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, 1999
Commission File Number:
II-A: 0-16388 II-D: 0-16980 II-G: 0-17802
II-B: 0-16405 II-E: 0-17320 II-H: 0-18305
II-C: 0-16981 II-F: 0-17799
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP II-A
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP II-B
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP II-C
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP II-D
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP II-E
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP II-F
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP II-G
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP II-H
---------------------------------------------------------
(Exact name of Registrant as specified in its Articles)
II-A 73-1295505
II-B 73-1303341
II-C 73-1308986
II-D 73-1329761
II-E 73-1324751
II-F 73-1330632
II-G 73-1336572
Oklahoma II-H 73-1342476
- ---------------------------- -------------------------------
(State or other jurisdiction (I.R.S. Employer Identification
of incorporation or Number)
organization)
Two West Second Street, Tulsa, Oklahoma 74103
------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code:(918) 583-1791
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes X No
------ ------
-1-
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP II-A
GEODYNE PRODUCTION PARTNERSHIP II-A
COMBINED BALANCE SHEETS
(Unaudited)
ASSETS
September 30, December 31,
1999 1998
------------- ------------
CURRENT ASSETS:
Cash and cash equivalents $ 697,002 $ 213,480
Accounts receivable:
Oil and gas sales 694,600 506,282
---------- ----------
Total current assets $1,391,602 $ 719,762
NET OIL AND GAS PROPERTIES, utilizing
the successful efforts method 3,644,038 4,109,296
DEFERRED CHARGE 701,486 701,486
---------- ----------
$5,737,126 $5,530,544
========== ==========
LIABILITIES AND PARTNERS' CAPITAL (DEFICIT)
CURRENT LIABILITIES:
Accounts payable $ 77,284 $ 171,762
Gas imbalance payable 125,904 125,904
---------- ----------
Total current liabilities $ 203,188 $ 297,666
ACCRUED LIABILITY $ 180,325 $ 180,325
PARTNERS' CAPITAL (DEFICIT):
General Partner ($ 377,394) ($ 417,336)
Limited Partners, issued and
outstanding, 484,283 units 5,731,007 5,469,889
---------- ----------
Total Partners' capital $5,353,613 $5,052,553
---------- ----------
$5,737,126 $5,530,544
========== ==========
The accompanying condensed notes are an integral part of
these combined financial statements.
-2-
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP II-A
GEODYNE PRODUCTION PARTNERSHIP II-A
COMBINED STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 1999 AND 1998
(Unaudited)
1999 1998
---------- ----------
REVENUES:
Oil and gas sales $1,135,642 $1,092,544
Interest income 5,895 22,091
Gain on sale of oil and
gas properties 1,237 35,623
---------- ----------
$1,142,774 $1,150,258
COSTS AND EXPENSES:
Lease operating $ 214,199 $ 311,930
Production tax 71,176 69,778
Depreciation, depletion, and
amortization of oil and gas
properties 175,328 214,594
General and administrative
(Note 2) 134,000 138,442
---------- ----------
$ 594,703 $ 734,744
---------- ----------
NET INCOME $ 548,071 $ 415,514
========== ==========
GENERAL PARTNER - NET INCOME $ 34,122 $ 28,255
========== ==========
LIMITED PARTNERS - NET INCOME $ 513,949 $ 387,259
========== ==========
NET INCOME per unit $ 1.06 $ .80
========== ==========
UNITS OUTSTANDING 484,283 484,283
========== ==========
The accompanying condensed notes are an integral part of
these combined financial statements.
-3-
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP II-A
GEODYNE PRODUCTION PARTNERSHIP II-A
COMBINED STATEMENTS OF OPERATIONS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1999 AND 1998
(Unaudited)
1999 1998
----------- ----------
REVENUES:
Oil and gas sales $2,629,667 $3,025,364
Interest income 10,585 40,695
Gain on sale of oil and
gas properties 1,237 688,344
Insurance settlement 202,500 -
Contract settlement income - 1,710,190
---------- ----------
$2,843,989 $5,464,593
COSTS AND EXPENSES:
Lease operating $ 772,355 $ 908,775
Production tax 144,189 184,851
Depreciation, depletion, and
amortization of oil and gas
properties 463,573 538,091
General and administrative
(Note 2) 441,628 443,790
---------- ----------
$1,821,745 $2,075,507
---------- ----------
NET INCOME $1,022,244 $3,389,086
========== ==========
GENERAL PARTNER - NET INCOME $ 69,126 $ 188,943
========== ==========
LIMITED PARTNERS - NET INCOME $ 953,118 $3,200,143
========== ==========
NET INCOME per unit $ 1.97 $ 6.61
========== ==========
UNITS OUTSTANDING 484,283 484,283
========== ==========
The accompanying condensed notes are an integral part of
these combined financial statements.
-4-
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP II-A
GEODYNE PRODUCTION PARTNERSHIP II-A
COMBINED STATEMENTS OF CASH FLOWS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1999 AND 1998
(Unaudited)
1999 1998
---------- ----------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $1,022,244 $3,389,086
Adjustments to reconcile net
income to net cash provided
by operating activities:
Depreciation, depletion, and
amortization of oil and gas
properties 463,573 538,091
Gain on sale of oil and gas
properties ( 1,237) ( 688,344)
(Increase) decrease in accounts
receivable - oil and gas sales ( 188,318) 380,089
Decrease in accounts receivable -
other - 20,975
Decrease in accounts payable ( 94,478) ( 138,877)
---------- ----------
Net cash provided by operating
activities $1,201,784 $3,501,020
---------- ----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures ($ 9,141) ($ 22,565)
Proceeds from sale of oil and
gas properties 12,063 784,540
---------- ----------
Net cash provided by investing
activities $ 2,922 $ 761,975
---------- ----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Cash distributions ($ 721,184) ($2,623,964)
---------- ----------
Net cash used by financing activities ($ 721,184) ($2,623,964)
---------- ----------
NET INCREASE IN CASH AND CASH
EQUIVALENTS $ 483,522 $1,639,031
CASH AND CASH EQUIVALENTS AT
BEGINNING OF PERIOD 213,480 830,584
---------- ----------
CASH AND CASH EQUIVALENTS AT
END OF PERIOD $ 697,002 $2,469,615
========== ==========
The accompanying condensed notes are an integral part of
these combined financial statements.
-5-
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP II-B
GEODYNE PRODUCTION PARTNERSHIP II-B
COMBINED BALANCE SHEETS
(Unaudited)
ASSETS
September 30, December 31,
1999 1998
------------ ------------
CURRENT ASSETS:
Cash and cash equivalents $ 435,223 $ 107,021
Accounts receivable:
Oil and gas sales 477,261 328,334
---------- ----------
Total current assets $ 912,484 $ 435,355
NET OIL AND GAS PROPERTIES, utilizing
the successful efforts method 2,256,067 2,569,828
DEFERRED CHARGE 179,833 179,833
---------- ----------
$3,348,384 $3,185,016
========== ==========
LIABILITIES AND PARTNERS' CAPITAL (DEFICIT)
CURRENT LIABILITIES:
Accounts payable $ 58,675 $ 77,383
Gas imbalance payable 19,790 19,790
---------- ----------
Total current liabilities $ 78,465 $ 97,173
ACCRUED LIABILITY $ 98,681 $ 98,681
PARTNERS' CAPITAL (DEFICIT):
General Partner ($ 294,417) ($ 320,234)
Limited Partners, issued and
outstanding, 361,719 units 3,465,655 3,309,396
---------- ----------
Total Partners' capital $3,171,238 $2,989,162
---------- ----------
$3,348,384 $3,185,016
========== ==========
The accompanying condensed notes are an integral part of
these combined financial statements.
-6-
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP II-B
GEODYNE PRODUCTION PARTNERSHIP II-B
COMBINED STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 1999 AND 1998
(Unaudited)
1999 1998
--------- --------
REVENUES:
Oil and gas sales $812,462 $543,938
Interest income 3,131 24,180
Gain on sale of oil and
gas properties - 3,649
-------- --------
$815,593 $571,767
COSTS AND EXPENSES:
Lease operating $162,365 $210,925
Production tax 58,135 33,204
Depreciation, depletion, and
amortization of oil and gas
properties 107,581 95,742
General and administrative
(Note 2) 100,087 103,430
-------- --------
$428,168 $443,301
-------- --------
NET INCOME $387,425 $128,466
======== ========
GENERAL PARTNER - NET INCOME $ 23,518 $ 9,044
======== ========
LIMITED PARTNERS - NET INCOME $363,907 $119,422
======== ========
NET INCOME per unit $ 1.01 $ .33
======== ========
UNITS OUTSTANDING 361,719 361,719
======== ========
The accompanying condensed notes are an integral part of
these combined financial statements.
-7-
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP II-B
GEODYNE PRODUCTION PARTNERSHIP II-B
COMBINED STATEMENTS OF OPERATIONS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1999 AND 1998
(Unaudited)
1999 1998
----------- ----------
REVENUES:
Oil and gas sales $1,898,187 $1,973,911
Interest income 5,515 33,865
Gain on sale of oil and
gas properties - 66,824
Contract settlement income - 2,793,295
---------- ----------
$1,903,702 $4,867,895
COSTS AND EXPENSES:
Lease operating $ 590,298 $ 630,942
Production tax 122,224 119,036
Depreciation, depletion, and
amortization of oil and gas
properties 292,007 296,713
General and administrative
(Note 2) 329,001 333,336
---------- ----------
$1,333,530 $1,380,027
---------- ----------
NET INCOME $ 570,172 $3,487,868
========== ==========
GENERAL PARTNER - NET INCOME $ 39,913 $ 184,569
========== ==========
LIMITED PARTNERS - NET INCOME $ 530,259 $3,303,299
========== ==========
NET INCOME per unit $ 1.47 $ 9.13
========== ==========
UNITS OUTSTANDING 361,719 361,719
========== ==========
The accompanying condensed notes are an integral part of
these combined financial statements.
-8-
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP II-B
GEODYNE PRODUCTION PARTNERSHIP II-B
COMBINED STATEMENTS OF CASH FLOWS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1999 AND 1998
(Unaudited)
1999 1998
--------- ----------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $570,172 $3,487,868
Adjustments to reconcile net
income to net cash provided
by operating activities:
Depreciation, depletion, and
amortization of oil and gas
properties 292,007 296,713
Gain on sale of oil and gas
properties - ( 66,824)
(Increase) decrease in accounts
receivable - oil and gas sales ( 148,927) 215,440
Decrease in accounts payable ( 18,708) ( 76,708)
-------- ----------
Net cash provided by operating
activities $694,544 $3,856,489
-------- ----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures ($ 1,454) ($ 43,519)
Proceeds from sale of oil and
gas properties 23,208 78,394
-------- ----------
Net cash provided by investing
activities $ 21,754 $ 34,875
-------- ----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Cash distributions ($388,096) ($1,591,911)
-------- ----------
Net cash used by financing activities ($388,096) ($1,591,911)
-------- ----------
NET INCREASE IN CASH AND CASH
EQUIVALENTS $328,202 $2,299,453
CASH AND CASH EQUIVALENTS AT
BEGINNING OF PERIOD 107,021 644,574
-------- ----------
CASH AND CASH EQUIVALENTS AT
END OF PERIOD $435,223 $2,944,027
======== ==========
The accompanying condensed notes are an integral part of
these combined financial statements.
-9-
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP II-C
GEODYNE PRODUCTION PARTNERSHIP II-C
COMBINED BALANCE SHEETS
(Unaudited)
ASSETS
September 30, December 31,
1999 1998
------------ ------------
CURRENT ASSETS:
Cash and cash equivalents $ 226,879 $ 66,617
Accounts receivable:
Oil and gas sales 230,734 157,275
---------- ----------
Total current assets $ 457,613 $ 223,892
NET OIL AND GAS PROPERTIES, utilizing
the successful efforts method 1,220,783 1,382,430
DEFERRED CHARGE 153,412 153,412
---------- ----------
$1,831,808 $1,759,734
========== ==========
LIABILITIES AND PARTNERS' CAPITAL (DEFICIT)
CURRENT LIABILITIES:
Accounts payable $ 24,670 $ 29,848
Gas imbalance payable 38,249 38,249
---------- ----------
Total current liabilities $ 62,919 $ 68,097
ACCRUED LIABILITY $ 59,308 $ 59,308
PARTNERS' CAPITAL (DEFICIT):
General Partner ($ 119,171) ($ 133,264)
Limited Partners, issued and
outstanding, 154,621 units 1,828,752 1,765,593
---------- ----------
Total Partners' capital $1,709,581 $1,632,329
---------- ----------
$1,831,808 $1,759,734
========== ==========
The accompanying condensed notes are an integral part of
these combined financial statements.
