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 March 31, 2005
Commission File Number:
P-1: 0-17800 P-4: 0-18308 P-6: 0-18937
P-3: 0-18306 P-5: 0-18637
GEODYNE INSTITUTIONAL/PENSION ENERGY INCOME P-1 LIMITED PARTNERSHIP
GEODYNE INSTITUTIONAL/PENSION ENERGY INCOME LIMITED PARTNERSHIP P-3
GEODYNE INSTITUTIONAL/PENSION ENERGY INCOME LIMITED PARTNERSHIP P-4
GEODYNE INSTITUTIONAL/PENSION ENERGY INCOME LIMITED PARTNERSHIP P-5
GEODYNE INSTITUTIONAL/PENSION ENERGY INCOME LIMITED PARTNERSHIP P-6
--------------------------------------------------------------------
(Exact Name of Registrant as specified in its Articles)
P-1 73-1330245
P-3 73-1336573
P-1: Texas P-4 73-1341929
P-3 through P-6: P-5 73-1353774
Oklahoma P-6 73-1357375
---------------------------- -------------------------------
(State or other jurisdiction (I.R.S. Employer Identification
of incorporation or Number)
organization)
Two West Second Street, Tulsa, Oklahoma 74103
------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code:(918) 583-1791
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes X No
------ ------
Indicate by check mark whether the registrant is an accelerated filer (as
defined in Rule 12b-2 of the Exchange Act).
Yes No X
------ ------
-1-
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
GEODYNE INSTITUTIONAL/PENSION ENERGY INCOME P-1 LIMITED PARTNERSHIP
GEODYNE NPI PARTNERSHIP P-1
COMBINED BALANCE SHEETS
(Unaudited)
ASSETS
March 31, December 31,
2005 2004
------------- ------------
CURRENT ASSETS:
Cash and cash equivalents $ 426,838 $ 448,368
Accounts receivable:
Net Profits 252,967 77,602
---------- ----------
Total current assets $ 679,805 $ 525,970
NET PROFITS INTERESTS, net, utilizing
the successful efforts method 682,094 693,128
---------- ----------
$1,361,899 $1,219,098
========== ==========
PARTNERS' CAPITAL (DEFICIT)
PARTNERS' CAPITAL (DEFICIT):
General Partner ($ 53,208) ($ 64,846)
Limited Partners, issued and
outstanding, 108,074 units 1,415,107 1,283,944
---------- ----------
Total Partners' capital $1,361,899 $1,219,098
========== ==========
The accompanying condensed notes are an integral part of
these combined financial statements.
-2-
GEODYNE INSTITUTIONAL/PENSION ENERGY INCOME P-1 LIMITED PARTNERSHIP
GEODYNE NPI PARTNERSHIP P-1
COMBINED STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED MARCH 31, 2005 AND 2004
(Unaudited)
2005 2004
-------- --------
REVENUES:
Net Profits $549,447 $418,377
Interest income 1,565 410
Gain on sale of Net Profits
Interests - 525
-------- --------
$551,012 $419,312
COSTS AND EXPENSES:
Depletion of Net Profits
Interests $ 15,428 $ 18,698
General and administrative
(Note 2) 51,812 36,431
-------- --------
$ 67,240 $ 55,129
-------- --------
NET INCOME $483,772 $364,183
======== ========
GENERAL PARTNER - NET INCOME $ 49,609 $ 38,060
======== ========
LIMITED PARTNERS - NET INCOME $434,163 $326,123
======== ========
NET INCOME per unit $ 4.02 $ 3.02
======== ========
UNITS OUTSTANDING 108,074 108,074
======== ========
The accompanying condensed notes are an integral part of
these combined financial statements.
-3-
GEODYNE INSTITUTIONAL/PENSION ENERGY INCOME P-1 LIMITED PARTNERSHIP
GEODYNE NPI PARTNERSHIP P-1
COMBINED STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS ENDED MARCH 31, 2005 AND 2004
(Unaudited)
2005 2004
---------- ----------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $483,772 $364,183
Adjustments to reconcile net income
to net cash provided by operating
activities:
Depletion of Net Profits
Interests 15,428 18,698
Gain on sale of Net Profits
Interests - ( 525)
Increase in accounts receivable -
Net Profits ( 172,932) ( 49,447)
-------- --------
Net cash provided by operating
activities $326,268 $332,909
-------- --------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures ($ 6,827) $ -
Proceeds from the sale of Net
Profits Interests - 396
-------- --------
Net cash provided (used) by investing
activities ($ 6,827) $ 396
-------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Cash distributions ($340,971) ($315,205)
-------- --------
Net cash used by financing
activities ($340,971) ($315,205)
-------- --------
NET INCREASE (DECREASE) IN CASH AND
CASH EQUIVALENTS ($ 21,530) $ 18,100
CASH AND CASH EQUIVALENTS AT
BEGINNING OF PERIOD 448,368 399,580
-------- --------
CASH AND CASH EQUIVALENTS AT
END OF PERIOD $426,838 $417,680
======== ========
The accompanying condensed notes are an integral part of
these combined financial statements.
-4-
GEODYNE INSTITUTIONAL/PENSION ENERGY INCOME LIMITED PARTNERSHIP P-3
GEODYNE NPI PARTNERSHIP P-3
COMBINED BALANCE SHEETS
(Unaudited)
ASSETS
March 31, December 31,
2005 2004
------------- ------------
CURRENT ASSETS:
Cash and cash equivalents $ 627,769 $ 633,196
Accounts receivable:
Net Profits 383,658 130,416
---------- ----------
Total current assets $1,011,427 $ 763,612
NET PROFITS INTERESTS, net, utilizing
the successful efforts method 1,048,919 1,071,849
---------- ----------
$2,060,346 $1,835,461
========== ==========
PARTNERS' CAPITAL (DEFICIT)
PARTNERS' CAPITAL (DEFICIT):
General Partner ($ 36,727) ($ 53,429)
Limited Partners, issued and
outstanding, 169,637 units 2,097,073 1,888,890
---------- ----------
Total Partners' capital $2,060,346 $1,835,461
========== ==========
The accompanying condensed notes are an integral part of
these combined financial statements.
-5-
GEODYNE INSTITUTIONAL/PENSION ENERGY INCOME LIMITED PARTNERSHIP P-3
GEODYNE NPI PARTNERSHIP P-3
COMBINED STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED MARCH 31, 2005 AND 2004
(Unaudited)
2005 2004
-------- --------
REVENUES:
Net Profits $787,556 $621,114
Interest income 2,260 647
Gain on sale of Net Profits
Interests - 1,049
-------- --------
$789,816 $622,810
COSTS AND EXPENSES:
Depletion of Net Profits
Interests $ 28,226 $ 29,394
General and administrative
(Note 2) 68,815 53,795
-------- --------
$ 97,041 $ 83,189
-------- --------
NET INCOME $692,775 $539,621
======== ========
GENERAL PARTNER - NET INCOME $ 71,592 $ 56,543
======== ========
LIMITED PARTNERS - NET INCOME $621,183 $483,078
======== ========
NET INCOME per unit $ 3.66 $ 2.85
======== ========
UNITS OUTSTANDING 169,637 169,637
======== ========
The accompanying condensed notes are an integral part of
these combined financial statements.
