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, 2000
Commission File Number: P-7: 0-20265 P-8: 0-20264
GEODYNE INSTITUTIONAL/PENSION ENERGY INCOME LIMITED PARTNERSHIP P-7
GEODYNE INSTITUTIONAL/PENSION ENERGY INCOME LIMITED PARTNERSHIP P-8
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(Exact name of Registrant as specified in its Articles)
P-7 73-1367186
Oklahoma P-8 73-1378683
---------------------------- -------------------------------
(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
------ ------
-1-
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
GEODYNE INSTITUTIONAL/PENSION ENERGY INCOME LIMITED PARTNERSHIP P-7
BALANCE SHEETS
(Unaudited)
ASSETS
September 30, December 31,
2000 1999
------------ ------------
CURRENT ASSETS:
Cash and cash equivalents $ 875,855 $ 353,416
Accounts receivable:
Net Profits 653,168 396,241
---------- ----------
Total current assets $1,529,023 $ 749,657
NET PROFITS INTERESTS, net, utilizing
the successful efforts method 2,239,624 2,253,572
---------- ----------
$3,768,647 $3,003,229
========== ==========
PARTNERS' CAPITAL (DEFICIT)
PARTNERS' CAPITAL (DEFICIT):
General Partner ($ 108,294) ($ 119,327)
Limited Partners, issued and
outstanding, 188,702 units 3,876,941 3,122,556
---------- ----------
Total Partners' capital $3,768,647 $3,003,229
========== ==========
The accompanying condensed notes are an integral part of
these financial statements.
-2-
GEODYNE INSTITUTIONAL/PENSION ENERGY INCOME LIMITED PARTNERSHIP P-7
STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2000 AND 1999
(Unaudited)
2000 1999
---------- --------
REVENUES:
Net Profits $ 661,848 $534,506
Interest income 10,588 1,903
Gain on sale of Net Profits
Interests 353,794 -
---------- --------
$1,026,230 $536,409
COSTS AND EXPENSES:
Depletion of Net Profits
Interests $ 55,579 $116,389
General and administrative
(Note 2) 53,966 52,211
---------- --------
$ 109,545 $168,600
---------- --------
NET INCOME $ 916,685 $367,809
========== ========
GENERAL PARTNER - NET INCOME $ 47,528 $ 22,951
========== ========
LIMITED PARTNERS - NET INCOME $ 869,157 $344,858
========== ========
NET INCOME per unit $ 4.60 $ 1.83
========== ========
UNITS OUTSTANDING 188,702 188,702
========== ========
The accompanying condensed notes are an integral part of
these financial statements.
-3-
GEODYNE INSTITUTIONAL/PENSION ENERGY INCOME LIMITED PARTNERSHIP P-7
STATEMENTS OF OPERATIONS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2000 AND 1999
(Unaudited)
2000 1999
---------- ----------
REVENUES:
Net Profits $2,123,416 $1,037,969
Interest income 19,741 3,673
Gain on sale of Net Profits
Interests 391,062 1,263
---------- ----------
$2,534,219 $1,042,905
COSTS AND EXPENSES:
Depletion of Net Profits
Interests $ 194,662 $ 328,565
General and administrative
(Note 2) 173,047 172,344
---------- ----------
$ 367,709 $ 500,909
---------- ----------
NET INCOME $2,166,510 $ 541,996
========== ==========
GENERAL PARTNER - NET INCOME $ 115,125 $ 40,059
========== ==========
LIMITED PARTNERS - NET INCOME $2,051,385 $ 501,937
========== ==========
NET INCOME per unit $ 10.87 $ 2.66
========== ==========
UNITS OUTSTANDING 188,702 188,702
========== ==========
The accompanying condensed notes are an integral part of
these financial statements.