-10-
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP II-C
GEODYNE PRODUCTION PARTNERSHIP II-C
COMBINED STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 1999 AND 1998
(Unaudited)
1999 1998
--------- ---------
REVENUES:
Oil and gas sales $379,273 $253,933
Interest income 1,808 10,759
Loss on sale of oil and
gas properties - ( 7,362)
-------- --------
$381,081 $257,330
COSTS AND EXPENSES:
Lease operating $ 65,164 $ 75,529
Production tax 26,752 15,445
Depreciation, depletion, and
amortization of oil and gas
properties 59,416 52,158
General and administrative
(Note 2) 42,780 44,210
-------- --------
$194,112 $187,342
-------- --------
NET INCOME $186,969 $ 69,988
======== ========
GENERAL PARTNER - NET INCOME $ 23,864 $ 5,048
======== ========
LIMITED PARTNERS - NET INCOME $163,105 $ 64,940
======== ========
NET INCOME per unit $ 1.06 $ .42
======== ========
UNITS OUTSTANDING 154,621 154,621
======== ========
The accompanying condensed notes are an integral part of
these combined financial statements.
-11-
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP II-C
GEODYNE PRODUCTION PARTNERSHIP II-C
COMBINED STATEMENTS OF OPERATIONS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1999 AND 1998
(Unaudited)
1999 1998
--------- ---------
REVENUES:
Oil and gas sales $903,938 $ 896,558
Interest income 3,668 17,869
Gain on sale of oil and
gas properties 47 191,496
Contract settlement income - 1,197,148
-------- ----------
$907,653 $2,303,071
COSTS AND EXPENSES:
Lease operating $227,596 $ 235,610
Production tax 69,002 58,186
Depreciation, depletion, and
amortization of oil and gas
properties 163,546 161,756
General and administrative
(Note 2) 141,385 142,940
-------- ----------
$601,529 $ 598,492
-------- ----------
NET INCOME $306,124 $1,704,579
======== ==========
GENERAL PARTNER - NET INCOME $ 44,965 $ 90,806
======== ==========
LIMITED PARTNERS - NET INCOME $261,159 $1,613,773
======== ==========
NET INCOME per unit $ 1.69 $ 10.44
======== ==========
UNITS OUTSTANDING 154,621 154,621
======== ==========
The accompanying condensed notes are an integral part of
these combined financial statements.
-12-
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP II-C
GEODYNE PRODUCTION PARTNERSHIP II-C
COMBINED STATEMENTS OF CASH FLOWS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1999 AND 1998
(Unaudited)
1999 1998
---------- ----------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $306,124 $1,704,579
Adjustments to reconcile net
income to net cash provided
by operating activities:
Depreciation, depletion, and
amortization of oil and gas
properties 163,546 161,756
Gain on sale of oil and gas
properties ( 47) ( 191,496)
(Increase) decrease in accounts
receivable - oil and gas sales ( 73,459) 115,388
Decrease in accounts receivable -
other - 1,931
Decrease in accounts payable ( 5,178) ( 7,550)
-------- ----------
Net cash provided by operating
activities $390,986 $1,784,608
-------- ----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures ($ 10,587) ($ 18,306)
Proceeds from sale of oil and
gas properties 8,735 274,913
-------- ----------
Net cash provided (used) by
investing activities ($ 1,852) $ 256,607
-------- ----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Cash distributions ($228,872) ($1,096,886)
-------- ----------
Net cash used by financing activities ($228,872) ($1,096,886)
-------- ----------
NET INCREASE IN CASH AND CASH
EQUIVALENTS $160,262 $ 944,329
CASH AND CASH EQUIVALENTS AT
BEGINNING OF PERIOD 66,617 358,095
-------- ----------
CASH AND CASH EQUIVALENTS AT
END OF PERIOD $226,879 $1,302,424
======== ==========
The accompanying condensed notes are an integral part of
these combined financial statements.
-13-
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP II-D
GEODYNE PRODUCTION PARTNERSHIP II-D
COMBINED BALANCE SHEETS
(Unaudited)
ASSETS
September 30, December 31,
1999 1998
------------ ------------
CURRENT ASSETS:
Cash and cash equivalents $ 440,515 $ 311,556
Accounts receivable:
Oil and gas sales 485,046 342,433
---------- ----------
Total current assets $ 925,561 $ 653,989
NET OIL AND GAS PROPERTIES, utilizing
the successful efforts method 2,436,293 2,726,713
DEFERRED CHARGE 614,207 614,207
---------- ----------
$3,976,061 $3,994,909
========== ==========
LIABILITIES AND PARTNERS' CAPITAL (DEFICIT)
CURRENT LIABILITIES:
Accounts payable $ 56,998 $ 67,934
Gas imbalance payable 149,648 149,648
---------- ----------
Total current liabilities $ 206,646 $ 217,582
ACCRUED LIABILITY $ 206,215 $ 206,215
PARTNERS' CAPITAL (DEFICIT):
General Partner ($ 220,455) ($ 247,182)
Limited Partners, issued and
outstanding, 314,878 units 3,783,655 3,818,294
---------- ----------
Total Partners' capital $3,563,200 $3,571,112
---------- ----------
$3,976,061 $3,994,909
========== ==========
The accompanying condensed notes are an integral part of
these combined financial statements.
-14-
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP II-D
GEODYNE PRODUCTION PARTNERSHIP II-D
COMBINED STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 1999 AND 1998
(Unaudited)
1999 1998
--------- ---------
REVENUES:
Oil and gas sales $705,104 $540,255
Interest income 3,898 27,851
Gain on sale of oil and
gas properties - 9,650
Contract settlement income - 363
-------- --------
$709,002 $578,119
COSTS AND EXPENSES:
Lease operating $144,496 $222,073
Production tax 48,457 34,797
Depreciation, depletion, and
amortization of oil and gas
properties 102,835 110,762
General and administrative
(Note 2) 87,122 90,053
-------- --------
$382,910 $457,685
-------- --------
NET INCOME $326,092 $120,434
======== ========
GENERAL PARTNER - NET INCOME $ 41,475 $ 9,060
======== ========
LIMITED PARTNERS - NET INCOME $284,617 $111,374
======== ========
NET INCOME per unit $ .90 $ .36
======== ========
UNITS OUTSTANDING 314,878 314,878
======== ========
The accompanying condensed notes are an integral part of
these combined financial statements.
-15-
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP II-D
GEODYNE PRODUCTION PARTNERSHIP II-D
COMBINED STATEMENTS OF OPERATIONS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1999 AND 1998
(Unaudited)
1999 1998
---------- ----------
REVENUES:
Oil and gas sales $1,831,319 $1,885,766
Interest income 9,785 47,221
Gain on sale of oil and
gas properties 36,944 518,545
Contract settlement income - 3,033,646
---------- ----------
$1,878,048 $5,485,178
COSTS AND EXPENSES:
Lease operating $ 590,571 $ 707,939
Production tax 137,156 137,214
Depreciation, depletion, and
amortization of oil and gas
properties 307,251 338,145
General and administrative
(Note 2) 286,856 290,356
---------- ----------
$1,321,834 $1,473,654
---------- ----------
NET INCOME $ 556,214 $4,011,524
========== ==========
GENERAL PARTNER - NET INCOME $ 76,853 $ 211,741
========== ==========
LIMITED PARTNERS - NET INCOME $ 479,361 $3,799,783
========== ==========
NET INCOME per unit $ 1.52 $ 12.07
========== ==========
UNITS OUTSTANDING 314,878 314,878
========== ==========
The accompanying condensed notes are an integral part of
these combined financial statements.
-16-
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP II-D
GEODYNE PRODUCTION PARTNERSHIP II-D
COMBINED STATEMENTS OF CASH FLOWS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1999 AND 1998
(Unaudited)
1999 1998
-------- ----------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $556,214 $4,011,524
Adjustments to reconcile net
income to net cash provided
by operating activities:
Depreciation, depletion, and
amortization of oil and gas
properties 307,251 338,145
Gain on sale of oil and gas
properties ( 36,944) ( 518,545)
(Increase) decrease in accounts
receivable - oil and gas sales ( 142,613) 346,446
Increase in accounts receivable -
General Partner - ( 363)
Decrease in accounts receivable -
other - 20,267
Decrease in accounts payable ( 10,936) ( 8,641)
-------- ----------
Net cash provided by operating
activities $672,972 $4,188,833
-------- ----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures ($ 16,831) ($ 1,639)
Proceeds from sale of oil and
gas properties 36,944 698,504
-------- ----------
Net cash provided by investing
activities $ 20,113 $ 696,865
-------- ----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Cash distributions ($564,126) ($2,724,865)
-------- ----------
Net cash used by financing activities ($564,126) ($2,724,865)
-------- ----------
NET INCREASE IN CASH AND CASH
EQUIVALENTS $128,959 $2,160,833
CASH AND CASH EQUIVALENTS AT
BEGINNING OF PERIOD 311,556 1,151,142
-------- ----------
CASH AND CASH EQUIVALENTS AT
END OF PERIOD $440,515 $3,311,975
======== ==========
The accompanying condensed notes are an integral part of
these combined financial statements.
-17-
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP II-E
GEODYNE PRODUCTION PARTNERSHIP II-E
COMBINED BALANCE SHEETS
(Unaudited)
ASSETS
September 30, December 31,
1999 1998
------------ ------------
CURRENT ASSETS:
Cash and cash equivalents $ 380,420 $ 376,779
Accounts receivable:
Oil and gas sales 339,344 220,028
---------- ----------
Total current assets $ 719,764 $ 596,807
NET OIL AND GAS PROPERTIES, utilizing
the successful efforts method 2,059,750 2,388,613
DEFERRED CHARGE 275,532 275,532
---------- ----------
$3,055,046 $3,260,952
========== ==========
LIABILITIES AND PARTNERS' CAPITAL (DEFICIT)
CURRENT LIABILITIES:
Accounts payable $ 30,321 $ 38,881
Gas imbalance payable 148,458 148,458
---------- ----------
Total current liabilities $ 178,779 $ 187,339
ACCRUED LIABILITY $ 81,050 $ 81,050
PARTNERS' CAPITAL (DEFICIT):
General Partner ($ 156,177) ($ 173,306)
Limited Partners, issued and
outstanding, 228,821 units 2,951,394 3,165,869
---------- ----------
Total Partners' capital $2,795,217 $2,992,563
---------- ----------
$3,055,046 $3,260,952
========== ==========
The accompanying condensed notes are an integral part of
these combined financial statements.
-18-
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP II-E
GEODYNE PRODUCTION PARTNERSHIP II-E
COMBINED STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 1999 AND 1998
(Unaudited)
1999 1998
--------- --------
REVENUES:
Oil and gas sales $490,849 $366,664
Interest income 3,827 52,456
Gain on sale of oil and
gas properties - 6,200
Contract settlement income - 736
-------- --------
$494,676 $426,056
COSTS AND EXPENSES:
Lease operating $ 90,976 $120,322
Production tax 36,311 26,860
Depreciation, depletion, and
amortization of oil and gas
properties 104,784 123,671
General and administrative
(Note 2) 63,315 65,460
-------- --------
$295,386 $336,313
-------- --------
NET INCOME $199,290 $ 89,743
======== ========
GENERAL PARTNER - NET
INCOME $ 28,977 $ 6,811
======== ========
LIMITED PARTNERS - NET
INCOME $170,313 $ 82,932
======== ========
NET INCOME per unit $ .75 $ .36
======== ========
UNITS OUTSTANDING 228,821 228,821
======== ========
The accompanying condensed notes are an integral part of
these combined financial statements.
-19-
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP II-E
GEODYNE PRODUCTION PARTNERSHIP II-E
COMBINED STATEMENTS OF OPERATIONS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1999 AND 1998
(Unaudited)
1999 1998
---------- ----------
REVENUES:
Oil and gas sales $1,294,093 $1,257,494
Interest income 9,926 63,149
Gain on sale of oil and
gas properties 23,406 326,675
Contract settlement income - 6,159,355
---------- ----------
$1,327,425 $7,806,673
COSTS AND EXPENSES:
Lease operating $ 297,620 $ 363,625
Production tax 90,873 90,804
Depreciation, depletion, and
amortization of oil and gas
properties 330,819 382,374
General and administrative
(Note 2) 208,877 214,935
---------- ----------
$ 928,189 $1,051,738
---------- ----------
NET INCOME $ 399,236 $6,754,935
========== ==========
GENERAL PARTNER - NET
INCOME $ 47,711 $ 349,884
========== ==========
LIMITED PARTNERS - NET
INCOME $ 351,525 $6,405,051
========== ==========
NET INCOME per unit $ 1.54 $ 27.99
========== ==========
UNITS OUTSTANDING 228,821 228,821
========== ==========
The accompanying condensed notes are an integral part of
these combined financial statements.
-20-
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP II-E
GEODYNE PRODUCTION PARTNERSHIP II-E
COMBINED STATEMENTS OF CASH FLOWS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1999 AND 1998
(Unaudited)
1999 1998
--------- ----------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $399,236 $6,754,935
Adjustments to reconcile net income
to net cash provided by operating
activities:
Depreciation, depletion, and
amortization of oil and gas
properties 330,819 382,374
Gain on sale of oil and gas
properties ( 23,406) ( 326,675)
(Increase) decrease in accounts
receivable - oil and gas sales ( 119,316) 230,047
Increase in accounts receivable -
General Partner - ( 736)
Decrease in accounts receivable -
other - 110
Decrease in accounts payable ( 8,560) ( 61,753)
-------- ----------
Net cash provided by operating
activities $578,773 $6,978,302
-------- ----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures ($ 5,785) ($ 110,926)
Proceeds from sale of oil and
gas properties 27,235 356,006
-------- ----------
Net cash provided by investing
activities $ 21,450 $ 245,080
-------- ----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Cash distributions ($596,582) ($1,584,587)
-------- ----------
Net cash used by financing activities ($596,582) ($1,584,587)
-------- ----------
NET INCREASE IN CASH AND CASH
EQUIVALENTS $ 3,641 $5,638,795
CASH AND CASH EQUIVALENTS AT
BEGINNING OF PERIOD 376,779 670,777
-------- ----------
CASH AND CASH EQUIVALENTS AT
END OF PERIOD $380,420 $6,309,572
======== ==========
The accompanying condensed notes are an integral part of
these combined financial statements.
