SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarter ended September 30, 2002
Commission File Number:
I-D: 0-15831 I-E: 0-15832 I-F: 0-15833
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP I-D
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP I-E
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP I-F
--------------------------------------------------------
(Exact name of Registrant as specified in its Articles)
I-D 73-1265223
I-E 73-1270110
Oklahoma I-F 73-1292669
- ---------------------------- -------------------------------
(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
------ ------
Indicate by check mark whether the registrant is an accelerated filer (as
defined in Rule 12b-2 of the Exchange Act).
Yes No X
------ ------
-1-
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP I-D
GEODYNE ENERGY INCOME PRODUCTION PARTNERSHIP I-D
COMBINED BALANCE SHEETS
(Unaudited)
ASSETS
September 30, December 31,
2002 2001
------------- ------------
CURRENT ASSETS:
Cash and cash equivalents $154,302 $148,852
Accounts receivable:
Oil and gas sales 111,244 61,223
General Partner (Note 2) - 49,103
-------- --------
Total current assets $265,546 $259,178
NET OIL AND GAS PROPERTIES, utilizing
the successful efforts method 386,148 411,383
DEFERRED CHARGE 98,433 98,433
-------- --------
$750,127 $768,994
======== ========
LIABILITIES AND PARTNERS' CAPITAL (DEFICIT)
CURRENT LIABILITIES:
Accounts payable $ 17,808 $ 10,086
Gas imbalance payable 27,101 27,101
-------- --------
Total current liabilities $ 44,909 $ 37,187
ACCRUED LIABILITY $ 37,370 $ 37,370
PARTNERS' CAPITAL (DEFICIT):
General Partner ($ 25,369) ($ 32,551)
Limited Partners, issued and
outstanding, 7,195 units 693,217 726,988
-------- --------
Total Partners' capital $667,848 $694,437
-------- --------
$750,127 $768,994
======== ========
The accompanying condensed notes are an integral part of these
combined financial statements.
-2-
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP I-D
GEODYNE ENERGY INCOME PRODUCTION PARTNERSHIP I-D
COMBINED STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2002 AND 2001
(Unaudited)
2002 2001
--------- ---------
REVENUES:
Oil and gas sales $177,343 $217,296
Interest income 327 1,701
-------- --------
$177,670 $218,997
COSTS AND EXPENSES:
Lease operating $ 26,940 $ 31,636
Production tax 10,537 13,807
Depreciation, depletion, and
amortization of oil and gas
properties 10,735 14,957
General and administrative
(Note 2) 22,872 22,037
-------- --------
$ 71,084 $ 82,437
-------- --------
NET INCOME $106,586 $136,560
======== ========
GENERAL PARTNER - NET INCOME $ 17,441 $ 22,323
======== ========
LIMITED PARTNERS - NET INCOME $ 89,145 $114,237
======== ========
NET INCOME per unit $ 12.39 $ 15.88
======== ========
UNITS OUTSTANDING 7,195 7,195
======== ========
The accompanying condensed notes are an integral part of these
combined financial statements.
-3-
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP I-D
GEODYNE ENERGY INCOME PRODUCTION PARTNERSHIP I-D
COMBINED STATEMENTS OF OPERATIONS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2002 AND 2001
(Unaudited)
2002 2001
--------- ---------
REVENUES:
Oil and gas sales $531,814 $872,478
Interest income 1,058 6,487
Gain on sale of oil and gas
properties - 2,933
-------- --------
$532,872 $881,898
COSTS AND EXPENSES:
Lease operating $102,716 $119,199
Production tax 31,693 60,980
Depreciation, depletion, and
amortization of oil and gas
properties 36,967 36,200
General and administrative
(Note 2) 82,384 80,742
-------- --------
$253,760 $297,121
-------- --------
NET INCOME $279,112 $584,777
======== ========
GENERAL PARTNER - NET INCOME $ 46,883 $ 91,401
======== ========
LIMITED PARTNERS - NET INCOME $232,229 $493,376
======== ========
NET INCOME per unit $ 32.28 $ 68.57
======== ========
UNITS OUTSTANDING 7,195 7,195
======== ========
The accompanying condensed notes are an integral part of these
combined financial statements.
-4-
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP I-D
GEODYNE ENERGY INCOME PRODUCTION PARTNERSHIP I-D
COMBINED STATEMENTS OF CASH FLOWS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2002 AND 2001
(Unaudited)
2002 2001
--------- ---------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $279,112 $584,777
Adjustments to reconcile net
income to net cash provided
by operating activities:
Depreciation, depletion, and
amortization of oil and gas
properties 36,967 36,200
Gain on sale of oil and gas
properties - ( 2,933)
(Increase) decrease in accounts
receivable - oil and gas sales ( 50,021) 131,815
Increase in accounts payable 7,722 827
Decrease in gas imbalance payable - ( 4,229)
Decrease in accrued liability - ( 1,857)
-------- --------
Net cash provided by operating
activities $273,780 $744,600
-------- --------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures ($ 13,005) ($ 48,528)
Proceeds from sale of oil and
gas properties 50,376 3,026
-------- --------
Net cash provided (used) by investing
activities $ 37,371 ($ 45,502)
-------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Cash distributions ($305,701) ($714,272)
-------- --------
Net cash used by financing activities ($305,701) ($714,272)
-------- --------
NET INCREASE (DECREASE) IN CASH AND
CASH EQUIVALENTS $ 5,450 ($ 15,174)
CASH AND CASH EQUIVALENTS AT
BEGINNING OF PERIOD 148,852 238,748
-------- --------
CASH AND CASH EQUIVALENTS AT
END OF PERIOD $154,302 $223,574
======== ========
The accompanying condensed notes are an integral part of these
combined financial statements.
