SECURITIES AND EXCHANGE COMMISSION
Washington, DC. 20549
FORM 10-Q
QUARTERLY REPORT UNDER SECTION 13 or 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For Quarter Ended September 30, 2002 Commission file number 333-88282
DORCHESTER MINERALS, L.P.
(Exact name of registrant as specified in its charter)
Delaware 81-0551518
(State or other jurisdiction of (I.R.S. Employer Identification No.)
Incorporation or organization)
3738 Oak Lawn, Suite 300, Dallas, Texas 75219
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (214) 559-0300
None
Former name, former address and former fiscal
year, if changed since last report
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 No X
As of December 11, 2002, zero common units of partnership interest were
outstanding.
DORCHESTER MINERALS, L.P.
(A Delaware Limited Partnership)
QUARTERLY REPORT ON FORM 10-Q
September 30, 2002
INDEX
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements:
Condensed Balance Sheet as of September 30, 2002 (Unaudited)
Notes to Balance Sheet (Unaudited)
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations
Item 3. Qualitative and Quantitative Disclosures about Market Risk
Item 4. Controls and Procedures
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
Item 2. Changes in Securities and Use of Proceeds
Item 3. Defaults Upon Senior Securities
Item 4. Submission of Matters to a Vote of Security Holders
Item 5. Other Information
Item 6. Exhibits and Reports on Form 8-K
SIGNATURES
DORCHESTER MINERALS, L.P.
(A Delaware Limited Partnership)
BALANCE SHEET
September 30, 2002
------------------
ASSETS (Unaudited)
Capital contributions receivable............................ $ 1,000
--------
$ 1,000
========
Partners' capital ........................................... $ 1,000
--------
$ 1,000
========
The accompanying notes are an
integral part of this balance sheet.
DORCHESTER MINERALS, L.P.
(A Delaware Limited Partnership)
NOTES TO BALANCE SHEET
September 30, 2002
(Unaudited)
NOTE A - ORGANIZATION AND NATURE OF OPERATIONS
Dorchester Minerals, L.P. (the Partnership) was formed on December 12, 2001, as
a Delaware limited partnership. The Partnership has not commenced operations. On
December 13, 2001, the Partnership entered into a combination agreement with
Dorchester Hugoton, Ltd. (Hugoton), Republic Royalty Company (Republic) and
Spinnaker Royalty Company (Spinnaker). The combination agreement provides for
the combining of the business and properties of Hugoton, Republic and Spinnaker
(the Combining Partnerships) into the Partnership upon approval of the limited
partners of the Combining Partnerships.
NOTE B - BASIS OF PRESENTATION
Since its formation, the Partnership has had no income, expenses or cash flows.
Therefore, the financial statements do not include statements of earnings or
cash flows.
NOTE C - CAPITAL CONTRIBUTION
The capital contribution receivable was paid subsequent to September 30, 2002.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Dorchester Minerals, L.P. (the Partnership) was formed on December 12, 2001, as
a Delaware limited partnership. The Partnership has not commenced operations. On
December 13, 2001, the Partnership entered into a combination agreement with
Dorchester Hugoton, Ltd. (Hugoton), Republic Royalty Company (Republic) and
Spinnaker Royalty Company (Spinnaker). The combination agreement provides for
the combining of the business and properties of Hugoton, Republic and Spinnaker
(the Combining Partnerships) into the Partnership upon approval of the limited
partners of the Combining Partnerships.
Where required, the parties to the combination currently have their respective
Special Meetings of Limited Partners scheduled for December 30, 2002. If
sufficient approvals are received and other conditions to the combination are
satisfied, the Partnership could begin commencing operations as early as January
1, 2003.
If the combination is consummated, the Partnership's business plan is to own and
hold a net profits interest in the former properties of Hugoton and own and hold
the properties acquired from Republic and Spinnaker, which will generally
consist of producing and non-producing mineral, royalty, overriding royalty, net
profits and leasehold interests. The Partnership will distribute on a quarterly
basis all cash that it receives from the ownership of those interests beyond
that required to pay its costs and fund reasonable reserves. The Partnership
does not anticipate incurring any debt other than trade debt incurred in the
ordinary course of our business. One of the Partnership's objectives will be to
avoid unrelated business taxable income for federal income tax purposes.