-21-
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP II-F
GEODYNE PRODUCTION PARTNERSHIP II-F
COMBINED BALANCE SHEETS
(Unaudited)
ASSETS
September 30, December 31,
1999 1998
------------ ------------
CURRENT ASSETS:
Cash and cash equivalents $ 243,149 $ 153,240
Accounts receivable:
Oil and gas sales 301,367 187,525
---------- ----------
Total current assets $ 544,516 $ 340,765
NET OIL AND GAS PROPERTIES, utilizing
the successful efforts method 1,830,142 2,086,592
DEFERRED CHARGE 46,373 46,373
---------- ----------
$2,421,031 $2,473,730
========== ==========
LIABILITIES AND PARTNERS' CAPITAL (DEFICIT)
CURRENT LIABILITIES:
Accounts payable $ 21,912 $ 24,007
Gas imbalance payable 4,233 4,233
---------- ----------
Total current liabilities $ 26,145 $ 28,240
ACCRUED LIABILITY $ 24,995 $ 24,995
PARTNERS' CAPITAL (DEFICIT):
General Partner ($ 109,466) ($ 144,763)
Limited Partners, issued and
outstanding, 171,400 units 2,479,357 2,565,258
---------- ----------
Total Partners' capital $2,369,891 $2,420,495
---------- ----------
$2,421,031 $2,473,730
========== ==========
The accompanying condensed notes are an integral part of
these combined financial statements.
-22-
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP II-F
GEODYNE PRODUCTION PARTNERSHIP II-F
COMBINED STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 1999 AND 1998
(Unaudited)
1999 1998
--------- ---------
REVENUES:
Oil and gas sales $454,356 $266,881
Interest income 1,950 6,023
Loss on sale of oil and
gas properties - ( 1,643)
-------- --------
$456,306 $271,261
COSTS AND EXPENSES:
Lease operating $ 67,499 $ 69,935
Production tax 26,867 19,525
Depreciation, depletion, and
amortization of oil and gas
properties 75,359 77,170
General and administrative
(Note 2) 47,427 49,088
-------- --------
$217,152 $215,718
-------- --------
NET INCOME $239,154 $ 55,543
======== ========
GENERAL PARTNER - NET INCOME $ 30,502 $ 5,563
======== ========
LIMITED PARTNERS - NET INCOME $208,652 $ 49,980
======== ========
NET INCOME per unit $ 1.22 $ .30
======== ========
UNITS OUTSTANDING 171,400 171,400
======== ========
The accompanying condensed notes are an integral part of
these combined financial statements.
-23-
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP II-F
GEODYNE PRODUCTION PARTNERSHIP II-F
COMBINED STATEMENTS OF OPERATIONS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1999 AND 1998
(Unaudited)
1999 1998
---------- ----------
REVENUES:
Oil and gas sales $1,225,529 $1,087,834
Interest income 5,125 16,066
Gain on sale of oil and
gas properties 1,203 654,302
---------- ----------
$1,231,857 $1,758,202
COSTS AND EXPENSES:
Lease operating $ 257,961 $ 218,337
Production tax 73,494 73,986
Depreciation, depletion, and
amortization of oil and gas
properties 269,059 254,409
General and administrative
(Note 2) 156,008 155,874
---------- ----------
$ 756,522 $ 702,606
---------- ----------
NET INCOME $ 475,335 $1,055,596
========== ==========
GENERAL PARTNER - NET INCOME $ 71,236 $ 62,153
========== ==========
LIMITED PARTNERS - NET INCOME $ 404,099 $ 993,443
========== ==========
NET INCOME per unit $ 2.36 $ 5.80
========== ==========
UNITS OUTSTANDING 171,400 171,400
========== ==========
The accompanying condensed notes are an integral part of
these combined financial statements.
-24-
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP II-F
GEODYNE PRODUCTION PARTNERSHIP II-F
COMBINED STATEMENTS OF CASH FLOWS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1999 AND 1998
(Unaudited)
1999 1998
-------- ----------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $475,335 $1,055,596
Adjustments to reconcile net income
to net cash provided by operating
activities:
Depreciation, depletion, and
amortization of oil and gas
properties 269,059 254,409
Gain on sale of oil and gas
properties ( 1,203) ( 654,302)
(Increase) decrease in accounts
receivable - oil and gas sales ( 113,842) 170,245
Decrease in accounts receivable -
other - 43
Decrease in accounts payable ( 2,095) ( 40,416)
-------- ----------
Net cash provided by operating
activities $627,254 $ 785,575
-------- ----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures ($ 17,239) ($ 34,281)
Proceeds from sale of oil and
gas properties 5,833 717,457
-------- ----------
Net cash provided (used) by
investing activities ($ 11,406) $ 683,176
-------- ----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Cash distributions ($525,939) ($2,004,865)
-------- ----------
Net cash used by financing activities ($525,939) ($2,004,865)
-------- ----------
NET INCREASE (DECREASE) IN CASH AND
CASH EQUIVALENTS $ 89,909 ($ 536,114)
CASH AND CASH EQUIVALENTS AT
BEGINNING OF PERIOD 153,240 741,852
-------- ----------
CASH AND CASH EQUIVALENTS AT
END OF PERIOD $243,149 $ 205,738
======== ==========
The accompanying condensed notes are an integral part of
these combined financial statements.
-25-
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP II-G
GEODYNE PRODUCTION PARTNERSHIP II-G
COMBINED BALANCE SHEETS
(Unaudited)
ASSETS
September 30, December 31,
1999 1998
------------ ------------
CURRENT ASSETS:
Cash and cash equivalents $ 502,847 $ 333,168
Accounts receivable:
Oil and gas sales 634,674 398,538
---------- ----------
Total current assets $1,137,521 $ 731,706
NET OIL AND GAS PROPERTIES, utilizing
the successful efforts method 3,944,416 4,492,141
DEFERRED CHARGE 101,955 101,955
---------- ----------
$5,183,892 $5,325,802
========== ==========
LIABILITIES AND PARTNERS' CAPITAL (DEFICIT)
CURRENT LIABILITIES:
Accounts payable $ 47,085 $ 51,385
Gas imbalance payable 9,029 9,029
---------- ----------
Total current liabilities $ 56,114 $ 60,414
ACCRUED LIABILITY $ 57,830 $ 57,830
PARTNERS' CAPITAL (DEFICIT):
General Partner ($ 273,282) ($ 304,885)
Limited Partners, issued and
outstanding, 372,189 units 5,343,230 5,512,443
---------- ----------
Total Partners' capital $5,069,948 $5,207,558
---------- ----------
$5,183,892 $5,325,802
========== ==========
The accompanying condensed notes are an integral part of
these combined financial statements.
-26-
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP II-G
GEODYNE PRODUCTION PARTNERSHIP II-G
COMBINED STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 1999 AND 1998
(Unaudited)
1999 1998
-------- ---------
REVENUES:
Oil and gas sales $888,505 $561,811
Interest income 4,234 12,836
Loss on sale of oil and
gas properties - ( 3,499)
-------- --------
$892,739 $571,148
COSTS AND EXPENSES:
Lease operating $145,415 $149,170
Production tax 54,369 42,199
Depreciation, depletion, and
amortization of oil and gas
properties 157,039 163,274
General and administrative
(Note 2) 102,973 106,564
-------- --------
$459,796 $461,207
-------- --------
NET INCOME $432,943 $109,941
======== ========
GENERAL PARTNER - NET INCOME $ 27,717 $ 11,386
======== ========
LIMITED PARTNERS - NET INCOME $405,226 $ 98,555
======== ========
NET INCOME per unit $ 1.09 $ .27
======== ========
UNITS OUTSTANDING 372,189 372,189
======== ========
The accompanying condensed notes are an integral part of
these combined financial statements.
-27-
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP II-G
GEODYNE PRODUCTION PARTNERSHIP II-G
COMBINED STATEMENTS OF OPERATIONS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1999 AND 1998
(Unaudited)
1999 1998
---------- ----------
REVENUES:
Oil and gas sales $2,593,092 $2,310,367
Interest income 11,235 34,323
Gain on sale of oil and
gas properties 2,693 1,368,785
---------- ----------
$2,607,020 $3,713,475
COSTS AND EXPENSES:
Lease operating $ 551,590 $ 465,999
Production tax 156,989 159,598
Depreciation, depletion, and
amortization of oil and gas
properties 574,522 543,788
General and administrative
(Note 2) 338,439 338,361
---------- ----------
$1,621,540 $1,507,746
---------- ----------
NET INCOME $ 985,480 $2,205,729
========== ==========
GENERAL PARTNER - NET INCOME $ 71,693 $ 130,322
========== ==========
LIMITED PARTNERS - NET INCOME $ 913,787 $2,075,407
========== ==========
NET INCOME per unit $ 2.46 $ 5.58
========== ==========
UNITS OUTSTANDING 372,189 372,189
========== ==========
The accompanying condensed notes are an integral part of
these combined financial statements.
-28-
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP II-G
GEODYNE PRODUCTION PARTNERSHIP II-G
COMBINED STATEMENTS OF CASH FLOWS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1999 AND 1998
(Unaudited)
1999 1998
---------- ----------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 985,480 $2,205,729
Adjustments to reconcile net income
to net cash provided by operating
activities:
Depreciation, depletion, and
amortization of oil and gas
properties 574,522 543,788
Gain on sale of oil and gas
properties ( 2,693) ( 1,368,785)
(Increase) decrease in accounts
receivable - oil and gas sales ( 236,136) 361,876
Decrease in accounts payable ( 4,300) ( 84,509)
---------- ----------
Net cash provided by operating
activities $1,316,873 $1,658,099
---------- ----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures ($ 36,609) ($ 74,175)
Proceeds from sale of oil and
gas properties 12,505 1,502,696
---------- ----------
Net cash provided (used) by
investing activities ($ 24,104) $1,428,521
---------- ----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Cash distributions ($1,123,090) ($4,212,085)
---------- ----------
Net cash used by financing activities ($1,123,090) ($4,212,085)
---------- ----------
NET INCREASE (DECREASE) IN CASH AND
CASH EQUIVALENTS $ 169,679 ($1,125,465)
CASH AND CASH EQUIVALENTS AT
BEGINNING OF PERIOD 333,168 1,564,325
---------- ----------
CASH AND CASH EQUIVALENTS AT
END OF PERIOD $ 502,847 $ 438,860
========== ==========
The accompanying condensed notes are an integral part of
these combined financial statements.
-29-
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP II-H
GEODYNE PRODUCTION PARTNERSHIP II-H
COMBINED BALANCE SHEETS
(Unaudited)
ASSETS
September 30, December 31,
1999 1998
------------ ------------
CURRENT ASSETS:
Cash and cash equivalents $ 120,620 $ 78,275
Accounts receivable:
Oil and gas sales 152,247 95,260
---------- ----------
Total current assets $ 272,867 $ 173,535
NET OIL AND GAS PROPERTIES, utilizing
the successful efforts method 930,418 1,057,945
DEFERRED CHARGE 23,749 23,749
---------- ----------
$1,227,034 $1,255,229
========== ==========
LIABILITIES AND PARTNERS' CAPITAL (DEFICIT)
CURRENT LIABILITIES:
Accounts payable $ 11,422 $ 12,408
---------- ----------
Total current liabilities $ 11,422 $ 12,408
ACCRUED LIABILITY $ 12,063 $ 12,063
PARTNERS' CAPITAL (DEFICIT):
General Partner ($ 67,915) ($ 75,631)
Limited Partners, issued and
outstanding, 91,711 units 1,271,464 1,306,389
---------- ----------
Total Partners' capital $1,203,549 $1,230,758
---------- ----------
$1,227,034 $1,255,229
========== ==========
The accompanying condensed notes are an integral part of
these combined financial statements.
-30-
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP II-H
GEODYNE PRODUCTION PARTNERSHIP II-H
COMBINED STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 1999 AND 1998
(Unaudited)
1999 1998
-------- ----------
REVENUES:
Oil and gas sales $222,185 $136,780
Interest income 906 2,866
Loss on sale of oil and
gas properties - ( 836)
-------- --------
$223,091 $138,810
COSTS AND EXPENSES:
Lease operating $ 35,386 $ 35,793
Production tax 13,556 10,703
Depreciation, depletion, and
amortization of oil and gas
properties 37,057 38,690
General and administrative
(Note 2) 25,373 26,255
-------- --------
$111,372 $111,441
-------- --------
NET INCOME $111,719 $ 27,369
======== ========
GENERAL PARTNER - NET INCOME $ 7,023 $ 2,772
======== ========
LIMITED PARTNERS - NET INCOME $104,696 $ 24,597
======== ========
NET INCOME per unit $ 1.14 $ .27
======== ========
UNITS OUTSTANDING 91,711 91,711
======== ========
The accompanying condensed notes are an integral part of
these combined financial statements.