-5-
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP I-E
GEODYNE ENERGY INCOME PRODUCTION PARTNERSHIP I-E
COMBINED BALANCE SHEETS
(Unaudited)
ASSETS
September 30, December 31,
2002 2001
------------ ------------
CURRENT ASSETS:
Cash and cash equivalents $ 870,163 $ 780,235
Accounts receivable:
Oil and gas sales 709,571 465,409
General Partner (Note 2) - 157,811
---------- ----------
Total current assets $1,579,734 $1,403,455
NET OIL AND GAS PROPERTIES, utilizing
the successful efforts method 2,164,487 2,290,340
DEFERRED CHARGE 542,109 542,109
---------- ----------
$4,286,330 $4,235,904
========== ==========
LIABILITIES AND PARTNERS' CAPITAL (DEFICIT)
CURRENT LIABILITIES:
Accounts payable $ 132,824 $ 99,801
Accrued liability - other (Note 1) 88,892 245,985
Gas imbalance payable 99,465 99,465
---------- ----------
Total current liabilities $ 321,181 $ 445,251
ACCRUED LIABILITY $ 219,317 $ 219,317
PARTNERS' CAPITAL (DEFICIT):
General Partner ($ 106,237) ($ 183,708)
Limited Partners, issued and
outstanding, 41,839 units 3,852,069 3,755,044
---------- ----------
Total Partners' capital $3,745,832 $3,571,336
---------- ----------
$4,286,330 $4,235,904
========== ==========
The accompanying condensed notes are an integral part of these
combined financial statements.
-6-
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP I-E
GEODYNE ENERGY INCOME PRODUCTION PARTNERSHIP I-E
COMBINED STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2002 AND 2001
(Unaudited)
2002 2001
---------- ----------
REVENUES:
Oil and gas sales $1,123,308 $1,349,455
Interest income 2,056 9,934
---------- ----------
$1,125,364 $1,359,389
COSTS AND EXPENSES:
Lease operating $ 227,389 $ 253,910
Production tax 69,164 84,503
Depreciation, depletion, and
amortization of oil and gas
properties 46,597 134,962
General and administrative
(Note 2) 124,203 123,372
---------- ----------
$ 467,353 $ 596,747
---------- ----------
NET INCOME $ 658,011 $ 762,642
========== ==========
GENERAL PARTNER - NET INCOME $ 104,917 $ 131,801
========== ==========
LIMITED PARTNERS - NET INCOME $ 553,094 $ 630,841
========== ==========
NET INCOME per unit $ 13.22 $ 15.08
========== ==========
UNITS OUTSTANDING 41,839 41,839
========== ==========
The accompanying condensed notes are an integral part of these
combined financial statements.
-7-
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP I-E
GEODYNE ENERGY INCOME PRODUCTION PARTNERSHIP I-E
COMBINED STATEMENTS OF OPERATIONS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2002 AND 2001
(Unaudited)
2002 2001
---------- ----------
REVENUES:
Oil and gas sales $3,192,292 $5,257,927
Interest income 6,118 36,675
Gain on sale of oil and gas
properties - 9,546
---------- ----------
$3,198,410 $5,304,148
COSTS AND EXPENSES:
Lease operating $ 768,346 $ 754,056
Production tax 181,108 346,753
Depreciation, depletion, and
amortization of oil and gas
properties 238,448 344,974
General and administrative
(Note 2) 388,755 382,817
---------- ----------
$1,576,657 $1,828,600
---------- ----------
NET INCOME $1,621,753 $3,475,548
========== ==========
GENERAL PARTNER - NET INCOME $ 275,728 $ 562,811
========== ==========
LIMITED PARTNERS - NET INCOME $1,346,025 $2,912,737
========== ==========
NET INCOME per unit $ 32.17 $ 69.62
========== ==========
UNITS OUTSTANDING 41,839 41,839
========== ==========
The accompanying condensed notes are an integral part of these
combined financial statements.
-8-
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP I-E
GEODYNE ENERGY INCOME PRODUCTION PARTNERSHIP I-E
COMBINED STATEMENTS OF CASH FLOWS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2002 AND 2001
(Unaudited)
2002 2001
----------- ----------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $1,621,753 $3,475,548
Adjustments to reconcile net
income to net cash provided
by operating activities:
Depreciation, depletion, and
amortization of oil and gas
properties 238,448 344,974
Gain on sale of oil and gas
properties - ( 9,546)
(Increase) decrease in accounts
receivable - oil and gas sales ( 244,162) 583,224
Increase in accounts payable 33,023 3,087
Decrease in accrued liability -
other (Note 1) ( 157,093) -
Decrease in gas imbalance payable - ( 42,632)
Decrease in accrued liability - ( 9,367)
---------- ----------
Net cash provided by operating
activities $1,491,969 $4,345,288
---------- ----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures ($ 115,155) ($ 286,642)
Proceeds from the sale of oil and gas
properties 160,371 16,723
---------- ----------
Net cash provided (used) by investing
activities $ 45,216 ($ 269,919)
---------- ----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Cash distributions ($1,447,257) ($4,214,462)
---------- ----------
Net cash used by financing activities ($1,447,257) ($4,214,462)
---------- ----------
NET INCREASE (DECREASE) IN CASH AND
CASH EQUIVALENTS $ 89,928 ($ 139,093)
CASH AND CASH EQUIVALENTS AT
BEGINNING OF PERIOD 780,235 1,309,542
---------- ----------
CASH AND CASH EQUIVALENTS AT
END OF PERIOD $ 870,163 $1,170,449
========== ==========
The accompanying condensed notes are an integral part of these
combined financial statements.