-6-
GEODYNE INSTITUTIONAL/PENSION ENERGY INCOME LIMITED PARTNERSHIP P-3
GEODYNE NPI PARTNERSHIP P-3
COMBINED STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS ENDED MARCH 31, 2005 AND 2004
(Unaudited)
2005 2004
---------- ----------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $692,775 $539,621
Adjustments to reconcile net income
to net cash provided by operating
activities:
Depletion of Net Profits
Interests 28,226 29,394
Gain on sale of Net Profits
Interests - ( 1,049)
Increase in accounts receivable -
Net Profits ( 245,536) ( 69,180)
-------- --------
Net cash provided by operating
activities $475,465 $498,786
-------- --------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures ($ 13,002) $ -
Proceeds from the sale of Net
Profits Interests - 885
-------- --------
Net cash provided (used) by investing
activities ($ 13,002) $ 885
-------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Cash distributions ($467,890) ($445,789)
-------- --------
Net cash used by financing
activities ($467,890) ($445,789)
-------- --------
NET INCREASE (DECREASE) IN CASH AND
CASH EQUIVALENTS ($ 5,427) $ 53,882
CASH AND CASH EQUIVALENTS AT
BEGINNING OF PERIOD 633,196 581,527
-------- --------
CASH AND CASH EQUIVALENTS AT
END OF PERIOD $627,769 $635,409
======== ========
The accompanying condensed notes are an integral part of
these combined financial statements.
-7-
GEODYNE INSTITUTIONAL/PENSION ENERGY INCOME LIMITED PARTNERSHIP P-4
GEODYNE NPI PARTNERSHIP P-4
COMBINED BALANCE SHEETS
(Unaudited)
ASSETS
March 31, December 31,
2005 2004
------------ ------------
CURRENT ASSETS:
Cash and cash equivalents $ 486,663 $ 510,213
Accounts receivable:
Net Profits 215,363 281,672
---------- ----------
Total current assets $ 702,026 $ 791,885
NET PROFITS INTERESTS, net, utilizing
the successful efforts method 386,468 394,957
---------- ----------
$1,088,494 $1,186,842
========== ==========
PARTNERS' CAPITAL (DEFICIT)
PARTNERS' CAPITAL (DEFICIT):
General Partner ($ 68,123) ($ 57,646)
Limited Partners, issued and
outstanding, 126,306 units 1,156,617 1,244,488
---------- ----------
Total Partners' capital $1,088,494 $1,186,842
========== ==========
The accompanying condensed notes are an integral part of
these combined financial statements.
-8-
GEODYNE INSTITUTIONAL/PENSION ENERGY INCOME LIMITED PARTNERSHIP P-4
GEODYNE NPI PARTNERSHIP P-4
COMBINED STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED MARCH 31, 2005 AND 2004
(Unaudited)
2005 2004
-------- --------
REVENUES:
Net Profits $345,627 $400,259
Interest income 1,859 449
Gain on sale of Net Profits
Interests - 962
-------- --------
$347,486 $401,670
COSTS AND EXPENSES:
Depletion of Net Profits
Interests $ 11,750 $ 34,202
General and administrative
(Note 2) 56,846 40,640
-------- --------
$ 68,596 $ 74,842
-------- --------
NET INCOME $278,890 $326,828
======== ========
GENERAL PARTNER - NET INCOME $ 28,761 $ 35,716
======== ========
LIMITED PARTNERS - NET INCOME $250,129 $291,112
======== ========
NET INCOME per unit $ 1.98 $ 2.30
======== ========
UNITS OUTSTANDING 126,306 126,306
======== ========
The accompanying condensed notes are an integral part of
these combined financial statements.
-9-
GEODYNE INSTITUTIONAL/PENSION ENERGY INCOME LIMITED PARTNERSHIP P-4
GEODYNE NPI PARTNERSHIP P-4
COMBINED STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS ENDED MARCH 31, 2005 AND 2004
(Unaudited)
2005 2004
---------- ----------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $278,890 $326,828
Adjustments to reconcile net income
to net cash provided by operating
activities:
Depletion of Net Profits
Interests 11,750 34,202
Gain on sale of Net Profits
Interests - ( 962)
Settlement of asset retirement
obligation - ( 77)
(Increase) decrease in accounts
receivable - Net Profits 67,776 ( 25,112)
-------- --------
Net cash provided by operating
activities $358,416 $334,879
-------- --------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures ($ 4,728) ($ 11,310)
Proceeds from sale of Net Profits
Interests - 948
-------- --------
Net cash used by investing
activities ($ 4,728) ($ 10,362)
-------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Cash distributions ($377,238) ($269,104)
-------- --------
Net cash used by financing
activities ($377,238) ($269,104)
-------- --------
NET INCREASE (DECREASE) IN CASH AND
CASH EQUIVALENTS ($ 23,550) $ 55,413
CASH AND CASH EQUIVALENTS AT
BEGINNING OF PERIOD 510,213 399,864
-------- --------
CASH AND CASH EQUIVALENTS AT
END OF PERIOD $486,663 $455,277
======== ========
The accompanying condensed notes are an integral part of
these combined financial statements.
-10-
GEODYNE INSTITUTIONAL/PENSION ENERGY INCOME LIMITED PARTNERSHIP P-5
GEODYNE NPI PARTNERSHIP P-5
COMBINED BALANCE SHEETS
(Unaudited)
ASSETS
March 31, December 31,
2005 2004
------------- ------------
CURRENT ASSETS:
Cash and cash equivalents $ 447,753 $ 393,840
Accounts receivable:
Net Profits 18,295 37,416
---------- ----------
Total current assets $ 466,048 $ 431,256
NET PROFITS INTERESTS, net, utilizing
the successful efforts method 608,214 600,879
---------- ----------
$1,074,262 $1,032,135
========== ==========
PARTNERS' CAPITAL (DEFICIT)
PARTNERS' CAPITAL (DEFICIT):
General Partner ($ 54,495) ($ 48,512)
Limited Partners, issued and
outstanding, 118,449 units 1,128,757 1,080,647
---------- ----------
Total Partners' capital $1,074,262 $1,032,135
========== ==========
The accompanying condensed notes are an integral part of
these combined financial statements.
-11-
GEODYNE INSTITUTIONAL/PENSION ENERGY INCOME LIMITED PARTNERSHIP P-5
GEODYNE NPI PARTNERSHIP P-5
COMBINED STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED MARCH 31, 2005 AND 2004
(Unaudited)
2005 2004
-------- --------
REVENUES:
Net Profits $376,868 $314,999
Interest income 1,390 394
Gain on sale of Net Profits
Interests - 117
Other income 1,464 -
-------- --------
$379,722 $315,510
COSTS AND EXPENSES:
Depletion of Net Profits
Interests $ 30,001 $ 30,380
General and administrative
(Note 2) 54,677 38,426
-------- --------
$ 84,678 $ 68,806
-------- --------
NET INCOME $295,044 $246,704
======== ========
GENERAL PARTNER - NET INCOME $ 31,934 $ 27,365
======== ========
LIMITED PARTNERS - NET INCOME $263,110 $219,339
======== ========
NET INCOME per unit $ 2.22 $ 1.85
======== ========
UNITS OUTSTANDING 118,449 118,449
======== ========
The accompanying condensed notes are an integral part of
these combined financial statements.
