expenses (including lease operating expenses and
production taxes) increased $144,242 (65.8%) for the three months ended
September 30, 2004 as compared to the three months ended September 30,
2003. This increase was primarily due to (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 22.6% for the three months ended September 30, 2004 from
17.4% 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 $144,735 (163.6%) for the three months ended September 30, 2004
as compared to the three months ended September 30, 2003. This increase
was primarily due to 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 increased to
14.5% for the three months ended September 30, 2004 from 7.0% for the
three months ended September 30, 2003. This percentage increase was
primarily
-76-
due to the dollar increase in depreciation, depletion, and amortization of
oil and gas properties.
General and administrative expenses decreased $7,763 (7.0%) 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 6.4% for the three months ended September 30, 2004 from 8.7%
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 $4,731,606 $4,388,272
Oil and gas production expenses $ 883,595 $ 885,480
Barrels produced 40,419 41,144
Mcf produced 698,661 705,942
Average price/Bbl $ 34.58 $ 28.57
Average price/Mcf $ 4.77 $ 4.55
As shown in the table above, total oil and gas sales increased $343,334
(7.8%) for the nine months ended September 30, 2004 as compared to the
nine months ended September 30, 2003. Of this increase, approximately
$243,000 and $154,000, respectively, were related to increases in the
average prices of oil and gas sold. Volumes of oil and gas sold decreased
725 barrels and 7,281 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) remained relatively constant for the nine months ended
September 30, 2004 and 2003. Decreases in production expenses primarily
due to (i) workover expenses incurred on several wells during the nine
months ended September 30, 2003 and (ii) a decrease in lease operating
expenses associated with the decreases in volumes of oil and gas sold were
substantially offset by (i) workover expenses incurred on two significant
wells during the nine 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 decreased to 18.7% for
the nine months ended September 30, 2004 from 20.2% for the nine months
ended September 30, 2003.
-77-
Depreciation, depletion, and amortization of oil and gas properties
increased $111,726 (46.8%) for the nine months ended September 30, 2004 as
compared to the nine months ended September 30, 2003. This increase was
primarily due to one significant well being fully depleted during the nine
months ended September 30, 2004 due to the lack of remaining reserves,
which increase was partially offset by upward revisions in the estimates
of remaining oil and gas reserves since September 30, 2003. As a
percentage of oil and gas sales, this expense increased to 7.4% for the
nine months ended September 30, 2004 from 5.4% 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 decreased to 7.0% for the nine months ended
September 30, 2004 from 7.6% for the nine months ended September 30, 2003.
The Limited Partners have received cash distributions through September
30, 2004 totaling $51,487,371 or 138.34% of Limited Partners' capital
contributions.
II-H 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 $381,538 $299,711
Oil and gas production expenses $ 86,955 $ 53,320
Barrels produced 2,808 2,973
Mcf produced 57,858 55,110
Average price/Bbl $ 39.40 $ 29.16
Average price/Mcf $ 4.68 $ 3.87
As shown in the table above, total oil and gas sales increased $81,827
(27.3%) for the three months ended September 30, 2004 as compared to the
three months ended September 30, 2003. Of this increase, approximately (i)
$29,000 and $47,000, respectively, were related to increases in the
average prices of oil and gas sold and (ii) $11,000 was related to an
increase in volumes of gas sold. Volumes of oil sold decreased 165
barrels, while volumes of gas sold increased 2,748 Mcf for the three
months ended September 30, 2004 as compared to the three months ended
September 30, 2003.
-78-
Oil and gas production expenses (including lease operating expenses and
production taxes) increased $33,635 (63.1%) for the three months ended
September 30, 2004 as compared to the three months ended September 30,
2003. This increase was primarily due to (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 22.8% for the three months ended September 30, 2004 from
17.8% 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 $34,251 (160.2%) for the three months ended September 30, 2004
as compared to the three months ended September 30, 2003. This increase
was primarily due to one significant well being fully depleted during the
three months ended September 30, 2004 due to the lack of remaining
reserves. As a percentage of oil and gas sales, this expense increased to
14.6% for the three months ended September 30, 2004 from 7.1% for the
three months ended September 30, 2003. This percentage increase was
primarily due to the dollar increase in depreciation, depletion, and
amortization of oil and gas properties.
General and administrative expenses decreased $1,725 (6.2%) 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 6.8% for the three months ended September 30, 2004 from 9.3%
for the three months ended September 30, 2003. This percentage decrease
was primarily due to the increase in oil and gas sales.
-79-
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 $1,129,619 $1,044,495
Oil and gas production expenses $ 213,320 $ 212,664
Barrels produced 9,384 9,557
Mcf produced 168,703 168,910
Average price/Bbl $ 34.58 $ 28.57
Average price/Mcf $ 4.77 $ 4.57
As shown in the table above, total oil and gas sales increased $85,124
(8.1%) for the nine months ended September 30, 2004 as compared to the
nine months ended September 30, 2003. Of this increase, approximately
$56,000 and $35,000, respectively, were related to increases in the
average prices of oil and gas sold. Volumes of oil and gas sold decreased
173 barrels and 207 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) remained relatively constant for the nine months ended
September 30, 2004 and 2003. Decreases in production expenses primarily
due to (i) workover expenses incurred on several wells during the nine
months ended September 30, 2003 and (ii) a decrease in lease operating
expenses associated with the decreases in volumes of oil and gas sold were
substantially offset by (i) workover expenses incurred on two significant
wells during the nine 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 decreased to 18.9% for
the nine months ended September 30, 2004 from 20.4% for the nine months
ended September 30, 2003.