-31-
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP II-H
GEODYNE PRODUCTION PARTNERSHIP II-H
COMBINED STATEMENTS OF OPERATIONS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1999 AND 1998
(Unaudited)
1999 1998
-------- ---------
REVENUES:
Oil and gas sales $618,940 $549,753
Interest income 2,356 7,688
Gain on sale of oil and
gas properties 700 314,187
-------- --------
$621,996 $871,628
COSTS AND EXPENSES:
Lease operating $132,845 $111,982
Production tax 37,682 39,027
Depreciation, depletion, and
amortization of oil and gas
properties 133,998 126,775
General and administrative
(Note 2) 83,453 83,369
-------- --------
$387,978 $361,153
-------- --------
NET INCOME $234,018 $510,475
======== ========
GENERAL PARTNER - NET INCOME $ 16,943 $ 30,210
======== ========
LIMITED PARTNERS - NET INCOME $217,075 $480,265
======== ========
NET INCOME per unit $ 2.37 $ 5.24
======== ========
UNITS OUTSTANDING 91,711 91,711
======== ========
The accompanying condensed notes are an integral part of
these combined financial statements.
-32-
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP II-H
GEODYNE PRODUCTION PARTNERSHIP II-H
COMBINED STATEMENTS OF CASH FLOWS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1999 AND 1998
(Unaudited)
1999 1998
-------- ---------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $234,018 $510,475
Adjustments to reconcile net income
to net cash provided by operating
activities:
Depreciation, depletion, and
amortization of oil and gas
properties 133,998 126,775
Gain on sale of oil and gas
properties ( 700) ( 314,187)
(Increase) decrease in accounts
receivable - oil and gas sales ( 56,987) 86,097
Decrease in accounts payable ( 986) ( 19,532)
-------- --------
Net cash provided by operating
activities $309,343 $389,628
-------- --------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures ($ 8,711) ($ 18,222)
Proceeds from sale of oil and
gas properties 2,940 345,273
-------- --------
Net cash provided (used) by
investing activities ($ 5,771) $327,051
-------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Cash distributions ($261,227) ($978,129)
-------- --------
Net cash used by financing activities ($261,227) ($978,129)
-------- --------
NET INCREASE (DECREASE) IN CASH AND
CASH EQUIVALENTS $ 42,345 ($261,450)
CASH AND CASH EQUIVALENTS AT
BEGINNING OF PERIOD 78,275 364,502
-------- --------
CASH AND CASH EQUIVALENTS AT
END OF PERIOD $120,620 $103,052
======== ========
The accompanying condensed notes are an integral part of
these combined financial statements.
-33-
GEODYNE ENERGY INCOME PROGRAM II LIMITED PARTNERSHIPS
CONDENSED NOTES TO THE COMBINED FINANCIAL STATEMENTS
SEPTEMBER 30, 1999
(Unaudited)
1. ACCOUNTING POLICIES
-------------------
The combined balance sheets as of September 30, 1999, combined statements
of operations for the three and nine months ended September 30, 1999 and
1998, and combined statements of cash flows for the nine months ended
September 30, 1999 and 1998 have been prepared by Geodyne Resources, Inc.,
the General Partner of the limited partnerships, without audit. Each
limited partnership is a general partner in the related Geodyne Production
Partnership in which Geodyne Resources, Inc. serves as the managing
partner. Unless the context indicates otherwise, all references to a
"Partnership" or the "Partnerships" are references to the limited
partnership and its related production partnership, collectively, and all
references to the "General Partner" are references to the general partner
of the limited partnerships and the managing partner of the production
partnerships, collectively. In the opinion of management the financial
statements referred to above include all necessary adjustments, consisting
of normal recurring adjustments, to present fairly the combined financial
position at September 30, 1999, the combined results of operations for the
three and nine months ended September 30, 1999 and 1998, and the combined
cash flows for the nine months ended September 30, 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 September 30, 1999 are not
necessarily indicative of the results to be expected for the full year.
The Limited Partners' net income or loss per unit is based upon each $100
initial capital contribution.
-34-
OIL AND GAS PROPERTIES
----------------------
The Partnerships follow the successful efforts method of accounting for
their oil and gas properties. Under the successful efforts method, the
Partnerships capitalize all property acquisition costs and development
costs incurred in connection with the further development of oil and gas
reserves. Property acquisition costs include costs incurred by the
Partnerships or the General Partner to acquire producing properties,
including related title insurance or examination costs, commissions,
engineering, legal and accounting fees, and similar costs directly related
to the acquisitions, plus an allocated portion, of the General Partner's
property screening costs. The acquisition cost to the Partnerships of
properties acquired by the General Partner is adjusted to reflect the net
cash results of operations, including interest incurred to finance the
acquisition, for the period of time the properties are held by the General
Partner prior to their transfer to the Partnerships. Leasehold impairment
is recognized based upon an individual property assessment and exploratory
experience. Upon discovery of commercial reserves, leasehold costs are
transferred to producing properties.
Depletion of the costs of producing oil and gas properties, amortization
of related intangible drilling and development costs, and depreciation of
tangible lease and well equipment are computed on the unit-of-production
method. The Partnerships' depletion, depreciation, and amortization
includes estimated dismantlement and abandonment costs, net of estimated
salvage value.
When complete units of depreciable property are retired or sold, the asset
cost and related accumulated depreciation are eliminated with any gain or
loss reflected in income. When less than complete units of depreciable
property are retired or sold, the proceeds are credited to oil and gas
properties.
-35-
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, 1999 the following payments were made to the General
Partner or its affiliates by the Partnerships:
Direct General Administrative
Partnership and Administrative Overhead
----------- ------------------- ---------------
II-A $ 6,557 $127,443
II-B 4,897 95,190
II-C 2,091 40,689
II-D 4,259 82,863
II-E 3,099 60,216
II-F 2,322 45,105
II-G 5,029 97,944
II-H 1,238 24,135
During the nine months ended September 30, 1999 the following payments
were made to the General Partner or its affiliates by the Partnerships:
Direct General Administrative
Partnership and Administrative Overhead
----------- ------------------- ---------------
II-A $59,299 $382,329
II-B 43,431 285,570
II-C 19,318 122,067
II-D 38,267 248,589
II-E 28,229 180,648
II-F 20,693 135,315
II-G 44,607 293,832
II-H 11,048 72,405
Affiliates of the Partnerships operate certain of the Partnerships'
properties and their policy is to bill the Partnerships for all customary
charges and cost reimbursements associated with their activities.
-36-
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
USE OF FORWARD-LOOKING STATEMENTS AND ESTIMATES
- -----------------------------------------------
This Quarterly Report contains certain forward-looking statements. The
words "anticipate", "believe", "expect", "plan", "intend", "estimate",
"project", "could", "may" and similar expressions are intended to identify
forward-looking statements. Such statements reflect management's current
views with respect to future events and financial performance. This
Quarterly Report also includes certain information, which is, or is based
upon, estimates and assumptions. Such estimates and assumptions are
management's efforts to accurately reflect the condition and operation of
the Partnerships.
Use of forward-looking statements and estimates and assumptions involve
risks and uncertainties which include, but are not limited to, the
volatility of oil and gas prices, the uncertainty of reserve information,
the operating risk associated with oil and gas properties (including the
risk of personal injury, death, property damage, damage to the well or
producing reservoir, environmental contamination, and other operating
risks), the prospect of changing tax and regulatory laws, the availability
and capacity of processing and transportation facilities, the general
economic climate, the supply and price of foreign imports of oil and gas,
the level of consumer product demand, and the price and availability of
alternative fuels. Should one or more of these risks or uncertainties
occur or should estimates or underlying assumptions prove incorrect,
actual conditions or results may vary materially and adversely from those
stated, anticipated, believed, estimated, and otherwise indicated.
GENERAL
- -------
The Partnerships are engaged in the business of acquiring and operating
producing oil and gas properties located in the continental United States.
In general, a Partnership acquired producing properties and did not engage
in development drilling or enhanced recovery projects, except as an
incidental part of the management of the producing properties acquired.
Therefore, the economic life of each Partnership, and its related
Production Partnership, is limited to the period of time required to fully
produce its acquired oil and gas reserves. The net proceeds from the oil
and gas operations are distributed to the Limited Partners and the General
Partner in accordance with the terms of the Partnerships' partnership
agreements.
-37-
LIQUIDITY AND CAPITAL RESOURCES
- -------------------------------
The Partnerships began operations and investors were assigned their rights
as Limited Partners, having made capital contributions in the amounts and
on the dates set forth below:
Limited
Date of Partner Capital
Partnership Activation Contributions
----------- ------------------ ---------------
II-A July 22, 1987 $48,428,300
II-B October 14, 1987 36,171,900
II-C January 14, 1988 15,462,100
II-D May 10, 1988 31,487,800
II-E September 27, 1988 22,882,100
II-F January 5, 1989 17,140,000
II-G April 10, 1989 37,218,900
II-H May 17, 1989 9,171,100
In general, the amount of funds available for acquisition of producing
properties was equal to the capital contributions of the Limited Partners,
less 15% for sales commissions and organization and management fees. All
of the Partnerships have fully invested their capital contributions.
Net proceeds from the operations less necessary operating capital are
distributed to the Limited Partners on a quarterly basis. Revenues and net
proceeds of a Partnership are largely dependent upon the volumes of oil
and gas sold and the prices received for such oil and gas. While the
General Partner cannot predict future pricing trends, it believes the
working capital available as of September 30, 1999 and the net revenue
generated from future operations will provide sufficient working capital
to meet current and future obligations.
In August 1999, the II-A Partnership received insurance settlement
proceeds in the amount of $202,500 for the costs incurred to drill the
State Lease 8191 No. 4 well in St. Bernard Parish, Louisiana for the
purpose of relieving pressure in another well which suffered a blowout
during a workover attempt. This new well was completed as a producing gas
well in 1998. The insurance proceeds amount was included in the
Partnership's August 1999 cash distribution.
-38-
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 on 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 in 1998 and early 1999 were at or
near their lowest level in the past decade due primarily to the global
surplus of crude oil. Oil prices have since 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.
II-A PARTNERSHIP
THREE MONTHS ENDED SEPTEMBER 30, 1999 COMPARED TO THE THREE MONTHS ENDED
SEPTEMBER 30, 1998.
Three Months Ended September 30,
--------------------------------
1999 1998
---------- ----------
Oil and gas sales $1,135,642 $1,092,544
Oil and gas production expenses $ 285,375 $ 381,708
Barrels produced 19,868 19,085
Mcf produced 332,216 481,584
Average price/Bbl $ 19.28 $ 10.66
Average price/Mcf $ 2.27 $ 1.85
As shown in the table above, total oil and gas sales increased $43,098
(3.9%) for the three months ended September 30, 1999 as compared to the
three months ended September 30, 1998. Of this increase, approximately
$8,000 was related to an increase in volumes of oil sold and approximately
$171,000 and $139,000, respectively, were related to increases in the
average prices of oil and gas sold. These increases were partially offset
by a decrease of approximately $275,000 related to a decrease in volumes
of gas sold. Volumes of oil sold increased 783 barrels,
-39-
while volumes of gas sold decreased 149,368 Mcf for the three months ended
September 30, 1999 as compared to the three months ended September 30,
1998. The decrease in volumes of gas sold was primarily due to positive
prior period volume adjustments made by the purchasers on several wells
during the three months ended September 30, 1998, which decreases were
partially offset by a positive prior period volume adjustment made by the
purchaser on one significant well during the three months ended September
30, 1999. Average oil and gas prices increased to $19.28 per barrel and
$2.27 per Mcf, respectively, for the three months ended September 30, 1999
from $10.66 per barrel and $1.85 per Mcf, respectively, for the three
months ended September 30, 1998.
Oil and gas production expenses (including lease operating expenses and
production taxes) decreased $96,333 (25.2%) for the three months ended
September 30, 1999 as compared to the three months ended September 30,
1998. This decrease was primarily due to (i) a positive prior period lease
operating expense adjustment made by the operator on one significant well
during the three months ended September 30, 1998 and (ii) workover
expenses incurred on several wells during the three months ended September
30, 1998 in order to improve the recovery of reserves. As a percentage of
oil and gas sales, these expenses decreased to 25.1% for the three months
ended September 30, 1999 from 34.9% for the three months ended September
30, 1998. This percentage decrease was primarily due to the increases in
the average prices of oil and gas sold.
Depreciation, depletion, and amortization of oil and gas properties
decreased $39,266 (18.3%) for the three months ended September 30, 1999 as
compared to the three months ended September 30, 1998. This decrease was
primarily due to the decrease in volumes of gas sold. As a percentage of
oil and gas sales, this expense decreased to 15.4% for the three months
ended September 30, 1999 from 19.6% for the three months ended September
30, 1998. This percentage decrease was primarily due to the increases in
the average prices of oil and gas sold.
General and administrative expenses decreased $4,442 (3.2%) for the three
months ended September 30, 1999 as compared to the three months ended
September 30, 1998. As a percentage of oil and gas sales, these expenses
decreased to 11.8% for the three months ended September 30, 1999 from
12.7% for the three months ended September 30, 1998.
