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, 2001
Commission File Number: P-7: 0-20265 P-8: 0-20264
GEODYNE INSTITUTIONAL/PENSION ENERGY INCOME LIMITED PARTNERSHIP P-7
GEODYNE INSTITUTIONAL/PENSION ENERGY INCOME LIMITED PARTNERSHIP P-8
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(Exact name of Registrant as specified in its Articles)
P-7 73-1367186
Oklahoma P-8 73-1378683
---------------------------- -------------------------------
(State or other jurisdiction (I.R.S. Employer Identification
of incorporation or Number)
organization)
Two West Second Street, Tulsa, Oklahoma 74103
------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code:(918) 583-1791
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes X No
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-1-
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
GEODYNE INSTITUTIONAL/PENSION ENERGY INCOME LIMITED PARTNERSHIP P-7
BALANCE SHEETS
(Unaudited)
ASSETS
September 30, December 31,
2001 2000
------------- ------------
CURRENT ASSETS:
Cash and cash equivalents $ 199,520 $ 633,461
Accounts receivable:
Net Profits 446,210 612,799
---------- ----------
Total current assets $ 645,730 $1,246,260
NET PROFITS INTERESTS, net, utilizing
the successful efforts method 2,397,349 2,325,235
---------- ----------
$3,043,079 $3,571,495
========== ==========
PARTNERS' CAPITAL (DEFICIT)
PARTNERS' CAPITAL (DEFICIT):
General Partner ($ 114,079) ($ 104,594)
Limited Partners, issued and
outstanding, 188,702 units 3,157,158 3,676,089
---------- ----------
Total Partners' capital $3,043,079 $3,571,495
========== ==========
The accompanying condensed notes are an integral part of
these financial statements.
-2-
GEODYNE INSTITUTIONAL/PENSION ENERGY INCOME LIMITED PARTNERSHIP P-7
STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2001 AND 2000
(Unaudited)
2001 2000
-------- ----------
REVENUES:
Net Profits $237,881 $ 661,848
Interest income 3,479 10,588
Gain on sale of Net
Profits Interests - 353,794
-------- ----------
$241,360 $1,026,230
COSTS AND EXPENSES:
Depletion of Net Profits
Interests $ 45,217 $ 55,579
General and administrative
(Note 2) 53,117 53,966
-------- ----------
$ 98,334 $ 109,545
-------- ----------
NET INCOME $143,026 $ 916,685
======== ==========
GENERAL PARTNER - NET INCOME $ 8,786 $ 47,528
======== ==========
LIMITED PARTNERS - NET INCOME $134,240 $ 869,157
======== ==========
NET INCOME per unit $ 0.71 $ 4.60
======== ==========
UNITS OUTSTANDING 188,702 188,702
======== ==========
The accompanying condensed notes are an integral part of
these financial statements.
-3-
GEODYNE INSTITUTIONAL/PENSION ENERGY INCOME LIMITED PARTNERSHIP P-7
STATEMENTS OF OPERATIONS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2001 AND 2000
(Unaudited)
2001 2000
------------ ----------
REVENUES:
Net Profits $1,701,623 $2,123,416
Interest income 15,814 19,741
Gain (loss) on sale of Net
Profits Interests ( 252) 391,062
---------- ----------
$1,717,185 $2,534,219
COSTS AND EXPENSES:
Depletion of Net Profits
Interests $ 167,113 $ 194,662
General and administrative
(Note 2) 173,269 173,047
---------- ----------
$ 340,382 $ 367,709
---------- ----------
NET INCOME $1,376,803 $2,166,510
========== ==========
GENERAL PARTNER - NET INCOME $ 74,734 $ 115,125
========== ==========
LIMITED PARTNERS - NET INCOME $1,302,069 $2,051,385
========== ==========
NET INCOME per unit $ 6.90 $ 10.87
========== ==========
UNITS OUTSTANDING 188,702 188,702
========== ==========
The accompanying condensed notes are an integral part of
these financial statements.