-12-
GEODYNE INSTITUTIONAL/PENSION ENERGY INCOME LIMITED PARTNERSHIP P-5
GEODYNE NPI PARTNERSHIP P-5
COMBINED STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS ENDED MARCH 31, 2005 AND 2004
(Unaudited)
2005 2004
---------- ----------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $295,044 $246,704
Adjustments to reconcile net income
to net cash provided by operating
activities:
Depletion of Net Profits
Interests 30,001 30,380
Gain on sale of Net Profits
Interests - ( 117)
Increase in accounts receivable -
Net Profits ( 176) ( 33,774)
-------- --------
Net cash provided by operating
activities $324,869 $243,193
-------- --------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures ($ 18,039) ($ 11,615)
Proceeds from the sale of Net
Profits Interests - 117
-------- --------
Net cash used by investing activities ($ 18,039) ($ 11,498)
-------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Cash distributions ($252,917) ($219,906)
-------- --------
Net cash used by financing
activities ($252,917) ($219,906)
-------- --------
NET INCREASE IN CASH AND CASH
EQUIVALENTS $ 53,913 $ 11,789
CASH AND CASH EQUIVALENTS AT
BEGINNING OF PERIOD 393,840 337,494
-------- --------
CASH AND CASH EQUIVALENTS AT
END OF PERIOD $447,753 $349,283
======== ========
The accompanying condensed notes are an integral part of
these combined financial statements.
-13-
GEODYNE INSTITUTIONAL/PENSION ENERGY INCOME LIMITED PARTNERSHIP P-6
GEODYNE NPI PARTNERSHIP P-6
COMBINED BALANCE SHEETS
(Unaudited)
ASSETS
March 31, December 31,
2005 2004
------------- ------------
CURRENT ASSETS:
Cash and cash equivalents $ 695,363 $ 469,272
---------- ----------
Total current assets $ 695,363 $ 469,272
NET PROFITS INTERESTS, net, utilizing
the successful efforts method 1,156,679 1,171,095
---------- ----------
$1,852,042 $1,640,367
========== ==========
LIABILITIES AND PARTNERS' CAPITAL (DEFICIT)
CURRENT LIABILITIES:
Accounts payable:
Net Profits $ 43,053 $ 26,403
---------- ----------
Total current liabilities $ 43,053 $ 26,403
PARTNERS' CAPITAL (DEFICIT):
General Partner ($ 62,715) ($ 52,148)
Limited Partners, issued and
outstanding, 143,041 units 1,871,704 1,666,112
---------- ----------
Total Partners' capital $1,808,989 $1,613,964
---------- ----------
$1,852,042 $1,640,367
========== ==========
TThe accompanying condensed notes are an integral part of
these combined financial statements.
-14-
GEODYNE INSTITUTIONAL/PENSION ENERGY INCOME LIMITED PARTNERSHIP P-6
GEODYNE NPI PARTNERSHIP P-6
COMBINED STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED MARCH 31, 2005 AND 2004
(Unaudited)
2005 2004
-------- --------
REVENUES:
Net Profits $589,533 $538,885
Interest income 1,499 642
Gain on sale of Net Profits
Interests - 41
Other income 503 -
-------- --------
$591,535 $539,568
COSTS AND EXPENSES:
Depletion of Net Profits
Interests $ 28,953 $ 36,087
General and administrative
(Note 2) 61,468 45,360
-------- --------
$ 90,421 $ 81,447
-------- --------
NET INCOME $501,114 $458,121
======== ========
GENERAL PARTNER - NET INCOME $ 52,522 $ 48,996
======== ========
LIMITED PARTNERS - NET INCOME $448,592 $409,125
======== ========
NET INCOME per unit $ 3.14 $ 2.86
======== ========
UNITS OUTSTANDING 143,041 143,041
======== ========
The accompanying condensed notes are an integral part of
these combined financial statements.
-15-
GEODYNE INSTITUTIONAL/PENSION ENERGY INCOME LIMITED PARTNERSHIP P-6
GEODYNE NPI PARTNERSHIP P-6
COMBINED STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS ENDED MARCH 31, 2005 AND 2004
(Unaudited)
2005 2004
---------- ----------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $501,114 $458,121
Adjustments to reconcile net income
to net cash provided by operating
activities:
Depletion of Net Profits
Interests 28,953 36,087
Gain on sale of Net Profits
Interests - ( 41)
Net change in accounts receivable
(accounts payable) - Net
Profits 8,103 ( 63,650)
-------- --------
Net cash provided by operating
activities $538,170 $430,517
-------- --------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures ($ 5,990) ($ 3,991)
Proceeds from sale of Net Profits
Interests - 41
-------- --------
Net cash used by investing
activities ($ 5,990) ($ 3,950)
-------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Cash distributions ($306,089) ($436,880)
-------- --------
Net cash used by financing
activities ($306,089) ($436,880)
-------- --------
NET INCREASE (DECREASE) IN CASH AND
CASH EQUIVALENTS $226,091 ($ 10,313)
CASH AND CASH EQUIVALENTS AT
BEGINNING OF PERIOD 469,272 567,735
-------- --------
CASH AND CASH EQUIVALENTS AT
END OF PERIOD $695,363 $557,422
======== ========
The accompanying condensed notes are an integral part of
these combined financial statements..
-16-
GEODYNE INSTITUTIONAL/PENSION ENERGY INCOME LIMITED PARTNERSHIPS
CONDENSED NOTES TO THE COMBINED FINANCIAL STATEMENTS
MARCH 31, 2005
(Unaudited)
1. ACCOUNTING POLICIES
-------------------
The combined balance sheets as of March 31, 2005, combined statements of
operations for the three months ended March 31, 2005 and 2004, and
combined statements of cash flows for the three months ended March 31,
2005 and 2004 have been prepared by Geodyne Resources, Inc., the General
Partner of the Geodyne Institutional/Pension Energy Income Limited
Partnerships, without audit. Each limited partnership is a general partner
in the related Geodyne NPI Partnership (the "NPI Partnerships") in which
Geodyne Resources, Inc. serves as the managing partner. For the purposes
of these financial statements, the general partner and managing partner
are collectively referred to as the "General Partner" and the limited
partnerships and NPI Partnerships are collectively referred to as the
"Partnerships". In the opinion of management the financial statements
referred to above include all necessary adjustments, consisting of normal
recurring adjustments, to present fairly the combined financial position
at March 31, 2005, the combined results of operations for the three months
ended March 31, 2005 and 2004, and the combined cash flows for the three
months ended March 31, 2005 and 2004.
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, 2004. The
results of operations for the period ended March 31, 2005 are not
necessarily indicative of the results to be expected for the full year.
As used in these financial statements, the Partnerships' net profits and
royalty interests in oil and gas sales are referred to as "Net Profits"
and the Partnerships' net profits and royalty interests in oil and gas
properties are referred to as "Net Profits Interests". The working
interests from which the Partnerships' Net Profits Interests are carved
are referred to as "Working Interests".
The Limited Partners' net income or loss per unit is based upon each $100
initial capital contribution.
-17-
NET PROFITS INTERESTS
---------------------
The Partnerships follow the successful efforts method of accounting for
their Net Profits Interests. Under the successful efforts method, the NPI
Partnerships capitalize all acquisition costs. Property acquisition costs
include costs incurred by the Partnerships or the General Partner to
acquire producing properties, including related title insurance or
examination costs, commissions, engineering, legal and accounting fees,
and similar costs directly related to the acquisitions, plus an allocated
portion, of the General Partner's property screening costs. The
acquisition cost to the NPI Partnership of Net Profits Interests acquired
by the General Partner is adjusted to reflect the net cash results of
operations, including interest incurred to finance the acquisition, for
the period of time the properties are held by the General Partner prior to
their transfer to the Partnerships.
