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 June 30, 2002 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 Oklahoma II-G 73-1336572 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 June 30, December 31, 2002 2001 ------------ ------------ CURRENT ASSETS: Cash and cash equivalents $ 565,892 $ 414,467 Accounts receivable: Oil and gas sales 587,329 396,257 General Partner (Note 2) 208,096 130,610 ---------- ---------- Total current assets $1,361,317 $ 941,334 NET OIL AND GAS PROPERTIES, utilizing the successful efforts method 2,041,063 2,204,572 DEFERRED CHARGE 668,468 695,623 ---------- ---------- $4,070,848 $3,841,529 ========== ========== LIABILITIES AND PARTNERS' CAPITAL (DEFICIT) CURRENT LIABILITIES: Accounts payable $ 192,440 $ 153,728 Accrued liability - other (Note 1) 26,672 73,800 Gas imbalance payable 96,299 96,299 ---------- ---------- Total current liabilities $ 315,411 $ 323,827 ACCRUED LIABILITY $ 243,327 $ 243,327 PARTNERS' CAPITAL (DEFICIT): General Partner ($ 235,447) ($ 285,152) Limited Partners, issued and outstanding, 484,283 units 3,747,557 3,559,527 ---------- ---------- Total Partners' capital $3,512,110 $3,274,375 ---------- ---------- $4,070,848 $3,841,529 ========== ========== 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 JUNE 30, 2002 AND 2001 (Unaudited) 2002 2001 ---------- ---------- REVENUES: Oil and gas sales $ 979,840 $1,452,896 Interest income 854 9,603 Gain on sale of oil and gas properties 193,272 43 ---------- ---------- $1,173,966 $1,462,542 COSTS AND EXPENSES: Lease operating $ 286,907 $ 303,840 Production tax 52,425 85,290 Depreciation, depletion, and amortization of oil and gas properties 80,362 83,678 General and administrative (Note 2) 134,300 132,498 ---------- ---------- $ 553,994 $ 605,306 ---------- ---------- NET INCOME $ 619,972 $ 857,236 ========== ========== GENERAL PARTNER - NET INCOME $ 69,144 $ 92,294 ========== ========== LIMITED PARTNERS - NET INCOME $ 550,828 $ 764,942 ========== ========== NET INCOME per unit $ 1.14 $ 1.58 ========== ========== 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 SIX MONTHS ENDED JUNE 30, 2002 AND 2001 (Unaudited) 2002 2001 ---------- ---------- REVENUES: Oil and gas sales $1,767,496 $3,139,007 Interest income 2,350 21,627 Gain on sale of oil and gas properties 193,272 3,277 ---------- ---------- $1,963,118 $3,163,911 COSTS AND EXPENSES: Lease operating $ 708,631 $ 548,075 Production tax 94,335 195,681 Depreciation, depletion, and amortization of oil and gas properties 161,495 163,777 General and administrative (Note 2) 289,402 283,580 ---------- ---------- $1,253,863 $1,191,113 ---------- ---------- NET INCOME $ 709,255 $1,972,798 ========== ========== GENERAL PARTNER - NET INCOME $ 85,225 $ 209,566 ========== ========== LIMITED PARTNERS - NET INCOME $ 624,030 $1,763,232 ========== ========== NET INCOME per unit $ 1.29 $ 3.64 ========== ========== 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 SIX MONTHS ENDED JUNE 30, 2002 AND 2001 (Unaudited) 2002 2001 ---------- ------------ CASH FLOWS FROM OPERATING ACTIVITIES: Net income $709,255 $1,972,798 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation, depletion, and amortization of oil and gas properties 161,495 163,777 Gain on sale of oil and gas properties ( 193,272) ( 3,277) (Increase) decrease in accounts receivable - oil and gas sales ( 191,072) 251,359 Decrease in deferred charge 27,155 - Increase (decrease) in accounts payable 38,712 ( 81,839) Decrease in accrued liability - other ( 47,128) - Decrease in gas imbalance payable - ( 11,273) Decrease in accrued liability - ( 10,552) -------- ---------- Net cash provided by operating activities $505,145 $2,280,993 -------- ---------- CASH FLOWS FROM INVESTING ACTIVITIES: Capital expenditures ($ 16,591) ($ 129,049) Proceeds from sale of oil and gas properties 134,391 9,654 -------- ---------- Net cash provided (used) by investing activities $117,800 ($ 119,395) -------- ---------- CASH FLOWS FROM FINANCING ACTIVITIES: Cash distributions ($471,520) ($2,181,799) -------- ---------- Net cash used by financing activities ($471,520) ($2,181,799) -------- ---------- NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS $151,425 ($ 20,201) CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 414,467 1,070,734 -------- ---------- CASH AND CASH EQUIVALENTS AT END OF PERIOD $565,892 $1,050,533 ======== ========== 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 June 30, December 31, 2002 2001 ----------- ------------ CURRENT ASSETS: Cash and cash equivalents $ 318,209 $ 262,153 Accounts receivable: Oil and gas sales 438,966 323,116 General Partner (Note 2) 21,292 - ---------- ---------- Total current assets $ 778,467 $ 585,269 NET OIL AND GAS PROPERTIES, utilizing the successful efforts method 1,705,177 1,821,517 DEFERRED CHARGE 214,754 214,754 ---------- ---------- $2,698,398 $2,621,540 ========== ========== LIABILITIES AND PARTNERS' CAPITAL (DEFICIT) CURRENT LIABILITIES: Accounts payable $ 148,375 $ 126,662 Gas imbalance payable 48,060 48,060 ---------- ---------- Total current liabilities $ 196,435 $ 174,722 ACCRUED LIABILITY $ 47,436 $ 47,436 PARTNERS' CAPITAL (DEFICIT): General Partner ($ 271,076) ($ 302,054) Limited Partners, issued and outstanding, 361,719 units 2,725,603 2,701,436 ---------- ---------- Total Partners' capital $2,454,527 $2,399,382 ---------- ---------- $2,698,398 $2,621,540 ========== ========== 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 JUNE 30, 2002 AND 2001 (Unaudited) 2002 2001 -------- ---------- REVENUES: Oil and gas sales $672,842 $1,103,829 Interest income 256 5,814 Gain on sale of oil and gas properties 20,525 - -------- ---------- $693,623 $1,109,643 COSTS AND EXPENSES: Lease operating $202,113 $ 190,302 Production tax 39,825 59,608 Depreciation, depletion, and amortization of oil and gas properties 62,456 53,926 General and administrative (Note 2) 101,499 99,312 -------- ---------- $405,893 $ 403,148 -------- ---------- NET INCOME $287,730 $ 706,495 ======== ========== GENERAL PARTNER - NET INCOME $ 34,369 $ 74,921 ======== ========== LIMITED PARTNERS - NET INCOME $253,361 $ 631,574 ======== ========== NET INCOME per unit $ .70 $ 1.75 ======== ========== 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 SIX MONTHS ENDED JUNE 30, 2002 AND 2001 (Unaudited) 2002 2001 ---------- ---------- REVENUES: Oil and gas sales $1,253,187 $2,433,197 Interest income 992 12,960 Gain on sale of oil and gas properties 20,525 - ---------- ---------- $1,274,704 $2,446,157 COSTS AND EXPENSES: Lease operating $ 518,793 $ 340,582 Production tax 71,435 136,606 Depreciation, depletion, and amortization of oil and gas properties 124,817 101,579 General and administrative (Note 2) 220,435 216,031 ---------- ---------- $ 935,480 $ 794,798 ---------- ---------- NET INCOME $ 339,224 $1,651,359 ========== ========== GENERAL PARTNER - NET INCOME $ 45,057 $ 172,982 ========== ========== LIMITED PARTNERS - NET INCOME $ 294,167 $1,478,377 ========== ========== NET INCOME per unit $ .81 $ 4.09 ========== ========== 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 SIX MONTHS ENDED JUNE 30, 2002 AND 2001 (Unaudited) 2002 2001 ---------- ------------ CASH FLOWS FROM OPERATING ACTIVITIES: Net income $339,224 $1,651,359 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation, depletion, and amortization of oil and gas properties 124,817 101,579 Gain on sale of oil and gas properties ( 20,525) - (Increase) decrease in accounts receivable - oil and gas sales ( 115,850) 184,181 Increase (decrease) in accounts payable 21,713 ( 68,424) -------- ---------- Net cash provided by operating activities $349,379 $1,868,695 -------- ---------- CASH FLOWS FROM INVESTING ACTIVITIES: Capital expenditures ($ 14,102) ($ 348,135) Proceeds from sale of properties 4,858 - -------- ---------- Net cash used by investing activities ($ 9,244) ($ 348,135) -------- ---------- CASH FLOWS FROM FINANCING ACTIVITIES: Cash distributions ($284,079) ($1,512,124) -------- ---------- Net cash used by financing activities ($284,079) ($1,512,124) -------- ---------- NET INCREASE IN CASH AND CASH EQUIVALENTS $ 56,056 $ 8,436 CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 262,153 714,162 -------- ---------- CASH AND CASH EQUIVALENTS AT END OF PERIOD $318,209 $ 722,598 ======== ========== 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 June 30, December 31, 2002 2001 ------------ ------------ CURRENT ASSETS: Cash and cash equivalents $ 188,875 $ 115,201 Accounts receivable: Oil and gas sales 202,286 137,952 ---------- ---------- Total current assets $ 391,161 $ 253,153 NET OIL AND GAS PROPERTIES, utilizing the successful efforts method 796,691 856,666 DEFERRED CHARGE 128,827 128,827 ---------- ---------- $1,316,679 $1,238,646 ========== ========== LIABILITIES AND PARTNERS' CAPITAL (DEFICIT) CURRENT LIABILITIES: Accounts payable $ 57,854 $ 50,950 Gas imbalance payable 29,876 29,876 ---------- ---------- Total current liabilities $ 87,730 $ 80,826 ACCRUED LIABILITY $ 29,477 $ 29,477 PARTNERS' CAPITAL (DEFICIT): General Partner ($ 114,809) ($ 130,178) Limited Partners, issued and outstanding, 154,621 units 1,314,281 1,258,521 ---------- ---------- Total Partners' capital $1,199,472 $1,128,343 ---------- ---------- $1,316,679 $1,238,646 ========== ========== 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 JUNE 30, 2002 AND 2001 (Unaudited) 2002 2001 -------- -------- REVENUES: Oil and gas sales $336,986 $519,745 Interest income 202 3,478 Gain on sale of oil and gas properties 1,014 739 -------- -------- $338,202 $523,962 COSTS AND EXPENSES: Lease operating $ 72,453 $ 65,747 Production tax 21,016 32,767 Depreciation, depletion, and amortization of oil and gas properties 32,478 26,975 General and administrative (Note 2) 46,076 43,363 -------- -------- $172,023 $168,852 -------- -------- NET INCOME $166,179 $355,110 ======== ======== GENERAL PARTNER - NET INCOME $ 19,521 $ 37,591 ======== ======== LIMITED PARTNERS - NET INCOME $146,658 $317,519 ======== ======== NET INCOME per unit $ .95 $ 2.05 ======== ======== 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 SIX MONTHS ENDED JUNE 30, 2002 AND 2001 (Unaudited) 2002 2001 -------- ---------- REVENUES: Oil and gas sales $604,759 $1,117,021 Interest income 506 7,753 Gain on sale of oil and gas properties 1,014 739 -------- ---------- $606,279 $1,125,513 COSTS AND EXPENSES: Lease operating $199,907 $ 140,489 Production tax 37,538 74,244 Depreciation, depletion, and amortization of oil and gas properties 62,331 51,337 General and administrative (Note 2) 103,926 102,139 -------- ---------- $403,702 $ 368,209 -------- ---------- NET INCOME $202,577 $ 757,304 ======== ========== GENERAL PARTNER - NET INCOME $ 25,817 $ 79,575 ======== ========== LIMITED PARTNERS - NET INCOME $176,760 $ 677,729 ======== ========== NET INCOME per unit $ 1.14 $ 4.38 ======== ========== 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 SIX MONTHS ENDED JUNE 30, 2002 AND 2001 (Unaudited) 2002 2001 ---------- ---------- CASH FLOWS FROM OPERATING ACTIVITIES: Net income $202,577 $757,304 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation, depletion, and amortization of oil and gas properties 62,331 51,337 Gain on sale of oil and gas properties ( 1,014) ( 739) (Increase) decrease in accounts receivable - oil and gas sales ( 64,334) 86,001 Increase in accounts payable 6,904 1,816 Decrease in accrued liability - ( 10,837) -------- -------- Net cash provided by operating activities $206,464 $884,882 -------- -------- CASH FLOWS FROM INVESTING ACTIVITIES: Capital expenditures ($ 2,944) ($ 52,276) Proceeds from sale of oil and gas properties 1,602 739 -------- -------- Net cash used by investing activities ($ 1,342) ($ 51,537) -------- -------- CASH FLOWS FROM FINANCING ACTIVITIES: Cash distributions ($131,448) ($855,485) -------- -------- Net cash used by financing activities ($131,448) ($855,485) -------- -------- NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS $ 73,674 ($ 22,140) CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 115,201 412,356 -------- -------- CASH AND CASH EQUIVALENTS AT END OF PERIOD $188,875 $390,216 ======== ======== 