-4-
GEODYNE INSTITUTIONAL/PENSION ENERGY INCOME LIMITED PARTNERSHIP P-7
STATEMENTS OF CASH FLOWS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2001 AND 2000
(Unaudited)
2001 2000
------------ ------------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $1,376,803 $2,166,510
Adjustments to reconcile net income
to net cash provided by operating
activities:
Depletion of Net Profits
Interests 167,113 194,662
(Gain) loss on sale of Net
Profits Interests 252 ( 391,062)
(Increase) decrease in accounts
receivable - Net Profits 166,589 ( 256,927)
---------- ----------
Net cash provided by operating
activities $1,710,757 $1,713,183
---------- ----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures ($ 239,479) ($ 185,525)
Proceeds from sale of Net Profits
Interests - 395,873
---------- ----------
Net cash provided (used) by investing
activities ($ 239,479) $ 210,348
---------- ----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Cash distributions ($1,905,219) ($1,401,092)
---------- ----------
Net cash used by financing
activities ($1,905,219) ($1,401,092)
---------- ----------
NET INCREASE (DECREASE) IN CASH AND
CASH EQUIVALENTS ($ 433,941) $ 522,439
CASH AND CASH EQUIVALENTS AT
BEGINNING OF PERIOD 633,461 353,416
---------- ----------
CASH AND CASH EQUIVALENTS AT
END OF PERIOD $ 199,520 $ 875,855
========== ==========
The accompanying condensed notes are an integral part of
these financial statements.
-5-
GEODYNE INSTITUTIONAL/PENSION ENERGY INCOME LIMITED PARTNERSHIP P-8
BALANCE SHEETS
(Unaudited)
ASSETS
September 30, December 31,
2001 2000
------------ ------------
CURRENT ASSETS:
Cash and cash equivalents $ 233,615 $ 498,373
Accounts receivable:
Net Profits 282,843 405,439
---------- ----------
Total current assets $ 516,458 $ 903,812
NET PROFITS INTERESTS, net, utilizing
the successful efforts method 1,398,212 1,355,008
---------- ----------
$1,914,670 $2,258,820
========== ==========
PARTNERS' CAPITAL (DEFICIT)
PARTNERS' CAPITAL (DEFICIT):
General Partner ($ 51,476) ($ 44,319)
Limited Partners, issued and
outstanding, 116,168 units 1,966,146 2,303,139
---------- ----------
Total Partners' capital $1,914,670 $2,258,820
========== ==========
The accompanying condensed notes are an integral part of
these financial statements.
-6-
GEODYNE INSTITUTIONAL/PENSION ENERGY INCOME LIMITED PARTNERSHIP P-8
STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2001 AND 2000
(Unaudited)
2001 2000
-------- --------
REVENUES:
Net Profits $194,816 $434,550
Interest income 3,101 7,092
Gain on sale of Net Profits
Interests - 181,260
-------- --------
$197,917 $622,902
COSTS AND EXPENSES:
Depletion of Net Profits
Interests $ 30,277 $ 33,729
General and administrative
(Note 2) 32,985 33,463
-------- --------
$ 63,262 $ 67,192
-------- --------
NET INCOME $134,655 $555,710
======== ========
GENERAL PARTNER - NET INCOME $ 7,789 $ 28,780
======== ========
LIMITED PARTNERS - NET INCOME $126,866 $526,930
======== ========
NET INCOME per unit $ 1.10 $ 4.53
======== ========
UNITS OUTSTANDING 116,168 116,168
======== ========
The accompanying condensed notes are an integral part of
these financial statements.
-7-
GEODYNE INSTITUTIONAL/PENSION ENERGY INCOME LIMITED PARTNERSHIP P-8
STATEMENTS OF OPERATIONS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2001 AND 2000
(Unaudited)
2001 2000
------------ ----------
REVENUES:
Net Profits $1,247,729 $1,360,487
Interest income 13,256 14,584
Gain (loss) on sale of Net
Profits Interests ( 121) 202,690
---------- ----------
$1,260,864 $1,577,761
COSTS AND EXPENSES:
Depletion of Net Profits
Interests $ 104,987 $ 114,051
General and administrative
(Note 2) 113,199 106,921
---------- ----------
$ 218,186 $ 220,972
---------- ----------
NET INCOME $1,042,678 $1,356,789
========== ==========
GENERAL PARTNER - NET INCOME $ 55,671 $ 71,672
========== ==========
LIMITED PARTNERS - NET INCOME $ 987,007 $1,285,117
========== ==========
NET INCOME per unit $ 8.50 $ 11.06
========== ==========
UNITS OUTSTANDING 116,168 116,168
========== ==========
The accompanying condensed notes are an integral part of
these financial statements.