-9-
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP I-F
GEODYNE ENERGY INCOME PRODUCTION PARTNERSHIP I-F
COMBINED BALANCE SHEETS
(Unaudited)
ASSETS
September 30, December 31,
2002 2001
------------ ------------
CURRENT ASSETS:
Cash and cash equivalents $ 277,687 $ 114,388
Accounts receivable:
Oil and gas sales 220,453 138,533
General Partner (Note 2) - 54,282
---------- ----------
Total current assets $ 498,140 $ 307,203
NET OIL AND GAS PROPERTIES, utilizing
the successful efforts method 680,511 687,356
DEFERRED CHARGE 396,557 396,557
---------- ----------
$1,575,208 $1,391,116
========== ==========
LIABILITIES AND PARTNERS' CAPITAL (DEFICIT)
CURRENT LIABILITIES:
Accounts payable $ 62,942 $ 48,556
Accrued liability - other (Note 1) 62,225 172,190
Gas imbalance payable 32,160 32,160
---------- ----------
Total current liabilities $ 157,327 $ 252,906
ACCRUED LIABILITY $ 171,440 $ 171,440
PARTNERS' CAPITAL (DEFICIT):
General Partner ($ 16,493) ($ 49,082)
Limited Partners, issued and
outstanding, 14,321 units 1,262,934 1,015,852
---------- ----------
Total Partners' capital $1,246,441 $ 966,770
---------- ----------
$1,575,208 $1,391,116
========== ==========
The accompanying condensed notes are an integral part of these
combined financial statements.
-10-
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP I-F
GEODYNE ENERGY INCOME PRODUCTION PARTNERSHIP I-F
COMBINED STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2002 AND 2001
(Unaudited)
2002 2001
--------- ----------
REVENUES:
Oil and gas sales $357,548 $365,798
Interest income 608 2,092
-------- --------
$358,156 $367,890
COSTS AND EXPENSES:
Lease operating $ 99,503 $110,972
Production tax 20,415 20,586
Depreciation, depletion, and
amortization of oil and gas
properties 3,809 39,730
General and administrative
(Note 2) 43,717 42,883
-------- --------
$167,444 $214,171
-------- --------
NET INCOME $190,712 $153,719
======== ========
GENERAL PARTNER - NET INCOME $ 29,049 $ 28,307
======== ========
LIMITED PARTNERS - NET INCOME $161,663 $125,412
======== ========
NET INCOME per unit $ 11.29 $ 8.75
======== ========
UNITS OUTSTANDING 14,321 14,321
======== ========
The accompanying condensed notes are an integral part of these
combined financial statements.
-11-
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP I-F
GEODYNE ENERGY INCOME PRODUCTION PARTNERSHIP I-F
COMBINED STATEMENTS OF OPERATIONS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2002 AND 2001
(Unaudited)
2002 2001
--------- -----------
REVENUES:
Oil and gas sales $976,513 $1,351,289
Interest income 1,476 10,272
Gain on sale of oil and gas
properties - 38,675
-------- ----------
$977,989 $1,400,236
COSTS AND EXPENSES:
Lease operating $291,173 $ 327,916
Production tax 46,998 82,244
Depreciation, depletion, and
amortization of oil and gas
properties 51,905 101,770
General and administrative
(Note 2) 145,410 142,860
-------- ----------
$535,486 $ 654,790
-------- ----------
NET INCOME $442,503 $ 745,446
======== ==========
GENERAL PARTNER - NET INCOME $ 73,421 $ 119,124
======== ==========
LIMITED PARTNERS - NET INCOME $369,082 $ 626,322
======== ==========
NET INCOME per unit $ 25.77 $ 43.73
======== ==========
UNITS OUTSTANDING 14,321 14,321
======== ==========
The accompanying condensed notes are an integral part of these
combined financial statements.
-12-
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP I-F
GEODYNE ENERGY INCOME PRODUCTION PARTNERSHIP I-F
COMBINED STATEMENTS OF CASH FLOWS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2002 AND 2001
(Unaudited)
2002 2001
--------- ----------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $442,503 $ 745,446
Adjustments to reconcile net
income to net cash provided
by operating activities:
Depreciation, depletion, and
amortization of oil and gas
properties 51,905 101,770
Gain on sale of oil and gas
properties - ( 38,675)
(Increase) decrease in accounts
receivable - oil and gas sales ( 81,920) 165,021
Increase in accounts payable 14,386 1,188
Decrease in accrued liability -
other (Note 1) ( 109,965)
-Decrease in gas imbalance payable - ( 24,092)
-------- ----------
Net cash provided by operating
activities $316,909 $ 950,658
-------- ----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures ($ 46,761) ($ 20,825)
Proceeds from the sale of oil and
gas properties 55,983 40,748
-------- ----------
Net cash provided by investing
activities $ 9,222 $ 19,923
-------- ----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Cash distributions ($162,832) ($1,157,010)
-------- ----------
Net cash used by financing activities ($162,832) ($1,157,010)
-------- ----------
NET INCREASE (DECREASE) IN CASH AND
CASH EQUIVALENTS $163,299 ($ 186,429)
CASH AND CASH EQUIVALENTS AT
BEGINNING OF PERIOD 114,388 437,623
-------- ----------
CASH AND CASH EQUIVALENTS AT
END OF PERIOD $277,687 $ 251,194
======== ==========
The accompanying condensed notes are an integral part of these
combined financial statements.