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 June 30, December 31, 2002 2001 ------------ ------------ CURRENT ASSETS: Cash and cash equivalents $ 453,501 $ 170,516 Accounts receivable: Oil and gas sales 441,424 315,910 ---------- ---------- Total current assets $ 894,925 $ 486,426 NET OIL AND GAS PROPERTIES, utilizing the successful efforts method 1,459,843 1,561,694 DEFERRED CHARGE 370,412 370,412 ---------- ---------- $2,725,180 $2,418,532 ========== ========== LIABILITIES AND PARTNERS' CAPITAL (DEFICIT) CURRENT LIABILITIES: Accounts payable $ 119,817 $ 84,721 Payable to General Partner (Note 2) - 65,905 Gas imbalance payable 55,098 55,098 ---------- ---------- Total current liabilities $ 174,915 $ 205,724 ACCRUED LIABILITY $ 112,500 $ 112,500 PARTNERS' CAPITAL (DEFICIT): General Partner ($ 208,027) ($ 238,692) Limited Partners, issued and outstanding, 314,878 units 2,645,792 2,339,000 ---------- ---------- Total Partners' capital $2,437,765 $2,100,308 ---------- ---------- $2,725,180 $2,418,532 ========== ========== 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 JUNE 30, 2002 AND 2001 (Unaudited) 2002 2001 -------- ---------- REVENUES: Oil and gas sales $798,184 $1,115,535 Interest income 479 8,709 Gain on sale of oil and gas properties 11,014 8,162 -------- ---------- $809,677 $1,132,406 COSTS AND EXPENSES: Lease operating $158,759 $ 219,148 Production tax 45,894 72,072 Depreciation, depletion, and amortization of oil and gas properties 73,842 44,982 General and administrative (Note 2) 88,945 86,744 -------- ---------- $367,440 $ 422,946 -------- ---------- NET INCOME $442,237 $ 709,460 ======== ========== GENERAL PARTNER - NET INCOME $ 50,822 $ 74,123 ======== ========== LIMITED PARTNERS - NET INCOME $391,415 $ 635,337 ======== ========== NET INCOME per unit $ 1.24 $ 2.02 ======== ========== 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 SIX MONTHS ENDED JUNE 30, 2002 AND 2001 (Unaudited) 2002 2001 ---------- ---------- REVENUES: Oil and gas sales $1,335,760 $2,441,111 Interest income 1,103 22,836 Gain on sale of oil and gas properties 11,014 8,162 ---------- ---------- $1,347,877 $2,472,109 COSTS AND EXPENSES: Lease operating $ 418,082 $ 381,100 Production tax 76,772 166,149 Depreciation, depletion, and amortization of oil and gas properties 133,712 93,888 General and administrative (Note 2) 194,071 190,565 ---------- ---------- $ 822,637 $ 831,702 ---------- ---------- NET INCOME $ 525,240 $1,640,407 ========== ========== GENERAL PARTNER - NET INCOME $ 64,448 $ 170,207 ========== ========== LIMITED PARTNERS - NET INCOME $ 460,792 $1,470,200 ========== ========== NET INCOME per unit $ 1.46 $ 4.67 ========== ========== 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 SIX MONTHS ENDED JUNE 30, 2002 AND 2001 (Unaudited) 2002 2001 ---------- ------------ CASH FLOWS FROM OPERATING ACTIVITIES: Net income $525,240 $1,640,407 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation, depletion, and amortization of oil and gas properties 133,712 93,888 Gain on sale of oil and gas properties ( 11,014) ( 8,162) (Increase) decrease in accounts receivable - oil and gas sales ( 125,514) 193,103 Increase in accounts payable 35,096 6,772 Decrease in payable to General Partner ( 65,905) - Decrease in accrued liability - ( 13,406) -------- ---------- Net cash provided by operating activities $491,615 $1,912,602 -------- ---------- CASH FLOWS FROM INVESTING ACTIVITIES: Capital expenditures ($ 37,663) ($ 32,100) Proceeds from sale of oil and gas properties 16,816 8,162 -------- ---------- Net cash used by investing activities ($ 20,847) ($ 23,938) -------- ---------- CASH FLOWS FROM FINANCING ACTIVITIES: Cash distributions ($187,783) ($2,397,636) -------- ---------- Net cash used by financing activities ($187,783) ($2,397,636) -------- ---------- NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS $282,985 ($ 508,972) CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 170,516 1,432,990 -------- ---------- CASH AND CASH EQUIVALENTS AT END OF PERIOD $453,501 $ 924,018 ======== ========== 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 June 30, December 31, 2002 2001 ------------ ------------ CURRENT ASSETS: Cash and cash equivalents $ 165,693 $ 242,032 Accounts receivable: Oil and gas sales 305,163 244,365 General Partner (Note 2) 22,189 - ---------- ---------- Total current assets $ 493,045 $ 486,397 NET OIL AND GAS PROPERTIES, utilizing the successful efforts method 1,454,969 1,391,297 DEFERRED CHARGE 206,554 206,554 ---------- ---------- $2,154,568 $2,084,248 ========== ========== LIABILITIES AND PARTNERS' CAPITAL (DEFICIT) CURRENT LIABILITIES: Accounts payable $ 74,287 $ 56,002 Payable to General Partner (Note 2) - 115,045 Gas imbalance payable 28,035 28,035 ---------- ---------- Total current liabilities $ 102,322 $ 199,082 ACCRUED LIABILITY $ 26,344 $ 26,344 PARTNERS' CAPITAL (DEFICIT): General Partner ($ 136,883) ($ 162,380) Limited Partners, issued and outstanding, 228,821 units 2,162,785 2,021,202 ---------- ---------- Total Partners' capital $2,025,902 $1,858,822 ---------- ---------- $2,154,568 $2,084,248 ========== ========== 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 JUNE 30, 2002 AND 2001 (Unaudited) 2002 2001 -------- ---------- REVENUES: Oil and gas sales $473,556 $757,605 Interest income 27 5,792 Gain (loss) on sale of oil and gas properties 20,604 ( 924) -------- -------- $494,187 $762,473 COSTS AND EXPENSES: Lease operating $ 94,630 $112,848 Production tax 36,153 54,018 Depreciation, depletion, and amortization of oil and gas properties 57,585 50,944 General and administrative (Note 2) 67,074 63,452 -------- -------- $255,442 $281,262 -------- -------- NET INCOME $238,745 $481,211 ======== ======== GENERAL PARTNER - NET INCOME $ 29,054 $ 52,127 ======== ======== LIMITED PARTNERS - NET INCOME $209,691 $429,084 ======== ======== NET INCOME per unit $ .92 $ 1.88 ======== ======== 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 SIX MONTHS ENDED JUNE 30, 2002 AND 2001 (Unaudited) 2002 2001 -------- ----------- REVENUES: Oil and gas sales $872,051 $1,690,610 Interest income 775 11,830 Gain (loss) on sale of oil and gas properties 20,604 ( 999) -------- ---------- $893,430 $1,701,441 COSTS AND EXPENSES: Lease operating $221,437 $ 216,890 Production tax 66,512 125,566 Depreciation, depletion, and amortization of oil and gas properties 118,352 96,703 General and administrative (Note 2) 148,066 142,992 -------- ---------- $554,367 $ 582,151 -------- ---------- NET INCOME $339,063 $1,119,290 ======== ========== GENERAL PARTNER - NET INCOME $ 44,480 $ 119,449 ======== ========== LIMITED PARTNERS - NET INCOME $294,583 $ 999,841 ======== ========== NET INCOME per unit $ 1.29 $ 4.37 ======== ========== 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 SIX MONTHS ENDED JUNE 30, 2002 AND 2001 (Unaudited) 2002 2001 ---------- ------------ CASH FLOWS FROM OPERATING ACTIVITIES: Net income $339,063 $1,119,290 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation, depletion, and amortization of oil and gas properties 118,352 96,703 (Gain) loss on sale of oil and gas properties ( 20,604) 999 (Increase) decrease in accounts receivable - oil and gas sales ( 60,798) 147,740 Increase in accounts payable 18,285 5,898 Decrease in payable to General Partner ( 115,045) - Decrease in accrued liability - ( 3,955) -------- ---------- Net cash provided by operating activities $279,253 $1,366,675 -------- ---------- CASH FLOWS FROM INVESTING ACTIVITIES: Capital expenditures ($183,609) ($ 12,268) -------- ---------- Net cash used by investing activities ($183,609) ($ 12,268) -------- ---------- CASH FLOWS FROM FINANCING ACTIVITIES: Cash distributions ($171,983) ($1,279,318) -------- ---------- Net cash used by financing activities ($171,983) ($1,279,318) -------- ---------- NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS ($ 76,339) $ 75,089 CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 242,032 511,025 -------- ---------- CASH AND CASH EQUIVALENTS AT END OF PERIOD $165,693 $ 586,114 ======== ========== 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 June 30, December 31, 2002 2001 ------------ ------------ CURRENT ASSETS: Cash and cash equivalents $ 252,381 $ 278,738 Accounts receivable: Oil and gas sales 293,199 229,071 General Partner (Note 2) 54,227 - ---------- ---------- Total current assets $ 599,807 $ 507,809 NET OIL AND GAS PROPERTIES, utilizing the successful efforts method 1,361,115 1,424,064 DEFERRED CHARGE 38,188 38,188 ---------- ---------- $1,999,110 $1,970,061 ========== ========== LIABILITIES AND PARTNERS' CAPITAL (DEFICIT) CURRENT LIABILITIES: Accounts payable $ 51,056 $ 49,662 Gas imbalance payable 7,953 7,953 ---------- ---------- Total current liabilities $ 59,009 $ 57,615 ACCRUED LIABILITY $ 13,875 $ 13,875 PARTNERS' CAPITAL (DEFICIT): General Partner ($ 98,140) ($ 118,848) Limited Partners, issued and outstanding, 171,400 units 2,024,366 2,017,419 ---------- ---------- Total Partners' capital $1,926,226 $1,898,571 ---------- ---------- $1,999,110 $1,970,061 ========== ========== 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 JUNE 30, 2002 AND 2001 (Unaudited) 2002 2001 -------- ---------- REVENUES: Oil and gas sales $426,001 $778,828 Interest income 372 4,874 Gain (loss) on sale of oil and gas properties 50,440 ( 978) -------- -------- $476,813 $782,724 COSTS AND EXPENSES: Lease operating $ 67,941 $ 72,829 Production tax 25,653 51,894 Depreciation, depletion, and amortization of oil and gas properties 45,298 61,846 General and administrative (Note 2) 50,854 47,100 -------- -------- $189,746 $233,669 -------- -------- NET INCOME $287,067 $549,055 ======== ======== GENERAL PARTNER - NET INCOME $ 32,747 $ 59,984 ======== ======== LIMITED PARTNERS - NET INCOME $254,320 $489,071 ======== ======== NET INCOME per unit $ 1.49 $ 2.86 ======== ======== 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 SIX MONTHS ENDED JUNE 30, 2002 AND 2001 (Unaudited) 2002 2001 -------- ---------- REVENUES: Oil and gas sales $842,559 $1,599,714 Interest income 1,107 9,949 Gain (loss) on sale of oil and gas properties 50,440 ( 1,162) -------- ---------- $894,106 $1,608,501 COSTS AND EXPENSES: Lease operating $182,047 $ 155,604 Production tax 53,096 106,455 Depreciation, depletion, and amortization of oil and gas properties 98,801 113,913 General and administrative (Note 2) 114,908 110,589 -------- ---------- $448,852 $ 486,561 -------- ---------- NET INCOME $445,254 $1,121,940 ======== ========== GENERAL PARTNER - NET INCOME $ 53,307 $ 121,451 ======== ========== LIMITED PARTNERS - NET INCOME $391,947 $1,000,489 ======== ========== NET INCOME per unit $ 2.29 $ 5.84 ======== ========== 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 SIX MONTHS ENDED JUNE 30, 2002 AND 2001 (Unaudited) 2002 2001 ---------- ------------ CASH FLOWS FROM OPERATING ACTIVITIES: Net income $445,254 $1,121,940 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation, depletion, and amortization of oil and gas properties 98,801 113,913 (Gain) loss on sale of oil and gas properties ( 50,440) 1,162 (Increase) decrease in accounts receivable - oil and gas sales ( 64,128) 81,361 Decrease in deferred charge - 2,422 Increase in accounts payable 1,394 3,793 -------- ---------- Net cash provided by operating activities $430,881 $1,324,591 -------- ---------- CASH FLOWS FROM INVESTING ACTIVITIES: Capital expenditures ($ 40,130) ($ 60,753) Proceeds from sale of oil and gas properties 491 - -------- ---------- Net cash used by investing activities ($ 39,639) ($ 60,753) -------- ---------- CASH FLOWS FROM FINANCING ACTIVITIES: Cash distributions ($417,599) ($1,116,828) -------- ---------- Net cash used by financing activities ($417,599) ($1,116,828) -------- ---------- NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS ($ 26,357) $ 147,010 CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 278,738 441,154 -------- ---------- CASH AND CASH EQUIVALENTS AT END OF PERIOD $252,381 $ 588,164 ======== ========== 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 June 30, December 31, 2002 2001 ------------ ------------ CURRENT ASSETS: Cash and cash equivalents $ 538,971 $ 625,720 Accounts receivable: Oil and gas