-8-
GEODYNE INSTITUTIONAL/PENSION ENERGY INCOME LIMITED PARTNERSHIP P-8
STATEMENTS OF CASH FLOWS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2001 AND 2000
(Unaudited)
2001 2000
------------ ------------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $1,042,678 $1,356,789
Adjustments to reconcile net income
to net cash provided by operating
activities:
Depletion of Net Profits
Interests 104,987 114,051
(Gain) loss on sale of Net
Profits Interests 121 ( 202,690)
(Increase) decrease in accounts
receivable - Net Profits 122,596 ( 158,085)
---------- ----------
Net cash provided by operating
activities $1,270,382 $1,110,065
---------- ----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures ($ 148,312) ($ 112,490)
Proceeds from sale of Net Profits
Interests - 204,874
---------- ----------
Net cash provided (used) by investing
activities ($ 148,312) $ 92,384
---------- ----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Cash distributions ($1,386,828) ($ 909,721)
---------- ----------
Net cash used by financing activities ($1,386,828) ($ 909,721)
---------- ----------
NET INCREASE (DECREASE) IN CASH AND
CASH EQUIVALENTS ($ 264,758) $ 292,728
CASH AND CASH EQUIVALENTS AT
BEGINNING OF PERIOD 498,373 291,963
---------- ----------
CASH AND CASH EQUIVALENTS AT
END OF PERIOD $ 233,615 $ 584,691
========== ==========
The accompanying condensed notes are an integral part of
these financial statements.
-9-
GEODYNE INSTITUTIONAL/PENSION ENERGY INCOME PROGRAM II LIMITED PARTNERSHIPS
CONDENSED NOTES TO THE FINANCIAL STATEMENTS
SEPTEMBER 30, 2001
(Unaudited)
1. ACCOUNTING POLICIES
-------------------
The balance sheets as of September 30, 2001, statements of operations for
the three and nine months ended September 30, 2001 and 2000, and
statements of cash flows for the nine months ended September 30, 2001 and
2000 have been prepared by Geodyne Resources, Inc., the General Partner
(the "General Partner") of the Geodyne Institutional/Pension Energy Income
Program II Limited Partnerships (individually, the "P-7 Partnership" or
the "P-8 Partnership", as the case may be, or, collectively, the
"Partnerships"), without audit. In the opinion of management the financial
statements referred to above include all necessary adjustments, consisting
of normal recurring adjustments, to present fairly the financial position
at September 30, 2001, the results of operations for the three and nine
months ended September 30, 2001 and 2000, and the cash flows for the nine
months ended September 30, 2001 and 2000.
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, 2000. The
results of operations for the period ended September 30, 2001 are not
necessarily indicative of the results to be expected for the full year.
As used in these financial statements, the Partnerships' net profits and
royalty interests in oil and gas sales are referred to as "Net Profits"
and the Partnerships' net profits and royalty interests in oil and gas
properties are referred to as "Net Profits Interests". The working
interests from which Partnerships' Net Profits Interests are carved are
referred to as "Working Interests".
The Limited Partners' net income or loss per unit is based upon each $100
initial capital contribution.