-4-
GEODYNE INSTITUTIONAL/PENSION ENERGY INCOME LIMITED PARTNERSHIP P-7
STATEMENTS OF CASH FLOWS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2000 AND 1999
(Unaudited)
2000 1999
----------- ----------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $2,166,510 $541,996
Adjustments to reconcile net income
to net cash provided by operating
activities:
Depletion of Net Profits
Interests 194,662 328,565
Gain on sale of Net Profits
Interests ( 391,062) ( 1,263)
Increase in accounts receivable -
Net Profits ( 256,927) ( 238,521)
---------- --------
Net cash provided by operating
activities $1,713,183 $630,777
---------- --------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures ($ 185,525) ($ 67,420)
Proceeds from sale of Net Profits
Interests 395,873 1,263
---------- --------
Net cash provided (used) by investing
activities $ 210,348 ($ 66,157)
---------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Cash distributions ($1,401,092) ($437,083)
---------- --------
Net cash used by financing activities ($1,401,092) ($437,083)
---------- --------
NET INCREASE IN CASH AND CASH
EQUIVALENTS $ 522,439 $127,537
CASH AND CASH EQUIVALENTS AT
BEGINNING OF PERIOD 353,416 222,925
---------- --------
CASH AND CASH EQUIVALENTS AT
END OF PERIOD $ 875,855 $350,462
========== ========
The accompanying condensed notes are an integral part of
these financial statements.
-5-
GEODYNE INSTITUTIONAL/PENSION ENERGY INCOME LIMITED PARTNERSHIP P-8
BALANCE SHEETS
(Unaudited)
ASSETS
September 30, December 31,
2000 1999
------------- ------------
CURRENT ASSETS:
Cash and cash equivalents $ 584,691 $ 291,963
Accounts receivable:
Net Profits 397,677 239,592
---------- ----------
Total current assets $ 982,368 $ 531,555
NET PROFITS INTERESTS, net, utilizing
the successful efforts method 1,310,058 1,313,803
---------- ----------
$2,292,426 $1,845,358
========== ==========
PARTNERS' CAPITAL (DEFICIT)
PARTNERS' CAPITAL (DEFICIT):
General Partner ($ 48,102) ($ 55,053)
Limited Partners, issued and
outstanding, 116,168 units 2,340,528 1,900,411
---------- ----------
Total Partners' capital $2,292,426 $1,845,358
========== ==========
The accompanying condensed notes are an integral part of
these financial statements.
-6-
GEODYNE INSTITUTIONAL/PENSION ENERGY INCOME LIMITED PARTNERSHIP P-8
STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2000 AND 1999
(Unaudited)
2000 1999
--------- ---------
REVENUES:
Net Profits $434,550 $342,490
Interest income 7,092 1,843
Gain on sale of Net Profits
Interests 181,260 -
-------- --------
$622,902 $344,333
COSTS AND EXPENSES:
Depletion of Net Profits
Interests $ 33,729 $ 64,170
General and administrative
(Note 2) 33,463 32,146
-------- --------
$ 67,192 $ 96,316
-------- --------
NET INCOME $555,710 $248,017
======== ========
GENERAL PARTNER - NET INCOME $ 28,780 $ 14,875
======== ========
LIMITED PARTNERS - NET INCOME $526,930 $233,142
======== ========
NET INCOME per unit $ 4.53 $ 2.00
======== ========
UNITS OUTSTANDING 116,168 116,168
======== ========
The accompanying condensed notes are an integral part of
these financial statements.
-7-
GEODYNE INSTITUTIONAL/PENSION ENERGY INCOME LIMITED PARTNERSHIP P-8
STATEMENTS OF OPERATIONS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2000 AND 1999
(Unaudited)
2000 1999
----------- ---------
REVENUES:
Net Profits $1,360,487 $698,140
Interest income 14,584 4,100
Gain on sale of Net Profits
Interests 202,690 678
---------- --------
$1,577,761 $702,918
COSTS AND EXPENSES:
Depletion of Net Profits
Interests $ 114,051 $185,291
General and administrative
(Note 2) 106,921 106,192
---------- --------
$ 220,972 $291,483
---------- --------
NET INCOME $1,356,789 $411,435
========== ========
GENERAL PARTNER - NET INCOME $ 71,672 $ 27,778
========== ========
LIMITED PARTNERS - NET INCOME $1,285,117 $383,657
========== ========
NET INCOME per unit $ 11.06 $ 3.30
========== ========
UNITS OUTSTANDING 116,168 116,168
========== ========
The accompanying condensed notes are an integral part of
these financial statements.