Depletion of the costs of Net Profits Interests is computed on the
unit-of-production method. The Partnerships' calculation of depletion of
its Net Profits Interests includes estimated dismantlement and abandonment
costs and estimated salvage value of the equipment.
The Partnerships do not directly bear capital costs. However, the
Partnerships indirectly bear certain capital costs incurred by the owners
of the Working Interests to the extent such capital costs are charged
against the applicable oil and gas revenues in calculating the Net Profits
payable to the Partnerships. For financial reporting purposes only, such
capital costs are reported as capital expenditures in the Partnerships'
Statements of Cash Flows.
ASSET RETIREMENT OBLIGATIONS
----------------------------
The Partnerships' wells must be properly plugged and abandoned after their
oil and gas reserves are exhausted. The Partnerships follow FAS No. 143,
"Accounting for Asset Retirement Obligations" in accounting for the future
expenditures that will be necessary to plug and abandon these wells. FAS
No. 143 requires the estimated plugging and abandonment obligations to be
recognized in the period in which they are incurred (i.e. when the well is
drilled or acquired) if a reasonable estimate of fair value can be made
and to be capitalized as part of the carrying amount of the well.
-18-
The asset retirement obligation will be adjusted upwards each quarter in
order to recognize accretion of the time-related discount factor. For the
three months ended March 31, 2005, the P-1, P-3, P-4, P-5, and P-6
Partnerships recognized approximately $1,000, $1,000, $1,000, $1,000, and
$2,000 of an increase in depletion of Net Profits Interests, which was
comprised of accretion of the asset retirement obligation and depletion of
the increase in Net Profits Interests.
The components of the change in asset retirement obligations for the three
months ended March 31, 2005 and 2004 are as shown below.
P-1 Partnership
---------------
Three months Three months
Ended Ended
3/31/2005 3/31/2004
------------ ------------
Total Asset Retirement
Obligation, January 1 $ 58,753 $ 56,388
Additions and revisions 229 -
Accretion expense 690 623
-------- --------
Total Asset Retirement
Obligation, End of Quarter $ 59,672 $ 57,011
======== ========
P-3 Partnership
---------------
Three months Three months
Ended Ended
3/31/2005 3/31/2004
------------ ------------
Total Asset Retirement
Obligation, January 1 $ 99,718 $95,666
Additions and revisions 295 -
Accretion expense 1,145 1,029
-------- -------
Total Asset Retirement
Obligation, End of Quarter $101,158 $96,695
======== =======
-19-
P-4 Partnership
---------------
Three months Three months
Ended Ended
3/31/2005 3/31/2004
------------ ------------
Total Asset Retirement
Obligation, January 1 $ 56,920 $ 56,632
Settlements and disposals - ( 2,277)
Accretion expense 574 451
-------- --------
Total Asset Retirement
Obligation, End of Quarter $ 57,494 $ 54,806
======== ========
P-5 Partnership
---------------
Three months Three months
Ended Ended
3/31/2005 3/31/2004
------------ ------------
Total Asset Retirement
Obligation, January 1 $ 76,681 $ 72,299
Additions and revisions 911 1,332
Accretion expense 788 604
-------- --------
Total Asset Retirement
Obligation, End of Quarter $ 78,380 $ 74,235
======== ========
P-6 Partnership
---------------
Three months Three months
Ended Ended
3/31/2005 3/31/2004
------------ ------------
Total Asset Retirement
Obligation, January 1 $208,086 $206,661
Additions and revisions 318 279
Accretion expense 1,924 1,384
-------- --------
Total Asset Retirement
Obligation, End of Quarter $210,328 $208,324
======== ========
-20-
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 March 31, 2005, the following payments were made to the General
Partner or its affiliates by the Partnerships:
Direct General Administrative
Partnership and Administrative Overhead
----------- ------------------ --------------
P-1 $23,372 $28,440
P-3 24,175 44,640
P-4 23,606 33,240
P-5 23,507 31,170
P-6 23,827 37,641
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.
-21-
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
USE OF FORWARD-LOOKING STATEMENTS AND ESTIMATES
-----------------------------------------------
This Quarterly Report contains certain forward-looking statements. The
words "anticipate", "believe", "expect", "plan", "intend", "estimate",
"project", "could", "may" and similar expressions are intended to identify
forward-looking statements. Such statements reflect management's current
views with respect to future events and financial performance. This
Quarterly Report also includes certain information, which is, or is based
upon, estimates and assumptions. Such estimates and assumptions are
management's efforts to accurately reflect the condition and operation of
the Partnerships.
Use of forward-looking statements and estimates and assumptions involve
risks and uncertainties which include, but are not limited to, the
volatility of oil and gas prices, the uncertainty of reserve information,
the operating risk associated with oil and gas properties (including the
risk of personal injury, death, property damage, damage to the well or
producing reservoir, environmental contamination, and other operating
risks), the prospect of changing tax and regulatory laws, the availability
and capacity of processing and transportation facilities, the general
economic climate, the supply and price of foreign imports of oil and gas,
the level of consumer product demand, and the price and availability of
alternative fuels. Should one or more of these risks or uncertainties
occur or should estimates or underlying assumptions prove incorrect,
actual conditions or results may vary materially and adversely from those
stated, anticipated, believed, estimated, and otherwise indicated.
GENERAL
-------
The Partnerships are engaged in the business of acquiring Net Profits
Interests in producing oil and gas properties located in the continental
United States. In general, a Partnership acquired passive interests in
producing properties and does not directly engage in development drilling
or enhanced recovery projects. Therefore, the economic life of each
limited partnership, and its related NPI Partnership, is limited to the
period of time required to fully produce its acquired oil and gas
reserves. A Net Profits Interest entitles the Partnerships to a portion of
the oil and gas sales less operating and production expenses and
development costs generated by the owner of the underlying Working
Interests. The net proceeds from the oil and gas operations are
distributed to the Limited Partners
-22-
and the General Partner in accordance with the terms of the Partnerships'
partnership agreements.
LIQUIDITY AND CAPITAL RESOURCES
-------------------------------
The Partnerships began operations and investors were assigned their rights
as Limited Partners, having made capital contributions in the amounts and
on the dates set forth below:
limited
Date of Partner Capital
Partnership Activation Contributions
----------- ----------------- ---------------
P-1 October 25, 1988 $10,807,400
P-3 May 10, 1989 16,963,700
P-4 November 21, 1989 12,630,600
P-5 February 27, 1990 11,844,900
P-6 September 5, 1990 14,304,100
In general, the amount of funds available for acquisition of producing
properties was equal to the capital contributions of the Limited Partners,
less 15% for sales commissions and organization and management fees. All
of the Partnerships have fully invested their capital contributions.
Net proceeds from the Partnerships' Net Profits Interests less necessary
operating capital are distributed to the Limited Partners on a quarterly
basis. Revenues and net proceeds of a Partnership are largely dependent
upon the volumes of oil and gas sold and the prices received for such oil
and gas. While the General Partner cannot predict future pricing trends,
it believes the working capital available as of March 31, 2005 and the net
revenue generated from future operations will provide sufficient working
capital to meet current and future obligations.