-10-
NET PROFITS INTERESTS
---------------------
The Partnerships follow the successful efforts method of accounting for
their Net Profits Interests. Under the successful efforts method, the
Partnerships capitalize all acquisition costs. Property acquisition costs
include costs incurred by the Partnerships or the General Partner to
acquire a net profits interest or other non-operating interest in
producing properties, including related title insurance or examination
costs, commissions, engineering, legal and accounting fees, and similar
costs directly related to the acquisitions, plus an allocated portion of
the General Partner's property screening costs. The acquisition cost to
the Partnerships of Net Profits Interests acquired by the General Partner
is adjusted to reflect the net cash results of operations, including
interest incurred to finance the acquisition, for the period of time the
properties are held by the General Partner prior to their transfer to the
Partnerships. Impairment of Net Profits Interests is recognized based upon
an individual property assessment.
Depletion of the costs of Net Profits Interests is computed on the
unit-of-production method. The Partnerships' calculation of depletion of
its Net Profits Interests includes estimated dismantlement and abandonment
costs, net of estimated salvage value.
The Partnerships do not directly bear capital costs. However, the
Partnerships indirectly bear certain capital costs incurred by the owners
of the Working Interests to the extent such capital costs are charged
against the applicable oil and gas revenues in calculating the Net Profits
payable to the Partnerships. For financial reporting purposes only, such
capital costs are reported as capital expenditures in the Partnerships'
Statements of Cash Flows.
2. TRANSACTIONS WITH RELATED PARTIES
---------------------------------
The Partnerships' partnership agreements provide for reimbursement to the
General Partner for all direct general and administrative expenses and for
the general and administrative overhead applicable to the Partnerships
based on an allocation of actual costs incurred. During the three months
ended September 30, 2001, the following payments were made to the General
Partner or its affiliates by the Partnerships:
-11-
Direct General Administrative
Partnership and Administrative Overhead
----------- ------------------- ---------------
P-7 $3,458 $49,659
P-8 2,415 30,570
During the nine months ended September 30, 2001, the following payments
were made to the General Partner or its affiliates by the Partnerships:
Direct General Administrative
Partnership and Administrative Overhead
----------- ------------------- ---------------
P-7 $24,292 $148,977
P-8 21,489 91,710
Affiliates of the Partnerships operate certain of the Partnerships'
properties and their policy is to bill the Partnerships for all customary
charges and cost reimbursements associated with their activities.
-12-
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
USE OF FORWARD-LOOKING STATEMENTS AND ESTIMATES
- -----------------------------------------------
This Quarterly Report contains certain forward-looking statements. The
words "anticipate", "believe", "expect", "plan", "intend", "estimate",
"project", "could", "may" and similar expressions are intended to identify
forward-looking statements. Such statements reflect management's current
views with respect to future events and financial performance. This
Quarterly Report also includes certain information, which is, or is based
upon, estimates and assumptions. Such estimates and assumptions are
management's efforts to accurately reflect the condition and operation of
the Partnerships.
Use of forward-looking statements and estimates and assumptions involve
risks and uncertainties which include, but are not limited to, the
volatility of oil and gas prices, the uncertainty of reserve information,
the operating risk associated with oil and gas properties (including the
risk of personal injury, death, property damage, damage to the well or
producing reservoir, environmental contamination, and other operating
risks), the prospect of changing tax and regulatory laws, the availability
and capacity of processing and transportation facilities, the general
economic climate, the supply and price of foreign imports of oil and gas,
the level of consumer product demand, and the price and availability of
alternative fuels. Should one or more of these risks or uncertainties
occur or should estimates or underlying assumptions prove incorrect,
actual conditions or results may vary materially and adversely from those
stated, anticipated, believed, estimated, and otherwise indicated.
GENERAL
- -------
The Partnerships were formed for the purpose of acquiring Net Profits
Interests located in the continental United States. In general, each
Partnership acquired passive interests in producing properties and does
not directly engage in development drilling or enhanced recovery projects.
Therefore, the economic life of each Partnership is limited to the period
of time required to fully produce its acquired oil and gas reserves. A Net
Profits Interest entitles the Partnerships to a portion of the oil and gas
sales less operating and production expenses and development costs
generated by the owner of the underlying Working Interests. The net
proceeds from the oil and gas operations
-13-
are distributed to the Limited Partners and General Partner in accordance
with the terms of the Partnerships' Partnership Agreements.