-8-
GEODYNE INSTITUTIONAL/PENSION ENERGY INCOME LIMITED PARTNERSHIP P-8
STATEMENTS OF CASH FLOWS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2000 AND 1999
(Unaudited)
2000 1999
---------- --------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $1,356,789 $411,435
Adjustments to reconcile net income
to net cash provided by operating
activities:
Depletion of Net Profits
Interests 114,051 185,291
Gain on sale of Net Profits
Interests ( 202,690) ( 678)
Increase in accounts receivable -
Net Profits ( 158,085) ( 153,115)
---------- --------
Net cash provided by operating
activities $1,110,065 $442,933
---------- --------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures ($ 112,490) ($ 51,235)
Proceeds from sale of Net Profits
Interests 204,874 678
---------- --------
Net cash provided (used) by investing
activities $ 92,384 ($ 50,557)
---------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Cash distributions ($ 909,721) ($298,069)
---------- --------
Net cash used by financing activities ($ 909,721) ($298,069)
---------- --------
NET INCREASE IN CASH AND CASH
EQUIVALENTS $ 292,728 $ 94,307
CASH AND CASH EQUIVALENTS AT
BEGINNING OF PERIOD 291,963 180,865
---------- --------
CASH AND CASH EQUIVALENTS AT
END OF PERIOD $ 584,691 $275,172
========== ========
The accompanying condensed notes are an integral part of
these financial statements.
-9-
GEODYNE INSTITUTIONAL/PENSION ENERGY INCOME PROGRAM II LIMITED PARTNERSHIPS
CONDENSED NOTES TO THE FINANCIAL STATEMENTS
SEPTEMBER 30, 2000
(Unaudited)
1. ACCOUNTING POLICIES
-------------------
The balance sheets as of September 30, 2000, statements of operations for
the three and nine months ended September 30, 2000 and 1999, and
statements of cash flows for the nine months ended September 30, 2000 and
1999 have been prepared by Geodyne Resources, Inc., the General Partner
(the "General Partner") of the Geodyne Institutional/Pension Energy Income
Program II Limited Partnerships (individually, the "P-7 Partnership" or
the "P-8 Partnership", as the case may be, or, collectively, the
"Partnerships"), without audit. In the opinion of management the financial
statements referred to above include all necessary adjustments, consisting
of normal recurring adjustments, to present fairly the financial position
at September 30, 2000, the results of operations for the three and nine
months ended September 30, 2000 and 1999, and the cash flows for the nine
months ended September 30, 2000 and 1999.
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, 1999. The
results of operations for the period ended September 30, 2000 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 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.
-10-
NET PROFITS INTERESTS
---------------------
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. Property acquisition costs
include costs incurred by the Partnerships or the General Partner to
acquire a net profits interest or other non-operating interest in
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 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. Impairment of Net Profits Interests is recognized based upon
an individual property assessment.
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, net of estimated salvage value.
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.
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, 2000 the following payments were made to the General
Partner or its affiliates by the Partnerships:
-11-
Direct General Administrative
Partnership and Administrative Overhead
----------- ------------------- ---------------
P-7 $4,307 $49,659
P-8 2,893 30,570
During the nine months ended September 30, 2000 the following payments
were made to the General Partner or its affiliates by the Partnerships:
Direct General Administrative
Partnership and Administrative Overhead
----------- ------------------- ---------------
P-7 $24,070 $148,977
P-8 15,211 91,710
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.
-12-
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 were formed for the purpose of acquiring Net Profits
Interests located in the continental United States. In general, each
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 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
-13-
are distributed to the Limited Partners and 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-7 February 28, 1992 $18,870,200
P-8 February 28, 1992 $11,616,800
In general, the amount of funds available for acquisition of producing
properties was equal to the capital contributions of the Limited Partners,
less 15% for sales commissions and organization and management fees. All
of the Partnerships have fully invested their capital contributions.