sales 621,855 484,681 General Partner (Note 2) 113,404 - ---------- ---------- Total current assets $1,274,230 $1,110,401 NET OIL AND GAS PROPERTIES, utilizing the successful efforts method 2,927,683 3,065,609 DEFERRED CHARGE 83,736 83,736 ---------- ---------- $4,285,649 $4,259,746 ========== ========== LIABILITIES AND PARTNERS' CAPITAL (DEFICIT) CURRENT LIABILITIES: Accounts payable $ 108,995 $ 105,862 Gas imbalance payable 17,264 17,264 ---------- ---------- Total current liabilities $ 126,259 $ 123,126 ACCRUED LIABILITY $ 31,820 $ 31,820 PARTNERS' CAPITAL (DEFICIT): General Partner ($ 102,440) ($ 146,206) Limited Partners, issued and outstanding, 372,189 units 4,230,010 4,251,006 ---------- ---------- Total Partners' capital $4,127,570 $4,104,800 ---------- ---------- $4,285,649 $4,259,746 ========== ========== 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 JUNE 30, 2002 AND 2001 (Unaudited) 2002 2001 ---------- ------------ REVENUES: Oil and gas sales $ 905,139 $1,659,073 Interest income 868 10,539 Gain (loss) on sale of oil and gas properties 105,409 ( 2,350) ---------- ---------- $1,011,416 $1,667,262 COSTS AND EXPENSES: Lease operating $ 144,832 $ 156,314 Production tax 54,832 111,179 Depreciation, depletion, and amortization of oil and gas properties 97,606 131,785 General and administrative (Note 2) 104,586 101,425 ---------- ---------- $ 401,856 $ 500,703 ---------- ---------- NET INCOME $ 609,560 $1,166,559 ========== ========== GENERAL PARTNER - NET INCOME $ 69,654 $ 127,463 ========== ========== LIMITED PARTNERS - NET INCOME $ 539,906 $1,039,096 ========== ========== NET INCOME per unit $ 1.45 $ 2.79 ========== ========== 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 SIX MONTHS ENDED JUNE 30, 2002 AND 2001 (Unaudited) 2002 2001 ---------- ------------ REVENUES: Oil and gas sales $1,786,842 $3,403,123 Interest income 2,639 21,417 Gain (loss) on sale of oil and gas properties 105,409 ( 2,735) ---------- ---------- $1,894,890 $3,421,805 COSTS AND EXPENSES: Lease operating $ 387,951 $ 333,117 Production tax 113,061 227,356 Depreciation, depletion, and amortization of oil and gas properties 212,791 242,833 General and administrative (Note 2) 227,874 221,171 ---------- ---------- $ 941,677 $1,024,477 ---------- ---------- NET INCOME $ 953,213 $2,397,328 ========== ========== GENERAL PARTNER - NET INCOME $ 114,209 $ 259,446 ========== ========== LIMITED PARTNERS - NET INCOME $ 839,004 $2,137,882 ========== ========== NET INCOME per unit $ 2.25 $ 5.74 ========== ========== 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 SIX MONTHS ENDED JUNE 30, 2002 AND 2001 (Unaudited) 2002 2001 ---------- ------------ CASH FLOWS FROM OPERATING ACTIVITIES: Net income $953,213 $2,397,328 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation, depletion, and amortization of oil and gas properties 212,791 242,833 (Gain) loss on sale of oil and gas properties ( 105,409) 2,735 (Increase) decrease in accounts receivable - oil and gas sales ( 137,174) 171,414 Decrease in deferred charge - 5,061 Increase in accounts payable 3,133 8,126 -------- ---------- Net cash provided by operating activities $926,554 $2,827,497 -------- ---------- CASH FLOWS FROM INVESTING ACTIVITIES: Capital expenditures ($ 83,919) ($ 133,912) Proceeds from sale of oil and gas properties 1,059 - -------- ---------- Net cash used by investing activities ($ 82,860) ($ 133,912) -------- ---------- CASH FLOWS FROM FINANCING ACTIVITIES: Cash distributions ($930,443) ($2,381,185) -------- ---------- Net cash used by financing activities ($930,443) ($2,381,185) -------- ---------- NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS ($ 86,749) $ 312,400 CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 625,720 934,304 -------- ---------- CASH AND CASH EQUIVALENTS AT END OF PERIOD $538,971 $1,246,704 ======== ========== 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 June 30, December 31, 2002 2001 ----------- ------------ CURRENT ASSETS: Cash and cash equivalents $ 123,951 $ 136,988 Accounts receivable: Oil and gas sales 146,878 114,762 General Partner (Note 2) 26,230 - ---------- ---------- Total current assets $ 297,059 $ 251,750 NET OIL AND GAS PROPERTIES, utilizing the successful efforts method 688,983 721,143 DEFERRED CHARGE 19,936 19,936 ---------- ---------- $1,005,978 $ 992,829 ========== ========== LIABILITIES AND PARTNERS' CAPITAL (DEFICIT) CURRENT LIABILITIES: Accounts payable $ 26,238 $ 25,473 Gas imbalance payable 4,266 4,266 ---------- ---------- Total current liabilities $ 30,504 $ 29,739 ACCRUED LIABILITY $ 6,430 $ 6,430 PARTNERS' CAPITAL (DEFICIT): General Partner ($ 54,822) ($ 65,089) Limited Partners, issued and outstanding, 91,711 units 1,023,866 1,021,749 ---------- ---------- Total Partners' capital $ 969,044 $ 956,660 ---------- ---------- $1,005,978 $ 992,829 ========== ========== 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 JUNE 30, 2002 AND 2001 (Unaudited) 2002 2001 -------- ---------- REVENUES: Oil and gas sales $214,575 $395,727 Interest income 155 2,365 Gain (loss) on sale of oil and gas properties 24,403 ( 677) -------- -------- $239,133 $397,415 COSTS AND EXPENSES: Lease operating $ 34,731 $ 37,945 Production tax 13,104 26,737 Depreciation, depletion, and amortization of oil and gas properties 22,738 30,812 General and administrative (Note 2) 29,528 25,531 -------- -------- $100,101 $121,025 -------- -------- NET INCOME $139,032 $276,390 ======== ======== GENERAL PARTNER - NET INCOME $ 15,934 $ 30,175 ======== ======== LIMITED PARTNERS - NET INCOME $123,098 $246,215 ======== ======== NET INCOME per unit $ 1.35 $ 2.68 ======== ======== 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 SIX MONTHS ENDED JUNE 30, 2002 AND 2001 (Unaudited) 2002 2001 -------- ---------- REVENUES: Oil and gas sales $423,019 $811,088 Interest income 484 4,905 Gain (loss) on sale of oil and gas properties 24,403 ( 766) -------- -------- $447,906 $815,227 COSTS AND EXPENSES: Lease operating $ 93,077 $ 80,470 Production tax 26,926 54,571 Depreciation, depletion, and amortization of oil and gas properties 49,484 56,842 General and administrative (Note 2) 70,061 66,684 -------- -------- $239,548 $258,567 -------- -------- NET INCOME $208,358 $556,660 ======== ======== GENERAL PARTNER - NET INCOME $ 25,241 $ 60,291 ======== ======== LIMITED PARTNERS - NET INCOME $183,117 $496,369 ======== ======== NET INCOME per unit $ 2.00 $ 5.41 ======== ======== 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 SIX MONTHS ENDED JUNE 30, 2002 AND 2001 (Unaudited) 2002 2001 ---------- ---------- CASH FLOWS FROM OPERATING ACTIVITIES: Net income $208,358 $556,660 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation, depletion, and amortization of oil and gas properties 49,484 56,842 (Gain) loss on sale of oil and gas properties ( 24,403) 766 (Increase) decrease in accounts receivable - oil and gas sales ( 32,116) 41,293 Decrease in deferred charge - 1,189 Increase in accounts payable 765 1,974 -------- -------- Net cash provided by operating activities $202,088 $658,724 -------- -------- CASH FLOWS FROM INVESTING ACTIVITIES: Capital expenditures ($ 19,409) ($ 33,930) Proceeds from sale of oil and gas properties 258 - -------- -------- Net cash used by investing activities ($ 19,151) ($ 33,930) -------- -------- CASH FLOWS FROM FINANCING ACTIVITIES: Cash distributions ($195,974) ($559,011) -------- -------- Net cash used by financing activities ($195,974) ($559,011) -------- -------- NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS ($ 13,037) $ 65,783 CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 136,988 229,651 -------- -------- CASH AND CASH EQUIVALENTS AT END OF PERIOD $123,951 $295,434 ======== ======== 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 JUNE 30, 2002 (Unaudited) 1. ACCOUNTING POLICIES ------------------- The combined balance sheets as of June 30, 2002, combined statements of operations for the three and six months ended June 30, 2002 and 2001, and combined statements of cash flows for the six months ended June 30, 2002 and 2001 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 June 30, 2002, the combined results of operations for the six months ended June 30, 2002 and 2001, and the combined cash flows for the six months ended June 30, 2002 and 2001. 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, 2001. The results of operations for the period ended June 30, 2002 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. ACCRUED LIABILITY - OTHER ------------------------- The Accrued Liability - Other at June 30, 2002 and December 31, 2001 for the II-A Partnership represents a charge accrued for the payment of a judgment related to plugging liabilities, which judgment is currently under appeal. The decrease in the Accrued Liability - Other from December 31, 2001 to June 30, 2002 was due to a partial settlement of this judgment, which settlement was paid in June 2002. -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 June 30, 2002, the following payments were made to the General Partner or its affiliates by the Partnerships: Direct General Administrative Partnership and Administrative Overhead ----------- ------------------- --------------- II-A $6,857 $127,443 II-B 6,309 95,190 II-C 5,387 40,689 II-D 6,082 82,863 II-E 6,858 60,216 II-F 5,749 45,105 II-G 6,642 97,944 II-H 5,393 24,135 During the six months ended June 30, 2002, the following payments were made to the General Partner or its affiliates by the Partnerships: Direct General Administrative Partnership and Administrative Overhead ----------- ------------------- --------------- II-A $34,516 $254,886 II-B 30,055 190,380 II-C 22,548 81,378 II-D 28,345 165,726 II-E 27,634 120,432 II-F 24,698 90,210 II-G 31,986 195,888 II-H 21,791 48,270 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. ACCOUNTS RECEIVABLE - GENERAL PARTNER The Accounts Receivable - General Partner at December 31, 2001 for the II-A Partnership represents accrued proceeds from a related party for the sale of certain oil and gas properties during December 2001. Such amount was received in January 2002. In addition, the Accounts Receivable - -36- General Partner at June 30, 2002 for the II-A, II-B, II-E, II-F, II-G, and II-H Partnerships represents accrued proceeds from a related party for the sale of certain oil and gas properties during the six months ended June 2002. Such amounts were received in July 2002. PAYABLE TO GENERAL PARTNER The payable to General Partner at December 31, 2001 for the II-D and II-E Partnerships represents litigation costs and settlement of a liability. Such amounts were repaid during the first quarter of 2002. -37- 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. -38- 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 June 30, 2002 and the net revenue generated from future operations will provide sufficient working capital to meet current and future obligations. Occasional expenditures for new wells or well recompletions or workovers, however, may reduce or eliminate cash available for a particular quarterly distribution. During the six months ended June 30, 2002, capital expenditures for the II-E Partnership totaled $183,609. These expenditures were primarily due to the drilling of the Ernest Frey #1 and Mordello Vincent #7 wells located in Acadia Parish, Louisiana, in each of which the II-E Partnership owns a working interest of approximately 5.8%. During the six months ended June 30, 2002, capital expenditures for the II-F, II-G, and II-H Partnerships totaled $40,130, $83,919, and $19,409, respectively. These expenditures were primarily due to a recompletion of the CH Weir B well located in Lea County, New Mexico. The II-F, II-G, and II-H Partnerships own working interests of approximately 4.0%, 8.3%, and 1.9%, respectively, in this well. -39- The II-A Partnership's Statement of Cash Flows for the six months ended June 30, 2002 includes proceeds from the sale of certain oil and gas properties during December 2001. These proceeds were included in the Partnership's cash distributions paid in February 2002. NEW ACCOUNTING PRONOUNCEMENTS Below is a brief description of Financial Accounting Standards ("FAS") recently issued by the Financial Accounting Standards Board ("FASB") which may have an impact on the Partnerships' future results of operations and financial position. In July 2001, the FASB issued FAS No. 143, "Accounting for Asset Retirement Obligations", which is effective for fiscal years beginning after June 15, 2002 (January 1, 2003 for the Partnerships). FAS No. 143 will require the recording of the fair value of liabilities associated with the retirement of long-lived assets (mainly plugging and abandonment costs for the Partnerships' depleted wells), in the period in which the liabilities are incurred (at the time the wells are drilled). Management has not yet determined the effect of adopting this statement on the Partnerships' financial condition or results of operations. In August 2001, the FASB issued FAS No. 144, "Accounting for the Impairment or Disposal of Long-Lived Assets", which is effective for fiscal years beginning after December 15, 2001 (January 1, 2002 for the Partnerships). This statement supersedes FAS No. 121 "Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed Of". The provisions of FAS No. 144, as they relate to the Partnerships, are essentially the same as FAS No. 121 and thus are not expected to have a significant effect on the Partnerships financial condition or results of operations. 