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DORCHESTER MINERALS, L.P.
(A Delaware Limited Partnership)
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
September 30, 2002
(Unaudited)
(Continued)
The Partnership may acquire oil and natural gas properties in the future after
the combination. However, the Partnership's Amended and Restated Partnership
Agreement will generally require majority approval of its common unit holders
for the general partner to cause the Partnership to acquire oil and natural gas
properties unless the acquisition is complementary to the Partnership's business
and is made either (i) in exchange for the Partnership's limited partner
interests, including common units, not exceeding 20% of the common units
outstanding after issuance; or (ii) in exchange for cash, if the aggregate cost
of any acquisitions made for cash during the twelve month period ending on the
first to occur of the execution of a definitive agreement for the acquisition or
its consummation is no more than ten percent (10%) of our aggregate cash
distributions for the four most recent fiscal quarters.
On a pro forma basis, giving effect to the combination agreement, the
Partnership's proved reserves consisted of 81,530,209 Mcf of natural gas and
4,374,761 Bbl of oil, with SEC PV-10 present value of $119,004,300 as of
December 31, 2001.
Item 3. Qualitative and Quantitative Disclosures about Market Risk: None.
Item 4. Controls and Procedures.
Based on the evaluation of the Partnership's disclosure controls and procedures
by W.C. McManemin, Chief Executive Officer of Dorchester Minerals Management GP
LLC, General Partner of Dorchester Minerals Management LP, General Partner of
Dorchester Minerals, L.P., and H.C. Allen, Chief Financial Officer of Dorchester
Minerals Management GP LLC, General Partner of Dorchester Minerals Management
LP, General Partner of Dorchester Minerals, L.P. as of a date within 90 days of
the filing date of this quarterly report, each of them have concluded that the
Partnership's disclosure controls and procedures are effective. There were no
significant changes in the Partnership's internal controls or in other factors
that could significantly affect these controls subsequent to the date of their
evaluation, including any corrective actions with regard to significant
deficiencies and material weaknesses.
<page>
DORCHESTER MINERALS, L.P.
(A Delaware Limited Partnership)
PART II
OTHER INFORMATION
Item 1. Legal Proceedings: None.
Item 2. Changes in Securities and Use of Proceeds: None.
Item 3. Defaults Upon Senior Securities: None.
Item 4. Submission of Matters to a Vote of Security Holders: None.
Item 5. Other Information: None.
Item 6. Exhibits and Reports on Form 8-K
a) Exhibits: None.
b) Reports on Form 8-K: The Partnership did not file any reports on Form
8-K during the quarter ended September 30, 2002.
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.
DORCHESTER MINERALS, L.P.
Registrant
by Dorchester Minerals Management LP
its General Partner,
by Dorchester Minerals Management GP LLC
its General Partner
Date: December 11, 2002 /s/ H.C. Allen
------------------------
H. C. Allen
Chief Financial Officer
<page>
CERTIFICATION
I, W.C. McManemin, Chief Executive officer of Dorchester Minerals Management GP
LLC, General Partner of Dorchester Minerals Management LP, General Partner of
Dorchester Minerals, L.P., (the "Registrant"), certify that:
1. I have reviewed this quarterly report on Form 10-Q of Dorchester Minerals,
L.P.;
2. Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to
make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered by
this quarterly report;
3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all
material respects the financial condition, results of operations and cash
flows of the registrant as of, and for, the periods presented in this
quarterly report;
4. The registrant's other certifying officer and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined
in Exchange Act Rules 13a-14 and 15-d-14) for the registrant and we have:
a) designed such disclosure controls and procedures to ensure that
material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within those
entities, particularly during the period in which this quarterly
report is being prepared;
b) evaluated the effectiveness of the registrant's disclosure controls
and procedures as of a date within 90 days prior to the filing date of
this quarterly report (the "Evaluation Date"); and
c) presented in this quarterly report our conclusions and about the
effectiveness of the disclosure controls and procedures based on our
evaluation as of the Evaluation Date;
5. The registrant's other certifying officer and I have disclosed, based on
our most recent evaluation, to the registrant's auditors and the audit
committee of registrant's board of directors (or persons performing the
equivalent function):
a) all significant deficiencies in the design or operation of internal
controls which could adversely affect the registrant's ability to
record, process, summarize and report financial data and have
identified for the registrant's auditors any material weaknesses in
internal controls; and
b) any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal
controls; and
6. The registrant's other certifying officer and I have indicated in this
quarterly report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal
controls subsequent to the date of our most recent evaluation, including
any corrective actions with regard to significant deficiencies and material
weaknesses.
