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, 1999
Commission File Number:
P-1: 0-17800 P-3: 0-18306 P-5: 0-18637
P-2: 0-17801 P-4: 0-18308 P-6: 0-18937
GEODYNE INSTITUTIONAL/PENSION ENERGY INCOME P-1 LIMITED PARTNERSHIP
GEODYNE INSTITUTIONAL/PENSION ENERGY INCOME P-2 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-2 73-1330625
P-1 and P-2: P-3 73-1336573
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
------ ------
-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,
1999 1998
------------- ------------
CURRENT ASSETS:
Cash and cash equivalents $ 105,113 $ 99,454
Accounts receivable:
Net Profits 110,024 108,440
---------- ----------
Total current assets $ 215,137 $ 207,894
NET PROFITS INTERESTS, net, utilizing
the successful efforts method 1,100,570 1,164,893
---------- ----------
$1,315,707 $1,372,787
========== ==========
PARTNERS' CAPITAL (DEFICIT)
PARTNERS' CAPITAL (DEFICIT):
General Partner ($ 83,740) ($ 82,899)
Limited Partners, issued and
outstanding, 108,074 units 1,399,447 1,455,686
---------- ----------
Total Partners' capital $1,315,707 $1,372,787
---------- ----------
$1,315,707 $1,372,787
========== ==========
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, 1999 AND 1998
(Unaudited)
1999 1998
-------- --------
REVENUES:
Net Profits $157,465 $219,128
Interest income 1,116 3,650
Gain on sale of Net Profits
Interests 664 83,194
-------- --------
$159,245 $305,972
COSTS AND EXPENSES:
Depletion of Net Profits
Interests $ 66,996 $ 59,735
General and administrative
(Note 2) 38,161 37,293
-------- --------
$105,157 $ 97,028
-------- --------
NET INCOME $ 54,088 $208,944
======== ========
GENERAL PARTNER - NET INCOME $ 11,327 $ 12,654
======== ========
LIMITED PARTNERS - NET INCOME $ 42,761 $196,290
======== ========
NET INCOME per unit $ .40 $ 1.82
======== ========
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, 1999 AND 1998
(Unaudited)
1999 1998
----------- ---------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 54,088 $208,944
Adjustments to reconcile net income
to net cash provided by operating
activities:
Depletion of Net Profits
Interests 66,996 59,735
Gain on sale of Net Profits
Interests ( 664) ( 83,194)
(Increase) decrease in accounts
receivable - Net Profits ( 1,584) 18,659
Increase in accounts receivable -
General Partner - ( 79,123)
-------- --------
Net cash provided by operating
activities $118,836 $125,021
-------- --------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures ($ 2,673) ($ 9,427)
Proceeds from sale of Net Profits
Interests 664 88,758
-------- --------
Net cash provided (used) by
investing activities ($ 2,009) $ 79,331
-------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Cash distributions ($111,168) ($499,345)
-------- --------
Net cash used by financing activities ($111,168) ($499,345)
-------- --------
NET INCREASE (DECREASE) IN CASH AND
CASH EQUIVALENTS $ 5,659 ($294,993)
CASH AND CASH EQUIVALENTS AT
BEGINNING OF PERIOD 99,454 503,622
-------- --------
CASH AND CASH EQUIVALENTS AT
END OF PERIOD $105,113 $208,629
======== ========
The accompanying condensed notes are an integral part of
these combined financial statements.
-4-
GEODYNE INSTITUTIONAL/PENSION ENERGY INCOME P-2 LIMITED PARTNERSHIP
GEODYNE NPI PARTNERSHIP P-2
COMBINED BALANCE SHEETS
(Unaudited)
ASSETS
March 31, December 31,
1999 1998
------------- ------------
CURRENT ASSETS:
Cash and cash equivalents $ 82,756 $ 78,435
Accounts receivable:
Net Profits 92,826 92,746
---------- ----------
Total current assets $ 175,582 $ 171,181
NET PROFITS INTERESTS, net, utilizing
the successful efforts method 950,147 1,001,498
---------- ----------
$1,125,729 $1,172,679
========== ==========
PARTNERS' CAPITAL (DEFICIT)
PARTNERS' CAPITAL (DEFICIT):
General Partner ($ 71,311) ($ 70,704)
Limited Partners, issued and
outstanding, 90,094 units 1,197,040 1,243,383
---------- ----------
Total Partners' capital $1,125,729 $1,172,679
---------- ----------
$1,125,729 $1,172,679
========== ==========
The accompanying condensed notes are an integral part of
these combined financial statements.
-5-
GEODYNE INSTITUTIONAL/PENSION ENERGY INCOME P-2 LIMITED PARTNERSHIP
GEODYNE NPI PARTNERSHIP P-2
COMBINED STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED MARCH 31, 1999 AND 1998
(Unaudited)
1999 1998
--------- ---------
REVENUES:
Net Profits $120,305 $167,958
Interest income 847 2,722
Gain on sale of Net Profits
Interests 454 58,185
-------- --------
$121,606 $228,865
COSTS AND EXPENSES:
Depletion of Net Profits
Interests $ 54,185 $ 46,075
General and administrative
(Note 2) 31,861 31,116
-------- --------
$ 86,046 $ 77,191
-------- --------
NET INCOME $ 35,560 $151,674
======== ========
GENERAL PARTNER - NET INCOME $ 3,903 $ 9,291
======== ========
LIMITED PARTNERS - NET INCOME $ 31,657 $142,383
======== ========
NET INCOME per unit $ .35 $ 1.58
======== ========
UNITS OUTSTANDING 90,094 90,094
======== ========
The accompanying condensed notes are an integral part of
these combined financial statements.