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. -40- Historically, oil and gas prices have been volatile and are likely to continue to be volatile. As a result, 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. It is likewise difficult to predict production volumes. However, oil and gas are depleting assets, so it can be expected that production levels will decline over time. Gas prices in 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. However, prices for both oil and gas soon declined and were relatively lower in late 2001 and early 2002 as a result of the declining economy and relatively mild winter weather. Recently, prices of oil and gas have improved, to some extent due to unrest in the Middle East. It is not possible to accurately predict future trends. II-A PARTNERSHIP THREE MONTHS ENDED JUNE 30, 2002 COMPARED TO THE THREE MONTHS ENDED JUNE 30, 2001. Three Months Ended June 30, --------------------------- 2002 2001 -------- ---------- Oil and gas sales $979,840 $1,452,896 Oil and gas production expenses $339,332 $ 389,130 Barrels produced 15,756 18,573 Mcf produced 210,636 194,696 Average price/Bbl $ 23.34 $ 24.64 Average price/Mcf $ 2.91 $ 5.11 As shown in the table above, total oil and gas sales decreased $473,056 (32.6%) for the three months ended June 30, 2002 as compared to the three months ended June 30, 2001. Of this decrease, approximately (i) $465,000 was related to a decrease in the average price of gas sold and (ii) $69,000 was related to a decrease in volumes of oil sold. These decreases were partially offset by an increase of approximately $81,000 related to an increase in volumes of gas sold. Volumes of oil sold decreased 2,817 barrels, while volumes of gas sold increased 15,940 Mcf for the three months ended June 30, 2002 as compared to the three months ended June 30, 2001. The decrease in volumes of oil sold was primarily due to the sale of several wells during early 2002. Average oil and gas prices decreased to $23.34 per -41- barrel and $2.91 per Mcf, respectively, for the three months ended June 30, 2002 from $24.64 per barrel and $5.11 per Mcf, respectively, for the three months ended June 30, 2001. The II-A Partnership sold certain oil and gas properties during the three months ended June 30, 2002 and recognized a $193,272 gain on such sales. No such material sales occurred during the three months ended June 30, 2001. Oil and gas production expenses (including lease operating expenses and production taxes) decreased $49,798 (12.8%) for the three months ended June 30, 2002 as compared to the three months ended June 30, 2001. This decrease was primarily due to (i) workover expenses incurred on several wells during the three months ended June 30, 2001 and (ii) a decrease in production taxes associated with the decrease in oil and gas sales. As a percentage of oil and gas sales, these expenses increased to 34.6% for the three months ended June 30, 2002 from 26.8% for the three months ended June 30, 2001. This percentage increase was primarily due to the decreases in the average prices of oil and gas sold. Depreciation, depletion, and amortization of oil and gas properties decreased $3,316 (4.0%) for the three months ended June 30, 2002 as compared to the three months ended June 30, 2001. As a percentage of oil and gas sales, this expense increased to 8.2% for the three months ended June 30, 2002 from 5.8% for the three months ended June 30, 2001. This percentage increase was primarily due to decreases in the average prices of oil and gas sold. General and administrative expenses increased $1,802 (1.4%) for the three months ended June 30, 2002 as compared to the three months ended June 30, 2001. As a percentage of oil and gas sales, these expenses increased to 13.7% for the three months ended June 30, 2002 from 9.1% for the three months ended June 30, 2001. This percentage increase was primarily due to the decrease in oil and gas sales. -42- SIX MONTHS ENDED JUNE 30, 2002 COMPARED TO THE SIX MONTHS ENDED JUNE 30, 2001. Six Months Ended June 30, ------------------------- 2002 2001 ---------- ---------- Oil and gas sales $1,767,496 $3,139,007 Oil and gas production expenses $ 802,966 $ 743,756 Barrels produced 31,367 37,300 Mcf produced 425,067 375,381 Average price/Bbl $ 20.95 $ 25.71 Average price/Mcf $ 2.61 $ 5.81 As shown in the table above, total oil and gas sales decreased $1,371,511 (43.7%) for the six months ended June 30, 2002 as compared to the six months ended June 30, 2001. Of this decrease, approximately (i) $149,000 and $1,358,000, respectively, were related to decreases in the average prices of oil and gas sold and (ii) $153,000 was related to a decrease in volumes of oil sold. These decreases were partially offset by an increase of approximately $288,000 related to an increase in volumes of gas sold. Volumes of oil sold decreased 5,933 barrels, while volumes of gas sold increased 49,686 Mcf for the six months ended June 30, 2002 as compared to the six months ended June 30, 2001. The decrease in volumes of oil sold was primarily due to (i) the sale of several wells during early 2002 and (ii) normal declines in production. The increase in volumes of gas sold was primarily due to (i) a negative prior period gas balancing adjustment on one significant well during the six months ended June 30, 2001, (ii) the II-A Partnership receiving an increased percentage of sales on another significant well during the six months ended June 30, 2002 due to gas balancing, and (iii) a positive prior period gas balancing adjustment on another significant well during the six months ended June 30, 2002. As of the date of this Quarterly Report, management expects the increased sales percentage due to gas balancing to continue for the foreseeable future, thereby continuing to contribute to an increase in volumes of gas sold for the II-A Partnership. Average oil and gas prices decreased to $20.95 per barrel and $2.61 per Mcf, respectively, for the six months ended June 30, 2002 from $25.71 per barrel and $5.81 per Mcf, respectively, for the six months ended June 30, 2001. The II-A Partnership sold certain oil and gas properties during the six months ended June 30, 2002 and recognized a $193,272 gain on such sales. Sales of oil and gas properties during the six months ended June 30, 2001 resulted in similar gains of $3,277. -43- Oil and gas production expenses (including lease operating expenses and production taxes) increased $59,210 (8.0%) for the six months ended June 30, 2002 as compared to the six months ended June 30, 2001. This increase was primarily due to workover expenses incurred on several wells during the six months ended June 30, 2002. This increase was partially offset by (i) a decrease in production taxes associated with the decrease in oil and gas sales, (ii) workover expenses incurred on several other wells during the six months ended June 30, 2001, and (iii) a partial reversal during the six months ended June 30, 2002 of approximately $22,000 (due to a partial post-judgment settlement) of a charge previously accrued for a judgment. As a percentage of oil and gas sales, these expenses increased to 45.4% for the six months ended June 30, 2002 from 23.7% for the six months ended June 30, 2001. This percentage increase was primarily due to the decreases in the average prices of oil and gas sold. Depreciation, depletion, and amortization of oil and gas properties decreased $2,282 (1.4%) for the six months ended June 30, 2002 as compared to the six months ended June 30, 2001. As a percentage of oil and gas sales, this expense increased to 9.1% for the six months ended June 30, 2002 from 5.2% for the six months ended June 30, 2001. This percentage increase was primarily due to the decreases in the average prices of oil and gas sold. General and administrative expenses increased $5,822 (2.1%) for the six months ended June 30, 2002 as compared to the six months ended June 30, 2001. As a percentage of oil and gas sales, these expenses increased to 16.4% for the six months ended June 30, 2002 from 9.0% for the six months ended June 30, 2001. This percentage increase was primarily due to the decrease in oil and gas sales. The Limited Partners have received cash distributions through June 30, 2002 totaling $54,785,357 or 113.13% of the Limited Partners' capital contributions. -44- II-B PARTNERSHIP THREE MONTHS ENDED JUNE 30, 2002 COMPARED TO THE THREE MONTHS ENDED JUNE 30, 2001. Three Months Ended June 30, --------------------------- 2002 2001 -------- ---------- Oil and gas sales $672,842 $1,103,829 Oil and gas production expenses $241,938 $ 249,910 Barrels produced 9,894 15,040 Mcf produced 166,381 168,603 Average price/Bbl $ 24.12 $ 25.35 Average price/Mcf $ 2.61 $ 4.29 As shown in the table above, total oil and gas sales decreased $430,987 (39.0%) for the three months ended June 30, 2002 as compared to the three months ended June 30, 2001. Of this decrease, approximately (i) $279,000 was related to a decrease in the average price of gas sold and (ii) $130,000 was related to a decrease in volumes of oil sold. Volumes of oil and gas sold decreased 5,146 barrels and 2,222 Mcf, respectively, for the three months ended June 30, 2002 as compared to the three months ended June 30, 2001. The decrease in volumes of oil sold was primarily due to (i) a positive prior period volume adjustment made by the operator on one significant well during the three months ended June 30, 2001 and (ii) normal declines in production. Average oil and gas prices decreased to $24.12 per barrel and $2.61 per Mcf, respectively, for the three months ended June 30, 2002 from $25.35 per barrel and $4.29 per Mcf, respectively, for the three months ended June 30, 2001. Oil and gas production expenses (including lease operating expenses and production taxes) decreased $7,972 (3.2%) for the three months ended June 30, 2002 as compared to the three months ended June 30, 2001. This decrease was primarily due to (i) positive prior period lease operating expense adjustments made by the operators on two significant wells during the three months ended June 30, 2001 and (ii) a decrease in production taxes associated with the decrease in oil and gas sales. These decreases were partially offset by workover expenses incurred on two other significant wells during the three months ended June 30, 2002. As a percentage of oil and gas sales, these expenses increased to 36.0% for the three months ended June 30, 2002 from 22.6% for the three months ended June 30, 2001. This percentage increase was primarily due to the decreases in the average prices of oil and gas sold. -45- Depreciation, depletion, and amortization of oil and gas properties increased $8,530 (15.8%) for the three months ended June 30, 2002 as compared to the three months ended June 30, 2001. This increase was primarily due to downward revisions in the estimates of remaining oil