LIQUIDITY AND CAPITAL RESOURCES
- -------------------------------
The Partnerships began operations and investors were assigned their rights
as Limited Partners, having made capital contributions in the amounts and
on the dates set forth below:
Limited
Date of Partner Capital
Partnership Activation Contributions
----------- ------------------ ---------------
P-7 February 28, 1992 $18,870,200
P-8 February 28, 1992 $11,616,800
In general, the amount of funds available for acquisition of producing
properties was equal to the capital contributions of the Limited Partners,
less 15% for sales commissions and organization and management fees. All
of the Partnerships have fully invested their capital contributions.
Net proceeds from the Partnerships' Net Profits Interests less necessary
operating capital are distributed to the Limited Partners on a quarterly
basis. Revenues and net proceeds of a Partnership are largely dependent
upon the volumes of oil and gas sold and the prices received for such oil
and gas. While the General Partner cannot predict future pricing trends,
it believes the working capital available as of September 30, 2001 and the
net revenue generated from future operations will provide sufficient
working capital to meet current and future obligations.
The P-7 and P-8 Partnerships' Statements of Cash Flows for the nine months
ended September 30, 2000 include proceeds from the sale of certain oil and
gas properties during the third quarter of 2000. These proceeds were
included in the Partnerships' cash distributions paid in November 2000.
Occasional expenditures for new wells or well recompletions or workovers,
however, may reduce or eliminate cash available for a particular quarterly
cash distribution. During the nine months ended September 30, 2001,
capital expenditures for the P-7 and P-8 Partnerships totaled $239,479 and
$148,312, respectively. These expenditures were primarily due to drilling
and recompletion activities on two large unitized properties, the North
Riley Unit in Gaines County, Texas, in which the P-7 and P-8 Partnerships
own interests of approximately 2.0% and 1.2%, respectively, and the
Robertson North Unit in Gaines County, Texas, in
-14-
which the P-7 and P-8 Partnerships own interests of approximately 2.7% and
1.7%, respectively. During the nine months ended September 30, 2000,
capital expenditures for the P-7 and P-8 Partnerships totaled $185,525 and
$112,490, respectively. These expenditures were primarily due to the
drilling activities in a large unitized property, the North Riley Unit in
Gaines County, Texas, in which the P-7 and P-8 Partnerships own interests
of approximately 2.0% and 1.2%, respectively.
Pursuant to the terms of the Partnerships' partnership agreements (the
"Partnership Agreements"), the Partnerships are scheduled to terminate on
February 28, 2002. However, the Partnership Agreements provide that the
General Partner may extend the term of each Partnership for up to five
periods of two years each. The General Partner currently intends to extend
the terms of the Partnerships for their first two year extension period to
February 28, 2004.
RESULTS OF OPERATIONS
- ---------------------
GENERAL DISCUSSION
The following general discussion should be read in conjunction with the
analysis of results of operations provided below. The most important
variables affecting the Partnerships' revenues are the prices received for
the sale of oil and gas and the volumes of oil and gas produced. The
Partnerships' production is mainly natural gas, so such pricing and
volumes are the most significant factors.
Due to the volatility of oil and gas prices, forecasting future prices is
subject to great uncertainty and inaccuracy. Substantially all of the
Partnerships' gas reserves are being sold in the "spot market". Prices on
the spot market are subject to wide seasonal and regional pricing
fluctuations due to the highly competitive nature of the spot market. Such
spot market sales are generally short-term in nature and are dependent
upon the obtaining of transportation services provided by pipelines.
However, oil and gas are depleting assets, so it can be expected that
production levels will decline over time. Gas prices in late 2000 and
early 2001 were significantly higher than the Partnerships' historical
average. This was attributable to the higher prices for crude oil, a
substitute fuel in some markets, and reduced production due to lower
capital investments in 1998 and 1999. In the last several months, however,
spot gas prices have substantially declined. A weakening economy and
recent terrorist activities may result in additional downward pricing
pressure. It is not possible to accurately predict future pricing
direction.
-15-
P-7 PARTNERSHIP
THREE MONTHS ENDED SEPTEMBER 30, 2001 COMPARED TO THE THREE MONTHS ENDED
SEPTEMBER 30, 2000.