Net proceeds from the Partnerships' Net Profits Interests less necessary
operating capital are distributed to the Limited Partners on a quarterly
basis. Revenues and net proceeds of a Partnership are largely dependent
upon the volumes of oil and gas sold and the prices received for such oil
and gas. While the General Partner cannot predict future pricing trends,
it believes the working capital available as of September 30, 2000 and the
net revenue generated from future operations will provide sufficient
working capital to meet current and future obligations.
The P-7 and P-8 Partnerships' Statements of Cash Flows for the nine months
ended September 30, 2000 include proceeds from the sale of certain oil and
gas properties during the third quarter of 2000. These proceeds will be
included in the Partnerships' cash distributions to be paid in November
2000.
Occasional expenditures for new wells or well recompletion or workovers,
however, may reduce or eliminate cash available for particular quarterly
cash distribution. During the nine months ended September 30, 2000,
capital expenditures for the P-7 and P-8 Partnerships totaled $185,525 and
$112,490, respectively. These expenditures were primarily due to drilling
activities in a large unitized property, the North Riley Unit in Gaines
County, Texas, in which the P-7 and P-8 Partnerships own interests of 2.0%
and 1.2%, respectively.
-14-
RESULTS OF OPERATIONS
- ---------------------
GENERAL DISCUSSION
The following general discussion should be read in conjunction with the
analysis of results of operations provided below. The most important
variables affecting the Partnerships' revenues are the prices received for
the sale of oil and gas and the volumes of oil and gas produced. The
Partnerships' production is mainly natural gas, so such pricing and
volumes are the most significant factors.
Due to the volatility of oil and gas prices, forecasting future prices is
subject to great uncertainty and inaccuracy. Substantially all of the
Partnerships' gas reserves are being sold in the "spot market". Prices on
the spot market are subject to wide seasonal and regional pricing
fluctuations due to the highly competitive nature of the spot market. Such
spot market sales are generally short-term in nature and are dependent
upon the obtaining of transportation services provided by pipelines.
However, oil and gas are depleting assets, so it can be expected that
production levels will decline over time. Recent gas prices have been
significantly higher than the Partnerships' historical average. This is
attributable to the higher prices for crude oil, a substitute fuel in some
markets, and reduced production due to lower capital investments in 1998
and 1999.
P-7 PARTNERSHIP
THREE MONTHS ENDED SEPTEMBER 30, 2000 COMPARED TO THE THREE MONTHS ENDED
SEPTEMBER 30, 1999.
Three Months Ended September 30,
--------------------------------
2000 1999
-------- --------
Net Profits $661,848 $534,506
Barrels produced 19,767 28,999
Mcf produced 99,354 127,013
Average price/Bbl $ 29.15 $ 17.45
Average price/Mcf $ 3.39 $ 2.22
As shown in the table above, total Net Profits increased $127,342 (23.8%)
for the three months ended September 30, 2000 as compared to the three
months ended September 30, 1999. Of this increase, approximately $231,000
and $116,000, respectively, were related to increases in the average
prices of oil and gas sold. These increases were partially offset by
decreases of approximately $161,000 and $61,000, respectively, related to
decreases in volumes of oil and gas sold. Volumes of oil and gas sold
decreased
-15-
9,232 barrels and 27,659 Mcf, respectively, for the three months ended
September 30, 2000 as compared to the three months ended September 30,
1999. The decrease in volumes of oil sold was primarily due to (i) a
positive prior period volume adjustment made by the purchaser on one
significant well during the three months ended September 30, 1999 and (ii)
normal declines in production. The decrease in volumes of gas sold was
primarily due to (i) normal declines in production, (ii) a negative prior
period volume adjustment made by the purchaser on one significant well
during the three months ended September 30, 2000, and (iii) the P-7
Partnership receiving an increased percentage of sales due to gas
balancing on one significant well during the three months ended September
30, 1999. Average oil and gas prices increased to $29.15 per barrel and
$3.39 per Mcf, respectively, for the three months ended September 30, 2000
from $17.45 per barrel and $2.22 per Mcf, respectively, for the three
months ended September 30, 1999.