and gas reserves. This increase was partially offset by the decreases in volumes of oil and gas sold. As a percentage of oil and gas sales, this expense increased to 9.3% for the three months ended June 30, 2002 from 4.9% for the three months ended June 30, 2001. This percentage increase was primarily due to the decreases in the average prices of oil and gas sold. General and administrative expenses increased $2,187 (2.2%) for the three months ended June 30, 2002 as compared to the three months ended June 30, 2001. As a percentage of oil and gas sales, these expenses increased to 15.1% for the three months ended June 30, 2002 from 9.0% for the three months ended June 30, 2001. This percentage increase was primarily due to the decrease in oil and gas sales. SIX MONTHS ENDED JUNE 30, 2002 COMPARED TO THE SIX MONTHS ENDED JUNE 30, 2001. Six Months Ended June 30, ------------------------- 2002 2001 ---------- ---------- Oil and gas sales $1,253,187 $2,433,197 Oil and gas production expenses $ 590,228 $ 477,188 Barrels produced 21,334 29,131 Mcf produced 323,141 312,790 Average price/Bbl $ 21.49 $ 25.77 Average price/Mcf $ 2.46 $ 5.38 As shown in the table above, total oil and gas sales decreased $1,180,010 (48.5%) for the six months ended June 30, 2002 as compared to the six months ended June 30, 2001. Of this decrease, approximately (i) $943,000 was related to a decrease in the average price of gas sold and (ii) $201,000 was related to a decrease in volumes of oil sold. Volumes of oil sold decreased 7,797 barrels, while volumes of gas sold increased 10,351 Mcf for the six months ended June 30, 2002 as compared to the six months ended June 30, 2001. The decrease in volumes of oil sold was primarily due to (i) a positive prior period volume adjustment made by the operator on one significant well during the six months ended June 30, 2001 and (ii) normal declines in production. Average oil and gas prices decreased to $21.49 per barrel and $2.46 per Mcf, respectively, for the six months ended June 30, 2002 from $25.77 per barrel and $5.38 per Mcf, respectively, for the six months ended June 30, 2001. -46- Oil and gas production expenses (including lease operating expenses and production taxes) increased $113,040 (23.7%) for the six months ended June 30, 2002 as compared to the six months ended June 30, 2001. This increase was primarily due to workover expenses incurred on several wells during the six months ended June 30, 2002. This increase was partially offset by (i) a decrease in production taxes associated with the decrease in oil and gas sales and (ii) positive prior period lease operating expense adjustments made by the operators on two significant wells during the six months ended June 30, 2001. As a percentage of oil and gas sales, these expenses increased to 47.1% for the six months ended June 30, 2002 from 19.6% for the six months ended June 30, 2001. This percentage increase was primarily due to the decreases in the average prices of oil and gas sold. Depreciation, depletion, and amortization of oil and gas properties increased $23,238 (22.9%) for the six months ended June 30, 2002 as compared to the six months ended June 30, 2001. This increase was primarily due to downward revisions in the estimates of remaining oil and gas reserves. This increase was partially offset by the decrease in volumes of oil sold. As a percentage of oil and gas sales, this expense increased to 10.0% for the six months ended June 30, 2002 from 4.2% for the six months ended June 30, 2001. This percentage increase was primarily due to the decreases in the average prices of oil and gas sold. General and administrative expenses increased $4,404 (2.0%) for the six months ended June 30, 2002 as compared to the six months ended June 30, 2001. As a percentage of oil and gas sales, these expenses increased to 17.6% for the six months ended June 30, 2002 from 8.9% for the six months ended June 30, 2001. This percentage increase was primarily due to the decrease in oil and gas sales. The Limited Partners have received cash distributions through June 30, 2002 totaling $39,594,916 or 109.46% of the Limited Partners' capital contributions. -47- II-C PARTNERSHIP THREE MONTHS ENDED JUNE 30, 2002 COMPARED TO THE THREE MONTHS ENDED JUNE 30, 2001. Three Months Ended June 30, --------------------------- 2002 2001 -------- -------- Oil and gas sales $336,986 $519,745 Oil and gas production expenses $ 93,469 $ 98,514 Barrels produced 4,055 3,474 Mcf produced 92,358 88,510 Average price/Bbl $ 23.07 $ 25.63 Average price/Mcf $ 2.64 $ 4.87 As shown in the table above, total oil and gas sales decreased $182,759 (35.2%) for the three months ended June 30, 2002 as compared to the three months ended June 30, 2001. Of this decrease, approximately $206,000 was related to a decrease in the average price of gas sold. This decrease was partially offset by an increase of approximately $19,000 related to an increase in volumes of gas sold. Volumes of oil and gas sold increased 581 barrels and 3,848 Mcf, respectively, for the three months ended June 30, 2002 as compared to the three months ended June 30, 2001. The increase in volumes of oil sold was primarily due to the successful completion of two new wells during late 2001. Average oil and gas prices decreased to $23.07 per barrel and $2.64 per Mcf, respectively, for the three months ended June 30, 2002 from $25.63 per barrel and $4.87 per Mcf, respectively, for the three months ended June 30, 2001. Oil and gas production expenses (including lease operating expenses and production taxes) decreased $5,045 (5.1%) for the three months ended June 30, 2002 as compared to the three months ended June 30, 2001. As a percentage of oil and gas sales, these expenses increased to 27.7% for the three months ended June 30, 2002 from 19.0% for the three months ended June 30, 2001. This percentage increase was primarily due to the decreases in the average prices of oil and gas sold. Depreciation, depletion, and amortization of oil and gas properties increased $5,503 (20.4%) for the three months ended June 30, 2002 as compared to the three months ended June 30, 2001. This increase was primarily due to (i) downward revisions in the estimates of remaining oil reserves and (ii) the increases in volumes of oil and gas sold. As a percentage of oil and gas sales, this expense increased to 9.6% for the three months ended June 30, 2002 from 5.2% for the three months ended June 30, 2001. This percentage increase was primarily due to the decreases in the average prices of oil and gas sold. General and administrative expenses increased $2,713 (6.3%) for the three months ended June 30, 2002 as compared to the three months ended June 30, 2001. As a percentage of oil and gas sales, these expenses increased to 13.7% for the three months ended June 30, 2002 from 8.3% for the three months ended June 30, 2001. This percentage increase was primarily due to the decrease in oil and gas sales. SIX MONTHS ENDED JUNE 30, 2002 COMPARED TO THE SIX MONTHS ENDED JUNE 30, 2001. Six Months Ended June 30, ------------------------- 2002 2001 -------- ---------- Oil and gas sales $604,759 $1,117,021 Oil and gas production expenses $237,445 $ 214,733 Barrels produced 7,737 7,543 Mcf produced 177,520 162,864 Average price/Bbl $ 21.90 $ 25.81 Average price/Mcf $ 2.45 $ 5.66 As shown in the table above, total oil and gas sales decreased $512,262 (45.9%) for the six months ended June 30, 2002 as compared to the six months ended June 30, 2001. Of this decrease, approximately $570,000 was related to a decrease in the average price of gas sold. This decrease was partially offset by an increase of approximately $83,000 related to an increase in volumes of gas sold. Volumes of oil and gas sold increased 194 barrels and 14,656 Mcf, respectively, for the six months ended June 30, 2002 as compared to the six months ended June 30, 2001. Average oil and gas prices decreased to $21.90 per barrel and $2.45 per Mcf, respectively, for the six months ended June 30, 2002 from $25.81 per barrel and $5.66 per Mcf, respectively, for the six months ended June 30, 2001. Oil and gas production expenses (including lease operating expenses and production taxes) increased $22,712 (10.6%) for the six months ended June 30, 2002 as compared to the six months ended June 30, 2001. This increase was primarily due to (i) workover expenses incurred on two significant wells during the six months ended June 30, 2002 and (ii) an increase in lease operating expenses associated with the increases in volumes of oil and gas sold. These increases were partially offset by a decrease in production taxes associated with the decrease in oil and gas sales. As a percentage of oil and gas sales, these expenses increased to 39.3% for the six months ended June 30, 2002 from 19.2% for the six months ended June 30, 2001. This percentage increase was primarily due to the decreases in the average prices of oil and gas sold. -48- Depreciation, depletion, and amortization of oil and gas properties increased $10,994 (21.4%) for the six months ended June 30, 2002 as compared to the six months ended June 30, 2001. This increase was primarily due to (i) downward revisions in the estimates of remaining oil reserves and (ii) the increases in volumes of oil and gas sold. As a percentage of oil and gas sales, this expense increased to 10.3% for the six months ended June 30, 2002 from 4.6% for the six months ended June 30, 2001. This percentage increase was primarily due to the decreases in the average prices of oil and gas sold. General and administrative expenses increased $1,787 (1.7%) for the six months ended June 30, 2002 as compared to the six months ended June 30, 2001. As a percentage of oil and gas sales, these expenses increased to 17.2% for the six months ended June 30, 2002 from 9.1% for the six months ended June 30, 2001. This percentage increase was primarily due to the decrease in oil and gas sales. The Limited Partners have received cash distributions through June 30, 2002 totaling $18,294,686 or 118.32% of the Limited Partners' capital contributions. II-D PARTNERSHIP THREE MONTHS ENDED JUNE 30, 2002 COMPARED TO THE THREE MONTHS ENDED JUNE 30, 2001. Three Months Ended June 30, --------------------------- 2002 2001 -------- ---------- Oil and gas sales $798,184 $1,115,535 Oil and gas production expenses $204,653 $ 291,220 Barrels produced 12,000 2,725 Mcf produced 210,201 179,225 Average price/Bbl $ 21.79 $ 23.89 Average price/Mcf $ 2.55 $ 5.86 As shown in the table above, total oil and gas sales decreased $317,351 (28.4%) for the three months ended June 30, 2002 as compared to the three months ended June 30, 2001. Of this decrease, approximately $695,000 was related to a decrease in the average price of gas sold. This decrease was partially offset by increases of approximately $222,000 and $182,000, respectively, related to increases in volumes of oil and gas sold. Volumes of oil and gas sold increased 9,275 barrels and 30,976 Mcf, respectively, for the three months ended June 30, 2002 as compared to the three months ended June 30, 2001. The increase in volumes of oil sold was primarily due to (i) the successful completion of one new well during late 2001 and (ii) an increase in production on another significant well due to -49- the successful workover of that well during mid 2001. The increase in volumes of gas sold was primarily due to (i) the successful completion of two other new wells during late 2001, (ii) an increase in production on one significant well due to the successful workover of that well during mid 2001, and (iii) an increase in production on another significant well following successful repairs made during mid 2001. These increases were partially offset by the II-D Partnership receiving a reduced percentage of sales on one significant well during the three months ended June 30, 2002 due to gas balancing. As of the date of this Quarterly Report, management expects the reduced sales percentage due to gas balancing to continue for the foreseeable future, thereby continuing to contribute to a decrease in volumes of gas sold for the II-D Partnership. Average oil and gas prices decreased to $21.79 per barrel and $2.55 