Occasional expenditures by the owners of the Working Interests for new
wells or well recompletions or workovers, however, may reduce or eliminate
cash available for a particular quarterly cash distribution.
The Partnerships' termination date under the partnership agreements is
December 31, 2005. The General Partner may extend the terms of the
Partnerships for up to five two-year extension periods. The General
Partner has not yet determined whether it will extend the terms of any
Partnership.
-23-
CRITICAL ACCOUNTING POLICIES
----------------------------
The Partnerships follow the successful efforts method of accounting for
their Net Profits Interests. Under the successful efforts method, the
Partnerships capitalize all acquisition costs. Such acquisition costs
include costs incurred by the Partnerships or the General Partner to
acquire a Net Profits Interest, including related title insurance or
examination costs, commissions, engineering, legal and accounting fees,
and similar costs directly related to the acquisitions plus an allocated
portion of the General Partner's property screening costs. The net
acquisition cost to the Partnerships of the Net Profits Interests in
properties acquired by the General Partner consists of the cost of
acquiring the underlying properties adjusted for the net cash results of
operations, including any interest incurred to finance the acquisition,
for the period of time the properties are held by the General Partner.
Depletion of the cost of Net Profits Interests is computed on the
unit-of-production method. The Partnerships' calculation of depletion of
their Net Profits Interests includes estimated dismantlement and
abandonment costs and estimated salvage value of the equipment.
The Partnerships evaluate the recoverability of the carrying costs of
their Net Profits Interests in proved oil and gas properties for each oil
and gas field (rather than separately for each well). If the unamortized
costs of a Net Profits Interest within a field exceeds the expected
undiscounted future cash flows from such Net Profits Interest, the cost of
the Net Profits Interest is written down to fair value, which is
determined by using the estimated discounted future cash flows from the
Net Profits Interest.
Accounts Receivable (Accounts Payable) - Net Profits
Revenues from a Net Profits Interest consist of a share of the oil and gas
sales of the property, less operating and production expenses. The
partnerships accrue for oil and gas revenues less expenses from the Net
Profits Interests. Sales of gas applicable to the Net Profits Interests
are recorded as revenue when the gas is metered and title transferred
pursuant to the gas sales contracts. During such times as sales of gas
exceed a Partnership's pro rata share of estimated total gas reserves
attributable to the underlying property, such excess is recorded as a
liability. The rates per Mcf used to calculate this liability are based on
the average gas price for which the Partnerships are currently settling
this liability. This liability is recorded as a reduction of accounts
receivable.
-24-
Also included in accounts receivable (payable) - Net Profits are amounts
which represent costs deferred or accrued for Net Profits relating to
lease operating expenses incurred in connection with the net underproduced
or overproduced gas imbalance positions. The rate used in calculating the
deferred charge or accrued liability is the annual average production
costs per Mcf. Also included in accounts receivable (payable) - Net
Profits is the asset retirement obligation.
ASSET RETIREMENT OBLIGATIONS
----------------------------
The Partnerships' wells must be properly plugged and abandoned after their
oil and gas reserves are exhausted. The Partnerships follow FAS No. 143,
"Accounting for Asset Retirement Obligations" in accounting for the future
expenditures that will be necessary to plug and abandon these wells. FAS
No. 143 requires the estimated plugging and abandonment obligations to be
recognized in the period in which they are incurred (i.e. when the well is
drilled or acquired) if a reasonable estimate of fair value can be made
and to be capitalized as part of the carrying amount of the well.
NEW ACCOUNTING PRONOUNCEMENTS
-----------------------------
The Partnerships are not aware of any recently issued accounting
pronouncements that would have an impact on the Partnerships' future
results of operations and financial position.
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.
-25-
The following tables summarize changes in net quantities of the
Partnerships' proved reserves, all of which are located in the United
States, for the periods indicated. The proved reserves were estimated by
petroleum engineers employed by affiliates of the Partnerships, and are
annually reviewed by an independent engineering firm. "Proved reserves"
refers to those estimated quantities of crude oil, gas, and gas liquids
which geological and engineering data demonstrate with reasonable
certainty to be recoverable in future years from known oil and gas
reservoirs under existing economic and operating conditions. The following
information includes certain gas balancing adjustments which cause the gas
volume to differ from the reserve reports prepared by the General Partner.
P-1 Partnership
---------------
Crude Natural
Oil Gas
(Barrels) (Mcf)
--------- -----------
Proved reserves, Dec. 31, 2004 243,982 2,291,734
Production ( 4,945) ( 66,143)
Extension and discoveries 325 5,603
Revisions of previous
estimates 6,385 36,466
------- ---------
Proved reserves, March 31, 2005 245,747 2,267,660
======= =========
P-3 Partnership
---------------
Crude Natural
Oil Gas
(Barrels) (Mcf)
--------- -----------
Proved reserves, Dec. 31, 2004 320,365 3,610,109
Production ( 6,358) ( 100,852)
Extension and discoveries 408 7,295
Revisions of previous
estimates 8,133 61,510
------- ---------
Proved reserves, March 31, 2005 322,548 3,578,062
======= =========
-26-
P-4 Partnership
---------------
Crude Natural
Oil Gas
(Barrels) (Mcf)
--------- -----------
Proved reserves, Dec. 31, 2004 59,656 1,969,168
Production ( 3,857) ( 56,407)
Extensions and discoveries 362 5,946
Revisions of previous
estimates 1,573 35,147
------ ---------
Proved reserves, March 31, 2005 57,734 1,953,854
====== =========
P-5 Partnership
---------------
Crude Natural
Oil Gas
(Barrels) (Mcf)
--------- -----------
Proved reserves, Dec. 31, 2004 38,157 2,130,613
Production ( 1,287) ( 63,777)
Extensions and discoveries 25 44,460
Revisions of previous
estimates 4,114 45,712
------ ---------
Proved reserves, March 31, 2005 41,009 2,157,008
====== =========
P-6 Partnership
---------------
Crude Natural
Oil Gas
(Barrels) (Mcf)
--------- -----------
Proved reserves, Dec. 31, 2004 124,894 3,940,334
Production ( 3,024) ( 112,950)
Extension and discoveries 8 14,866
Revisions of previous
estimates 7,813 109,815
------- ---------
Proved reserves, March 31, 2005 129,691 3,952,065
======= =========
-27-
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 March 31, 2005 and December 31, 2004.
Net present value attributable to the Partnerships' proved reserves was
calculated on the basis of current costs and prices as of the date of
estimation. Such prices were not escalated except in certain circumstances
where escalations were fixed and readily determinable in accordance with
applicable contract provisions. The table also indicates the gas prices in
effect on the dates corresponding to the reserve valuations. Changes in
the oil and gas prices have caused the estimates of remaining economically
recoverable reserves, as well as the values placed on said reserves to
fluctuate. The prices used in calculating the net present value
attributable to the Partnerships' proved reserves do not necessarily
reflect market prices for oil and gas production subsequent to March 31,
2005. There can be no assurance that the prices used in calculating the
net present value of the Partnerships' proved reserves at March 31, 2005
will actually be realized for such production.