-40-
NINE MONTHS ENDED SEPTEMBER 30, 1999 COMPARED TO THE NINE MONTHS ENDED
SEPTEMBER 30, 1998.
Nine Months Ended September 30,
-------------------------------
1999 1998
---------- ----------
Oil and gas sales $2,629,667 $3,025,364
Oil and gas production expenses $ 916,544 $1,093,626
Barrels produced 63,543 65,533
Mcf produced 867,158 1,101,499
Average price/Bbl $ 14.49 $ 12.81
Average price/Mcf $ 1.97 $ 1.98
As shown in the table above, total oil and gas sales decreased $395,697
(13.1%) for the nine months ended September 30, 1999 as compared to the
nine months ended September 30, 1998. Of this decrease, approximately
$465,000 was related to a decrease in volumes of gas sold, which decrease
was partially offset by an increase of approximately $107,000 related to
an increase in the average price of oil sold. Volumes of oil and gas sold
decreased 1,990 barrels and 234,341 Mcf, respectively, for the nine months
ended September 30, 1999 as compared to the nine months ended September
30, 1998. The decrease in volumes of gas 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, 1998, (ii) the
sale of several wells during 1998, and (iii) normal declines in
production. Average oil prices increased to $14.49 per barrel for the nine
months ended September 30, 1999 from $12.81 per barrel for the nine months
ended September 30, 1998. Average gas prices remained relatively constant
at $1.97 per Mcf for the nine months ended September 30, 1999 and $1.98
per Mcf for the nine months ended September 30, 1998.
The II-A Partnership sold certain oil and gas properties during the nine
months ended September 30, 1999 and recognized a $1,237 gain on such
sales. Sales of oil and as properties during the nine months ended
September 30, 1998 resulted in the II-A Partnership recognizing similar
gains totaling $688,344.
As discussed in Liquidity and Capital Resources above, the II-A
Partnership recognized an insurance settlement in the amount of $202,500
during the nine months ended September 30, 1999. No similar settlements
occurred during the nine months ended September 30, 1998.
-41-
The II-A Partnership recognized a gas contract settlement in the amount of
$1,710,190 during the nine months ended September 30, 1998. This
settlement involved claims made for take or pay deficiencies and gas
pricing issues arising out of a gas purchase contract. No similar
settlements occurred during the nine months ended September 30, 1999.
Oil and gas production expenses (including lease operating expenses and
production taxes) decreased $177,082 (16.2%) for the nine months ended
September 30, 1999 as compared to the nine months ended September 30,
1998. This decrease was primarily due to (i) workover expenses incurred on
one significant well during the nine months ended September 30, 1998 in
order to improve the recovery of reserves, (ii) a positive prior period
lease operating expense adjustment made by the operator on another
significant well during the nine months ended September 30, 1998, and
(iii) a decrease in production taxes associated with the decrease in oil
and gas sales. As a percentage of oil and gas sales, these expenses
decreased to 34.9% for the nine months ended September 30, 1999 from 36.1%
for the nine months ended September 30, 1998.
Depreciation, depletion, and amortization of oil and gas properties
decreased $74,518 (13.8%) for the nine months ended September 30, 1999 as
compared to the nine months ended September 30, 1998. This decrease was
primarily due to the decreases in volumes of oil and gas sold. As a
percentage of oil and gas sales, this expense remained relatively constant
at 17.6% for the nine months ended September 30, 1999 and 17.8% for the
nine months ended September 30, 1998.
General and administrative expenses remained relatively constant for the
nine months ended September 30, 1999 as compared to the nine months ended
September 30, 1998. As a percentage of oil and gas sales, these expenses
increased to 16.8% for the nine months ended September 30, 1999 from 14.7%
for the nine months ended September 30, 1998. This percentage increase was
primarily due to the decrease in oil and gas sales.
The Limited Partners have received cash distributions through September
30, 1999 totaling $47,427,357 or 97.93% of Limited Partners' capital
contributions.
-42-
II-B PARTNERSHIP
THREE MONTHS ENDED SEPTEMBER 30, 1999 COMPARED TO THE THREE MONTHS ENDED
SEPTEMBER 30, 1998.
Three Months Ended September 30,
--------------------------------
1999 1998
-------- --------
Oil and gas sales $812,462 $543,938
Oil and gas production expenses $220,500 $244,129
Barrels produced 14,643 12,625
Mcf produced 253,666 231,444
Average price/Bbl $ 18.05 $ 11.88
Average price/Mcf $ 2.16 $ 1.70
As shown in the table above, total oil and gas sales increased $268,524
(49.4%) for the three months ended September 30, 1999 as compared to the
three months ended September 30, 1998. Of this increase, approximately
$38,000 was related to an increase in volumes of gas sold and
approximately $90,000 and $116,000, respectively, were related to
increases in the average prices of oil and gas sold. Volumes of oil and
gas sold increased 2,018 barrels and 22,222 Mcf, respectively, for the
three months ended September 30, 1999 as compared to the three months
ended September 30, 1998. The increase 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) negative prior period volume adjustments made by the
purchaser on two significant wells during the three months ended September
30, 1998. Average oil and gas prices increased to $18.05 per barrel and
$2.16 per Mcf, respectively, for the three months ended September 30, 1999
from $11.88 per barrel and $1.70 per Mcf, respectively, for the three
months ended September 30, 1998.
Oil and gas production expenses (including lease operating expenses and
production taxes) decreased $23,629 (9.7%) for the three months ended
September 30, 1999 as compared to the three months ended September 30,
1998. This decrease was primarily due to workover expenses incurred on
several wells during the three months ended September 30, 1998 in order to
improve the recovery of reserves, which decrease was partially offset by
an increase in production taxes associated with the increase in oil and
gas sales. As a percentage of oil and gas sales, these expenses decreased
to 27.1% for the three months ended September 30, 1999 from 44.9% for the
three months ended September 30, 1998. This percentage decrease was
primarily due to the 1998 workover expenses and the increases in the
average prices of oil and gas sold.
-43-
Depreciation, depletion, and amortization of oil and gas properties
increased $11,839 (12.4%) for the three months ended September 30, 1999 as
compared to the three months ended September 30, 1998. This increase was
primarily due to the increase in volumes of oil and gas sold. As a
percentage of oil and gas sales, this expense decreased to 13.2% for the
three months ended September 30, 1999 from 17.6% for the three months
ended September 30, 1998. This percentage decrease was primarily due to
the increases in the average prices of oil and gas sold.
General and administrative expenses decreased $3,343 (3.2%) for the three
months ended September 30, 1999 as compared to the three months ended
September 30, 1998. As a percentage of oil and gas sales, these expenses
decreased to 12.3% for the three months ended September 30, 1999 from
19.0% for the three months ended September 30, 1998. This percentage
decrease was primarily due to the increase in oil and gas sales.
NINE MONTHS ENDED SEPTEMBER 30, 1999 COMPARED TO THE NINE MONTHS ENDED
SEPTEMBER 30, 1998.
Nine Months Ended September 30,
--------------------------------
1999 1998
---------- ----------
Oil and gas sales $1,898,187 $1,973,911
Oil and gas production expenses $ 712,522 $ 749,978
Barrels produced 42,696 41,381
Mcf produced 670,828 703,731
Average price/Bbl $ 14.40 $ 14.09
Average price/Mcf $ 1.91 $ 1.98
As shown in the table above, total oil and gas sales decreased $75,724
(3.8%) for the nine months ended September 30, 1999 as compared to the
nine months ended September 30, 1998. Of this decrease, approximately
$65,000 was related to a decrease in volumes of gas sold and approximately
$43,000 was related to a decrease in the average price of gas sold. This
decrease was partially offset by increases of approximately $19,000
related to an increase in volumes of oil sold and approximately $13,000
related to an increase in the average price of oil sold. Volumes of oil
sold increased 1,315 barrels, while volumes of gas sold decreased 32,903
Mcf for the nine months ended September 30, 1999 as compared to the nine
months ended September 30, 1998. Average oil prices increased to $14.40
per barrel for the nine months ended September 30, 1999 from $14.09 per
barrel for the nine months ended September 30, 1998. Average gas prices
decreased to $1.91 per Mcf for the nine months ended
-44-
September 30, 1999 from $1.98 per Mcf for the nine months ended September
30, 1998.
The II-B Partnership recognized a gas contract settlement in the amount of
$2,793,295 during the nine months ended September 30, 1998. This
settlement involved claims made for take or pay deficiencies and gas
pricing issues arising out of a gas purchase contract. No similar
settlements occurred during the nine months ended September 30, 1999.
Oil and gas production expenses (including lease operating expenses and
production taxes) decreased $37,456 (5.0%) for the nine months ended
September 30, 1999 as compared to the nine months ended September 30,
1998. As a percentage of oil and gas sales, these expenses decreased to
37.5% for the nine months ended September 30, 1999 from 38.0% for the nine
months ended September 30, 1998.
Depreciation, depletion, and amortization of oil and gas properties
decreased $4,706 (1.6%) for the nine months ended September 30, 1999 as
compared to the nine months ended September 30, 1998. As a percentage of
oil and gas sales, this expense increased to 15.4% for the nine months
ended September 30, 1999 from 15.0% for the nine months ended September
30, 1998.
General and administrative expenses decreased $4,335 (1.3%) for the nine
months ended September 30, 1999 as compared to the nine months ended
September 30, 1998. As a percentage of oil and gas sales, these expenses
increased to 17.3% for the nine months ended September 30, 1999 from 16.9%
for the nine months ended September 30, 1998.
The Limited Partners have received cash distributions through September
30, 1999 totaling $34,506,916 or 95.40% of the Limited Partners' capital
contributions.
II-C PARTNERSHIP
THREE MONTHS ENDED SEPTEMBER 30, 1999 COMPARED TO THE THREE MONTHS ENDED
SEPTEMBER 30, 1998.
Three Months Ended September 30,
--------------------------------
1999 1998
-------- --------
Oil and gas sales $379,273 $253,933
Oil and gas production expenses $ 91,916 $ 90,974
Barrels produced 4,847 4,119
Mcf produced 132,959 121,527
Average price/Bbl $ 18.01 $ 12.28
Average price/Mcf $ 2.20 $ 1.67
As shown in the table above, total oil and gas sales increased $125,340
(49.4%) for the three months ended
-45-
September 30, 1999 as compared to the three months ended September 30,
1998. Of this increase, approximately $19,000 was related to an increase
in volumes of gas sold and approximately $28,000 and $69,000,
respectively, were related to increases in the average prices of oil and
gas sold. Volumes of oil and gas sold increased 728 barrels and 11,432
Mcf, respectively, for the three months ended September 30, 1999 as
compared to the three months ended September 30, 1998. The increase 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) a negative prior period
volume adjustment made by the purchaser on another significant well during
the three months ended September 30, 1998. Average oil and gas prices
increased to $18.01 per barrel and $2.20 per Mcf, respectively, for the
three months ended September 30, 1999 from $12.28 per barrel and $1.67 per
Mcf, respectively, for the three months ended September 30, 1998.
Oil and gas production expenses (including lease operating expenses and
production taxes) increased $942 (1.0%) for the three months ended
September 30, 1999 as compared to the three months ended September 30,
1998. This increase was primarily due to a positive prior period
production tax adjustment made by the purchaser on one significant well
during the three months ended September 30, 1999, which increase was
substantially offset by workover expenses incurred on one significant well
during the three months ended September 30, 1998 in order to improve the
recovery of reserves. As a percentage of oil and gas sales, these expenses
decreased to 24.2% for the three months ended September 30, 1999 from
35.8% for the three months ended September 30, 1998. This percentage
decrease was primarily due to the increases in the average prices of oil
and gas sold.
Depreciation, depletion, and amortization of oil and gas properties
increased $7,258 (13.9%) for the three months ended September 30, 1999 as
compared to the three months ended September 30, 1998. This increase was
primarily due to the increase in volumes of oil and gas sold. As a
percentage of oil and gas sales, this expense decreased to 15.7% for the
three months ended September 30, 1999 from 20.5% for the three months
ended September 30, 1998. This percentage decrease was primarily due to
the increases in the average prices of oil and gas sold.
-46-
General and administrative expenses decreased $1,430 (3.2%) for the three
months ended September 30, 1999 as compared to the three months ended
September 30, 1998. As a percentage of oil and gas sales, these expenses
decreased to 11.3% for the three months ended September 30, 1999 from
17.4% for the three months ended September 30, 1998. This percentage
decrease was primarily due to the increase in oil and gas sales.
NINE MONTHS ENDED SEPTEMBER 30, 1999 COMPARED TO THE NINE MONTHS ENDED
SEPTEMBER 30, 1998.
Nine Months Ended September 30,
-------------------------------
1999 1998
-------- --------
Oil and gas sales $903,938 $896,558
Oil and gas production expenses $296,598 $293,796
Barrels produced 13,638 12,968
Mcf produced 364,207 375,715
Average price/Bbl $ 14.95 $ 14.05
Average price/Mcf $ 1.92 $ 1.90
As shown in the table above, total oil and gas sales increased $7,380
(0.8%) for the nine months ended September 30, 1999 as compared to the
nine months ended September 30, 1998. Of this increase, approximately
$9,000 was related to an increase in volumes of oil sold and approximately
$12,000 and $7,000, respectively, were related to increases in the average
prices of oil and gas sold. These increases were partially offset by a
decrease of approximately $21,000 related to a decrease in volumes of gas
sold. Volumes of oil sold increased 670 barrels, while volumes of gas sold
decreased 11,508 Mcf for the nine months ended September 30, 1999 as
compared to the nine months ended September 30, 1998. Average oil and gas
prices increased to $14.95 per barrel and $1.92 per Mcf, respectively, for
the nine months ended September 30, 1999 from $14.05 per barrel and $1.90
per Mcf, respectively, for the nine months ended September 30, 1998.