per Mcf, respectively, for the three months ended June 30, 2002 from $23.89 per barrel and $5.86 per Mcf, respectively, for the three months ended June 30, 2001. Oil and gas production expenses (including lease operating expenses and production taxes) decreased $86,567 (29.7%) for the three months ended June 30, 2002 as compared to the three months ended June 30, 2001. This decrease was primarily due to (i) workover expenses incurred on several wells during the three months ended June 30, 2001 and (ii) a decrease in production taxes associated with the decrease in oil and gas sales. These decreases were partially offset by (i) a negative prior period lease operating expense adjustment made by the operator on one significant well during the three months ended June 30, 2001 and (ii) workover expenses incurred on another significant well during the three months ended June 30, 2002. As a percentage of oil and gas sales, these expenses decreased to 25.6% for the three months ended June 30, 2002 from 26.1% for the three months ended June 30, 2001. Depreciation, depletion, and amortization of oil and gas properties increased $28,860 (64.2%) for the three months ended June 30, 2002 as compared to the three months ended June 30, 2001. This increase was primarily due to (i) the increases in volumes of oil and gas sold and (ii) downward revisions in the estimates of remaining oil and gas reserves. As a percentage of oil and gas sales, this expense increased to 9.3% for the three months ended June 30, 2002 from 4.0% for the three months ended June 30, 2001. This percentage increase was primarily due to the decreases in the average prices of oil and gas sold. -50- General and administrative expenses increased $2,201 (2.5%) for the three months ended June 30, 2002 as compared to the three months ended June 30, 2001. As a percentage of oil and gas sales, these expenses increased to 11.1% for the three months ended June 30, 2002 from 7.8% for the three months ended June 30, 2001. This percentage increase was primarily due to the decrease in oil and gas sales. SIX MONTHS ENDED JUNE 30, 2002 COMPARED TO THE SIX MONTHS ENDED JUNE 30, 2001. Six Months Ended June 30, ------------------------- 2002 2001 ---------- ---------- Oil and gas sales $1,335,760 $2,441,111 Oil and gas production expenses $ 494,854 $ 547,249 Barrels produced 18,382 7,787 Mcf produced 400,710 361,489 Average price/Bbl $ 20.97 $ 25.35 Average price/Mcf $ 2.37 $ 6.21 As shown in the table above, total oil and gas sales decreased $1,105,351 (45.3%) for the six months ended June 30, 2002 as compared to the six months ended June 30, 2001. Of this decrease, approximately $1,537,000 was related to a decrease in the average price of gas sold. This decrease was partially offset by increases of approximately $269,000 and $243,000, respectively, related to increases in volumes of oil and gas sold. Volumes of oil and gas sold increased 10,595 barrels and 39,221 Mcf, respectively, for the six months ended June 30, 2002 as compared to the six months ended June 30, 2001. The increase in volumes of oil sold was primarily due to (i) the successful completion of one new well during late 2001 and (ii) an increase in production on another significant well due to the successful workover of that well during mid 2001. The increase in volumes of gas sold was primarily due to (i) the successful completion of two other new wells during late 2001, (ii) a negative prior period gas balancing adjustment on one significant well during the six months ended June 30, 2001, and (iii) an increase in production on another significant well following successful repairs made during mid 2001. These increases were partially offset by (i) the II-D Partnership receiving a reduced percentage of sales on one significant well during the six months ended June 30, 2002 due to gas balancing and (ii) normal declines in production. As of the date of this Quarterly Report, management expects the reduced sales percentage due to gas balancing to continue for the foreseeable future, thereby continuing to contribute to a decrease in volumes of gas sold for the II-D Partnership. Average oil and gas prices decreased to $20.97 per barrel and $2.37 per Mcf, respectively, for the six months ended June 30, 2002 from $25.35 per barrel and $6.21 per Mcf, respectively, for the six months ended June 30, 2001. -51- Oil and gas production expenses (including lease operating expenses and production taxes) decreased $52,395 (9.6%) for the six months ended June 30, 2002 as compared to the six months ended June 30, 2001. This decrease was primarily due to (i) a decrease in production taxes associated with the decrease in oil and gas sales and (ii) workover expenses incurred on several wells during the six months ended June 30, 2001. These decreases were partially offset by (i) workover expenses incurred on two other significant wells during the six months ended June 30, 2002 and (ii) a positive prior period lease operating expense adjustment made by the operator on one significant well during the six months ended June 30, 2002. As a percentage of oil and gas sales, these expenses increased to 37.0% for the six months ended June 30, 2002 from 22.4% for the six months ended June 30, 2001. This percentage increase was primarily due to the decreases in the average prices of oil and gas sold. Depreciation, depletion, and amortization of oil and gas properties increased $39,824 (42.4%) for the six months ended June 30, 2002 as compared to the six months ended June 30, 2001. This increase was primarily due to (i) the increases in volumes of oil and gas sold and (ii) downward revisions in the estimates of remaining oil and gas reserves. As a percentage of oil and gas sales, this expense increased to 10.0% for the six months ended June 30, 2002 from 3.8% for the six months ended June 30, 2001. This percentage increase was primarily due to the decreases in the average prices of oil and gas sold. General and administrative expenses increased $3,506 (1.8%) for the six months ended June 30, 2002 as compared to the six months ended June 30, 2001. As a percentage of oil and gas sales, these expenses increased to 14.5% for the six months ended June 30, 2002 from 7.8% for the six months ended June 30, 2001. This percentage increase was primarily due to the decrease in oil and gas sales. The Limited Partners have received cash distributions through June 30, 2002 totaling $37,455,903 or 118.95% of Limited Partners' capital contributions. -52- II-E PARTNERSHIP THREE MONTHS ENDED JUNE 30, 2002 COMPARED TO THE THREE MONTHS ENDED JUNE 30, 2001. Three Months Ended June 30, --------------------------- 2002 2001 -------- -------- Oil and gas sales $473,556 $757,605 Oil and gas production expenses $130,783 $166,866 Barrels produced 6,217 6,504 Mcf produced 115,576 127,098 Average price/Bbl $ 23.92 $ 26.55 Average price/Mcf $ 2.81 $ 4.60 As shown in the table above, total oil and gas sales decreased $284,049 (37.5%) for the three months ended June 30, 2002 as compared to the three months ended June 30, 2001. Of this decrease, approximately (i) $207,000 was related to a decrease in the average price of gas sold and (ii) $53,000 was related to a decrease in volumes of gas sold. Volumes of oil and gas sold decreased 287 barrels and 11,522 Mcf, respectively, for the three months ended June 30, 2002 as compared to the three months ended June 30, 2001. Average oil and gas prices decreased to $23.92 per barrel and $2.81 per Mcf, respectively, for the three months ended June 30, 2002 from $26.55 per barrel and $4.60 per Mcf, respectively, for the three months ended June 30, 2001. Oil and gas production expenses (including lease operating expenses and production taxes) decreased $36,083 (21.6%) for the three months ended June 30, 2002 as compared to the three months ended June 30, 2001. This decrease was primarily due to (i) a decrease in production taxes associated with the decrease in oil and gas sales, (ii) a decrease in repair and maintenance expenses incurred on one significant well during the three months ended June 30, 2002 as compared to the three months ended June 30, 2001, and (iii) workover expenses incurred on another significant well during the three months ended June 30, 2001. As a percentage of oil and gas sales, these expenses increased to 27.6% for the three months ended June 30, 2002 from 22.0% for the three months ended June 30, 2001. This percentage increase was primarily due to the decreases in the average prices of oil and gas sold. Depreciation, depletion, and amortization of oil and gas properties increased $6,641 (13.0%) for the three months ended June 30, 2002 as compared to the three months ended June 30, 2001. This increase was primarily due to downward revisions in the estimates of remaining oil reserves. This increase was partially offset by the decreases in volumes of oil and gas sold. As a percentage of oil and gas sales, this -53- expense increased to 12.2% for the three months ended June 30, 2002 from 6.7% for the three months ended June 30, 2001. This percentage increase was primarily due to the decreases in the average prices of oil and gas sold. General and administrative expenses increased $3,622 (5.7%) for the three months ended June 30, 2002 as compared to the three months ended June 30, 2001. As a percentage of oil and gas sales, these expenses increased to 14.2% for the three months ended June 30, 2002 from 8.4% for the three months ended June 30, 2001. This percentage increase was primarily due to the decrease in oil and gas sales. SIX MONTHS ENDED JUNE 30, 2002 COMPARED TO THE SIX MONTHS ENDED JUNE 30, 2001. Six Months Ended June 30, ------------------------- 2002 2001 -------- ---------- Oil and gas sales $872,051 $1,690,610 Oil and gas production expenses $287,949 $ 342,456 Barrels produced 12,856 12,165 Mcf produced 237,069 242,344 Average price/Bbl $ 21.77 $ 27.28 Average price/Mcf $ 2.50 $ 5.61 As shown in the table above, total oil and gas sales decreased $818,559 (48.4%) for the six months ended June 30, 2002 as compared to the six months ended June 30, 2001. Of this decrease, approximately $737,000 was related to a decrease in the average price of gas sold. Volumes of oil sold increased 691 barrels, while volumes of gas sold decreased 5,275 Mcf for the six months ended June 30, 2002 as compared to the six months ended June 30, 2001. Average oil and gas prices decreased to $21.77 per barrel and $2.50 per Mcf, respectively, for the six months ended June 30, 2002 from $27.28 per barrel and $5.61 per Mcf, respectively, for the six months ended June 30, 2001. Oil and gas production expenses (including lease operating expenses and production taxes) decreased $54,507 (15.9%) for the six months ended June 30, 2002 as compared to the six months ended June 30, 2001. This decrease was primarily due to a decrease in production taxes associated with the decrease in oil and gas sales. This decrease was partially offset by a negative prior period lease operating expense adjustment on one significant well during the six months ended June 30, 2001. As a percentage of oil and gas sales, these expenses increased to 33.0% for the six months ended June 30, 2002 from 20.3% for the six months ended June 30, 2001. This percentage increase was primarily due to the decreases in the average prices of oil and gas sold. -54- Depreciation, depletion, and amortization of oil and gas properties increased $21,649 (22.4%) for the six months ended June 30, 2002 as compared to the six months ended June 30, 2001. This increase was primarily due to downward revisions in the estimates of remaining oil reserves. As a percentage of oil and gas sales, this expense increased to 13.6% for the six months ended June 30, 2002 from 5.7% for the six months ended June 30, 2001. This percentage increase was primarily due to the decreases in the average prices of oil and gas sold. General and administrative expenses increased $5,074 (3.5%) for the six months ended June 30, 2002 as compared to the six months ended June 30, 2001. As a percentage of oil and gas sales, these expenses increased to 17.0% for the six months ended June 30, 2002 from 8.5% for the six months ended June 30, 