Three Months Ended September 30,
--------------------------------
2001 2000
-------- --------
Net Profits $237,881 $661,848
Barrels produced 13,785 19,767
Mcf produced 85,796 99,354
Average price/Bbl $ 25.37 $ 29.15
Average price/Mcf $ 2.51 $ 3.39
As shown in the table above, total Net Profits decreased $423,967 (64.1%)
for the three months ended September 30, 2001 as compared to the three
months ended September 30, 2000. Of this decrease, approximately (i)
$174,000 and $46,000, respectively, were related to decreases in volumes
of oil and gas sold, (ii) $52,000 and $76,000, respectively, were related
to decreases in the average prices of oil and gas sold, and (iii) $76,000
was related to an increase in production expenses. Volumes of oil and gas
sold decreased 5,982 barrels and 13,558 Mcf, respectively, for the three
months ended September 30, 2001 as compared to the three months ended
September 30, 2000. The decrease in volumes of oil sold was primarily due
to (i) normal declines in production and (ii) the sale of two significant
wells during mid 2000. The decrease in volumes of gas sold was primarily
due to normal declines in production, which decrease was partially offset
by increased production on one significant well due to the successful
recompletion of that well during 2001. The increase in production expenses
was primarily due to workover expenses incurred on several wells during
the three months ended September 30, 2001. This increase was partially
offset by a decrease in production taxes associated with the decrease in
Net Profits and the sale of two significant wells during mid 2000. Average
oil and gas prices decreased to $25.37 per barrel and $2.51 per Mcf,
respectively, for the three months ended September 30, 2001 from $29.15
per barrel and $3.39 per Mcf, respectively, for the three months ended
September 30, 2000.
As discussed in Liquidity and Capital Resources above, the P-7 Partnership
sold certain oil and gas properties during the three months ended
September 30, 2000 and recognized a $353,794 gain on such sales. No such
sales occurred during the three months ended September 30, 2001.
-16-
Depletion of Net Profits Interests decreased $10,362 (18.6%) for the three
months ended September 30, 2001 as compared to the three months ended
September 30, 2000. This decrease was primarily due to the decreases in
volumes of oil and gas sold. As a percentage of Net Profits, this expense
increased to 19.0% for the three months ended September 30, 2001 from 8.4%
for the three months ended September 30, 2000. This percentage increase
was primarily due to the decreases in the average prices of oil and gas
sold.
General and administrative expenses decreased $849 (1.6%) for the three
months ended September 30, 2001 as compared to the three months ended
September 30, 2000. As a percentage of Net Profits, these expenses
increased to 22.3% for the three months ended September 30, 2001 from 8.2%
for the three months ended September 30, 2000. This percentage increase
was primarily due to the decrease in Net Profits.
NINE MONTHS ENDED SEPTEMBER 30, 2001 COMPARED TO THE NINE MONTHS ENDED
SEPTEMBER 30, 2000.
Nine Months Ended September 30,
-------------------------------
2001 2000
---------- ----------
Net Profits $1,701,623 $2,123,416
Barrels produced 53,128 71,495
Mcf produced 304,011 334,408
Average price/Bbl $ 26.03 $ 28.50
Average price/Mcf $ 4.17 $ 3.03
As shown in the table above, total Net Profits decreased $421,793 (19.9%)
for the nine months ended September 30, 2001 as compared to the nine
months ended September 30, 2000. Of this decrease, approximately (i)
$523,000 and $92,000, respectively, were related to decreases in volumes
of oil and gas sold and (ii) $131,000 was related to a decrease in the
average price of oil sold. These decreases were partially offset by an
increase of approximately $346,000 related to an increase in the average
price of gas sold. Volumes of oil and gas sold decreased 18,367 barrels
and 30,397 Mcf, respectively, for the nine months ended September 30, 2001
as compared to the nine months ended September 30, 2000. The decrease in
volumes of oil sold was primarily due to (i) normal declines in production
and (ii) the sale of several wells during 2000. The decrease in volumes of
gas sold was primarily due to normal declines in production, which
decrease was partially offset by increased production on one significant
well due to the successful recompletion of that well during 2001. Average
oil prices decreased to $26.03 per barrel for the nine months ended
September 30, 2001 from $28.50 per barrel for the nine months ended
September 30, 2000. Average gas prices
-17-
increased to $4.17 per Mcf for the nine months ended September 30, 2001
from $3.03 per Mcf for the nine months ended September 30, 2000.