The II-C Partnership sold certain oil and gas properties during the nine
months ended September 30, 1999 and recognized a $47 gain on such sales.
Sales of oil and gas properties during the nine months ended September 30,
1998 resulted in the II-C Partnership recognizing similar gains totaling
$191,496.
The II-C Partnership recognized a gas contract settlement in the amount of
$1,197,148 during the nine months ended September 30, 1998. This
settlement involved claims made for take or pay deficiencies and gas
pricing issues arising
-47-
out of a gas purchase contract. No similar settlements occurred during the
nine months ended September 30, 1999.
Oil and gas production expenses (including lease operating expenses and
production taxes) increased $2,802 (1.0%) for the nine months ended
September 30, 1999 as compared to the nine months ended September 30,
1998. This increase was primarily due to positive prior period production
tax adjustments made by the purchaser on several wells during the nine
months ended September 30, 1999, which increase was substantially offset
by workover expenses incurred on one significant well during the nine
months ended September 30, 1998 in order to improve the recovery of
reserves. As a percentage of oil and gas sales, these expenses remained
constant at 32.8% for the nine months ended September 30, 1999 and 1998.
Depreciation, depletion, and amortization of oil and gas properties
increased $1,790 (1.1%) for the nine months ended September 30, 1999 as
compared to the nine months ended September 30, 1998. As a percentage of
oil and gas sales, this expense remained relatively constant at 18.1% for
the nine months ended September 30, 1999 and 18.0% for the nine months
ended September 30, 1998.
General and administrative expenses decreased $1,555 (1.1%) for the nine
months ended September 30, 1999 as compared to the nine months ended
September 30, 1998. As a percentage of oil and gas sales, these expenses
decreased to 15.6% for the nine months ended September 30, 1999 from 15.9%
for the nine months ended September 30, 1998.
The Limited Partners have received cash distributions through September
30, 1999 totaling $15,699,686 or 101.54% of the Limited Partners' capital
contributions.
II-D PARTNERSHIP
THREE MONTHS ENDED SEPTEMBER 30, 1999 COMPARED TO THE THREE MONTHS ENDED
SEPTEMBER 30, 1998.
Three Months Ended September 30,
-------------------------------
1999 1998
-------- --------
Oil and gas sales $705,104 $540,255
Oil and gas production expenses $192,953 $256,870
Barrels produced 7,755 9,708
Mcf produced 250,111 264,360
Average price/Bbl $ 19.44 $ 12.71
Average price/Mcf $ 2.22 $ 1.58
As shown in the table above, total oil and gas sales increased $164,849
(30.5%) for the three months ended
-48-
September 30, 1999 as compared to the three months ended September 30,
1998. Of this increase, approximately $52,000 and $160,000, respectively,
were related to increases in the average prices of oil and gas sold. This
increase was partially offset by decreases of approximately $25,000 and
$22,000, respectively, related to decreases in volumes of oil and gas
sold. Volumes of oil and gas sold decreased 1,953 barrels and 14,249 Mcf,
respectively, for the three months ended September 30, 1999 as compared to
the three months ended September 30, 1998. The decrease in volumes of oil
sold was primarily due to (i) normal declines in production and (ii) a
positive prior period volume adjustment made by the purchaser on one
significant well during the three months ended September 30, 1998. Average
oil and gas prices increased to $19.44 per barrel and $2.22 per Mcf,
respectively, for the three months ended September 30, 1999 from $12.71
per barrel and $1.58 per Mcf, respectively, for the three months ended
September 30, 1998.
Oil and gas production expenses (including lease operating expenses and
production taxes) decreased $63,917 (24.9%) for the three months ended
September 30, 1999 as compared to the three months ended September 30,
1998. This decrease was primarily due to (i) workover expenses incurred on
three significant wells during the three months ended September 30, 1998
and (ii) a decrease in lease operating expenses associated with the
decrease in volumes of oil and gas sold. As a percentage of oil and gas
sales, these expenses decreased to 27.4% for the three months ended
September 30, 1999 from 47.5% for the three months ended September 30,
1998. This percentage decrease was primarily due to the increases in the
average prices of oil and gas sold and the 1998 workover expenses.
Depreciation, depletion, and amortization of oil and gas properties
decreased $7,927 (7.2%) for the three months ended September 30, 1999 as
compared to the three months ended September 30, 1998. As a percentage of
oil and gas sales, this expense decreased to 14.6% for the three months
ended September 30, 1999 from 20.5% for the three months ended September
30, 1998. This percentage decrease was primarily due to the increases in
the average prices of oil and gas sold.
General and administrative expenses decreased $2,931 (3.3%) for the three
months ended September 30, 1999 as compared to the three months ended
September 30, 1998. As a percentage of oil and gas sales, these expenses
decreased to 12.4% for the three months ended September 30, 1999 from
16.7% for the three months ended September 30, 1998. This percentage
decrease was primarily due to the increase in oil and gas sales.
-49-
NINE MONTHS ENDED SEPTEMBER 30, 1999 COMPARED TO THE NINE MONTHS ENDED
SEPTEMBER 30, 1998.
Nine Months Ended September 30,
-------------------------------
1999 1998
---------- ----------
Oil and gas sales $1,831,319 $1,885,766
Oil and gas production expenses $ 727,727 $ 845,153
Barrels produced 26,368 30,202
Mcf produced 728,093 803,674
Average price/Bbl $ 14.42 $ 13.30
Average price/Mcf $ 1.99 $ 1.85
As shown in the table above, total oil and gas sales decreased $54,447
(2.9%) for the nine months ended September 30, 1999 as compared to the
nine months ended September 30, 1998. Of this decrease, approximately
$51,000 and $139,000, respectively, were related to decreases in volumes
of oil and gas sold. These decreases were partially offset by increases of
approximately $30,000 and $106,000, respectively, related to increases in
the average prices of oil and gas sold. Volumes of oil and gas sold
decreased 3,834 barrels and 75,581 Mcf, respectively, for the nine months
ended September 30, 1999 as compared to the nine months ended September
30, 1998. The decrease in volumes of oil sold was primarily due to (i)
normal declines in production and (ii) the sale of one significant well
during 1998. Average oil and gas prices increased to $14.42 per barrel and
$1.99 per Mcf, respectively, for the nine months ended September 30, 1999
from $13.30 per barrel and $1.85 per Mcf, respectively, for the nine
months ended September 30, 1998.
The II-D Partnership sold certain oil and gas properties during the nine
months ended September 30, 1999 and recognized a $36,944 gain on such
sales. Sales of oil and gas properties during the nine months ended
September 30, 1998 resulted in the II-D Partnership recognizing similar
gains of $518,545.
The II-D Partnership recognized a gas contract settlement in the amount of
$3,033,646 during the nine months ended September 30, 1998. This
settlement involved claims made for take or pay deficiencies and gas
pricing issues arising out of a gas purchase contract. No similar
settlements occurred during the nine months ended September 30, 1999.
Oil and gas production expenses (including lease operating expenses and
production taxes) decreased $117,426 (13.9%) for the nine months ended
September 30, 1999 as compared to the nine months ended September 30,
1998. This decrease was primarily due to (i) a decrease in lease operating
expenses associated with the decreases in volumes of oil and gas sold
-50-
and (ii) workover expenses incurred on several significant wells during
the nine months ended September 30, 1998. As a percentage of oil and gas
sales, these expenses decreased to 39.7% for the nine months ended
September 30, 1999 from 44.8% for the nine months ended September 30,
1998. This percentage decrease was primarily due to the increases in the
average prices of oil and gas sold and the 1998 workover expenses.
Depreciation, depletion, and amortization of oil and gas properties
decreased $30,894 (9.1%) for the nine months ended September 30, 1999 as
compared to the nine months ended September 30, 1998. As a percentage of
oil and gas sales, this expense decreased to 16.8% for the nine months
ended September 30, 1999 from 17.9% for the nine months ended September
30, 1998.
Gener al and administrative expenses decreased $3,500 (1.2%) for the nine
months ended September 30, 1999 as compared to the nine months ended
September 30, 1998. As a percentage of oil and gas sales, these expenses
remained relatively constant at 15.7% for the nine months ended September
30, 1999 and 15.4 % for the nine months ended September 30, 1998.
The II-D Partnership achieved payout during the nine months ended
September 30, 1999. After payout, operations and revenues for the II-D
Partnership have been and will be allocated using after payout
percentages. After payout percentages allocate operating income and
expenses 10% to the General Partner and 90% to the Limited Partners.
Before payout, operating income and expenses were allocated 5% to the
General Partner and 95% to the Limited Partners. See the Partnerships'
Annual Report on Form 10-K for the year ended December 31, 1998 for a
further discussion of pre and post payout allocations of income and
expense.
The Limited Partners have received cash distributions through September
30, 1999 totaling $31,799,903 or 100.99% of Limited Partners' capital
contributions.
-51-
II-E PARTNERSHIP
THREE MONTHS ENDED SEPTEMBER 30, 1999 COMPARED TO THE THREE MONTHS ENDED
SEPTEMBER 30, 1998.
Three Months Ended September 30,
--------------------------------
1999 1998
-------- --------
Oil and gas sales $490,849 $366,664
Oil and gas production expenses $127,287 $147,182
Barrels produced 7,120 10,767
Mcf produced 153,140 142,090
Average price/Bbl $ 21.26 $ 13.05
Average price/Mcf $ 2.22 $ 1.59
As shown in the table above, total oil and gas sales increased $124,185
(33.9%) for the three months ended September 30, 1999 as compared to the
three months ended September 30, 1998. Of this increase, approximately
$58,000 and $96,000, respectively, were related to increases in the
average prices of oil and gas sold and approximately $18,000 was related
to an increase in volumes of gas sold. These increases were partially
offset by a decrease of approximately $48,000 related to a decrease in
volumes of oil sold. Volumes of oil sold decreased 3,647 barrels, while
volumes of gas sold increased 11,050 Mcf for the three months ended
September 30, 1999 as compared to the three months ended September 30,
1998. The decrease in volumes of oil sold was primarily due to (i) normal
declines in production and (ii) a positive prior period volume adjustment
made by the purchaser on one significant well during the three months
ended September 30, 1998. Average oil and gas prices increased to $21.26
per barrel and $2.22 per Mcf, respectively, for the three months ended
September 30, 1999 from $13.05 per barrel and $1.59 per Mcf, respectively,
for the three months ended September 30, 1998.
Oil and gas production expenses (including lease operating expenses and
production taxes) decreased $19,895 (13.5%) for the three months ended
September 30, 1999 as compared to the three months ended September 30,
1998. This decrease was primarily due to workover expenses incurred on two
significant wells during the three months ended September 30, 1998 in
order to improve the recovery of reserves, which decrease was partially
offset by an increase in production taxes associated with the increase in
oil and gas sales. As a percentage of oil and gas sales, these expenses
decreased to 25.9% for the three months ended September 30, 1999 from
40.1% for the three months ended September 30, 1998. This percentage
decrease was primarily due to the increases in the average prices of oil
and gas sold.
-52-
Depreciation, depletion, and amortization of oil and gas properties
decreased $18,887 (15.3%) for the three months ended September 30, 1999 as
compared to the three months ended September 30, 1998. This decrease was
primarily due to (i) an upward revision in the estimate of remaining gas
reserves at December 31, 1998 and (ii) the decrease in volumes of oil
sold. As a percentage of oil and gas sales, this expense decreased to
21.3% for the three months ended September 30, 1999 from 33.7% for the
three months ended September 30, 1998. This percentage decrease was
primarily due to the increases in the average prices of oil and gas sold
and the dollar decrease in depreciation, depletion, and amortization.
General and administrative expenses decreased $2,145 (3.3%) for the three
months ended September 30, 1999 as compared to the three months ended
September 30, 1998. As a percentage of oil and gas sales, these expenses
decreased to 12.9% for the three months ended September 30, 1999 from
17.9% for the three months ended September 30, 1998. This percentage
decrease was primarily due to the increase in oil and gas sales.
The II-E Partnership achieved payout during the three months ended
September 30, 1999. After payout, operations and revenues for the II-E
Partnership have been and will be allocated using after payout
percentages. After payout percentages allocate operating income and
expenses 10% to the General Partner and 90% to the Limited Partners.
Before payout, operating income and expenses were allocated 5% to the
General Partner and 95% to the Limited Partners. See the Partnerships'
Annual Report on Form 10-K for the year ended December 31, 1998 for a
further discussion of pre and post payout allocations of income and
expense.
NINE MONTHS ENDED SEPTEMBER 30, 1999 COMPARED TO THE NINE MONTHS ENDED
SEPTEMBER 30, 1998.