2001. This percentage increase was primarily due to the decrease in oil and gas sales. The Limited Partners have received cash distributions through June 30, 2002 totaling $26,947,574 or 117.77% of Limited Partners' capital contributions. II-F PARTNERSHIP THREE MONTHS ENDED JUNE 30, 2002 COMPARED TO THE THREE MONTHS ENDED JUNE 30, 2001. Three Months Ended June 30, --------------------------- 2002 2001 -------- -------- Oil and gas sales $426,001 $778,828 Oil and gas production expenses $ 93,594 $124,723 Barrels produced 6,518 8,389 Mcf produced 101,716 128,069 Average price/Bbl $ 23.50 $ 26.29 Average price/Mcf $ 2.68 $ 4.36 As shown in the table above, total oil and gas sales decreased $352,827 (45.3%) for the three months ended June 30, 2002 as compared to the three months ended June 30, 2001. Of this decrease, approximately (i) $171,000 was related to a decrease in the average price of gas sold and (ii) $49,000 and $115,000, respectively, were related to decreases in volumes of oil and gas sold. Volumes of oil and gas sold decreased 1,871 barrels and 26,353 Mcf, respectively, for the three months ended June 30, 2002 as compared to the three months ended June 30, 2001. The decrease in volumes of oil sold was primarily due to a positive prior period volume adjustment made by the purchaser on one significant well during the three months ended June 30, 2001. The decrease in volumes of gas sold was primarily due to (i) positive prior period volume -55- adjustments made by the purchasers on two significant wells during the three months ended June 30, 2001, (ii) a positive prior period gas balancing adjustment on another significant well during the three months ended June 30, 2001, and (iii) normal declines in production. Average oil and gas prices decreased to $23.50 per barrel and $2.68 per Mcf, respectively, for the three months ended June 30, 2002 from $26.29 per barrel and $4.36 per Mcf, respectively, for the three months ended June 30, 2001. The II-F Partnership sold certain oil and gas properties during the three months ended June 30, 2002 and recognized a $50,440 gain on such sales. No such material sales occurred during the three months ended June 30, 2001. Oil and gas production expenses (including lease operating expenses and production taxes) decreased $31,129 (25.0%) for the three months ended June 30, 2002 as compared to the three months ended June 30, 2001. This decrease was primarily due to a decrease in production taxes associated with the decrease in oil and gas sales. As a percentage of oil and gas sales, these expenses increased to 22.0% for the three months ended June 30, 2002 from 16.0% for the three months ended June 30, 2001. This percentage increase was primarily due to the decreases in the average prices of oil and gas sold. Depreciation, depletion, and amortization of oil and gas properties decreased $16,548 (26.8%) for the three months ended June 30, 2002 as compared to the three months ended June 30, 2001. 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 increased to 10.6% for the three months ended June 30, 2002 from 7.9% for the three months ended June 30, 2001. This percentage increase was primarily due to the decreases in the average prices of oil and gas sold. General and administrative expenses increased $3,754 (8.0%) for the three months ended June 30, 2002 as compared to the three months ended June 30, 2001. As a percentage of oil and gas sales, these expenses increased to 11.9% for the three months ended June 30, 2002 from 6.0% for the three months ended June 30, 2001. This percentage increase was primarily due to the decrease in oil and gas sales. -56- SIX MONTHS ENDED JUNE 30, 2002 COMPARED TO THE SIX MONTHS ENDED JUNE 30, 2001. Six Months Ended June 30, ------------------------- 2002 2001 -------- ---------- Oil and gas sales $842,559 $1,599,714 Oil and gas production expenses $235,143 $ 262,059 Barrels produced 14,645 15,079 Mcf produced 219,283 238,121 Average price/Bbl $ 21.08 $ 27.07 Average price/Mcf $ 2.43 $ 5.00 As shown in the table above, total oil and gas sales decreased $757,155 (47.3%) for the six months ended June 30, 2002 as compared to the six months ended June 30, 2001. Of this decrease, approximately (i) $88,000 and $563,000, respectively, were related to decreases in the average prices of oil and gas sold and (ii) $94,000 was related to a decrease in volumes of gas sold. Volumes of oil and gas sold decreased 434 barrels and 18,838 Mcf, respectively, for the six months ended June 30, 2002 as compared to the six months ended June 30, 2001. Average oil and gas prices decreased to $21.08 per barrel and $2.43 per Mcf, respectively, for the six months ended June 30, 2002 from $27.07 per barrel and $5.00 per Mcf, respectively, for the six months ended June 30, 2001. The II-F Partnership sold certain oil and gas properties during the six months ended June 30, 2002 and recognized a $50,440 gain on such sales. No such material sales occurred during the six months ended June 30, 2001. Oil and gas production expenses (including lease operating expenses and production taxes) decreased $26,916 (10.3%) for the six months ended June 30, 2002 as compared to the six months ended June 30, 2001. This decrease was primarily due to a decrease in production taxes associated with the decrease in oil and gas sales. This decrease was partially offset by workover expenses incurred on several wells during the six months ended June 30, 2002. As a percentage of oil and gas sales, these expenses increased to 27.9% for the six months ended June 30, 2002 from 16.4% for the six months ended June 30, 2001. This percentage increase was primarily due to the decreases in the average prices of oil and gas sold. -57- Depreciation, depletion, and amortization of oil and gas properties decreased $15,112 (13.3%) for the six months ended June 30, 2002 as compared to the six months ended June 30, 2001. This decrease was primarily due to (i) upward revisions in the estimates of remaining gas reserves and (ii) the decreases in volumes of oil and gas sold. As a percentage of oil and gas sales, this expense increased to 11.7% for the six months ended June 30, 2002 from 7.1% for the six months ended June 30, 2001. This percentage increase was primarily due to the decreases in the average prices of oil and gas sold. General and administrative expenses increased $4,319 (3.9%) for the six months ended June 30, 2002 as compared to the six months ended June 30, 2001. As a percentage of oil and gas sales, these expenses increased to 13.6% for the six months ended June 30, 2002 from 6.9% for the six months ended June 30, 2001. This percentage increase was primarily due to the decrease in oil and gas sales. The Limited Partners have received cash distributions through June 30, 2002 totaling $21,327,051 or 124.43% of Limited Partners' capital contributions. II-G PARTNERSHIP THREE MONTHS ENDED JUNE 30, 2002 COMPARED TO THE THREE MONTHS ENDED JUNE 30, 2001. Three Months Ended June 30, --------------------------- 2002 2001 -------- ---------- Oil and gas sales $905,139 $1,659,073 Oil and gas production expenses $199,664 $ 267,493 Barrels produced 13,676 17,607 Mcf produced 216,741 272,690 Average price/Bbl $ 23.49 $ 26.29 Average price/Mcf $ 2.69 $ 4.39 As shown in the table above, total oil and gas sales decreased $753,934 (45.4%) for the three months ended June 30, 2002 as compared to the three months ended June 30, 2001. Of this decrease, approximately (i) $367,000 was related to a decrease in the average price of gas sold and (ii) $103,000 and $245,000, respectively, were related to decreases in volumes of oil and gas sold. Volumes of oil and gas sold decreased 3,931 barrels and 55,949 Mcf, respectively, for the three months ended June 30, 2002 as compared to the three months ended June 30, 2001. The decrease in volumes of oil sold was primarily due to a positive prior period volume adjustment made by the purchaser on one significant well during the three months -58- ended June 30, 2001. The decrease in volumes of gas sold was primarily due to (i) positive prior period volume adjustments made by the purchasers on two significant wells during the three months ended June 30, 2001, (ii) a positive prior period gas balancing adjustment on another significant well during the three months ended June 30, 2001, and (iii) normal declines in production. Average oil and gas prices decreased to $23.49 per barrel and $2.69 per Mcf, respectively, for the three months ended June 30, 2002 from $26.29 per barrel and $4.39 per Mcf, respectively, for the three months ended June 30, 2001. The II-G Partnership sold certain oil and gas properties during the three months ended June 30, 2002 and recognized a $105,409 gain on such sales. No such material sales occurred during the three months ended June 30, 2001. Oil and gas production expenses (including lease operating expenses and production taxes) decreased $67,829 (25.4%) for the three months ended June 30, 2002 as compared to the three months ended June 30, 2001. This decrease was primarily due to a decrease in production taxes associated with the decrease in oil and gas sales. As a percentage of oil and gas sales, these expenses increased to 22.1% for the three months ended June 30, 2002 from 16.1% for the three months ended June 30, 2001. This percentage increase was primarily due to the decreases in the average prices of oil and gas sold. Depreciation, depletion, and amortization of oil and gas properties decreased $34,179 (25.9%) for the three months ended June 30, 2002 as compared to the three months ended June 30, 2001. 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 increased to 10.8% for the three months ended June 30, 2002 from 7.9% for the three months ended June 30, 2001. This percentage increase was primarily due to the decreases in the average prices of oil and gas sold. General and administrative expenses increased $3,161 (3.1%) for the three months ended June 30, 2002 as compared to the three months ended June 30, 2001. As a percentage of oil and gas sales, these expenses increased to 11.6% for the three months ended June 30, 2002 from 6.1% for the three months ended June 30, 2001. This percentage increase was primarily due to the decrease in oil and gas sales. -59- SIX MONTHS ENDED JUNE 30, 2002 COMPARED TO THE SIX MONTHS ENDED JUNE 30, 2001. Six Months Ended June 30, ------------------------- 2002 2001 ---------- ---------- Oil and gas sales $1,786,842 $3,403,123 Oil and gas production expenses $ 501,012 $ 560,473 Barrels produced 30,710 31,623 Mcf produced 467,143 507,390 Average price/Bbl $ 21.07 $ 27.07 Average price/Mcf $ 2.44 $ 5.02 As shown in the table above, total oil and gas sales decreased $1,616,281 (47.5%) for the six months ended June 30, 2002 as compared to the six months ended June 30, 2001. Of this decrease, approximately (i) $184,000 and $1,205,000, respectively, were related to decreases in the average prices of oil and gas sold and (ii) $202,000 was related to a decrease in volumes of gas sold. Volumes of oil and gas sold decreased 913 barrels and 40,247 Mcf, respectively, for the six months ended June 30, 2002 as compared to the six months ended June 30, 2001. Average oil and gas prices decreased to $21.07 per barrel and $2.44 per Mcf, respectively, for the six months ended June 30, 2002 from $27.07 per barrel and $5.02 per Mcf, respectively, for the six months ended June 30, 2001. The II-G Partnership sold certain oil and gas properties during the six months ended June 30, 2002 and recognized a $105,409 gain on such sales. No such material sales occurred during the six months ended June 30, 2001. Oil and gas production expenses (including lease operating expenses and production taxes) decreased $59,461 (10.6%) for the six months ended June 30, 2002 as compared to the six months ended June 30, 2001. This decrease was primarily due to a decrease in production taxes associated with the decrease in oil and gas sales. This decrease was partially offset by workover expenses incurred on several wells during the six months ended June 30, 2002. As a percentage of oil and gas sales, these expenses increased to 28.0% for the six months ended June 30, 2002 from 