-6-
GEODYNE INSTITUTIONAL/PENSION ENERGY INCOME P-2 LIMITED PARTNERSHIP
GEODYNE NPI PARTNERSHIP P-2
COMBINED STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS ENDED MARCH 31, 1999 AND 1998
(Unaudited)
1999 1998
--------- ---------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $35,560 $151,674
Adjustments to reconcile net income
to net cash provided by operating
activities:
Depletion of Net Profits
Interests 54,185 46,075
Gain on sale of Net Profits
Interests ( 454) ( 58,185)
(Increase) decrease in accounts
receivable - Net Profits ( 80) 19,916
Increase in accounts receivable -
General Partner - ( 57,823)
------- --------
Net cash provided by operating
activities $89,211 $101,657
------- --------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures ($ 2,834) ($ 6,480)
Proceeds from sale of Net Profits
Interests 454 65,106
------- --------
Net cash provided (used) by
investing activities ($ 2,380) $ 58,626
------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Cash distributions ($82,510) ($364,063)
------- --------
Net cash used by financing activities ($82,510) ($364,063)
------- --------
NET INCREASE (DECREASE) IN CASH AND
CASH EQUIVALENTS $ 4,321 ($203,780)
CASH AND CASH EQUIVALENTS AT
BEGINNING OF PERIOD 78,435 369,191
------- --------
CASH AND CASH EQUIVALENTS AT
END OF PERIOD $82,756 $165,411
======= ========
The accompanying condensed notes are an integral part of
these combined financial statements.
-7-
GEODYNE INSTITUTIONAL/PENSION ENERGY INCOME LIMITED PARTNERSHIP P-3
GEODYNE NPI PARTNERSHIP P-3
COMBINED BALANCE SHEETS
(Unaudited)
ASSETS
March 31, December 31,
1999 1998
------------- ------------
CURRENT ASSETS:
Cash and cash equivalents $ 154,593 $ 146,246
Accounts receivable:
Net Profits 170,118 170,389
---------- ----------
Total current assets $ 324,711 $ 316,635
NET PROFITS INTERESTS, net, utilizing
the successful efforts method 1,771,320 1,866,716
---------- ----------
$2,096,031 $2,183,351
========== ==========
PARTNERS' CAPITAL (DEFICIT)
PARTNERS' CAPITAL (DEFICIT):
General Partner ($ 134,149) ($ 132,995)
Limited Partners, issued and
outstanding, 169,637 units 2,230,180 2,316,346
---------- ----------
Total Partners' capital $2,096,031 $2,183,351
---------- ----------
$2,096,031 $2,183,351
========== ==========
The accompanying condensed notes are an integral part of
these combined financial statements.
-8-
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, 1999 AND 1998
(Unaudited)
1999 1998
-------- ---------
REVENUES:
Net Profits $223,179 $313,340
Interest income 1,667 5,142
Gain on sale of Net Profits
Interests 837 108,543
-------- --------
$225,683 $427,025
COSTS AND EXPENSES:
Depletion of Net Profits
Interests $100,772 $ 85,459
General and administrative
(Note 2) 59,878 58,572
-------- --------
$160,650 $144,031
-------- --------
NET INCOME $ 65,033 $282,994
======== ========
GENERAL PARTNER - NET INCOME $ 7,199 $ 17,311
======== ========
LIMITED PARTNERS - NET INCOME $ 57,834 $265,683
======== ========
NET INCOME per unit $ .34 $ 1.57
======== ========
UNITS OUTSTANDING 169,637 169,637
======== ========
The accompanying condensed notes are an integral part of
these combined financial statements.
-9-
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, 1999 AND 1998
(Unaudited)
1999 1998
----------- ---------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 65,033 $282,994
Adjustments to reconcile net income
to net cash provided by operating
activities:
Depletion of Net Profits
Interests 100,772 85,459
Gain on sale of Net Profits
Interests ( 837) ( 108,543)
Decrease in accounts receivable -
Net Profits 271 36,522
Increase in accounts receivable -
General Partner - ( 107,199)
-------- --------
Net cash provided by operating
activities $165,239 $189,233
-------- --------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures ($ 5,376) ($ 11,961)
Proceeds from sale of Net Profits
Interests 837 120,656
-------- --------
Net cash provided (used) by
investing activities ($ 4,539) $108,695
-------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Cash distributions ($152,353) ($675,977)
-------- --------
Net cash used by financing activities ($152,353) ($675,977)
-------- --------
NET INCREASE (DECREASE) IN CASH AND
CASH EQUIVALENTS $ 8,347 ($378,049)
CASH AND CASH EQUIVALENTS AT
BEGINNING OF PERIOD 146,246 685,628
-------- --------
CASH AND CASH EQUIVALENTS AT
END OF PERIOD $154,593 $307,579
======== ========
The accompanying condensed notes are an integral part of
these combined financial statements.
-10-
GEODYNE INSTITUTIONAL/PENSION ENERGY INCOME LIMITED PARTNERSHIP P-4
GEODYNE NPI PARTNERSHIP P-4
COMBINED BALANCE SHEETS
(Unaudited)
ASSETS
March 31, December 31,
1999 1998
------------- ------------
CURRENT ASSETS:
Cash and cash equivalents $ 108,550 $ 101,652
Accounts receivable:
Net Profits 193,868 209,218
---------- ----------
Total current assets $ 302,418 $ 310,870
NET PROFITS INTERESTS, net, utilizing
the successful efforts method 1,034,903 1,092,574
---------- ----------
$1,337,321 $1,403,444
========== ==========
PARTNERS' CAPITAL (DEFICIT)
PARTNERS' CAPITAL (DEFICIT):
General Partner ($ 95,197) ($ 93,853)
Limited Partners, issued and
outstanding, 126,306 units 1,432,518 1,497,297
---------- ----------
Total Partners' capital $1,337,321 $1,403,444
---------- ----------
$1,337,321 $1,403,444
========== ==========
The accompanying condensed notes are an integral part of
these combined financial statements.
-11-
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, 1999 AND 1998
(Unaudited)
1999 1998
--------- --------
REVENUES:
Net Profits $129,381 $240,392
Interest income 948 2,861
Gain on sale of Net
Profits Interests - 4,248
-------- --------
$130,329 $247,501
COSTS AND EXPENSES:
Depletion of Net Profits
Interests $ 59,886 $ 69,393
General and administrative
(Note 2) 44,581 43,588
-------- --------
$104,467 $112,981
-------- --------
NET INCOME $ 25,862 $134,520
======== ========
GENERAL PARTNER - NET INCOME $ 3,641 $ 9,359
======== ========
LIMITED PARTNERS - NET INCOME $ 22,221 $125,161
======== ========
NET INCOME per unit $ .18 $ .99
======== ========
UNITS OUTSTANDING 126,306 126,306
======== ========
The accompanying condensed notes are an integral part of
these combined financial statements.