As discussed in Liquidity and Capital Resources above, the P-7 Partnership
sold certain oil and gas properties during the nine months ended September
30, 2000 and recognized a $391,062 gain on such sales. No such sales
occurred during the nine months ended September 30, 2001.
Depletion of Net Profits Interests decreased $27,549 (14.2%) for the nine
months ended September 30, 2001 as compared to the nine months ended
September 30, 2000. This decrease was primarily due to the decreases in
volumes of oil and gas sold. As a percentage of Net Profits, this expense
increased to 9.8% for the nine months ended September 30, 2001 from 9.2%
for the nine months ended September 30, 2000.
General and administrative expenses remained relatively constant for the
nine months ended September 30, 2001 as compared to the nine months ended
September 30, 2000. As a percentage of Net Profits, these expenses
increased to 10.2% for the nine months ended September 30, 2001 from 8.1%
for the nine months ended September 30, 2000. This percentage increase was
primarily due to the decrease in Net Profits.
Cumulative cash distributions to the Limited Partners through September
30, 2001 were $15,595,916 or 82.65% of the Limited Partner's capital
contributions.
P-8 PARTNERSHIP
THREE MONTHS ENDED SEPTEMBER 30, 2001 COMPARED TO THE THREE MONTHS ENDED
SEPTEMBER 30, 2000.
Three Months Ended September 30,
--------------------------------
2001 2000
-------- --------
Net Profits $194,816 $434,550
Barrels produced 9,029 11,757
Mcf produced 71,111 77,180
Average price/Bbl $ 25.08 $ 29.12
Average price/Mcf $ 2.59 $ 3.36
As shown in the table above, total Net Profits decreased $239,734 (55.2%)
for the three months ended September 30, 2001 as compared to the three
months ended September 30, 2000. Of this decrease, approximately (i)
$79,000 was related to a decrease in volumes of oil sold, (ii) $36,000 and
$55,000, respectively, were related to decreases in the average prices of
oil and gas sold, and (iii) $49,000 was related to an increase in
production expenses. Volumes of oil and gas sold decreased 2,728 barrels
and 6,069 Mcf,
-18-
respectively, for the three months ended September 30, 2001 as compared to
the three months ended September 30, 2000. The decrease in volumes of oil
sold was primarily due to (i) normal declines in production and (ii) the
sale of several wells during 2000. The increase in production expenses was
primarily due to an increase in workover expenses incurred on several
wells during the three months ended September 30, 2001. This increase was
partially offset by (i) a decrease in production taxes associated with the
decrease in Net Profits and (ii) the sale of several wells during 2000.
Average oil and gas prices decreased to $25.08 per barrel and $2.59 per
Mcf, respectively, for the three months ended September 30, 2001 from
$29.12 per barrel and $3.36 per Mcf, respectively, for the three months
ended September 30, 2000.
As discussed in Liquidity and Capital Resources above, the P-8 Partnership
sold certain oil and gas properties during the three months ended
September 30, 2000 and recognized a $181,260 gain on such sales. No such
sales occurred during the three months ended September 30, 2001.
Depletion of Net Profits Interests decreased $3,452 (10.2%) for the three
months ended September 30, 2001 as compared to the three months ended
September 30, 2000. This decrease was primarily due to the decreases in
volumes of oil and gas sold. As a percentage of Net Profits, this expense
increased to 15.5% for the three months ended September 30, 2001 from 7.8%
for the three months ended September 30, 2000. This percentage increase
was primarily due to the decreases in the average prices of oil and gas
sold.