As discussed in Liquidity and Capital Resources above, the P-7 Partnership
sold certain oil and gas properties during the three months ended
September 30, 2000 and recognized a $353,794 gain on such sales. No such
sales occurred during the three months ended September 30, 1999.
Depletion of Net Profits Interests decreased $60,810 (52.2%) for the three
months ended September 30, 2000 as compared to the three months ended
September 30, 1999. This decrease was primarily due to (i) upward
revisions in the estimates of remaining oil and gas reserves at December
31, 1999 and (ii) the decreases in volumes of oil and gas sold. As a
percentage of Net Profits, this expense decreased to 8.4% for the three
months ended September 30, 2000 from 21.8% for the three months ended
September 30, 1999. This percentage decrease was primarily due to the
increases in the average prices of oil and gas sold.
General and administrative expenses increased $1,755 (3.4%) for the three
months ended September 30, 2000 as compared to the three months ended
September 30, 1999. As a percentage of Net Profits, these expenses
decreased to 8.2% for the three months ended September 30, 2000 from 9.8%
for the three months ended September 30, 1999. This percentage decrease
was primarily due to the increase in Net Profits.
-16-
NINE MONTHS ENDED SEPTEMBER 30, 2000 COMPARED TO THE NINE MONTHS ENDED
SEPTEMBER 30, 1999.
Nine Months Ended September 30,
------------------------------
2000 1999
---------- ----------
Net Profits $2,123,416 $1,037,969
Barrels produced 71,495 80,679
Mcf produced 334,408 365,662
Average price/Bbl $ 28.50 $ 14.57
Average price/Mcf $ 3.03 $ 1.85
As shown in the table above, total Net Profits increased $1,085,447
(104.6%) for the nine months ended September 30, 2000 as compared to the
nine months ended September 30, 1999. Of this increase, approximately
$996,000 and $395,000, respectively, were related to increases in the
average prices of oil and gas sold. These increases were partially offset
by decreases of approximately (i) $134,000 related to a decrease in
volumes of gas sold and (ii) $114,000 related to an increase in production
expenses. Volumes of oil and gas sold decreased 9,184 barrels and 31,254
Mcf, respectively, for the nine months ended September 30, 2000 as
compared to the nine months ended September 30, 1999. The decrease in
volumes of oil sold was primarily due to (i) a positive prior period
volume adjustment made by the purchaser on one significant well during the
nine months ended September 30, 1999 and (ii) normal declines in
production. The increase in production expenses was primarily due to (i)
an increase in production taxes associated with the increases in average
prices of oil and gas sold, (ii) an increase in repair and maintenance
expenses incurred on one significant well during the nine months ended
September 30, 2000, and (iii) an increase in workover expenses incurred on
two significant wells during the nine months ended September 30, 2000 in
order to improve the recovery of reserves. Average oil and gas prices
increased to $28.50 per barrel and $3.03 per Mcf, respectively, for the
nine months ended September 30, 2000 from $14.57 per barrel and $1.85 per
Mcf, respectively, for the nine months ended September 30, 1999.
As discussed in Liquidity and Capital Resources above, the P-7 Partnership
sold certain oil and gas properties during the nine months ended September
30, 2000 and recognized a $391,062 gain on such sales. Sales of oil and
gas properties during the nine months ended September 30, 1999 resulted in
the P-7 Partnership recognizing similar gains totaling $1,263.
-17-
Depletion of Net Profits Interests decreased $133,903 (40.8%) for the nine
months ended September 30, 2000 as compared to the nine months ended
September 30, 1999. This decrease was primarily due to upward revisions in
the estimates of remaining oil and gas reserves at December 31, 1999. As a
percentage of Net Profits, this expense decreased to 9.2% for the nine
months ended September 30, 2000 from 31.7% for the nine months ended
September 30, 1999. This percentage decrease was primarily due to the
increases in the average prices of oil and gas sold.
General and administrative expenses remained relatively constant for the
nine months ended September 30, 2000 as compared to the nine months ended
September 30, 1999. As a percentage of Net Profits, these expenses
decreased to 8.1% for the nine months ended September 30, 2000 from 16.6%
for the nine months ended September 30, 1999. This percentage decrease was
primarily due to the increase in Net Profits.