-12-
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, 1999 AND 1998
(Unaudited)
1999 1998
--------- ---------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 25,862 $134,520
Adjustments to reconcile net income
to net cash provided by operating
activities:
Depletion of Net Profits
Interests 59,886 69,393
Gain on sale of Net Profits
Interests - ( 4,248)
Decrease in accounts receivable -
Net Profits 15,350 72,789
Increase in accounts receivable -
General Partner - ( 6,396)
-------- --------
Net cash provided by operating
activities $101,098 $266,058
-------- --------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures ($ 2,215) ($ 342)
Proceeds from sale of Net Profits
Interests - 9,373
-------- --------
Net cash provided (used) by
investing activities ($ 2,215) $ 9,031
-------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Cash distributions ($ 91,985) ($234,500)
-------- --------
Net cash used by financing activities ($ 91,985) ($234,500)
-------- --------
NET INCREASE IN CASH AND CASH
EQUIVALENTS $ 6,898 $ 40,589
CASH AND CASH EQUIVALENTS AT
BEGINNING OF PERIOD 101,652 243,903
-------- --------
CASH AND CASH EQUIVALENTS AT
END OF PERIOD $108,550 $284,492
======== ========
The accompanying condensed notes are an integral part of
these combined financial statements.
-13-
GEODYNE INSTITUTIONAL/PENSION ENERGY INCOME LIMITED PARTNERSHIP P-5
GEODYNE NPI PARTNERSHIP P-5
COMBINED BALANCE SHEETS
(Unaudited)
ASSETS
March 31, December 31,
1999 1998
------------- ------------
CURRENT ASSETS:
Cash and cash equivalents $ 135,998 $ 166,487
Accounts receivable:
Net Profits 71,346 99,823
---------- ----------
Total current assets $ 207,344 $ 266,310
NET PROFITS INTERESTS, net, utilizing
the successful efforts method 948,225 991,179
---------- ----------
$1,155,569 $1,257,489
========== ==========
PARTNERS' CAPITAL (DEFICIT)
PARTNERS' CAPITAL (DEFICIT):
General Partner ($ 81,102) ($ 79,248)
Limited Partners, issued and
outstanding, 118,449 units 1,236,671 1,336,737
---------- ----------
Total Partners' capital $1,155,569 $1,257,489
---------- ----------
$1,155,569 $1,257,489
========== ==========
The accompanying condensed notes are an integral part of
these combined financial statements.
-14-
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, 1999 AND 1998
(Unaudited)
1999 1998
--------- ---------
REVENUES:
Net Profits $144,443 $248,386
Interest income 1,356 2,429
Gain on sale of Net Profits
Interests - 136,624
-------- --------
$145,799 $387,439
COSTS AND EXPENSES:
Depletion of Net Profits
Interests $ 53,417 $ 58,197
General and administrative
(Note 2) 41,853 40,910
-------- --------
$ 95,270 $ 99,107
-------- --------
NET INCOME $ 50,529 $288,332
======== ========
GENERAL PARTNER - NET INCOME $ 4,595 $ 16,623
======== ========
LIMITED PARTNERS - NET INCOME $ 45,934 $271,709
======== ========
NET INCOME per unit $ .39 $ 2.29
======== ========
UNITS OUTSTANDING 118,449 118,449
======== ========
The accompanying condensed notes are an integral part of
these combined financial statements.
-15-
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, 1999 AND 1998
(Unaudited)
1999 1998
--------- ---------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 50,529 $288,332
Adjustments to reconcile net income
to net cash provided by operating
activities:
Depletion of Net Profits
Interests 53,417 58,197
Gain on sale of Net Profits
Interests - ( 136,624)
Decrease in accounts receivable -
Net Profits 28,477 15,282
Increase in accounts receivable -
General Partner - ( 147,494)
-------- --------
Net cash provided by operating
activities $132,423 $ 77,693
-------- --------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures ($ 10,463) ($ 19,135)
Proceeds from sale of Net Profits
Interests - 147,494
-------- --------
Net cash provided (used) by investing
activities ($ 10,463) $128,359
-------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Cash distributions ($152,449) ($216,946)
-------- --------
Net cash used by financing activities ($152,449) ($216,946)
-------- --------
NET DECREASE IN CASH AND CASH
EQUIVALENTS ($ 30,489) ($ 10,894)
CASH AND CASH EQUIVALENTS AT
BEGINNING OF PERIOD 166,487 228,750
-------- --------
CASH AND CASH EQUIVALENTS AT
END OF PERIOD $135,998 $217,856
======== ========
The accompanying condensed notes are an integral part of
these combined financial statements.
-16-
GEODYNE INSTITUTIONAL/PENSION ENERGY INCOME LIMITED PARTNERSHIP P-6
GEODYNE NPI PARTNERSHIP P-6
COMBINED BALANCE SHEETS
(Unaudited)
ASSETS
March 31, December 31,
1999 1998
------------- ------------
CURRENT ASSETS:
Cash and cash equivalents $ 196,592 $ 300,324
Accounts receivable:
Net Profits 87,622 145,612
---------- ----------
Total current assets $ 284,214 $ 445,936
NET PROFITS INTERESTS, net, utilizing
the successful efforts method 1,976,314 2,065,846
---------- ----------
$2,260,528 $2,511,782
========== ==========
PARTNERS' CAPITAL (DEFICIT)
PARTNERS' CAPITAL (DEFICIT):
General Partner ($ 110,436) ($ 106,642)
Limited Partners, issued and
outstanding, 143,041 units 2,370,964 2,618,424
---------- ----------
Total Partners' capital $2,260,528 $2,511,782
---------- ----------
$2,260,528 $2,511,782
========== ==========
The accompanying condensed notes are an integral part of
these combined financial statements.