-13-
GEODYNE ENERGY INCOME PROGRAM I LIMITED PARTNERSHIPS
CONDENSED NOTES TO THE COMBINED FINANCIAL STATEMENTS
SEPTEMBER 30, 2002
(Unaudited)
1. ACCOUNTING POLICIES
-------------------
The combined balance sheets as of September 30, 2002, combined statements
of operations for the three and nine months ended September 30, 2002 and
2001, and combined statements of cash flows for the nine months ended
September 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 Energy
Income Production Partnership in which Geodyne Resources, Inc. serves as
the managing partner. Unless the context indicates otherwise, all
references to a "Partnership" or the "Partnerships" are references to the
limited partnership and its related production partnership, collectively,
and all references to the "General Partner" are references to the general
partner of the limited partnerships and the managing partner of the
production partnerships, collectively. In the opinion of management the
financial statements referred to above include all necessary adjustments,
consisting of normal recurring adjustments, to present fairly the combined
financial position at September 30, 2002, the combined results of
operations for the three and nine months ended September 30, 2002 and
2001, and the combined cash flows for the nine months ended September 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 September 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
$1,000 initial capital contribution.
-14-
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 September 30, 2002 and December 31, 2001
for the I-E and I-F Partnerships 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 September 30, 2002 was due to a partial settlement of
this judgment, which settlement was paid in June 2002.
-15-
2. TRANSACTIONS WITH RELATED PARTIES
---------------------------------
The Partnerships' partnership agreements provide for reimbursement to the
General Partner for all direct general and administrative expenses and for
the general and administrative overhead applicable to the Partnerships
based on an allocation of actual costs incurred. During the three months
ended September 30, 2002, the following payments were made to the General
Partner or its affiliates by the Partnerships:
Direct General Administrative
Partnership and Administrative Overhead
----------- ------------------- ---------------
I-D $2,886 $ 19,986
I-E 7,983 116,220
I-F 3,937 39,780
During the nine months ended September 30, 2002, the following payments
were made to the General Partner or its affiliates by the Partnerships:
Direct General Administrative
Partnership and Administrative Overhead
----------- ------------------- ---------------
I-D $22,426 $ 59,958
I-E 40,095 348,660
I-F 26,070 119,340
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
I-D, I-E, and I-F Partnerships 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.
-16-
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.
-17-
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
----------- ------------------ ---------------
I-D March 4, 1986 $ 7,194,700
I-E September 10, 1986 41,839,400
I-F December 16, 1986 14,320,900
In general, the amount of funds available for acquisition of producing
properties was equal to the capital contributions of the Limited Partners,
less 15% for sales commissions and organization and management fees. All
of the Partnerships have fully invested their capital contributions.
Net proceeds from the operations less necessary operating capital are
distributed to the Limited Partners on a quarterly basis. Revenues and net
proceeds of a Partnership are largely dependent upon the volumes of oil
and gas sold and the prices received for such oil and gas. While the
General Partner cannot predict future pricing trends, it believes the
working capital available as of September 30, 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
cash distribution. During the nine months ended September 30, 2002,
capital expenditures for the I-F Partnership totaled $46,761. These
expenditures were primarily due to a successful recompletion in the
Jo-Mill Unit located in Borden County, Texas and drilling activities in a
large unitized property, the Willamar Community E Unit located in Willacy
County, Texas. The I-F Partnership owns working interests of approximately
0.3% and 3.5%, respectively, in these wells. In addition, during the nine
months ended September 30, 2001, capital expenditures for the I-D and I-E
Partnerships totaled $48,528 and $286,642, respectively. These
expenditures were primarily due to the successful recompletion of the
Haley 08-1 well located in Winkler County, Texas, in which the I-D and I-E
Partnerships own working interests of approximately 1.2% and 7.3%,
respectively.
-18-
The I-D, I-E, and I-F Partnerships' Statements of Cash Flows for the nine
months ended September 30, 2002 include proceeds from the sale of certain
oil and gas properties during December 2001. These proceeds were included
in the Partnerships' cash distributions paid in February 2002.
Pursuant to the terms of the Partnerships' partnership agreements (the
"Partnership Agreements"), the Partnerships would have terminated on
December 31, 1999. However, the Partnership Agreements provide that the
General Partner may extend the term of each Partnership for up to five
periods of two years each. The General Partner has extended the terms of
the Partnerships for their second two year extension period to December
31, 2003.
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.
-19-
RESULTS OF OPERATIONS
- ---------------------
GENERAL DISCUSSION
The following general discussion should be read in conjunction with the
analysis of results of operations provided below.
The primary source of liquidity and Partnership cash distributions comes
from the net revenues generated from the sale of oil and gas produced from
the Partnerships' oil and gas properties. The level of net revenues is
highly dependent upon the total volumes of oil and natural gas sold. Oil
and gas reserves are depleting assets and will experience production
declines over time, thereby likely resulting in reduced net revenues.
The level of net revenues is also highly dependent upon the prices
received for oil and gas sales, which prices have historically been very
volatile and may continue to be so. Additionally, lower oil and natural
gas prices may reduce the amount of oil and gas that is economic to
produce and reduce the Partnerships' revenues and cash flow. Various
factors beyond the Partnerships' control will affect prices for oil and
natural gas, such as:
* The worldwide and domestic supplies of oil and natural gas;
* The ability of the members of the Organization of Petroleum
Exporting Countries ("OPEC") to agree to and maintain oil prices
and production quotas;
* Political instability or armed conflict in oil-producing regions
or around major shipping areas;
* The level of consumer demand and overall economic activity;
* The competitiveness of alternative fuels;
* Weather conditions;
* The availability of pipelines for transportation; and
* Domestic and foreign government regulations and taxes.