16.5% for the six months ended June 30, 2001. This percentage increase was primarily due to the decreases in the average prices of oil and gas sold. -60- Depreciation, depletion, and amortization of oil and gas properties decreased $30,042 (12.4%) for the six months ended June 30, 2002 as compared to the six months ended June 30, 2001. This decrease was primarily due to (i) the decreases in volumes of oil and gas sold and (ii) upward revisions in the estimates of remaining gas reserves. As a percentage of oil and gas sales, this expense increased to 11.9% for the six months ended June 30, 2002 from 7.1% for the six months ended June 30, 2001. This percentage increase was primarily due to the decreases in the average prices of oil and gas sold. General and administrative expenses increased $6,703 (3.0%) for the six months ended June 30, 2002 as compared to the six months ended June 30, 2001. As a percentage of oil and gas sales, these expenses increased to 12.8% for the six months ended June 30, 2002 from 6.5% for the six months ended June 30, 2001. This percentage increase was primarily due to the decrease in oil and gas sales. The Limited Partners have received cash distributions through June 30, 2002 totaling $44,437,371 or 119.39% of Limited Partners' capital contributions. II-H PARTNERSHIP THREE MONTHS ENDED JUNE 30, 2002 COMPARED TO THE THREE MONTHS ENDED JUNE 30, 2001. Three Months Ended June 30, --------------------------- 2002 2001 -------- -------- Oil and gas sales $214,575 $395,727 Oil and gas production expenses $ 47,835 $ 64,682 Barrels produced 3,187 4,094 Mcf produced 51,938 65,181 Average price/Bbl $ 23.46 $ 26.28 Average price/Mcf $ 2.69 $ 4.42 As shown in the table above, total oil and gas sales decreased $181,152 (45.8%) for the three months ended June 30, 2002 as compared to the three months ended June 30, 2001. Of this decrease, approximately (i) $90,000 was related to a decrease in the average price of gas sold and (ii) $24,000 and $59,000, respectively, were related to decreases in volumes of oil and gas sold. Volumes of oil and gas sold decreased 907 barrels and 13,243 Mcf, respectively, for the three months ended June 30, 2002 as compared to the three months ended June 30, 2001. The decrease in volumes of oil sold was primarily due to a positive prior period volume adjustment made by the purchaser on one significant well during the three months -61- ended June 30, 2001. The decrease in volumes of gas sold was primarily due to (i) positive prior period volume adjustments made by the purchasers on two significant wells during the three months ended June 30, 2001, (ii) a positive prior period gas balancing adjustment on another significant well during the three months ended June 30, 2001, and (iii) normal declines in production. Average oil and gas prices decreased to $23.46 per barrel and $2.69 per Mcf, respectively, for the three months ended June 30, 2002 from $26.28 per barrel and $4.42 per Mcf, respectively, for the three months ended June 30, 2001. The II-H Partnership sold certain oil and gas properties during the three months ended June 30, 2002 and recognized a $24,403 gain on such sales. No such material sales occurred during the three months ended June 30, 2001. Oil and gas production expenses (including lease operating expenses and production taxes) decreased $16,847 (26.0%) for the three months ended June 30, 2002 as compared to the three months ended June 30, 2001. This decrease was primarily due to a decrease in production taxes associated with the decrease in oil and gas sales. As a percentage of oil and gas sales, these expenses increased to 22.3% for the three months ended June 30, 2002 from 16.3% for the three months ended June 30, 2001. This percentage increase was primarily due to the decreases in the average prices of oil and gas sold. Depreciation, depletion, and amortization of oil and gas properties decreased $8,074 (26.2%) for the three months ended June 30, 2002 as compared to the three months ended June 30, 2001. 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 increased to 10.6% for the three months ended June 30, 2002 from 7.8% for the three months ended June 30, 2001. This percentage increase was primarily due to the decreases in the average prices of oil and gas sold. General and administrative expenses increased $3,997 (15.7%) for the three months ended June 30, 2002 as compared to the three months ended June 30, 2001. This increase was primarily due to (i) a change in allocation of audit fees among the II-H Partnership and other affiliated partnerships and (ii) an increase in professional fees. As a percentage of oil and gas sales, these expenses increased to 13.8% for the three months ended June 30, 2002 from 6.5% for the three months ended June 30, 2001. This percentage increase was primarily due to the decrease in oil and gas sales. -62- SIX MONTHS ENDED JUNE 30, 2002 COMPARED TO THE SIX MONTHS ENDED JUNE 30, 2001. Six Months Ended June 30, ------------------------- 2002 2001 -------- -------- Oil and gas sales $423,019 $811,088 Oil and gas production expenses $120,003 $135,041 Barrels produced 7,141 7,352 Mcf produced 111,791 121,447 Average price/Bbl $ 21.06 $ 27.07 Average price/Mcf $ 2.44 $ 5.04 As shown in the table above, total oil and gas sales decreased $388,069 (47.8%) for the six months ended June 30, 2002 as compared to the six months ended June 30, 2001. Of this decrease, approximately (i) $43,000 and $291,000, respectively, were related to decreases in the average prices of oil and gas sold and (ii) $49,000 was related to a decrease in volumes of gas sold. Volumes of oil and gas sold decreased 211 barrels and 9,656 Mcf, respectively, for the six months ended June 30, 2002 as compared to the six months ended June 30, 2001. Average oil and gas prices decreased to $21.06 per barrel and $2.44 per Mcf, respectively, for the six months ended June 30, 2002 from $27.07 per barrel and $5.04 per Mcf, respectively, for the six months ended June 30, 2001. The II-H Partnership sold certain oil and gas properties during the six months ended June 30, 2002 and recognized a $24,403 gain on such sales. No such material sales occurred during the six months ended June 30, 2001. Oil and gas production expenses (including lease operating expenses and production taxes) decreased $15,038 (11.1%) for the six months ended June 30, 2002 as compared to the six months ended June 30, 2001. This decrease was primarily due to a decrease in production taxes associated with the decrease in oil and gas sales. This decrease was partially offset by workover expenses incurred on several wells during the six months ended June 30, 2002. As a percentage of oil and gas sales, these expenses increased to 28.4% for the six months ended June 30, 2002 from 16.6% for the six months ended June 30, 2001. This percentage increase was primarily due to the decreases in the average prices of oil and gas sold. -63- Depreciation, depletion, and amortization of oil and gas properties decreased $7,358 (12.9%) for the six months ended June 30, 2002 as compared to the six months ended June 30, 2001. This decrease was primarily due to (i) the decreases in volumes of oil and gas sold and (ii) upward revisions in the estimates of remaining gas reserves. As a percentage of oil and gas sales, this expense increased to 11.7% for the six months ended June 30, 2002 from 7.0% for the six months ended June 30, 2001. This percentage increase was primarily due to the decreases in the average prices of oil and gas sold. General and administrative expenses increased $3,377 (5.1%) for the six months ended June 30, 2002 as compared to the six months ended June 30, 2001. As a percentage of oil and gas sales, these expenses increased to 16.6% for the six months ended June 30, 2002 from 8.2% for the six months ended June 30, 2001. This percentage increase was primarily due to the decrease in oil and gas sales. The Limited Partners have received cash distributions through June 30, 2002 totaling $10,340,364 or 112.75% of Limited Partners' capital contributions. -64- ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK. The Partnerships do not hold any market risk sensitive instruments. -65- PART II. OTHER INFORMATION ITEM 1. LEGAL PROCEEDINGS A lawsuit styled Xplor Energy Operating Co. v. The Newton Corp, et al., Case No. 99-04-01960-CV was filed on May 12, 1999 in the 284th Judicial District Court of Montgomery County, Texas against Samson. The Plaintiff had acquired at auction the interests of the II-A Partnership and other owners in the State 87-S1 well. The lawsuit alleged that Samson and others were the record owners of the lease when it expired and therefore were responsible for the costs of plugging and abandoning the well. Plaintiff sought to recover the Defendants' proportionate share of the costs to plug and abandon the well along with attorneys' fees and interest. The Defendants denied liability and trial was held on August 6, 2001. At the conclusion of the trial the Court awarded the Plaintiff $447,245.55. On January 15, 2002 the Defendants filed an appeal of the matter with the Court of Appeals, Fifth District of Texas, Dallas, Texas, Case No. 05-02-00070-CV. Samson, on behalf of the II-A Partnership and others, intends to vigorously pursue this appeal. In connection with this appeal, the Defendants filed an appellate bond in the amount of $491,970.10, which consists of $86,444.12 for damages, $360,801.43 for costs and attorneys' fees, and $44,724.55 for estimated post-judgment interest. The II-A Partnership had a working interest in the plugged well and its' portion of the judgment and estimated post-judgment interest is approximately $74,000. On April 23, 2002 the II-A Partnership entered into a settlement agreement with Xplor Energy Operating Company thereby settling for $24,750 the portion of the judgment which is in favor of Xplor. The appeal is still ongoing with respect to the portion of the judgment which is in favor of The Newton Corporation. The II-A Partnership's portion of the remaining judgment and estimated post-judgment interest are approximately $27,000. ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K (a) Exhibits 99.1 Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 for the II-A Partnership. 99.2 Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 for the II-B Partnership. -66- 99.3 Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 for the II-C Partnership. 99.4 Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 for the II-D Partnership. 99.5 Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 for the II-E Partnership. 99.6 Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 for the II-F Partnership. 99.7 Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 for the II-G Partnership. 99.8 Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 for the II-H Partnership. (b) Reports on Form 8-K. None. -67- 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: August 13, 2002 By: /s/Dennis R. Neill -------------------------------- (Signature) Dennis R. Neill President Date: August 13, 2002 By: /s/Craig D. Loseke -------------------------------- (Signature) Craig D. Loseke Chief Accounting Officer -68- INDEX TO EXHIBITS ----------------- Exh. No. Exhibit - ---- ------- 99.1 Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 for the Geodyne Energy Income Limited Partnership II-A. 99.2 Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 for the Geodyne Energy Income Limited Partnership II-B. 99.3 Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 for the Geodyne Energy Income Limited Partnership II-C. 99.4 Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 for the Geodyne Energy Income Limited Partnership II-D. 99.5 Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 for the Geodyne Energy Income Limited Partnership II-E. 99.6 Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 for the Geodyne Energy Income Limited Partnership II-F. 99.7 Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 for the Geodyne Energy Income Limited Partnership II-G. 99.8 Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 for the Geodyne Energy Income Limited Partnership II-H. -69-