Nine Months Ended September 30,
-------------------------------
1999 1998
---------- ----------
Oil and gas sales $1,294,093 $1,257,494
Oil and gas production expenses $ 388,493 $ 454,429
Barrels produced 24,392 29,489
Mcf produced 472,003 462,132
Average price/Bbl $ 15.72 $ 13.79
Average price/Mcf $ 1.93 $ 1.84
As shown in the table above, total oil and gas sales increased $36,599
(2.9%) for the nine months ended September 30, 1999 as compared to the
nine months ended September 30, 1998. Of this increase, approximately
$47,000 and $42,000, respectively, were related to increases in the
average prices
-53-
of oil and gas sold and approximately $18,000 was related to an increase
in volumes of gas sold. These increases were partially offset by a
decrease of approximately $70,000 related to a decrease in volumes of oil
sold. Volumes of oil sold decreased 5,097 barrels, while volumes of gas
sold increased 9,871 Mcf for the nine months ended September 30, 1999 as
compared to the nine months ended September 30, 1998. The decrease in
volumes of oil sold was primarily due to (i) normal declines in production
and (ii) positive prior period volume adjustments made by the purchasers
on several wells during the nine months ended September 30, 1998. Average
oil and gas prices increased to $15.72 per barrel and $1.93 per Mcf,
respectively, for the nine months ended September 30, 1999 from $13.79 per
barrel and $1.84 per Mcf, respectively, for the nine months ended
September 30, 1998.
The II-E Partnership recognized a gas contract settlement in the amount of
$6,159,355 during the nine months ended September 30, 1998. This
settlement involved claims made for take or pay deficiencies and gas
pricing issues arising out of a gas purchase contract. No similar
settlements occurred during the nine months ended September 30, 1999.
Oil and gas production expenses (including lease operating expenses and
production taxes) decreased $65,936 (14.5%) for the nine months ended
September 30, 1999 as compared to the nine months ended September 30,
1998. This decrease was primarily due to workover expenses incurred on
several wells during the nine months ended September 30, 1998 in order to
improve the recovery of reserves. As a percentage of oil and gas sales,
these expenses decreased to 30.0% for the nine months ended September 30,
1999 from 36.1% for the nine months ended September 30, 1998. This
percentage decrease was primarily due to the dollar decrease in oil and
gas production expenses and the increases in the average prices of oil and
gas sold.
Depreciation, depletion, and amortization of oil and gas properties
decreased $51,555 (13.5%) for the nine months ended September 30, 1999 as
compared to the nine months ended September 30, 1998. This decrease was
primarily due to (i) an upward revision in the estimate of remaining gas
reserves at December 31, 1998 and (ii) the decrease in volumes of oil
sold. As a percentage of oil and gas sales, this expense decreased to
25.6% for the nine months ended September 30, 1999 from 30.4% for the nine
months ended September 30, 1998. This percentage decrease was primarily
due to the increases in the average prices of oil and gas sold and the
dollar decrease in depreciation, depletion, and amortization.
-54-
General and administrative expenses decreased $6,058 (2.8%) for the nine
months ended September 30, 1999 as compared to the nine months ended
September 30, 1998. As a percentage of oil and gas sales, these expenses
decreased to 16.1% for the nine months ended September 30, 1999 from 17.1%
for the nine months ended September 30, 1998.
The II-E Partnership achieved payout during the nine months ended
September 30, 1999. After payout, operations and revenues for the II-E
Partnership have been and will be allocated using after payout
percentages. After payout percentages allocate operating income and
expenses 10% to the General Partner and 90% to the Limited Partners.
Before payout, operating income and expenses were allocated 5% to the
General Partner and 95% to the Limited Partners. See the Partnerships'
Annual Report on Form 10-K for the year ended December 31, 1998 for a
further discussion of pre and post payout allocations of income and
expense.
The Limited Partners have received cash distributions through September
30, 1999 totaling $23,037,574 or 100.68% of Limited Partners' capital
contributions.
II-F PARTNERSHIP
THREE MONTHS ENDED SEPTEMBER 30, 1999 COMPARED TO THE THREE MONTHS ENDED
SEPTEMBER 30, 1998.
Three Months Ended September 30,
--------------------------------
1999 1998
-------- --------
Oil and gas sales $454,356 $266,881
Oil and gas production expenses $ 94,366 $ 89,460
Barrels produced 7,718 7,692
Mcf produced 123,033 120,405
Average price/Bbl $ 21.29 $ 11.07
Average price/Mcf $ 2.36 $ 1.51
As shown in the table above, total oil and gas sales increased $187,475
(70.2%) for the three months ended September 30, 1999 as compared to the
three months ended September 30, 1998. Of this increase, approximately
$78,000 and $104,000, respectively, were related to increases in the
average prices of oil and gas sold. Volumes of oil and gas sold increased
26 barrels and 2,628 Mcf, respectively, for the three months ended
September 30, 1999 as compared to the three months ended September 30,
1998. Average oil and gas prices increased to $21.29 per barrel and $2.36
per Mcf, respectively, for the three months ended September 30, 1999 from
$11.07 per barrel and $1.51 per Mcf, respectively, for the three months
ended September 30, 1998.
-55-
Oil and gas production expenses (including lease operating expenses and
production taxes) increased $4,906 (5.5%) for the three months ended
September 30, 1999 as compared to the three months ended September 30,
1998. As a percentage of oil and gas sales, these expenses decreased to
20.8% for the three months ended September 30, 1999 from 33.5% for the
three months ended September 30, 1998. This percentage decrease was
primarily due to the increases in the average prices of oil and gas sold.
Depreciation, depletion, and amortization of oil and gas properties
decreased $1,811 (2.3%) for the three months ended September 30, 1999 as
compared to the three months ended September 30, 1998. As a percentage of
oil and gas sales, this expense decreased to 16.5% for the three months
ended September 30, 1999 from 28.9% for the three months ended September
30, 1998. This percentage decrease was primarily due to the increases in
the average prices of oil and gas sold.
General and administrative expenses decreased $1,661 (3.4%) for the three
months ended September 30, 1999 as compared to the three months ended
September 30, 1998. As a percentage of oil and gas sales, these expenses
decreased to 10.4% for the three months ended September 30, 1999 from
18.4% for the three months ended September 30, 1998. This percentage
decrease was primarily due to the increase in oil and gas sales.
NINE MONTHS ENDED SEPTEMBER 30, 1999 COMPARED TO THE NINE MONTHS ENDED
SEPTEMBER 30, 1998.
Nine Months Ended September 30,
-------------------------------
1999 1998
---------- ----------
Oil and gas sales $1,225,529 $1,087,834
Oil and gas production expenses $ 331,455 $ 292,323
Barrels produced 27,299 28,477
Mcf produced 440,829 378,224
Average price/Bbl $ 14.97 $ 13.93
Average price/Mcf $ 1.85 $ 1.83
As shown in the table above, total oil and gas sales increased $137,695
(12.7%) for the nine months ended September 30, 1999 as compared to the
nine months ended September 30, 1998. Of this increase, approximately
$114,000 was related to an increase in volumes of gas sold and
approximately $28,000 was related to an increase in the average price of
oil sold. These increases were partially offset by a decrease of
approximately $16,000 related to a decrease in volumes of oil sold.
Volumes of oil sold decreased 1,178 barrels, while volumes of gas sold
increased 62,605 Mcf for the nine months ended September 30, 1999 as
-56-
compared to the nine months ended September 30, 1998. The increase in
volumes of gas sold was primarily due to (i) an increase in production due
to the successful recompletion of one significant well in late 1998 and
(ii) a positive prior period volume adjustment made by the operator on
another significant well during the nine months ended September 30, 1999.
Average oil and gas prices increased to $14.97 per barrel and $1.85 per
Mcf, respectively, for the nine months ended September 30, 1999 from
$13.93 per barrel and $1.83 per Mcf, respectively, for the nine months
ended September 30, 1998.
The II-F Partnership sold certain oil and gas properties during the nine
months ended September 30, 1999 and recognized a $1,203 gain on such
sales. Sales of oil and gas properties during the nine months ended
September 30, 1998 resulted in the II-F Partnership recognizing similar
gains totaling $654,302.
Oil and gas production expenses (including lease operating expenses and
production taxes) increased $39,132 (13.4%) for the nine months ended
September 30, 1999 as compared to the nine months ended September 30,
1998. This increase was primarily due to (i) the timing of ad valorem tax
payments, (ii) positive prior period lease operating expense adjustments
made by the operator on several wells during the nine months ended
September 30, 1999, and (iii) workover expenses incurred on one
significant well during the nine months ended September 30, 1999 in order
to improve the recovery of reserves. As a percentage of oil and gas sales,
these expenses remained relatively constant at 27.0% for the nine months
ended September 30, 1999 and 26.9% for the nine months ended September 30,
1998.
Depreciation, depletion, and amortization of oil and gas properties
increased $14,650 (5.8%) for the nine months ended September 30, 1999 as
compared to the nine months ended September 30, 1998. As a percentage of
oil and gas sales, this expense decreased to 22.0% for the nine months
ended September 30, 1999 from 23.4% for the nine months ended September
30, 1998.
General and administrative expenses remained relatively constant for the
nine months ended September 30, 1999 as compared to the nine months ended
September 30, 1998. As a percentage of oil and gas sales, these expenses
decreased to 12.7% for the nine months ended September 30, 1999 from 14.3%
for the nine months ended September 30, 1998. This percentage decrease was
primarily due to the increase in oil and gas sales.
-57-
The II-F Partnership achieved payout during the nine months ended
September 30, 1999. After payout, operations and revenues for the II-F
Partnership have been and will be allocated using after payout
percentages. After payout percentages allocate operating income and
expenses 10% to the General Partner and 90% to the Limited Partners.
Before payout, operating income and expenses were allocated 5% to the
General Partner and 95% to the Limited Partners. See the Partnerships'
Annual Report on Form 10-K for the year ended December 31, 1998 for a
further discussion of pre and post payout allocations of income and
expense.
The Limited Partners have received cash distributions through September
30, 1999 totaling $17,518,051 or 102.21% of Limited Partners' capital
contributions.
II-G PARTNERSHIP
THREE MONTHS ENDED SEPTEMBER 30, 1999 COMPARED TO THE THREE MONTHS ENDED
SEPTEMBER 30, 1998.
Three Months Ended September 30,
--------------------------------
1999 1998
-------- ---------
Oil and gas sales $888,505 $561,811
Oil and gas production expenses $199,784 $191,369
Barrels produced 16,277 16,107
Mcf produced 252,612 253,227
Average price/Bbl $ 20.69 $ 11.03
Average price/Mcf $ 2.18 $ 1.52
As shown in the table above, total oil and gas sales increased $326,694
(58.2%) for the three months ended September 30, 1999 as compared to the
three months ended September 30, 1998. Of this increase, approximately
$157,000 and $169,000, respectively, were related to increases in the
average prices of oil and gas sold. Volumes of oil sold increased 170
barrels, while volumes of gas sold decreased 615 Mcf for the three months
ended September 30, 1999 as compared to the three months ended September
30, 1998. Average oil and gas prices increased to $20.69 per barrel and
$2.18 per Mcf, respectively, for the three months ended September 30, 1999
from $11.03 per barrel and $1.52 per Mcf, respectively, for the three
months ended September 30, 1998.
Oil and gas production expenses (including lease operating expenses and
production taxes) increased $8,415 (4.4%) for the three months ended
September 30, 1999 as compared to the three months ended September 30,
1998. As a percentage of oil and gas sales, these expenses decreased to
22.5% for the three months ended September 30, 1999 from 34.1% for the
three months ended September 30, 1998. This percentage
-58-
decrease was primarily due to the increases in the average prices of oil
and gas sold.
Depreciation, depletion, and amortization of oil and gas properties
decreased $6,235 (3.8%) for the three months ended September 30, 1999 as
compared to the three months ended September 30, 1998. As a percentage of
oil and gas sales, this expense decreased to 17.7% for the three months
ended September 30, 1999 from 29.1% for the three months ended September
30, 1998. This percentage decrease was primarily due to the increases in
the average prices of oil and gas sold.
General and administrative expenses decreased $3,591 (3.4%) for the three
months ended September 30, 1999 as compared to the three months ended
September 30, 1998. As a percentage of oil and gas sales, these expenses
decreased to 11.6% for the three months ended September 30, 1999 from
19.0% for the three months ended September 30, 1998. This percentage
decrease was primarily due to the increase in oil and gas sales.
NINE MONTHS ENDED SEPTEMBER 30, 1999 COMPARED TO THE NINE MONTHS ENDED
SEPTEMBER 30, 1998.
Nine Months Ended September 30,
-------------------------------
1999 1998
---------- ----------
Oil and gas sales $2,593,092 $2,310,367
Oil and gas production expenses $ 708,579 $ 625,597
Barrels produced 57,547 59,757
Mcf produced 936,181 806,717
Average price/Bbl $ 14.90 $ 13.92
Average price/Mcf $ 1.85 $ 1.83
As shown in the table above, total oil and gas sales increased $282,725
(12.2%) for the nine months ended September 30, 1999 as compared to the
nine months ended September 30, 1998. Of this increase, approximately
$237,000 was related to an increase in volumes of gas sold and
approximately $57,000 was related to an increase in the average price of
oil sold. These increases were partially offset by a decrease of
approximately $31,000 related to a decrease in volumes of oil sold.