Recently, while economic factors have been relatively unfavorable for oil
and natural gas demand, oil prices have benefited from the political
uncertainty associated with the increase in terrorist activities in parts
of the world. In the last few years, natural gas prices have varied
significantly, from very high prices in late 2000 and early 2001, to low
prices in late 2001 and early 2002, to rising prices in the later part of
2002. The high natural gas prices were associated with cold winter weather
and decreased supply from reduced capital investment for new drilling,
while the low prices were associated with warm winter weather and reduced
economic activity. The more
-20-
recent increase in prices is the result of increased demand from weather
patterns, the pricing effect of relatively high oil prices and increased
concern about the ability of the industry to meet any longer-term demand
increases based upon current drilling activity. It is not possible to
predict the future direction of oil or natural gas prices or whether the
above discussed trends will remain.
Operating costs, including General and Administrative Expenses, may not
decline over time or may experience only a gradual decline, thus adversely
affecting net revenues as either production or oil and natural gas prices
decline. In any particular period, net revenues may also be affected by
either the receipt of proceeds from property sales or the incursion of
additional costs as a result of well workovers, recompletions, new well
drilling, and other events.
PROVED RESERVES AND NET PRESENT VALUE
- -------------------------------------
The process of estimating oil and gas reserves is complex, requiring
significant subjective decisions in the evaluation of available
geological, engineering, and economic data for each reservoir. The data
for a given reservoir may change substantially over time as a result of,
among other things, additional development activity, production history,
and viability of production under varying economic conditions;
consequently, it is reasonably possible that material revisions to
existing reserve estimates may occur in the future. Although every
reasonable effort has been made to ensure that these reserve estimates
represent the most accurate assessment possible, the significance of the
subjective decisions required and variances in available data for various
reservoirs make these estimates generally less precise than other
estimates presented in connection with financial statement disclosures.
-21-
The following tables summarize changes in net quantities of the
Partnerships' proved reserves, all of which are located in the United
States, for the periods indicated. The proved reserves were estimated by
petroleum engineers employed by affiliates of the Partnerships, and are
annually reviewed by an independent engineering firm. "Proved reserves"
refers to those estimated quantities of crude oil, gas, and gas liquids
which geological and engineering data demonstrate with reasonable
certainty to be recoverable in future years from known oil and gas
reservoirs under existing economic and operating conditions. The following
information includes certain gas balancing adjustments which cause the gas
volume to differ from the reserve reports prepared by the General Partner.
I-D Partnership
---------------
Crude Natural
Oil Gas
(Barrels) (Mcf)
--------- -----------
Proved reserves, Dec. 31, 2001 51,137 1,303,312
Production ( 2,819) ( 169,104)
Extensions and discoveries 931 -
Revisions of previous
estimates 1,252 41,674
------- ---------
Proved reserves, Sept. 30, 2002 50,501 1,175,882
======= =========
I-E Partnership
---------------
Crude Natural
Oil Gas
(Barrels) (Mcf)
--------- -----------
Proved reserves, Dec. 31, 2001 333,791 6,588,491
Production ( 33,796) ( 903,208)
Extensions and discoveries 15,557 9,858
Revisions of previous
estimates 51,543 273,883
------- ---------
Proved reserves, Sept. 30, 2002 367,095 5,969,024
======= =========
-22-
I-F Partnership
---------------
Crude Natural
Oil Gas
(Barrels) (Mcf)
--------- -----------
Proved reserves, Dec. 31, 2001 161,037 2,448,371
Production ( 16,440) ( 225,709)
Extensions and discoveries 5,911 3,451
Revisions of previous
estimates 24,471 104,508
------- ---------
Proved reserves, Sept. 30, 2002 174,979 2,330,621
======= =========
In addition to the volume changes, the net present value of the
Partnerships' reserves may change dramatically as oil and gas prices
change or as volumes change for the reasons described above. Net present
value represents estimated future gross cash flow from the production and
sale of proved reserves, net of estimated oil and gas production costs
(including production taxes, ad valorem taxes, and operating expenses) and
estimated future development costs, discounted at 10% per annum.
The following table indicates the estimated net present value of the
Partnerships' proved reserves as of December 31, 2001 and September 30,
2002. Net present value attributable to the Partnerships' proved reserves
was calculated on the basis of current costs and prices as of the date of
estimation. Such prices were $16.75 per barrel and $2.65 per Mcf as of
December 31, 2001 and $27.25 per barrel and $3.76 per Mcf as of September
30, 2002. Such prices were not escalated except in certain circumstances
where escalations were fixed and readily determinable in accordance with
applicable contract provisions. The prices used in calculating the net
present value attributable to the Partnerships' proved reserves do not
necessarily reflect market prices for oil and gas production subsequent to
the date the net present value was estimated. There can be no assurance
that the prices used in calculating the net present value of the
Partnerships' proved reserves will actually be realized for such
production.
Net Present Value of Reserves
---------------------------------
Partnership 12/31/01 9/30/02
----------- ---------- -----------
I-D $1,786,821 $ 2,353,665
I-E $9,205,734 $12,732,060
I-F $3,230,203 $ 4,840,584
-23-
I-D PARTNERSHIP
THREE MONTHS ENDED SEPTEMBER 30, 2002 COMPARED TO THE THREE MONTHS ENDED
SEPTEMBER 30, 2001.