-17-
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, 1999 AND 1998
(Unaudited)
1999 1998
-------- ---------
REVENUES:
Net Profits $207,544 $338,028
Interest income 2,387 4,017
Gain on sale of Net Profits
Interests - 66,346
-------- --------
$209,931 $408,391
COSTS AND EXPENSES:
Depletion of Net Profits
Interests $103,069 $ 96,943
General and administrative
(Note 2) 50,500 49,386
-------- --------
$153,569 $146,329
-------- --------
NET INCOME $ 56,362 $262,062
======== ========
GENERAL PARTNER - NET INCOME $ 6,822 $ 16,780
======== ========
LIMITED PARTNERS - NET INCOME $ 49,540 $245,282
======== ========
NET INCOME per unit $ .35 $ 1.71
======== ========
UNITS OUTSTANDING 143,041 143,041
======== ========
The accompanying condensed notes are an integral part of
these combined financial statements.
-18-
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, 1999 AND 1998
(Unaudited)
1999 1998
--------- ----------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 56,362 $262,062
Adjustments to reconcile net income
to net cash provided by operating
activities:
Depletion of Net Profits
Interests 103,069 96,943
Gain on sale of Net Profits
Interests - ( 66,346)
Decrease in accounts receivable -
Net Profits 57,990 101,300
Increase in accounts receivable -
General Partner - ( 71,423)
-------- --------
Net cash provided by operating
activities $217,421 $322,536
-------- --------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures ($ 13,537) ($ 22,047)
Proceeds from sale of Net Profits
Interests - 71,423
-------- --------
Net cash provided (used) by
investing activities ($ 13,537) $ 49,376
-------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Cash distributions ($307,616) ($375,276)
-------- --------
Net cash used by financing activities ($307,616) ($375,276)
-------- --------
NET DECREASE IN CASH AND CASH
EQUIVALENTS ($103,732) ($ 3,364)
CASH AND CASH EQUIVALENTS AT
BEGINNING OF PERIOD 300,324 362,957
-------- --------
CASH AND CASH EQUIVALENTS AT
END OF PERIOD $196,592 $359,593
======== ========
The accompanying condensed notes are an integral part of
these combined financial statements.
-19-
GEODYNE INSTITUTIONAL/PENSION ENERGY INCOME LIMITED PARTNERSHIPS
CONDENSED NOTES TO THE COMBINED FINANCIAL STATEMENTS
MARCH 31, 1999
(Unaudited)
1. ACCOUNTING POLICIES
-------------------
The combined balance sheets as of March 31, 1999, combined statements of
operations for the three months ended March 31, 1999 and 1998, and
combined statements of cash flows for the three months ended March 31,
1999 and 1998 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, 1999, the combined results of operations for the three months
ended March 31, 1999 and 1998, and the combined cash flows for the three
months ended March 31, 1999 and 1998.
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, 1998. The
results of operations for the period ended March 31, 1999 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.
-20-
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. 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 March 31, 1999 the following payments were made to the General
Partner or its affiliates by the Partnerships:
-21-
Direct General Administrative
Partnership and Administrative Overhead
----------- ------------------- ---------------
P-1 $ 9,721 $28,440
P-2 8,152 23,709
P-3 15,238 44,640
P-4 11,341 33,240
P-5 10,683 31,170
P-6 12,859 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.
-22-
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
-23-
underlying Working Interests. The net proceeds from the oil and gas
operations are distributed to the Limited Partners and the General Partner
in accordance with the terms of the Partnerships' partnership agreements.
LIQUIDITY AND CAPITAL RESOURCES
- -------------------------------
The Partnerships began operations and investors were assigned their rights
as Limited Partners, having made capital contributions in the amounts and
on the dates set forth below:
Limited
Date of Partner Capital
Partnership Activation Contributions
----------- ------------------ ---------------
P-1 October 25, 1988 $10,807,400
P-2 February 9, 1989 9,009,400
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, 1999 and the net
revenue generated from future operations will provide sufficient working
capital to meet current and future obligations.
-24-
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
variable affecting the Partnerships' revenues is the prices received for
the sale of oil and gas. 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. In addition, crude oil prices were recently at or near their
lowest level in the past decade due primarily to the global surplus of
crude oil. However, as of the date of this Quarterly Report oil prices
have rebounded primarily due to a decrease in the global oil surplus as a
result of production curtailments by several major oil producing nations.
Management is unable to predict whether future oil and gas prices will (i)
stabilize, (ii) increase, or (iii) decrease.
P-1 PARTNERSHIP
THREE MONTHS ENDED MARCH 31, 1999 COMPARED TO THE THREE MONTHS ENDED MARCH
31, 1998.
Three Months Ended March 31,
----------------------------
1999 1998
-------- --------
Net Profits $157,465 $219,128
Barrels produced 7,426 6,960
Mcf produced 118,847 90,986
Average price/Bbl $ 10.22 $ 14.14
Average price/Mcf $ 1.53 $ 2.05
As shown in the table above, total Net Profits decreased $61,663 (28.1%)
for the three months ended March 31, 1999 as compared to the three months
ended March 31, 1998. Of this decrease, approximately $29,000 and $62,000,
respectively, were related to decreases in the average prices of oil and
gas sold and approximately $34,000 was related to an increase in
production expenses incurred by the owners of the Working Interests. These
decreases were partially offset by increases of approximately $7,000 and
$57,000, respectively, related to increases in volumes of oil and gas
-25-
sold. Volumes of oil and gas sold increased 466 barrels and 27,861 Mcf,
respectively, for the three months ended March 31, 1999 as compared to the
three months ended March 31, 1998. The increase in volumes of gas sold
resulted primarily from (i) a positive prior period volume adjustment made
by the operator during the three months ended March 31, 1999 due to the
payout of one well and (ii) the successful recompletion of another well
during the fourth quarter of 1998. The increase in production expenses
resulted primarily from (i) ad valorem taxes paid during the three months
ended March 31, 1999, (ii) lease operating expenses paid during the three
months ended March 31, 1999 related to prior periods on the well which
reached payout, and (iii) workover expenses incurred during the three
months ended March 31, 1999 on one well in order to improve the recovery
of reserves. Average oil and gas prices decreased to $10.22 per barrel and
$1.53 per Mcf, respectively, for the three months ended March 31, 1999
from $14.14 per barrel and $2.05 per Mcf, respectively, for the three
months ended March 31, 1998.