Cumulative cash distributions to the Limited Partners through September
30, 2000 were $12,899,916 or 68.36% of the Limited Partner's capital
contributions.
P-8 PARTNERSHIP
THREE MONTHS ENDED SEPTEMBER 30, 2000 COMPARED TO THE THREE MONTHS ENDED
SEPTEMBER 30, 1999.
Three Months Ended September 30,
--------------------------------
2000 1999
-------- --------
Net Profits $434,550 $342,490
Barrels produced 11,757 16,963
Mcf produced 77,180 91,695
Average price/Bbl $ 29.12 $ 17.57
Average price/Mcf $ 3.36 $ 2.20
As shown in the table above, total Net Profits increased $92,060 (26.9%)
for the three months ended September 30, 2000 as compared to the three
months ended September 30, 1999. Of this increase, approximately $136,000
and $90,000, respectively, were related to increases in the average prices
of oil and gas sold. These increases were partially offset by decreases of
approximately $91,000 and $32,000, respectively, related to decreases in
volumes of oil and gas sold. Volumes of oil and gas sold decreased 5,206
barrels and 14,515 Mcf, respectively, for the three months ended September
30, 2000 as compared to the three months ended September 30, 1999. The
decrease in volumes of oil sold was primarily due to (i) a positive prior
period volume adjustment made by the purchaser on one significant well
during the three months ended September 30, 1999 and (ii)
-18-
normal declines in production. The decrease in volumes of gas sold was
primarily due to (i) normal declines in production, (ii) a negative prior
period volume adjustment made by the purchaser on one significant well
during the three months ended September 30, 2000, and (iii) the P-8
Partnership receiving an increased percentage of sales due to gas
balancing on one significant well during the three months ended September
30, 1999. Average oil and gas prices increased to $29.12 per barrel and
$3.36 per Mcf, respectively, for the three months ended September 30, 2000
from $17.57 per barrel and $2.20 per Mcf, respectively, for the three
months ended September 30, 1999.
As discussed in Liquidity and Capital Resources above, the P-8 Partnership
sold certain oil and gas properties during the three months ended
September 30, 2000 and recognized a $181,260 gain on such sales. No such
sales occurred during the three months ended September 30, 1999.
Depletion of Net Profits Interests decreased $30,441 (47.4%) for the three
months ended September 30, 2000 as compared to the three months ended
September 30, 1999. This decrease was primarily due to (i) upward
revisions in the estimates of remaining oil and gas reserves at December
31, 1999 and (ii) the decreases in volumes of oil and gas sold. As a
percentage of Net Profits, this expense decreased to 7.8% for the three
months ended September 30, 2000 from 18.7% for the three months ended
September 30, 1999. This percentage decrease was primarily due to the
increases in the average prices of oil and gas sold.
General and administrative expenses increased $1,317 (4.1%) for the three
months ended September 30, 2000 as compared to the three months ended
September 30, 1999. As a percentage of Net Profits, these expenses
decreased to 7.7% for the three months ended September 30, 2000 from 9.4%
for the three months ended September 30, 1999. This percentage decrease
was primarily due to the increase in Net Profits.
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NINE MONTHS ENDED SEPTEMBER 30, 2000 COMPARED TO THE NINE MONTHS ENDED
SEPTEMBER 30, 1999.
Nine Months Ended September 30,
-------------------------------
2000 1999
---------- --------
Net Profits $1,360,487 $698,140
Barrels produced 42,342 47,767
Mcf produced 245,444 272,062
Average price/Bbl $ 28.45 $ 14.57
Average price/Mcf $ 3.03 $ 1.87
As shown in the table above, total Net Profits increased $662,347 (94.9%)
for the nine months ended September 30, 2000 as compared to the nine
months ended September 30, 1999. Of this increase, approximately $588,000
and $285,000, respectively, were related to increases in the average
prices of oil and gas sold. These increases were partially offset by
decreases of approximately (i) $79,000 related to a decrease in volumes of
gas sold and (ii) $81,000 related to an increase in production expenses.