Three Months Ended September 30,
--------------------------------
2002 2001
-------- --------
Oil and gas sales $177,343 $217,296
Oil and gas production expenses $ 37,477 $ 45,443
Barrels produced 904 754
Mcf produced 52,635 76,327
Average price/Bbl $ 27.60 $ 25.30
Average price/Mcf $ 2.90 $ 2.60
As shown in the table above, total oil and gas sales decreased $39,953
(18.4%) for the three months ended September 30, 2002 as compared to the
three months ended September 30, 2001. Of this decrease, approximately
$62,000 was related to a decrease in volumes of gas sold, which decrease
was partially offset by an increase of approximately $16,000 related to an
increase in the average price of gas sold. Volumes of oil sold increased
150 barrels, while volumes of gas sold decreased 23,692 Mcf for the three
months ended September 30, 2002 as compared to the three months ended
September 30, 2001. The decrease in volumes of gas sold was primarily due
to (i) a positive prior period gas balancing adjustment made by the
purchaser on one significant well during the three months ended September
30, 2001, (ii) a positive prior period gas balancing adjustment made by
the operator on another significant well during the three months ended
September 30, 2001, and (iii) normal declines in production. Average oil
and gas prices increased to $27.60 per barrel and $2.90 per Mcf,
respectively, for the three months ended September 30, 2002 from $25.30
per barrel and $2.60 per Mcf, respectively, for the three months ended
September 30, 2001.
Oil and gas production expenses (including lease operating expenses and
production taxes) decreased $7,966 (17.5%) for the three months ended
September 30, 2002 as compared to the three months ended September 30,
2001. This decrease was primarily due to (i) workover expenses incurred on
one significant well during the three months ended September 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 21.1% for the three months ended September 30, 2002 from
20.9% for the three months ended September 30, 2001.
-24-
Depreciation, depletion, and amortization of oil and gas properties
decreased $4,222 (28.2%) for the three months ended September 30, 2002 as
compared to the three months ended September 30, 2001. This decrease was
primarily due to the decrease in volumes of gas sold. As a percentage of
oil and gas sales, this expense decreased to 6.1% for the three months
ended September 30, 2002 from 6.9% for the three months ended September
30, 2001. This percentage decrease was primarily due to the increases in
the average prices of oil and gas sold.
General and administrative expenses increased $835 (3.8%) for the three
months ended September 30, 2002 as compared to the three months ended
September 30, 2001. As a percentage of oil and gas sales, these expenses
increased to 12.9% for the three months ended September 30, 2002 from
10.1% for the three months ended September 30, 2001. This percentage
increase was primarily due to the decrease in oil and gas sales.
NINE MONTHS ENDED SEPTEMBER 30, 2002 COMPARED TO THE NINE MONTHS ENDED
SEPTEMBER 30, 2001.
Nine Months Ended September 30,
-------------------------------
2002 2001
-------- --------
Oil and gas sales $531,814 $872,478
Oil and gas production expenses $134,409 $180,179
Barrels produced 2,819 2,561
Mcf produced 169,104 180,313
Average price/Bbl $ 24.18 $ 27.20
Average price/Mcf $ 2.74 $ 4.45
As shown in the table above, total oil and gas sales decreased $340,664
(39.0%) for the nine months ended September 30, 2002 as compared to the
nine months ended September 30, 2001. Of this decrease, approximately (i)
$289,000 was related to a decrease in the average price of gas sold and
(ii) $50,000 was related to a decrease in volumes of gas sold. Volumes of
oil sold increased 258 barrels, while volumes of gas sold decreased 11,209
Mcf for the nine months ended September 30, 2002 as compared to the nine
months ended September 30, 2001. Average oil and gas prices decreased to
$24.18 per barrel and $2.74 per Mcf, respectively, for the nine months
ended September 30, 2002 from $27.20 per barrel and $4.45 per Mcf,
respectively, for the nine months ended September 30, 2001.
-25-
Oil and gas production expenses (including lease operating expenses and
production taxes) decreased $45,770 (25.4%) for the nine months ended
September 30, 2002 as compared to the nine months ended September 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) a
decrease in workover expenses incurred on one significant well during the
nine months ended September 30, 2002 as compared to the nine months ended
September 30, 2001. As a percentage of oil and gas sales, this expense
increased to 25.3% for the nine months ended September 30, 2002 from 20.7%
for the nine months ended September 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 $767 (2.1%) for the nine months ended September 30, 2002 as
compared to the nine months ended September 30, 2001. As a percentage of
oil and gas sales, this expense increased to 7.0% for the nine months
ended September 30, 2002 from 4.1% for the nine months ended September 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 $1,642 (2.0%) for the nine
months ended September 30, 2002 as compared to the nine months ended
September 30, 2001. As a percentage of oil and gas sales, these expenses
increased to 15.5% for the nine months ended September 30, 2002 from 9.3%
for the nine months ended September 30, 2001. This percentage increase was
primarily due to the decrease in oil and gas sales.
The Limited Partners have received cash distributions through September
30, 2002 totaling $16,180,175 or 224.89% of Limited Partners' capital
contributions.
-26-
I-E PARTNERSHIP
THREE MONTHS ENDED SEPTEMBER 30, 2002 COMPARED TO THE THREE MONTHS ENDED
SEPTEMBER 30, 2001.