Depletion of Net Profits Interests increased $7,261 (12.2%) for the three
months ended March 31, 1999 as compared to the three months ended March
31, 1998. This increase resulted primarily from the increases in volumes
of oil and gas sold. As a percentage of Net Profits, this expense
increased to 42.5% for the three months ended March 31, 1999 from 27.3%
for the three months ended March 31, 1998. This percentage increase was
primarily due to the decreases in the average prices of oil and gas sold.
General and administrative expenses increased $868 (2.3%) for the three
months ended March 31, 1999 as compared to the three months ended March
31, 1998. As a percentage of Net Profits, these expenses increased to
24.2% for the three months ended March 31, 1999 from 17.0% for the three
months ended March 31, 1998. This percentage increase was primarily due to
the decrease in Net Profits.
Cumulative cash distributions to the Limited Partners through March 31,
1999 were $11,581,558 or 107.16% of the Limited Partners' capital
contributions.
-26-
P-2 PARTNERSHIP
THREE MONTHS ENDED MARCH 31, 1999 COMPARED TO THE THREE MONTHS ENDED MARCH
31, 1998.
Three Months Ended March 31,
----------------------------
1999 1998
-------- --------
Net Profits $120,305 $167,958
Barrels produced 5,342 4,941
Mcf produced 94,942 73,503
Average price/Bbl $ 10.29 $ 14.14
Average price/Mcf $ 1.53 $ 2.05
As shown in the table above, total Net Profits decreased $47,653 (28.4%)
for the three months ended March 31, 1999 as compared to the three months
ended March 31, 1998. Of this decrease, approximately $21,000 and $49,000,
respectively, were related to decreases in the average prices of oil and
gas sold and approximately $28,000 was related to an increase in
production expenses incurred by the owners of the Working Interests. These
decreases were partially offset by increases of approximately $6,000 and
$44,000, respectively, related to increases in volumes of oil and gas
sold. Volumes of oil and gas sold increased 401 barrels and 21,439 Mcf,
respectively, for the three months ended March 31, 1999 as compared to the
three months ended March 31, 1998. The increase in volumes of gas sold
resulted primarily from (i) a positive prior period volume adjustment made
by the operator during the three months ended March 31, 1999 due to the
payout of one well and (ii) the successful recompletion of another well
during the fourth quarter of 1998. The increase in production expenses
resulted primarily from (i) ad valorem taxes incurred during the three
months ended March 31, 1999, (ii) lease operating expenses paid during the
three months ended March 31, 1999 related to prior periods on the well
which reached payout, and (iii) workover expenses incurred during the
three months ended March 31, 1999 on one well in order to improve the
recovery of reserves. Average oil and gas prices decreased to $10.29 per
barrel and $1.53 per Mcf, respectively, for the three months ended March
31, 1999 from $14.14 per barrel and $2.05 per Mcf, respectively, for the
three months ended March 31, 1998.
-27-
Depletion of Net Profits Interests increased $8,110 (17.6%) for the three
months ended March 31, 1999 as compared to the three months ended March
31, 1998. This increase resulted primarily from the increases in volumes
of oil and gas sold. As a percentage of Net Profits, this expense
increased to 45.0% for the three months ended March 31, 1999 from 27.4%
for the three months ended March 31, 1998. This percentage increase was
primarily due to the decreases in the average prices of oil and gas sold.
General and administrative expenses increased $745 (2.4%) for the three
months ended March 31, 1999 as compared to the three months ended March
31, 1998. As a percentage of Net Profits, these expenses increased to
26.5% for the three months ended March 31, 1999 from 18.5% for the three
months ended March 31, 1998. This percentage increase was primarily due to
the decrease in Net Profits.
Cumulative cash distributions to the Limited Partners through March 31,
1999 were $8,801,561 or 97.69% of the Limited Partners' capital
contributions.
P-3 PARTNERSHIP
THREE MONTHS ENDED MARCH 31, 1999 COMPARED TO THE THREE MONTHS ENDED MARCH
31, 1998.
Three Months Ended March 31,
----------------------------
1999 1998
-------- --------
Net Profits $223,179 $313,340
Barrels produced 9,867 9,143
Mcf produced 176,983 137,185
Average price/Bbl $ 10.29 $ 14.13
Average price/Mcf $ 1.53 $ 2.06
As shown in the table above, total Net Profits decreased $90,161 (28.8%)
for the three months ended March 31, 1999 as compared to the three months
ended March 31, 1998. Of this decrease, approximately $38,000 and $92,000,
respectively, were related to decreases in the average prices of oil and
gas sold and approximately $52,000 was related to an increase in
production expenses incurred by the owners of the Working Interests. These
decreases were partially offset by increases of approximately $10,000 and
$82,000, respectively, related to an increase in volumes of oil and gas
sold. Volumes of oil and gas sold increased 724 barrels and 39,798 Mcf,
respectively, for the three months ended March 31, 1999 as compared to the
three months ended March 31, 1998. The increase in volumes of gas sold
resulted primarily from (i) a positive prior period volume adjustment made
by the operator during the three months ended March 31,
-28-
1999 due to the payout of one well and (ii) the successful recompletion of
another well during the fourth quarter of 1998. The increase in production
expenses resulted primarily from (i) ad valorem taxes paid during the
three months ended March 31, 1999, (ii) lease operating expenses paid
during the three months ended March 31, 1999 related to prior periods on
the well which reached payout, and (iii) workover expenses incurred during
the three months ended March 31, 1999 on one well in order to improve the
recovery of reserves. Average oil and gas prices decreased to $10.29 per
barrel and $1.53 per Mcf, respectively, for the three months ended March
31, 1999 from $14.13 per barrel and $2.06 per Mcf, respectively, for the
three months ended March 31, 1998.
Depletion of Net Profits Interests increased $15,313 (17.9%) for the three
months ended March 31, 1999 as compared to the three months ended March
31, 1998. This increase resulted primarily from the increases in volumes
of oil and gas sold. As a percentage of Net Profits, this expense
increased to 45.2% for the three months ended March 31, 1999 from 27.3%
for the three months ended March 31, 1998. This percentage increase was
primarily due to the decreases in the average prices of oil and gas sold.