Volumes of oil and gas sold decreased 5,425 barrels and 26,618 Mcf,
respectively, for the nine months ended September 30, 2000 as compared to
the nine months ended September 30, 1999. The decrease in volumes of oil
sold was primarily due to (i) a positive prior period volume adjustment
made by the purchaser on one significant well during the nine months ended
September 30, 1999 and (ii) normal declines in production. The increase in
production expenses was primarily due to (i) an increase in production
taxes associated with the increases in average prices of oil and gas sold,
(ii) an increase in workover expenses incurred on one significant well
during the nine months ended September 30, 2000 in order to improve the
recovery of reserves, and (iii) repair and maintenance expenses incurred
on two significant wells during the nine months ended September 30, 2000.
Average oil and gas prices increased to $28.45 per barrel and $3.03 per
Mcf, respectively, for the nine months ended September 30, 2000 from
$14.57 per barrel and $1.87 per Mcf, respectively, for the nine months
ended September 30, 1999.
As discussed in Liquidity and Capital Resources above, the P-8 Partnership
sold certain oil and gas properties during the nine months ended September
30, 2000 and recognized a $202,690 gain on such sales. Sales of oil and
gas properties during the nine months ended September 30, 1999 resulted in
the P-8 Partnership recognizing similar gains totaling $678.
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Depletion of Net Profits Interests decreased $71,240 (38.4%) for the nine
months ended September 30, 2000 as compared to the nine months ended
September 30, 1999. This decrease was primarily due to upward revisions in
the estimates of remaining oil and gas reserves at December 31, 1999. As a
percentage of Net Profits, this expense decreased to 8.4% for the nine
months ended September 30, 2000 from 26.5% for the nine months ended
September 30, 1999. This percentage decrease was primarily due to the
increases in the average prices of oil and gas sold.
General and administrative expenses remained relatively constant for the
nine months ended September 30, 2000 as compared to the nine months ended
September 30, 1999. As a percentage of Net Profits, these expenses
decreased to 7.9% for the nine months ended September 30, 2000 from 15.2%
for the nine months ended September 30, 1999. This percentage decrease was
primarily due to the increase in Net Profits.
Cumulative cash distributions to the Limited Partners through September
30, 2000 were $8,112,583 or 69.83% of the Limited Partner's capital
contributions.
-21-
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET
RISK.
The Partnerships do not hold any market risk sensitive instruments.
-22-
PART II. OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
27.1 Financial Data Schedule containing summary financial information
extracted from the P-7 Partnership's financial statements as of
September 30, 2000 and for the nine months ended September 30, 2000,
filed herewith.
27.2 Financial Data Schedule containing summary financial information
extracted from the P-8 Partnership's financial statements as of
September 30, 2000 and for the nine months ended September 30, 2000,
filed herewith.
All other exhibits are omitted as inapplicable.
(b) Reports on Form 8-K.
None.
-23-
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 LIMITED PARTNERSHIP P-7
GEODYNE INSTITUTIONAL/PENSION ENERGY
INCOME LIMITED PARTNERSHIP P-8
(Registrant)
BY: GEODYNE RESOURCES, INC.
General Partner
Date: November 13, 2000 By: /s/Dennis R. Neill
--------------------------------
(Signature)
Dennis R. Neill
President
Date: November 13, 2000 By: /s/Patrick M. Hall
--------------------------------
(Signature)
Patrick M. Hall
Principal Accounting Officer
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INDEX TO EXHIBITS
NUMBER DESCRIPTION
- ------ -----------
27.1 Financial Data Schedule containing summary financial information
extracted from the Geodyne Institutional/Pension Energy Income
Limited Partnership P-7's financial statements as of September 30,
2000 and for the nine months ended September 30, 2000, filed
herewith.
27.2 Financial Data Schedule containing summary financial information
extracted from the Geodyne Institutional/Pension Energy Income
Limited Partnership P-8's financial statements as of September 30,
2000 and for the nine months ended September 30, 2000, filed
herewith.
All other exhibits are omitted as inapplicable.
-25-