Net Present Value of Reserves
------------------------------------------------------
Partnership 3/31/05 12/31/04
----------- ----------- -----------
P-1 $10,488,767 $ 8,498,702
P-3 15,405,046 12,485,054
P-4 7,466,153 6,180,522
P-5 6,666,402 5,260,713
P-6 12,940,542 10,217,705
Oil and Gas Prices
-------------------------------------------------------
Pricing 3/31/05 12/31/04
----------- ----------- -----------
Oil (Bbl) $ 55.31 $ 43.36
Gas (Mcf) 7.17 6.02
-28-
RESULTS OF OPERATIONS
---------------------
GENERAL DISCUSSION
The following general discussion should be read in conjunction with the
analysis of results of operations provided below.
The primary source of liquidity and Partnership cash distributions comes
from the net revenues generated from the sale of oil and gas produced from
the Partnerships' oil and gas properties. The level of net revenues is
highly dependent upon the total volumes of oil and natural gas sold. Oil
and gas reserves are depleting assets and will experience production
declines over time, thereby likely resulting in reduced net revenues. The
level of net revenues is also highly dependent upon the prices received
for oil and gas sales, which prices have historically been very volatile
and may continue to be so.
Additionally, lower oil and natural gas prices may reduce the amount of
oil and gas that is economic to produce and reduce the Partnerships'
revenues and cash flow. Various factors beyond the Partnerships' control
will affect prices for oil and natural gas, such as:
* Worldwide and domestic supplies of oil and natural gas;
* The ability of the members of the Organization of Petroleum Exporting
Countries ("OPEC") to agree to and maintain oil prices and production
quotas;
* Political instability or armed conflict in oil-producing regions or
around major shipping areas;
* The level of consumer demand and overall economic activity;
* The competitiveness of alternative fuels;
* Weather conditions;
* The availability of pipelines for transportation; and
* Domestic and foreign government regulations and taxes.
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.
-29-
In addition to pricing, the level of net revenues is also 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. Despite this general
trend of declining production, several factors can cause the volumes of
oil and gas sold to increase or decrease at an even greater rate over a
given period. These factors include, but are not limited to, (i)
geophysical conditions which cause an acceleration of the decline in
production, (ii) the shutting in of wells (or the opening of previously
shut-in wells) due to low oil and gas prices (or high oil and gas prices),
mechanical difficulties, loss of a market or transportation, or
performance of workovers, recompletions, or other operations in the well,
(iii) prior period volume adjustments (either positive or negative) made
by the purchasers of the production, (iv) ownership adjustments in
accordance with agreements governing the operation or ownership of the
well (such as adjustments that occur at payout), and (v) completion of
enhanced recovery projects which increase production for the well. Many of
these factors are very significant as related to a single well or as
related to many wells over a short period of time. However, due to the
large number of wells owned by the Partnerships, these factors are
generally not material as compared to the normal declines in production
experienced on all remaining wells.
P-1 PARTNERSHIP
THREE MONTHS ENDED MARCH 31, 2005 COMPARED TO THE THREE MONTHS ENDED MARCH
31, 2004.
Three Months Ended March 31,
----------------------------
2005 2004
-------- --------
Net Profits $549,447 $418,377
Barrels produced 4,945 5,644
Mcf produced 66,143 76,701
Average price/Bbl $ 44.97 $ 30.66
Average price/Mcf $ 6.05 $ 4.35
As shown in the table above, total Net Profits increased $131,070 (31.3%)
for the three months ended March 31, 2005 as compared to the three months
ended March 31, 2004. Of this increase, approximately (i) $71,000 and
$112,000, respectively, were related to increases in the average prices of
oil and gas sold and (ii) $15,000 was related to a decrease in production
expenses. These increases were partially offset by decreases of
approximately $21,000 and $46,000, respectively, related to decreases in
volumes of oil and gas sold. Volumes of oil and gas sold decreased 699
barrels and 10,558 Mcf, respectively, for the three months ended March 31,
2005 as compared to the three months ended
-30-
March 31, 2004. The decrease in volumes of oil sold was primarily due to
(i) positive prior period volume adjustments made by the operators on
several wells during the three months ended March 31, 2004 and (ii) normal
declines in production. The decrease in volumes of gas sold was primarily
due to (i) normal declines in production and (ii) a positive prior period
volume adjustment made by the operator on one significant well during the
three months ended March 31, 2004. The decrease in production expenses was
primarily due to (i) the receipt of ad valorem tax credits on one
significant well during the three months ended March 31, 2005 and (ii)
workover expenses incurred on two significant wells during the three
months ended March 31, 2004. These decreases were partially offset by an
increase in production taxes associated with the increase in oil and gas
sales.
Depletion of Net Profits Interests decreased $3,270 (17.5%) for the three
months ended March 31, 2005 as compared to the three months ended March
31, 2004. 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 March 31, 2004. These decreases were
partially offset by an increase in depletable Net Profits Interests
primarily due to the developmental drilling of one significant well during
the three months ended March 31, 2005. As a percentage of Net Profits,
this expense decreased to 2.8% for the three months ended March 31, 2005
from 4.5% for the three months ended March 31, 2004. This percentage
decrease was primarily due to (i) the increases in the average prices of
oil and gas sold and (ii) the dollar decrease in depletion of Net Profits
Interests.
General and administrative expenses increased $15,381 for the three months
ended March 31, 2005 as compared to the three months ended March 31, 2004.
As a percentage of Net Profits, these expenses increased to 9.4% for the
three months ended March 31, 2005 from 8.7% for the three months ended
March 31, 2004.
Cumulative cash distributions to the Limited Partners through March 31,
2005 were $17,163,558 or 158.81% of Limited Partners' capital
contributions.
-31-
P-3 PARTNERSHIP
THREE MONTHS ENDED MARCH 31, 2005 COMPARED TO THE THREE MONTHS ENDED MARCH
31, 2004.
Three Months Ended March 31,
----------------------------
2005 2004
-------- --------
Net Profits $787,556 $621,114
Barrels produced 6,358 7,208
Mcf produced 100,852 118,733
Average price/Bbl $ 45.49 $ 30.70
Average price/Mcf $ 6.00 $ 4.49
As shown in the table above, total Net Profits increased $166,442 (26.8%)
for the three months ended March 31, 2005 as compared to the three months
ended March 31, 2004. Of this increase, approximately (i) $93,000 and
$152,000, respectively, were related to increases in the average prices of
oil and gas sold and (ii) $27,000 was related to a decrease in production
expenses. These increases were partially offset by decreases of
approximately $26,000 and $80,000, respectively, related to decreases in
volumes of oil and gas sold. Volumes of oil and gas sold decreased 850
barrels and 17,881 Mcf, respectively, for the three months ended March 31,
2005 as compared to the three months ended March 31, 2004. The decrease in
volumes of oil sold was primarily due to (i) positive prior period volume
adjustments made by the operators on several wells during the three months
ended March 31, 2004 and (ii) normal declines in production. The decrease
in volumes of gas sold was primarily due to (i) normal declines in
production and (ii) a positive prior period volume adjustment made by the
operator on one significant well during the three months ended March 31,
2004. The decrease in production expenses was primarily due to (i) the
receipt of ad valorem tax credits on one significant well during the three
months ended March 31, 2005 and (ii) workover expenses incurred on two
significant wells during the three months ended March 31, 2004. These
decreases were partially offset by (i) an increase in production taxes
associated with the increase in oil and gas sales and (ii) workover
expenses incurred on one significant well during the three months ended
March 31, 2005.