General and administrative expenses increased $1,306 (2.2%) for the three
months ended March 31, 1999 as compared to the three months ended March
31, 1998. As a percentage of Net Profits, these expenses increased to
26.8% for the three months ended March 31, 1999 from 18.7% for the three
months ended March 31, 1998. This percentage increase was primarily due to
the decrease in Net Profits.
Cumulative cash distributions to the Limited Partners through March 31,
1999 were $15,903,401 or 93.75% of the Limited Partners' capital
contributions.
P-4 PARTNERSHIP
THREE MONTHS ENDED MARCH 31, 1999 COMPARED TO THE THREE MONTHS ENDED MARCH
31, 1998.
Three Months Ended March 31,
----------------------------
1999 1998
-------- --------
Net Profits $129,381 $240,392
Barrels produced 4,633 4,833
Mcf produced 99,620 104,877
Average price/Bbl $ 10.90 $ 14.56
Average price/Mcf $ 1.66 $ 2.21
As shown in the table above, total Net Profits decreased $111,011 (46.2%)
for the three months ended March 31, 1999
-29-
as compared to the three months ended March 31, 1998. Of this decrease,
approximately $17,000 and $55,000, respectively, were related to decreases
in the average prices of oil and gas sold and approximately $12,000 was
related to a decrease in volumes of gas sold. In addition, approximately
$25,000 of this decrease was related to an increase in production expenses
incurred by the owners of the Working Interests. Volumes of oil and gas
sold decreased 200 barrels and 5,257 Mcf, respectively, for the three
months ended March 31, 1999 as compared to the three months ended March
31, 1998. The increase in production expenses resulted primarily from (i)
ad valorem taxes paid during the three months ended March 31, 1999 on one
well, (ii) workover expenses incurred on two wells during the three months
ended March 31, 1999, and (iii) a general increase in lease operating
expenses. Average oil and gas prices decreased to $10.90 per barrel and
$1.66 per Mcf, respectively, for the three months ended March 31, 1999
from $14.56 per barrel and $2.21 per Mcf, respectively, for the three
months ended March 31, 1998.
Depletion of Net Profits Interests decreased $9,507 (13.7%) for the three
months ended March 31, 1999 as compared to the three months ended March
31, 1998. This decrease resulted primarily from (i) the decreases in
volumes of oil and gas sold and (ii) upward revisions in the estimates of
remaining oil and gas reserves at December 31, 1998. As a percentage of
Net Profits, this expense increased to 46.3% for the three months ended
March 31, 1999 from 28.9% for the three months ended March 31, 1998. This
percentage increase was primarily due to the decreases in the average
prices of oil and gas sold.
General and administrative expenses increased $993 (2.3%) for the three
months ended March 31, 1999 as compared to the three months ended March
31, 1998. As a percentage of Net Profits, these expenses increased to
34.5% for the three months ended March 31, 1999 from 18.1% for the three
months ended March 31, 1998. This percentage increase was primarily due to
the decrease in Net Profits.
Cumulative cash distributions to the Limited Partners through March 31,
1999 were $12,274,945 or 97.18% of the Limited Partners' capital
contributions.
-30-
P-5 PARTNERSHIP
THREE MONTHS ENDED MARCH 31, 1999 COMPARED TO THE THREE MONTHS ENDED MARCH
31, 1998.
Three Months Ended March 31,
----------------------------
1999 1998
-------- --------
Net Profits $144,443 $248,386
Barrels produced 1,565 1,795
Mcf produced 125,271 124,573
Average price/Bbl $ 11.50 $ 17.43
Average price/Mcf $ 1.48 $ 2.33
As shown in the table above, total Net Profits decreased $103,943 (41.8%)
for the three months ended March 31, 1999 as compared to the three months
ended March 31, 1998. Of this decrease, approximately $9,000 and $106,000,
respectively, were related to decreases in the average prices of oil and
gas sold, which decreases were partially offset by an increase of
approximately $14,000 related to decreases in production expenses incurred
by the owners of the Working Interests. Volumes of oil sold decreased 230
barrels while volumes of gas sold increased 698 Mcf for the three months
ended March 31, 1999 as compared to the three months ended March 31, 1998.
The decrease in volumes of oil sold resulted primarily from normal
declines in production. Average oil and gas prices decreased to $11.50 per
barrel and $1.48 per Mcf, respectively, for the three months ended March
31, 1999 from $17.43 per barrel and $2.33 per Mcf, respectively, for the
three months ended March 31, 1998.
Depletion of Net Profits Interests decreased $4,780 (8.2%) for the three
months ended March 31, 1999 as compared to the three months ended March
31, 1998. As a percentage of Net Profits, this expense increased to 37.0%
for the three months ended March 31, 1999 from 23.4% for the three months
ended March 31, 1998. This percentage increase was primarily due to the
decreases in the average prices of oil and gas sold.
General and administrative expenses increased $943 (2.3%) for the three
months ended March 31, 1999 as compared to the three months ended March
31, 1998. As a percentage of Net Profits, these expenses increased to
29.0% for the three months ended March 31, 1999 from 16.5% for the three
months ended March 31, 1998. This percentage increase was primarily due to
the decrease in Net Profits.
Cumulative cash distributions to the Limited Partners through March 31,
1999 were $7,571,759 or 63.92% of the Limited Partners' capital
contributions.
-31-
P-6 PARTNERSHIP
THREE MONTHS ENDED MARCH 31, 1999 COMPARED TO THE THREE MONTHS ENDED MARCH
31, 1998.
Three Months Ended March 31,
----------------------------
1999 1998
-------- --------
Net Profits $207,544 $338,028
Barrels produced 2,714 3,661
Mcf produced 235,103 212,576
Average price/Bbl $ 10.74 $ 16.05
Average price/Mcf $ 1.43 $ 2.07
As shown in the table above, total Net Profits decreased $130,484 (38.6%)
for the three months ended March 31, 1999 as compared to the three months
ended March 31, 1998. Of this decrease, approximately $14,000 and
$150,000, respectively, were related to decreases in the average prices of
oil and gas sold and approximately $15,000 was related to a decrease in
the volumes of oil sold. These decreases were partially offset by an
increase of approximately $47,000 related to an increase in the volumes of
gas sold. Volumes of oil sold decreased 947 barrels while volumes of gas
sold increased 22,527 Mcf for the three months ended March 31, 1999 as
compared to the three months ended March 31, 1998. The decrease in volumes
of oil sold resulted primarily from (i) the curtailment of oil sales in
one field due to low prices and (ii) normal declines in production. The
increase in volumes of gas sold resulted primarily from the successful
recompletion of one well in 1998. Average oil and gas prices decreased to
$10.74 per barrel and $1.43 per Mcf, respectively, for the three months
ended March 31, 1999 from $16.05 per barrel and $2.07 per Mcf,
respectively, for the three months ended March 31, 1998.