Three Months Ended September 30,
--------------------------------
2002 2001
----------- ----------
Oil and gas sales $1,123,308 $1,349,455
Oil and gas production expenses $ 296,553 $ 338,413
Barrels produced 10,304 10,889
Mcf produced 286,851 397,393
Average price/Bbl $ 26.67 $ 23.43
Average price/Mcf $ 2.96 $ 2.75
As shown in the table above, total oil and gas sales decreased $226,147
(16.8%) for the three months ended September 30, 2002 as compared to the
three months ended September 30, 2001. Of this decrease, approximately
$304,000 was related to a decrease in volumes of gas sold. This decrease
was partially offset by increases of approximately $33,000 and $59,000,
respectively, related to increases in the average prices of oil and gas
sold. Volumes of oil and gas sold decreased 585 barrels and 110,542 Mcf,
respectively, for the three months ended September 30, 2002 as compared to
the three months ended September 30, 2001. The decrease in volumes of gas
sold was primarily due to (i) a positive prior period gas balancing
adjustment made by the operator on one significant well during the three
months ended September 30, 2001, (ii) a positive prior period gas
balancing adjustment made by the purchaser on another significant well
during the three months ended September 30, 2001, and (iii) normal
declines in production. Average oil and gas prices increased to $26.67 per
barrel and $2.96 per Mcf, respectively, for the three months ended
September 30, 2002 from $23.43 per barrel and $2.75 per Mcf, respectively,
for the three months ended September 30, 2001.
Oil and gas production expenses (including lease operating expenses and
production taxes) decreased $41,860 (12.4%) for the three months ended
September 30, 2002 as compared to the three months ended September 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 workover expenses incurred on two wells within the same unit during the
three months ended September 30, 2002 as compared to the three months
ended September 30, 2001, and (iii) workover expenses incurred on another
significant well during the three months ended September 30, 2001. As a
percentage of oil and gas sales, these expenses increased to 26.4% for the
three months ended September 30, 2002 from 25.1% for the three months
ended September 30, 2001.
-27-
Depreciation, depletion, and amortization of oil and gas properties
decreased $88,365 (65.5%) for the three months ended September 30, 2002 as
compared to the three months ended September 30, 2001. This decrease was
primarily due to (i) upward revisions in the estimates of remaining oil
and gas reserves at September 30, 2002, (ii) the decreases in volumes of
oil and gas sold, and (iii) a decrease in depletable oil and gas
properties primarily due to two significant wells being substantially
depleted in 2001 due to the lack of remaining economically recoverable
reserves. As a percentage of oil and gas sales, this expense decreased to
4.1% for the three months ended September 30, 2002 from 10.0% for the
three months ended September 30, 2001. This percentage decrease was
primarily due to the dollar decrease in depreciation, depletion, and
amortization.
General and administrative expenses remained relatively constant for the
three months ended September 30, 2002 and 2001. As a percentage of oil and
gas sales, these expenses increased to 11.1% for the three months ended
September 30, 2002 from 9.1% for the three months ended September 30,
2001. This percentage increase was primarily due to the decrease in oil
and gas sales.
NINE MONTHS ENDED SEPTEMBER 30, 2002 COMPARED TO THE NINE MONTHS ENDED
SEPTEMBER 30, 2001.
Nine Months Ended September 30,
-------------------------------
2002 2001
---------- ----------
Oil and gas sales $3,192,292 $5,257,927
Oil and gas production expenses $ 949,454 $1,100,809
Barrels produced 33,796 32,848
Mcf produced 903,208 985,678
Average price/Bbl $ 22.03 $ 25.25
Average price/Mcf $ 2.71 $ 4.49
As shown in the table above, total oil and gas sales decreased $2,065,635
(39.3%) for the nine months ended September 30, 2002 as compared to the
nine months ended September 30, 2001. Of this decrease, approximately (i)
$1,610,000 was related to a decrease in the average price of gas sold and
(ii) $371,000 was related to a decrease in volumes of gas sold. Volumes of
oil sold increased 948 barrels, while volumes of gas sold decreased 82,470
Mcf for the nine months ended September 30, 2002 as compared to the nine
months ended September 30, 2001. Average oil and gas prices decreased to
$22.03 per barrel and $2.71 per Mcf, respectively, for the nine months
ended September 30, 2002 from $25.25 per barrel and $4.49 per Mcf,
respectively, for the nine months ended September 30, 2001.
-28-
Oil and gas production expenses (including lease operating expenses and
production taxes) decreased $151,355 (13.7%) for the nine months ended
September 30, 2002 as compared to the nine months ended September 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) a partial
reversal during the nine months ended September 30, 2002 of approximately
$75,000 (due to a partial post-judgment settlement) of a charge previously
accrued for a judgment. These decreases were partially offset by (i) an
increase in workover expenses incurred on two wells within the same unit
during the nine months ended September 30, 2002 as compared to the nine
months ended September 30, 2001 and (ii) workover expenses incurred on
another significant well during the nine months ended September 30, 2002.
As a percentage of oil and gas sales, these expenses increased to 29.7%
for the nine months ended September 30, 2002 from 20.9% for the nine
months ended September 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 $106,526 (30.9%) for the nine months ended September 30, 2002 as
compared to the nine months ended September 30, 2001. This decrease was
primarily due to (i) upward revisions in the estimates of remaining oil
and gas reserves at September 30, 2002, (ii) the decrease in volumes of
gas sold, and (iii) a decrease in depletable oil and gas properties
primarily due to two significant wells being substantially depleted in
2001 due to the lack of remaining economically recoverable reserves. As a
percentage of oil and gas sales, this expense increased to 7.5% for the
nine months ended September 30, 2002 from 6.6% for the nine months ended
September 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 $5,938 (1.6%) for the nine
months ended September 30, 2002 as compared to the nine months ended
September 30, 2001. As a percentage of oil and gas sales, these expenses
increased to 12.2% for the nine months ended September 30, 2002 from 7.3%
for the nine months ended September 30, 2001. This percentage increase was
primarily due to the decrease in oil and gas sales.