Depletion of Net Profits Interests decreased $1,168 (4.0%) for the three
months ended March 31, 2005 as compared to the three months ended March
31, 2004. This decrease was primarily due to the decreases in volumes of
oil and gas sold. This decrease was partially offset by an increase in
depletable Net Profits Interests primarily due to the developmental
drilling of one significant well during the three months ended March 31,
2005. As a percentage of Net Profits, this expense decreased to 3.6%
-32-
for the three months ended March 31, 2005 from 4.7% for the three months
ended March 31, 2004. This percentage decrease was primarily due to the
increases in the average prices of oil and gas sold.
General and administrative expenses increased $15,020 for the three months
ended March 31, 2005 as compared to the three months ended March 31, 2004.
As a percentage of Net Profits, these expenses remained constant at 8.7%
for the three months ended March 31, 2005 and 2004.
Cumulative cash distributions to the Limited Partners through March 31,
2005 were $23,967,401 or 141.29% of Limited Partners' capital
contributions.
P-4 PARTNERSHIP
THREE MONTHS ENDED MARCH 31, 2005 COMPARED TO THE THREE MONTHS ENDED MARCH
31, 2004.
Three Months Ended March 31,
----------------------------
2005 2004
-------- --------
Net Profits $345,627 $400,259
Barrels produced 3,857 4,775
Mcf produced 56,407 66,934
Average price/Bbl $ 45.35 $ 33.64
Average price/Mcf $ 6.14 $ 5.29
As shown in the table above, total Net Profits decreased $54,632 (13.6%)
for the three months ended March 31, 2005 as compared to the three months
ended March 31, 2004. Of this decrease, approximately (i) $31,000 and
$56,000, respectively, were related to decreases in volumes of oil and gas
sold and (ii) $61,000 was related to an increase in production expenses.
These decreases were partially offset by increases of approximately
$45,000 and $48,000, respectively, related to increases in the average
prices of oil and gas sold. Volumes of oil and gas sold decreased 918
barrels and 10,527 Mcf, respectively, for the three months ended March 31,
2005 as compared to the three months ended March 31, 2004. The decrease in
volumes of oil sold was primarily due to (i) the shutting-in of one
significant well during late 2004 and early 2005 due to mechanical
problems and (ii) normal declines in production. As of the date of this
Quarterly Report, the shut-in well has returned to production at a lower
rate than previously experienced. The decrease in volumes of gas sold was
primarily due to (i) a positive prior period volume adjustment made by the
operator on one significant well during the three months ended March 31,
2004, (ii) normal declines in production, and (iii) the shutting-in of one
significant well during late 2004 and early 2005 due to mechanical
problems. As of the date of this Quarterly Report, the shut-in well has
returned to production at a lower rate than previously experienced. The
-33-
increase in production expenses was primarily due to (i) workover expenses
incurred on several wells during the three months ended March 31, 2005,
(ii) a positive prior period production tax adjustment made by the
operator on one significant well during the three months ended March 31,
2005, and (iii) an increase in salt water disposal expenses incurred on
several wells during the three months ended March 31, 2005 as compared to
the three months ended March 31, 2004. These increases were partially
offset by (i) a negative prior period production tax adjustment made by
the operator on one significant well during the three months ended March
31, 2005 and (ii) workover expenses incurred on two significant wells
during the three months ended March 31, 2004.
Depletion of Net Profits Interests decreased $22,452 (65.6%) for the three
months ended March 31, 2005 as compared to the three months ended March
31, 2004. This decrease was primarily due to (i) the abandonment of one
significant well during the three months ended March 31, 2004 following an
unsuccessful recompletion attempt and (ii) the decreases in volumes of oil
and gas sold. As a percentage of Net Profits, this expense decreased to
3.4% for the three months ended March 31, 2005 from 8.5% for the three
months ended March 31, 2004. This percentage decrease was primarily due to
the dollar decrease in depletion of Net Profits Interests.
General and administrative expenses increased $16,206 for the three months
ended March 31, 2005 as compared to the three months ended March 31, 2004.
As a percentage of Net Profits, these expenses increased to 16.4% for the
three months ended March 31, 2005 from 10.2% for the three months ended
March 31, 2004. This percentage increase was primarily due to the dollar
increase in general and administrative expenses.
Cumulative cash distributions to the Limited Partners through March 31,
2005 were $19,235,945 or 152.30% of Limited Partners' capital
contributions.
-34-
P-5 PARTNERSHIP
THREE MONTHS ENDED MARCH 31, 2005 COMPARED TO THE THREE MONTHS ENDED MARCH
31, 2004.
Three Months Ended March 31,
----------------------------
2005 2004
-------- --------
Net Profits $376,868 $314,999
Barrels produced 1,287 1,387
Mcf produced 63,777 73,924
Average price/Bbl $ 45.88 $ 32.10
Average price/Mcf $ 6.42 $ 4.73
As shown in the table above, total Net Profits increased $61,869 (19.6%)
for the three months ended March 31, 2005 as compared to the three months
ended March 31, 2004. Of this increase, approximately $18,000 and
$108,000, respectively, were related to increases in the average prices of
oil and gas sold. These increases were partially offset by decreases of
approximately (i) $48,000 related to a decrease in volumes of gas sold and
(ii) $12,000 related to an increase in production expenses. Volumes of oil
and gas sold decreased 100 barrels and 10,147 Mcf, respectively, for the
three months ended March 31, 2005 as compared to the three months ended
March 31, 2004. The decrease in volumes of gas sold was primarily due to
normal declines in production. The increase in production expenses was
primarily due to (i) an increase in production taxes associated with the
increase in oil and gas sales and (ii) increases in repair and maintenance
expenses incurred on two significant wells for the three months ended
March 31, 2005 as compared to the three months ended March 31, 2004.
Depletion of Net Profits Interests decreased $379 (1.2%) for the three
months ended March 31, 2005 as compared to the three months ended March
31, 2004. This decrease was primarily due to (i) an increase in depletable
Net Profits Interests during 2004 due to the developmental drilling of one
significant well and (ii) the decreases in volumes of oil and gas sold.
These decreases were partially offset by an increase in depletable Net
Profits Interests primarily due to the developmental drilling of two
significant wells during the three months ended March 31, 2005. As a
percentage of Net Profits, this expense decreased to 8.0% for the three
months ended March 31, 2005 from 9.6% for the three months ended March 31,
2004. This percentage decrease was primarily due to the increases in the
average prices of oil and gas sold.
-35-
General and administrative expenses increased $16,251 for the three months
ended March 31, 2005 as compared to the three months ended March 31, 2004.
As a percentage of Net Profits, these expenses increased to 14.5% for the
three months ended March 31, 2005 from 12.2% for the three months ended
March 31, 2004. This percentage increase was primarily due to the dollar
increase in general and administrative expenses.
Cumulative cash distributions to the Limited Partners through March 31,
2005 were $13,427,759 or 113.36% of Limited Partners' capital
contributions.
P-6 PARTNERSHIP
THREE MONTHS ENDED MARCH 31, 2005 COMPARED TO THE THREE MONTHS ENDED MARCH
31, 2004.