Depletion of Net Profits Interests increased $6,126 (6.3%) for the three
months ended March 31, 1999 as compared to the three months ended March
31, 1998. As a percentage of Net Profits, this expense increased to 49.7%
for the three months ended March 31, 1999 from 28.7% for the three months
ended March 31, 1998. This percentage increase was primarily due to the
decreases in the average prices of oil and gas sold.
General and administrative expenses increased $1,114 (2.3%) for the three
months ended March 31, 1999 as compared to the three months ended March
31, 1998. As a percentage of Net Profits, these expenses increased to
24.3% for the three months ended March 31, 1999 from 14.6% for the three
months
-32-
ended March 31, 1998. This percentage increase was primarily due to the
decrease in Net Profits.
Cumulative cash distributions to the Limited Partners through March 31,
1999 were $10,075,248 or 70.44% of the Limited Partners' capital
contributions.
YEAR 2000 COMPUTER ISSUES
- -------------------------
IN GENERAL
The Year 2000 Issue ("Y2K") refers to the inability of computer and other
information technology systems to properly process date and time
information, stemming from the earlier programming practice of using two
digits rather than four to represent the year in a date. For example,
computer programs and imbedded chips that are date sensitive may recognize
a date using (00) as the year 1900 rather than the year 2000. The
consequence of Y2K is that computer and imbedded processing systems may be
at risk of malfunctioning, particularly during the transition from 1999 to
2000.
The effects of Y2K are exacerbated by the interdependence of computer and
telecommunication systems throughout the world. This interdependence also
exists among the Partnerships, Samson, and their vendors, customers, and
business partners, as well as with regulators. The potential risks
associated with Y2K for an oil and gas production company fall into three
general areas: (i) financial, leasehold and administrative computer
systems, (ii) imbedded systems in field process control units, and (iii)
third party exposures. As discussed below, General Partner does not
believe that these risks will be material to the Partnerships' operations.
The Partnerships' business is producing oil and gas. The day-to-day
production of the Partnerships' oil and gas is not dependent on computers
or equipment with imbedded chips. As further discussed below, management
anticipates that the Partnerships' daily business activities will not be
materially affected by Y2K.
The Partnerships rely on Samson to provide all of their operational and
administrative services on either a direct or indirect basis. Samson is
addressing each of the three Y2K areas discussed above through a readiness
process that seeks to:
1. increase the awareness of the issue among key employees;
2. identify areas of potential risk;
-33-
3. assess the relative impact of these risks and Samson's ability to
manage them; and
4. remediate these risks on a priority basis wherever possible.
Samson Investment Company's Chief Financial Officer is responsible for
communicating to its Board of Directors Y2K actions and for the ultimate
implementation of its Y2K plan. He has delegated to Samson Investment
Company's Senior Vice President-Technology and Administrative Services
principal responsibility for ensuring Y2K compliance within Samson.
Samson has been planning for the impact of Y2K on its information
technology systems since 1993. As of May 1, 1999, Samson is in the final
stages of implementation of a Y2K plan, as summarized below:
FINANCIAL AND ADMINISTRATIVE SYSTEMS
1. Awareness. Samson has alerted its officers, managers and supervisors of
Y2K issues and asked them to have their employees participate in the
identification of potential Y2K risks which might otherwise go unnoticed
by higher level employees and officers. As a result, awareness of the
issue is considered high.
2. Risk Identification. Samson's most significant financial and
administrative systems exposure is the Y2K status of the accounting and
land administration system used to collect and manage data for internal
management decision making and for external revenue and accounts payable
purposes. Other concerns include network hardware and software, desktop
computing hardware and software, telecommunications, and office space
readiness.
3. Risk Assessment. The failure to identify and correct a material Y2K
problem could result in inaccurate or untimely financial information for
management decision-making or cash flow and payment purposes, including
maintaining oil and gas leases.
4. Remediation. Since 1993, Samson has been upgrading its accounting and
land administration software. Substantially all of the Y2K upgrades have
been completed, with the remainder scheduled to be completed during the
2nd quarter of 1999. In addition, in 1997 and 1998 Samson replaced or
applied software patches to substantially all of its network and desktop
software applications and believes them to be generally Y2K compliant.
Additional patches or software upgrades will be applied no later than June
30, 1999 to complete this process. The costs of all such risk assessments
and remediation are not expected to be material to the Partnerships.
-34-
5. Contingency Planning. Notwithstanding the foregoing, should there be
significant unanticipated disruptions in Samson's financial and
administrative systems, all of the accounting processes that are currently
automated will need to be performed manually. Samson will consider in the
second half of 1999 its options with respect to contingency arrangements
for temporary staffing to accommodate such situations.
IMBEDDED SYSTEMS
1. Awareness. Samson's Y2K Partnership has involved all levels of field
personnel from production foremen and higher. Employees at all levels of
the organization have been asked to participate in the identification of
potential Y2K risks, which might otherwise go unnoticed by higher level
employees and officers of Samson, and as a result, awareness of the issue
is considered high.
2. Risk Identification. Samson has inventoried all possible exposures to
imbedded chips and systems. Such exposures can be classified as either (i)
oil and gas production and processing equipment or (ii) office machines
such as faxes, copiers, phones, etc.
With respect to oil and gas production and processing equipment, neither
Samson nor the Partnerships operate offshore wells, significant processing
plants, or wells with older electronic monitoring systems. As a result,
Samson's inventory identified less than 10 applications using imbedded
chips. All of these are in the process of being tested by the respective
vendors and are expected to be Y2K compliant or replaced no later than
June 30, 1999. Oil and gas production related to such equipment is very
minor with respect to the entire Samson group, and, in fact, the
Partnerships' production may not use such equipment at all.