Date: December 11, 2002 /s/ W.C. McManemin
------------------
W. C. McManemin
Chief Executive Officer
CERTIFICATION
I, H.C. Allen, Chief Financial Officer of Dorchester Minerals Management GP
LLC, General Partner of Dorchester Minerals Management LP, General Partner of
Dorchester Minerals, L.P., (the "Registrant"), certify that:
1. I have reviewed this quarterly report on Form 10-Q of Dorchester Minerals,
L.P.;
2. Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to
make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered by
this quarterly report;
3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all
material respects the financial condition, results of operations and cash
flows of the registrant as of, and for, the periods presented in this
quarterly report;
4. The registrant's other certifying officer and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined
in Exchange Act Rules 13a-14 and 15-d-14) for the registrant and we have:
a) designed such disclosure controls and procedures to ensure that
material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within those
entities, particularly during the period in which this quarterly
report is being prepared;
b) evaluated the effectiveness of the registrant's disclosure controls
and procedures as of a date within 90 days prior to the filing date of
this quarterly report (the "Evaluation Date"); and
c) presented in this quarterly report our conclusions and about the
effectiveness of the disclosure controls and procedures based on our
evaluation as of the Evaluation Date;
5. The registrant's other certifying officer and I have disclosed, based on
our most recent evaluation, to the registrant's auditors and the audit
committee of registrant's board of directors (or persons performing the
equivalent function):
a) all significant deficiencies in the design or operation of internal
controls which could adversely affect the registrant's ability to
record, process, summarize and report financial data and have
identified for the registrant's auditors any material weaknesses in
internal controls; and
b) any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal
controls; and
6. The registrant's other certifying officer and I have indicated in this
quarterly report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal
controls subsequent to the date of our most recent evaluation, including
any corrective actions with regard to significant deficiencies and material
weaknesses.
Date: December 11, 2002 /s/ H.C. Allen
------------------
H. C. Allen
Chief Financial Officer
CERTIFICATION PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
(18 U.S.C. SECTION 1350)
In connection with the accompanying Quarterly Report of Dorchester
Minerals, L.P. (the "Partnership") on Form 10-Q for the period ended September
30, 2002 (the "Report"), I, W.C. McManemin, Chief Executive Officer of
Dorchester Minerals Management GP LLC, General Partner of Dorchester Minerals
Management LP, General Partner of the Partnership, hereby certify that:
(1) The Report fully complies with the requirements of Section 13(a) or 15(d)
of the Securities Exchange Act of 1934 (15 U.S.C. 78m or 78o(d)); and
(2) The information contained in the Report fairly presents, in all material
respects, the financial condition and results of operations of the Company.
Dated: December 11, 2002 /s/W. C. McManemin
-------------------------------------
W. C. McManemin
Chief Executive Officer
CERTIFICATION PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
(18 U.S.C. SECTION 1350)
In connection with the accompanying Quarterly Report of Dorchester
Minerals, L.P. (the "Partnership") on Form 10-Q for the period ended September
30, 2002 (the "Report"), I, H.C. Allen, Chief Financial Officer of Dorchester
Minerals Management GP LLC, General Partner of Dorchester Minerals Management
LP, General Partner of the Partnership, hereby certify that:
(1) The Report fully complies with the requirements of Section 13(a) or 15(d)
of the Securities Exchange Act of 1934 (15 U.S.C. 78m or 78o(d)); and
(2) The information contained in the Report fairly presents, in all material
respects, the financial condition and results of operations of the Company.
Dated: December 11, 2002 /s/ H. C. Allen
-------------------------------------
H. C. Allen
Chief Financial Officer