Depreciation, depletion, and amortization of oil and gas properties
increased $27,115 (47.9%) for the nine months ended September 30, 2004 as
compared to the nine months ended September 30, 2003. This increase was
primarily due to one significant well being fully depleted during the nine
months ended September 30, 2004 due to the lack of remaining reserves,
which increase was partially offset by upward revisions in the estimates
of remaining oil and gas reserves since September 30, 2003. As a
percentage of oil and gas sales, this expense increased to 7.4% for the
nine months ended September 30, 2004 from 5.4% 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.
-80-
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 8.7% for the nine months ended
September 30, 2004 from 9.4% for the nine months ended September 30, 2003.
The Limited Partners have received cash distributions through September
30, 2004 totaling $11,962,364 or 130.44% 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 II-A Partnership.
31.2 Certification by Craig D. Loseke required by Rule
13a-14(a)/15d-14(a) for the II-A Partnership.
31.3 Certification by Dennis R. Neill required by Rule
13a-14(a)/15d-14(a) for the II-B Partnership.
31.4 Certification by Craig D. Loseke required by Rule
13a-14(a)/15d-14(a) for the II-B Partnership.
31.5 Certification by Dennis R. Neill required by Rule
13a-14(a)/15d-14(a) for the II-C Partnership.
31.6 Certification by Craig D. Loseke required by Rule
13a-14(a)/15d-14(a) for the II-C Partnership.
31.7 Certification by Dennis R. Neill required by Rule
13a-14(a)/15d-14(a) for the II-D Partnership.
31.8 Certification by Craig D. Loseke required by Rule
13a-14(a)/15d-14(a) for the II-D Partnership.
31.9 Certification by Dennis R. Neill required by Rule
13a-14(a)/15d-14(a) for the II-E Partnership.
31.10 Certification by Craig D. Loseke required by Rule
13a-14(a)/15d-14(a) for the II-E Partnership.
31.11 Certification by Dennis R. Neill required by Rule
13a-14(a)/15d-14(a) for the II-F Partnership.
31.12 Certification by Craig D. Loseke required by Rule
13a-14(a)/15d-14(a) for the II-F Partnership.
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31.13 Certification by Dennis R. Neill required by Rule
13a-14(a)/15d-14(a) for the II-G Partnership.
31.14 Certification by Craig D. Loseke required by Rule
13a-14(a)/15d-14(a) for the II-G Partnership.
31.15 Certification by Dennis R. Neill required by Rule
13a-14(a)/15d-14(a) for the II-H Partnership.
31.16 Certification by Craig D. Loseke required by Rule
13a-14(a)/15d-14(a) for the II-H Partnership.
32.1 Certification pursuant to 18 U.S.C. Section 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 for the
II-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
II-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
II-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
II-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
II-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
II-F Partnership.
32.7 Certification pursuant to 18 U.S.C. Section 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 for the
II-G Partnership.
32.8 Certification pursuant to 18 U.S.C. Section 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 for the
II-H Partnership.
-84-
(b) Reports on Form 8-K.
None.
-85-
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 II-A
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP II-B
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP II-C
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP II-D
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP II-E
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP II-F
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP II-G
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP II-H
(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
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 II-A.
31.2 Certification by Craig D. Loseke required by Rule 13a-14(a)/15d-14(a) for
the Geodyne Energy Income Limited Partnership II-A.
31.3 Certification by Dennis R. Neill required by Rule 13a-14(a)/15d-14(a) for
the Geodyne Energy Income Limited Partnership II-B.
31.4 Certification by Craig D. Loseke required by Rule 13a-14(a)/15d-14(a) for
the Geodyne Energy Income Limited Partnership II-B.
31.5 Certification by Dennis R. Neill required by Rule 13a-14(a)/15d-14(a) for
the Geodyne Energy Income Limited Partnership II-C.
31.6 Certification by Craig D. Loseke required by Rule 13a-14(a)/15d-14(a) for
the Geodyne Energy Income Limited Partnership II-C.
31.7 Certification by Dennis R. Neill required by Rule 13a-14(a)/15d-14(a) for
the Geodyne Energy Income Limited Partnership II-D.
31.8 Certification by Craig D. Loseke required by Rule 13a-14(a)/15d-14(a) for
the Geodyne Energy Income Limited Partnership II-D.
31.9 Certification by Dennis R. Neill required by Rule 13a-14(a)/15d-14(a) for
the Geodyne Energy Income Limited Partnership II-E.
31.10 Certification by Craig D. Loseke required by Rule 13a-14(a)/15d-14(a) for
the Geodyne Energy Income Limited Partnership II-E.
31.11 Certification by Dennis R. Neill required by Rule 13a-14(a)/15d-14(a) for
the Geodyne Energy Income Limited Partnership II-F.
31.12 Certification by Craig D. Loseke required by Rule 13a-14(a)/15d-14(a) for
the Geodyne Energy Income Limited Partnership II-F.
-86-
31.13 Certification by Dennis R. Neill required by Rule 13a-14(a)/15d-14(a) for
the Geodyne Energy Income Limited Partnership II-G.
31.14 Certification by Craig D. Loseke required by Rule 13a-14(a)/15d-14(a) for
the Geodyne Energy Income Limited Partnership II-G.
31.15 Certification by Dennis R. Neill required by Rule 13a-14(a)/15d-14(a) for
the Geodyne Energy Income Limited Partnership II-H.
31.16 Certification by Craig D. Loseke required by Rule 13a-14(a)/15d-14(a) for
the Geodyne Energy Income Limited Partnership II-H.
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 II-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 II-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 II-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 II-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 II-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 II-F.
32.7 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 II-G.
32.8 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 II-H.