Office machines are currently being tested by Samson and vendors. It is
expected that such machines will be made compliant or replaced no later
than June 30, 1999.
3. Risk Assessment and Remediation. The failure to identify and correct a
material Y2K problem in an imbedded system could result in outcomes
ranging from errors in data reporting to curtailments or shutdowns in
production. As noted above, Samson has identified less than 10 imbedded
system applications that may have a Y2K problem. None of these
applications are believed to be material to Samson or the Partnerships.
Once identified, assessed and prioritized, Samson intends to test and
upgrade imbedded components and systems in field process control units
deemed to pose the greatest risk of significant non-compliance and
-35-
capable of testing. Samson believes that sufficient manual processes are
available to minimize any such field level risk and that there will be no
material impact on the Partnerships with respect to these applications.
4. Contingency Planning. Should material production disruptions occur as a
result of Y2K failures in field operations, Samson will utilize its
existing field personnel in an attempt to avoid any material impact on
operating cash flow. Samson is not able to quantify any potential exposure
in the event of systems failure or inadequate manual alternatives.
THIRD PARTY EXPOSURES
1. Awareness. Samson has advised management to consider Y2K implications
with its outside vendors, customers, and business partners. Management has
been asked to participate in the identification of potential third party
Y2K risks and, as a result, awareness of the issue is considered high.
2. Risk Identification. Samson's most significant third party Y2K exposure
is its dependence on third parties for the receipt of revenues from oil
and gas sales. However, virtually all of these purchasers are very large
and sophisticated companies. Other Y2K concerns include the availability
of electric power to Samson's field operations, the integrity of
telecommunication systems, and the readiness of commercial banks to
execute electronic fund transfers.
3. Risk Assessment. Because of the high awareness of the Y2K problem in
the U.S., Samson has not undertaken and does not plan to undertake a
formal company wide plan to make inquiries of third parties on the subject
of Y2K readiness. If it did so, Samson has no ability to require responses
to such inquiries or to independently verify their accuracy. Samson has,
however, received oral assurances from its significant oil and gas
purchasers of Y2K compliance. If significant disruptions from major
purchasers were to occur, however, there could be a material and adverse
impact on the Partnerships' results of operations, liquidity, and
financial conditions.
It is important to note that third party oil and gas purchasers have
significant incentives to avoid disruptions arising from a Y2K failure.
For example, most of these parties are under contractual obligations to
purchase oil and gas or disperse revenues to Samson. The failure to do so
will result in contractual and statutory penalties. Therefore, Samson
believes that it is unlikely that there will be material third party
non-compliance with purchase and remittance obligations as a result of Y2K
issues.
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4. Remediation. Where Samson perceives significant risk of Y2K
non-compliance that may have a material impact on it, and where the
relationship between Samson and a vendor, customer, or business partner
permits, joint testing may be undertaken during 1999 to further identify
these risks.
5. Contingency Planning. In the unlikely event that material production
disruptions occur as a result of Y2K failures of third parties, the
Partnerships' operating cash flow could be impacted. This contingency will
be factored into deliberations on the level of quarterly cash
distributions paid out during any such period of cash flow disruption.
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ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET
RISK.
The Partnerships do not hold any market risk sensitive instruments.
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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-1 Partnership's
financial statements as of March 31, 1999 and for the
three months ended March 31, 1999, filed herewith.
27.2 Financial Data Schedule containing summary financial
information extracted from the P-2 Partnership's
financial statements as of March 31, 1999 and for the
three months ended March 31, 1999, filed herewith.
27.3 Financial Data Schedule containing summary financial
information extracted from the P-3 Partnership's
financial statements as of March 31, 1999 and for the
three months ended March 31, 1999, filed herewith.
27.4 Financial Data Schedule containing summary financial
information extracted from the P-4 Partnership's
financial statements as of March 31, 1999 and for the
three months ended March 31, 1999, filed herewith.
27.5 Financial Data Schedule containing summary financial
information extracted from the P-5 Partnership's
financial statements as of March 31, 1999 and for the
three months ended March 31, 1999, filed herewith.
27.6 Financial Data Schedule containing summary financial
information extracted from the P-6 Partnership's
financial statements as of March 31, 1999 and for the
three months ended March 31, 1999, filed herewith.
All other exhibits are omitted as inapplicable.
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(b) Reports on Form 8-K.
Current Report on Form 8-K filed during the first quarter of 1999:
Date of event: January 29, 1999
Date filed with the SEC: January 29, 1999
Items Included: Item 5. Other Events
Item 7. Exhibits
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
GEODYNE INSTITUTIONAL/PENSION ENERGY
INCOME P-1 LIMITED PARTNERSHIP
GEODYNE INSTITUTIONAL/PENSION ENERGY
INCOME P-2 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 7, 1999 By: /s/Dennis R. Neill
--------------------------------
(Signature)
Dennis R. Neill
President
Date: May 7, 1999 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 P-1
Limited Partnership's financial statements as of March 31, 1999 and
for the three months ended March 31, 1999,
filed herewith.
27.2 Financial Data Schedule containing summary financial information
extracted from the Geodyne Institutional/Pension Energy Income P-2
Limited Partnership's financial statements as of March 31, 1999 and
for the three months ended March 31, 1999,
filed herewith.
27.3 Financial Data Schedule containing summary financial information
extracted from the Geodyne Institutional/Pension Energy Income
Limited Partnership P-3's financial statements as of March 31, 1999
and for the three months ended March 31, 1999,
filed herewith.
27.4 Financial Data Schedule containing summary financial information
extracted from the Geodyne Institutional/Pension Energy Income
Limited Partnership P-4's financial statements as of March 31, 1999
and for the three months ended March 31, 1999,
filed herewith.
27.5 Financial Data Schedule containing summary financial information
extracted from the Geodyne Institutional/Pension Energy Income
Limited Partnership P-5's financial statements as of March 31, 1999
and for the three months ended March 31, 1999,
filed herewith.
27.6 Financial Data Schedule containing summary financial information
extracted from the Geodyne Institutional/Pension Energy Income
Limited Partnership P-6's financial statements as of March 31, 1999
and for the three months ended March 31, 1999,
filed herewith.
All other exhibits are omitted as inapplicable.
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