Volumes of oil sold decreased 2,210 barrels, while volumes of gas sold
increased 129,464 Mcf for the nine months ended September 30, 1999 as
compared to the nine months ended September 30, 1998. The increase in
volumes of gas sold was primarily due to (i) an increase in production due
to the successful recompletion of one significant well in late 1998 and
(ii) a positive prior period volume adjustment made by the operator on
another significant well during the nine months ended September 30, 1999.
Average oil and gas prices increased to $14.90 per
-59-
barrel and $1.85 per Mcf, respectively, for the nine months ended
September 30, 1999 from $13.92 per barrel and $1.83 per Mcf, respectively,
for the nine months ended September 30, 1998.
The II-G Partnership sold certain oil and gas properties during the nine
months ended September 30, 1999 and recognized a $2,693 gain on such
sales. Sales of oil and gas properties during the nine months ended
September 30, 1998 resulted in the II-G Partnership recognizing similar
gains totaling $1,368,785.
Oil and gas production expenses (including lease operating expenses and
production taxes) increased $82,982 (13.3%) for the nine months ended
September 30, 1999 as compared to the nine months ended September 30,
1998. This increase was primarily due to (i) the timing of ad valorem tax
payments, (ii) positive prior period lease operating expense adjustments
made by the operator on several wells during the nine months ended
September 30, 1999, and (iii) workover expenses incurred on one
significant well during the nine months ended September 30, 1999 in order
to improve the recovery of reserves. As a percentage of oil and gas sales,
these expenses remained relatively constant at 27.3% for the nine months
ended September 30, 1999 and 27.1% for the nine months ended September 30,
1998.
Depreciation, depletion, and amortization of oil and gas properties
increased $30,734 (5.7%) for the nine months ended September 30, 1999 as
compared to the nine months ended September 30, 1998. As a percentage of
oil and gas sales, this expense decreased to 22.2% for the nine months
ended September 30, 1999 from 23.5% for the nine months ended September
30, 1998.
General and administrative expenses remained relatively constant for the
nine months ended September 30, 1999 as compared to the nine months ended
September 30, 1998. As a percentage of oil and gas sales, these expenses
decreased to 13.1% for the nine months ended September 30, 1999 from 14.6%
for the nine months ended September 30, 1998. This percentage decrease was
primarily due to the increase in oil and gas sales.
The Limited Partners have received cash distributions through September
30, 1999 totaling $36,188,371 or 97.23% of Limited Partners' capital
contributions.
-60-
II-H PARTNERSHIP
THREE MONTHS ENDED SEPTEMBER 30, 1999 COMPARED TO THE THREE MONTHS ENDED
SEPTEMBER 30, 1998.
Three Months Ended September 30,
--------------------------------
1999 1998
-------- --------
Oil and gas sales $222,185 $136,780
Oil and gas production expenses $ 48,942 $ 46,496
Barrels produced 3,734 3,736
Mcf produced 61,823 61,996
Average price/Bbl $ 21.35 $ 10.95
Average price/Mcf $ 2.30 $ 1.55
As shown in the table above, total oil and gas sales increased $85,405
(62.4%) for the three months ended September 30, 1999 as compared to the
three months ended September 30, 1998. Of this increase, approximately
$39,000 and $47,000, respectively, were related to increases in the
average prices of oil and gas sold. Volumes of oil and gas sold decreased
2 barrels and 173 Mcf, respectively, for the three months ended September
30, 1999 as compared to the three months ended September 30, 1998. Average
oil and gas prices increased to $21.35 per barrel and $2.30 per Mcf,
respectively, for the three months ended September 30, 1999 from $10.95
per barrel and $1.55 per Mcf, respectively, for the three months ended
September 30, 1998.
Oil and gas production expenses (including lease operating expenses and
production taxes) increased $2,446 (5.3%) for the three months ended
September 30, 1999 as compared to the three months ended September 30,
1998. As a percentage of oil and gas sales, these expenses decreased to
22.0% for the three months ended September 30, 1999 from 34.0% for the
three months ended September 30, 1998. This percentage decrease was
primarily due to the increases in the average prices of oil and gas sold.
Depreciation, depletion, and amortization of oil and gas properties
decreased $1,633 (4.2%) for the three months ended September 30, 1999 as
compared to the three months ended September 30, 1998. As a percentage of
oil and gas sales, this expense decreased to 16.7% for the three months
ended September 30, 1999 from 28.3% for the three months ended September
30, 1998. This percentage decrease was primarily due to the increases in
the average prices of oil and gas sold.
-61-
General and administrative expenses decreased $882 (3.4%) for the three
months ended September 30, 1999 as compared to the three months ended
September 30, 1998. As a percentage of oil and gas sales, these expenses
decreased to 11.4% for the three months ended September 30, 1999 from
19.2% for the three months ended September 30, 1998. This percentage
decrease was primarily due to the increase in oil and gas sales.
NINE MONTHS ENDED SEPTEMBER 30, 1999 COMPARED TO THE NINE MONTHS ENDED
SEPTEMBER 30, 1998.
Nine Months Ended September 30,
-------------------------------
1999 1998
-------- --------
Oil and gas sales $618,940 $549,753
Oil and gas production expenses $170,527 $151,009
Barrels produced 13,371 13,887
Mcf produced 224,318 193,275
Average price/Bbl $ 14.95 $ 13.90
Average price/Mcf $ 1.87 $ 1.85
As shown in the table above, total oil and gas sales increased $69,187
(12.6%) for the nine months ended September 30, 1999 as compared to the
nine months ended September 30, 1998. Of this increase, approximately
$57,000 was related to an increase in volumes of gas sold and
approximately $14,000 was related to an increase in the average price of
oil sold. These increases were partially offset by a decrease of
approximately $7,000 related to a decrease in volumes of oil sold. Volumes
of oil sold decreased 516 barrels, while volumes of gas sold increased
31,043 Mcf for the nine months ended September 30, 1999 as compared to the
nine months ended September 30, 1998. The increase in volumes of gas sold
was primarily due to (i) an increase in production due to the successful
recompletion of one significant well in late 1998 and (ii) a positive
prior period volume adjustment made by the operator on another significant
well during the nine months ended September 30, 1999. Average oil and gas
prices increased to $14.95 per barrel and $1.87 per Mcf, respectively, for
the nine months ended September 30, 1999 from $13.90 per barrel and $1.85
per Mcf, respectively, for the nine months ended September 30, 1998.
The II-H Partnership sold certain oil and gas properties during the nine
months ended September 30, 1999 and recognized a $700 gain on such sales.
Sales of oil and gas properties during the nine months ended September 30,
1998 resulted in the II-H Partnership recognizing similar gains totaling
$314,187.
-62-
Oil and gas production expenses (including lease operating expenses and
production taxes) increased $19,518 (12.9%) for the nine months ended
September 30, 1999 as compared to the nine months ended September 30,
1998. This increase was primarily due to (i) the timing of ad valorem tax
payments, (ii) positive prior period lease operating expense adjustments
made by the operator on several wells during the nine months ended
September 30, 1999, and (iii) workover expenses incurred on one
significant well during the nine months ended September 30, 1999 in order
to improve the recovery of reserves. As a percentage of oil and gas sales,
these expenses remained relatively constant at 27.6% for the nine months
ended September 30, 1999 and 27.5% for the nine months ended September 30,
1998.
Depreciation, depletion, and amortization of oil and gas properties
increased $7,223 (5.7%) for the nine months ended September 30, 1999 as
compared to the nine months ended September 30, 1998. As a percentage of
oil and gas sales, this expense decreased to 21.6% for the nine months
ended September 30, 1999 from 23.1% for the nine months ended September
30, 1998.
General and administrative expenses remained relatively constant for the
nine months ended September 30, 1999 as compared to the nine months ended
September 30, 1998. As a percentage of oil and gas sales, these expenses
decreased to 13.5% for the nine months ended September 30, 1999 from 15.2%
for the nine months ended September 30, 1998. This percentage decrease was
primarily due to the increase in oil and gas sales.
The Limited Partners have received cash distributions through September
30, 1999 totaling $8,424,364 or 91.86% of 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.
-63-
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 Investment Company and its
affiliates ("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 has
addressed each of the three Y2K areas discussed above through a readiness
process that:
1. increased the awareness of the issue among key employees;
2. identified areas of potential risk;
3. assessed the relative impact of these risks and Samson's ability
to manage them; and
4. remediated the risks on a priority basis wherever possible.
One of Samson Investment Company's Executive Vice Presidents 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 November 1, 1999, Samson is in the
final stages of implementation of a Y2K plan, as summarized below:
-64-
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. All of the Y2K upgrades have been completed.
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 currently Y2K compliant. The costs of all such risk
assessments and remediation were not material to the Partnerships.
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 has communicated to
its management team the importance of having adequate staff available to
manually perform necessary functions to minimize disruptions.
IMBEDDED SYSTEMS
1. Awareness. Samson's Y2K program 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.
-65-
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 have been tested by the respective vendors and have
been found to be Y2K compliant or have been upgraded or replaced.
Office machines have been tested by Samson and vendors and are believed to
be compliant.
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 all of which have been made compliant or replaced.
None of these applications are believed to be material to Samson or the
Partnerships. Samson believes that sufficient manual processes are
available to minimize any 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,
-66-
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.
4. Remediation. Where Samson perceived a significant risk of Y2K
non-compliance by banks and other significant vendors that would have had
a material impact on Samson's business, Samson undertook joint testing
during 1999, and any identified problems have been resolved.
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.
-67-
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET
RISK.
The Partnerships do not hold any market risk sensitive instruments.
-68-
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 II-A Partnership's financial statements as of September 30, 1999
and for the nine months ended September 30, 1999, filed herewith.
27.2 Financial Data Schedule containing summary financial information extracted
from the II-B Partnership's financial statements as of September 30, 1999
and for the nine months ended September 30, 1999, filed herewith.
27.3 Financial Data Schedule containing summary financial information extracted
from the II-C Partnership's financial statements as of September 30, 1999
and for the nine months ended September 30, 1999, filed herewith.
27.4 Financial Data Schedule containing summary financial information extracted
from the II-D Partnership's financial statements as of September 30, 1999
and for the nine months ended September 30, 1999, filed herewith.
27.5 Financial Data Schedule containing summary financial information extracted
from the II-E Partnership's financial statements as of September 30, 1999
and for the nine months ended September 30, 1999, filed herewith.
27.6 Financial Data Schedule containing summary financial information extracted
from the II-F Partnership's financial statements as of September 30, 1999
and for the nine months ended September 30, 1999, filed herewith.
27.7 Financial Data Schedule containing summary financial information extracted
from the II-G Partnership's financial statements as of September 30, 1999
and for the nine months ended September 30, 1999, filed herewith.
-69-
27.8 Financial Data Schedule containing summary financial information extracted
from the II-H Partnership's financial statements as of September 30, 1999
and for the nine months ended September 30, 1999, filed herewith.
All other exhibits are omitted as inapplicable.
(b) Reports on Form 8-K.
None.
-70-
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP II-A
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP II-B
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP II-C
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP II-D
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP II-E
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP II-F
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP II-G
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP II-H
(Registrant)
BY: GEODYNE RESOURCES, INC.
General Partner
Date: November 12, 1999 By: /s/Dennis R. Neill
--------------------------------
(Signature)
Dennis R. Neill
President
Date: November 12, 1999 By: /s/Patrick M. Hall
--------------------------------
(Signature)
Patrick M. Hall
Principal Accounting Officer
-71-
INDEX TO EXHIBITS
NUMBER DESCRIPTION
- ------ -----------
27.1 Financial Data Schedule containing summary financial information
extracted from the Geodyne Energy Income Limited Partnership II-A's
financial statements as of September 30, 1999 and for the nine
months ended September 30, 1999, filed herewith.
27.2 Financial Data Schedule containing summary financial information
extracted from the Geodyne Energy Income Limited Partnership II-B's
financial statements as of September 30, 1999 and for the nine
months ended September 30, 1999, filed herewith.
27.3 Financial Data Schedule containing summary financial information
extracted from the Geodyne Energy Income Limited Partnership II-C's
financial statements as of September 30, 1999 and for the nine
months ended September 30, 1999, filed herewith.
27.4 Financial Data Schedule containing summary financial information
extracted from the Geodyne Energy Income Limited Partnership II-D's
financial statements as of September 30, 1999 and for the nine
months ended September 30, 1999, filed herewith.
27.5 Financial Data Schedule containing summary financial information
extracted from the Geodyne Energy Income Limited Partnership II-E's
financial statements as of September 30, 1999 and for the nine
months ended September 30, 1999, filed herewith.
27.6 Financial Data Schedule containing summary financial information
extracted from the Geodyne Energy Income Limited Partnership II-F's
financial statements as of September 30, 1999 and for the nine
months ended September 30, 1999, filed herewith.
27.7 Financial Data Schedule containing summary financial information
extracted from the Geodyne Energy Income Limited Partnership II-G's
financial statements as of September 30, 1999 and for the nine
months ended September 30, 1999, filed herewith.
27.8 Financial Data Schedule containing summary financial information
extracted from the Geodyne Energy Income Limited Partnership II-H's
financial statements as of September 30, 1999 and for the nine
months ended September 30, 1999, filed herewith.
All other exhibits are omitted as inapplicable.
-72-