Three Months Ended March 31,
----------------------------
2005 2004
---------- --------
Net Profits $589,533 $538,885
Barrels produced 3,024 3,307
Mcf produced 112,950 127,504
Average price/Bbl $ 47.35 $ 31.56
Average price/Mcf $ 5.54 $ 4.72
As shown in the table above, total Net Profits increased $50,648 (9.4%)
for the three months ended March 31, 2005 as compared to the three months
ended March 31, 2004. Of this increase, approximately $48,000 and $93,000,
respectively, were related to increases in the average prices of oil and
gas sold. These increases were partially offset by decreases of
approximately (i) $9,000 and $69,000, respectively, related to decreases
in volumes of oil and gas sold and (ii) $12,000 related to an increase in
production expenses. Volumes of oil and gas sold decreased 283 barrels and
14,554 Mcf, respectively, for the three months ended March 31, 2005 as
compared to the three months ended March 31, 2004. The decrease in volumes
of gas sold was primarily due to normal declines in production. The
increase in production expenses was primarily due to (i) an increase in
production taxes associated with the increase in oil and gas sales and
(ii) repair and maintenance expenses incurred on several wells during the
three months ended March 31, 2005.
Depletion of Net Profits Interests decreased $7,134 (19.8%) for the three
months ended March 31, 2005 as compared to the three months ended March
31, 2004. This decrease was primarily due to (i) the decreases in volumes
of oil and gas sold and (ii) an increase in depletable Net Profits
Interests during 2004 due to the developmental drilling of one significant
well. These decreases were partially offset by an increase in depletable
Net Profits Interests during the three months ended March 31, 2005 due
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to the developmental drilling of two significant wells. As a percentage of
Net Profits, this expense decreased to 4.9% for the three months ended
March 31, 2005 from 6.7% for the three months ended March 31, 2004. This
percentage decrease was primarily due to the dollar decrease in depletion
of Net Profits Interests.
General and administrative expenses increased $16,108 for the three months
ended March 31, 2005 as compared to the three months ended March 31, 2004.
As a percentage of Net Profits, these expenses increased to 10.4% for the
three months ended March 31, 2005 from 8.4% for the three months ended
March 31, 2004. This percentage increase was primarily due to the dollar
increase in general and administrative expenses.
Cumulative cash distributions to the Limited Partners through March 31,
2005 were $19,714,248 or 137.82% of Limited Partners' capital
contribution.
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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
31.1 Certification by Dennis R. Neill required by Rule
13a-14(a)/15d-14(a) for the P-1 Partnership.
31.2 Certification by Craig D. Loseke required by Rule
13a-14(a)/15d-14(a) for the P-1 Partnership.
31.3 Certification by Dennis R. Neill required by Rule
13a-14(a)/15d-14(a) for the P-3 Partnership.
31.4 Certification by Craig D. Loseke required by Rule
13a-14(a)/15d-14(a) for the P-3 Partnership.
31.5 Certification by Dennis R. Neill required by Rule
13a-14(a)/15d-14(a) for the P-4 Partnership.
31.6 Certification by Craig D. Loseke required by Rule
13a-14(a)/15d-14(a) for the P-4 Partnership.
31.7 Certification by Dennis R. Neill required by Rule
13a-14(a)/15d-14(a) for the P-5 Partnership.
31.8 Certification by Craig D. Loseke required by Rule
13a-14(a)/15d-14(a) for the P-5 Partnership.
31.9 Certification by Dennis R. Neill required by Rule
13a-14(a)/15d-14(a) for the P-6 Partnership.
31.10 Certification by Craig D. Loseke required by Rule
13a-14(a)/15d-14(a) for the P-6 Partnership.
32.1 Certification pursuant to 18 U.S.C. Section 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 for
the P-1 Partnership.
32.3 Certification pursuant to 18 U.S.C. Section 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 for
the P-3 Partnership.
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32.4 Certification pursuant to 18 U.S.C. Section 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 for
the P-4 Partnership.
32.5 Certification pursuant to 18 U.S.C. Section 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 for
the P-5 Partnership.
32.6 Certification pursuant to 18 U.S.C. Section 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 for
the P-6 Partnership.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
GEODYNE INSTITUTIONAL/PENSION ENERGY INCOME P-1
LIMITED PARTNERSHIP
GEODYNE INSTITUTIONAL/PENSION ENERGY INCOME LIMITED
PARTNERSHIP P-3
GEODYNE INSTITUTIONAL/PENSION ENERGY INCOME LIMITED
PARTNERSHIP P-4
GEODYNE INSTITUTIONAL/PENSION ENERGY INCOME LIMITED
PARTNERSHIP P-5
GEODYNE INSTITUTIONAL/PENSION ENERGY INCOME LIMITED
PARTNERSHIP P-6
(Registrant)
BY: GEODYNE RESOURCES, INC.
General Partner
Date: May 13, 2005 By: /s/Dennis R. Neill
--------------------------------
(Signature)
Dennis R. Neill
President
Date: May 13, 2005 By: /s/Craig D. Loseke
--------------------------------
(Signature)
Craig D. Loseke
Chief Accounting Officer
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INDEX TO EXHIBITS
-----------------
Exh.
No. Exhibit
- ---- -------
31.1 Certification by Dennis R. Neill required by Rule 13a-14(a)/15d-14(a) for
the Geodyne Institutional/Pension Energy Income P-1 Limited Partnership.
31.2 Certification by Craig D. Loseke required by Rule 13a-14(a)/15d-14(a) for
the Geodyne Institutional/Pension Energy Income P-1 Limited Partnership.
31.3 Certification by Dennis R. Neill required by Rule 13a-14(a)/15d-14(a) for
the Geodyne Institutional/Pension Energy Income P-3 Limited Partnership.
31.4 Certification by Craig D. Loseke required by Rule 13a-14(a)/15d-14(a) for
the Geodyne Institutional/Pension Energy Income P-3 Limited Partnership.
31.5 Certification by Dennis R. Neill required by Rule 13a-14(a)/15d-14(a) for
the Geodyne Institutional/Pension Energy Income P-4 Limited Partnership.
31.6 Certification by Craig D. Loseke required by Rule 13a-14(a)/15d-14(a) for
the Geodyne Institutional/Pension Energy Income P-4 Limited Partnership.
31.7 Certification by Dennis R. Neill required by Rule 13a-14(a)/15d-14(a) for
the Geodyne Institutional/Pension Energy Income P-5 Limited Partnership.
31.8 Certification by Craig D. Loseke required by Rule 13a-14(a)/15d-14(a) for
the Geodyne Institutional/Pension Energy Income P-5 Limited Partnership.
31.9 Certification by Dennis R. Neill required by Rule 13a-14(a)/15d-14(a) for
the Geodyne Institutional/Pension Energy Income P-6 Limited Partnership.
31.10 Certification by Craig D. Loseke required by Rule 13a-14(a)/15d-14(a) for
the Geodyne Institutional/Pension Energy Income P-6 Limited Partnership.
32.1 Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002 for the Geodyne
Institutional/Pension Energy Income P-1 Limited Partnership.
32.2 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
Institutional/Pension Energy Income Limited Partnership P-3.
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32.3 Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002 for the Geodyne
Institutional/Pension Energy Income Limited Partnership P-4.
32.4 Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002 for the Geodyne
Institutional/Pension Energy Income Limited Partnership P-5.
32.5 Certification pursuant to 18 U.S.C.Section 1350, as adopted pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002 for the Geodyne
Institutional/Pension Energy Income Limited Partnership P-6.
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