General and administrative expenses decreased $478(1.4%) for the three
months ended September 30, 2001 as compared to the three months ended
September 30, 2000. As a percentage of Net Profits, these expenses
increased to 16.9% for the three months ended September 30, 2001 from 7.7%
for the three months ended September 30, 2000. This percentage increase
was primarily due to the decrease in Net Profits.
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NINE MONTHS ENDED SEPTEMBER 30, 2001 COMPARED TO THE NINE MONTHS ENDED
SEPTEMBER 30, 2000.
Nine Months Ended September 30,
-------------------------------
2001 2000
---------- ----------
Net Profits $1,247,729 $1,360,487
Barrels produced 33,073 42,342
Mcf produced 235,990 245,444
Average price/Bbl $ 25.87 $ 28.45
Average price/Mcf $ 4.28 $ 3.03
As shown in the table above, total Net Profits decreased $112,758 (8.3%)
for the nine months ended September 30, 2001 as compared to the nine
months ended September 30, 2000. Of this decrease, approximately (i)
$264,000 and $29,000, respectively, were related to decreases in volumes
of oil and gas sold, (ii) $85,000 was related to a decrease in the average
price of oil sold, and (iii) $30,000 was related to an increase in
production expenses. These decreases were partially offset by an increase
of approximately $295,000 related to an increase in the average price of
gas sold. Volumes of oil and gas sold decreased 9,269 barrels and 9,454
Mcf, respectively, for the nine months ended September 30, 2001 as
compared to the nine months ended September 30, 2000. The decrease in
volumes of oil sold was primarily due to (i) normal declines in production
and (ii) the sale of several wells during 2000. The increase in production
expenses was primarily due to an increase in workover expenses incurred on
several wells during the nine months ended September 30, 2001. This
increase was partially offset by (i) a decrease in production taxes
associated with the decrease in Net Profits and (ii) the sale of several
wells during 2000. Average oil prices decreased to $25.87 per barrel for
the nine months ended September 30, 2001 from $28.45 for the nine months
ended September 30, 2000. Average gas prices increased to $4.28 per Mcf
for the nine months ended September 30, 2001 from $3.03 per Mcf for the
nine months ended September 30, 2000.
As discussed in Liquidity and Capital Resources above, the P-8 Partnership
sold certain oil and gas properties during the nine months ended September
30, 2000 and recognized a $202,690 gain on such sales. No such sales
occurred during the nine months ended September 30, 2001.
Depletion of Net Profits Interests decreased $9,064 (7.9%) for the nine
months ended September 30, 2001 as compared to the nine months ended
September 30, 2000. As a percentage of Net Profits, this expense remained
constant at 8.4% for
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the nine months ended September 30, 2001 and the nine months ended
September 30, 2000.
General and administrative expenses increased $6,278 (5.9%) for the nine
months ended September 30, 2001 as compared to the nine months ended
September 30, 2000. As a percentage of Net Profits, these expenses
increased to 9.1% for the nine months ended September 30, 2001 from 7.9%
for the nine months ended September 30, 2000. This percentage increase was
primarily due to the decrease in Net Profits.
Cumulative cash distributions to the Limited Partners through September
30, 2001 were $9,965,583 or 85.79% of the Limited Partner's capital
contributions.
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ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET
RISK.
The Partnerships do not hold any market risk sensitive instruments.
-22-
PART II. OTHER INFORMATION
ITEM 5. OTHER INFORMATION
On November 1, 2001 Craig D. Loseke was named Chief Accounting Officer
of Geodyne.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
None.
(b) Reports on Form 8-K.
None.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
GEODYNE INSTITUTIONAL/PENSION ENERGY
INCOME LIMITED PARTNERSHIP P-7
GEODYNE INSTITUTIONAL/PENSION ENERGY
INCOME LIMITED PARTNERSHIP P-8
(Registrant)
BY: GEODYNE RESOURCES, INC.
General Partner
Date: November 13, 2001 By: /s/Dennis R. Neill
--------------------------------
(Signature)
Dennis R. Neill
President
Date: November 13, 2001 By: /s/Craig D. Loseke
--------------------------------
(Signature)
Craig D. Loseke
Chief Accounting Officer
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