The Limited Partners have received cash distributions through September
30, 2002 totaling $64,569,552 or 154.33% of Limited Partners' capital
contributions.
-29-
I-F PARTNERSHIP
THREE MONTHS ENDED SEPTEMBER 30, 2002 COMPARED TO THE THREE MONTHS ENDED
SEPTEMBER 30, 2001.
Three Months Ended September 30,
--------------------------------
2002 2001
-------- --------
Oil and gas sales $357,548 $365,798
Oil and gas production expenses $119,918 $131,558
Barrels produced 4,920 5,875
Mcf produced 72,848 83,941
Average price/Bbl $ 26.58 $ 24.63
Average price/Mcf $ 3.11 $ 2.63
As shown in the table above, total oil and gas sales decreased $8,250
(2.3%) for the three months ended September 30, 2002 as compared to the
three months ended September 30, 2001. Of this decrease, approximately
$24,000 and $29,000, respectively, were related to decreases in volumes of
oil and gas sold. These decreases were partially offset by increases of
approximately $10,000 and $35,000, respectively, related to increases in
the average prices of oil and gas sold. Volumes of oil and gas sold
decreased 955 barrels and 11,093 Mcf, respectively, for the three months
ended September 30, 2002 as compared to the three months ended September
30, 2001. The decrease in volumes of oil sold was primarily due to normal
declines in production. The decrease in volumes of gas sold was primarily
due to (i) a positive prior period gas balancing adjustment made by the
purchaser on one significant well during the three months ended September
30, 2001, (ii) a positive prior period volume adjustment made by the
purchaser on another significant well during the three months ended
September 30, 2001, and (iii) the I-F Partnership receiving an increased
percentage of sales on another significant well during the three months
ended September 30, 2001 due to gas balancing. Average oil and gas prices
increased to $26.58 per barrel and $3.11 per Mcf, respectively, for the
three months ended September 30, 2002 from $24.63 per barrel and $2.63 per
Mcf, respectively, for the three months ended September 30, 2001.
Oil and gas production expenses (including lease operating expenses and
production taxes) decreased $11,640 (8.8%) for the three months ended
September 30, 2002 as compared to the three months ended September 30,
2001. As a percentage of oil and gas sales, these expenses decreased to
33.5% for the three months ended September 30, 2002 from 36.0% for the
three months ended September 30, 2001.
-30-
Depreciation, depletion, and amortization of oil and gas properties
decreased $35,921 (90.4%) for the three months ended September 30, 2002 as
compared to the three months ended September 30, 2001. This decrease was
primarily due to (i) a decrease in depletable oil and gas properties
primarily due to two significant wells being substantially depleted in
2001 due to the lack of remaining economically recoverable reserves, (ii)
upward revisions in the estimates of remaining oil and gas reserves at
September 30, 2002, and (iii) the decreases in volumes of oil and gas
sold. As a percentage of oil and gas sales, this expense decreased to 1.1%
for the three months ended September 30, 2002 from 10.9% for the three
months ended September 30, 2001. This percentage decrease was primarily
due to the dollar decrease in depreciation, depletion, and amortization.
General and administrative expenses increased $834 (1.9%) for the three
months ended September 30, 2002 as compared to the three months ended
September 30, 2001. As a percentage of oil and gas sales, these expenses
increased to 12.2% for the three months ended September 30, 2002 from
11.7% for the three months ended September 30, 2001.
NINE MONTHS ENDED SEPTEMBER 30, 2002 COMPARED TO THE NINE MONTHS ENDED
SEPTEMBER 30, 2001.
Nine Months Ended September 30,
-------------------------------
2002 2001
-------- ----------
Oil and gas sales $976,513 $1,351,289
Oil and gas production expenses $338,171 $ 410,160
Barrels produced 16,440 15,946
Mcf produced 225,709 209,635
Average price/Bbl $ 21.54 $ 25.19
Average price/Mcf $ 2.76 $ 4.53
As shown in the table above, total oil and gas sales decreased $374,776
(27.7%) for the nine months ended September 30, 2002 as compared to the
nine months ended September 30, 2001. Of this decrease, approximately
$60,000 and $400,000, respectively, were related to decreases in the
average prices of oil and gas sold. These decreases were partially offset
by an increase of approximately $73,000 related to an increase in volumes
of gas sold. Volumes of oil and gas sold increased 494 barrels and 16,074
Mcf, respectively, for the nine months ended September 30, 2002 as
compared to the nine months ended September 30, 2001. Average oil and gas
prices decreased to $21.54 per barrel and $2.76 per Mcf, respectively, for
the nine months ended September 30, 2002 from $25.19 per barrel and $4.53
per Mcf, respectively, for the nine months ended September 30, 2001.
-31-
Oil and gas production expenses (including lease operating expenses and
production taxes) decreased $71,989 (17.6%) for the nine months ended
September 30, 2002 as compared to the nine months ended September 30,
2001. This decrease was primarily due to (i) a partial reversal during the
nine months ended September 30, 2002 of approximately $52,000 (due to a
partial post-judgment settlement) of a charge previously accrued for a
judgment 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 nine months ended September 30, 2002
from 30.4% for the nine months ended September 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 $49,865 (49.0%) for the nine months ended September 30, 2002 as
compared to the nine months ended September 30, 2001. This decrease was
primarily due to (i) a decrease in depletable oil and gas properties
primarily due to two significant wells being substantially depleted in
2001 due to the lack of remaining economically recoverable reserves and
(ii) upward revisions in the estimates of remaining oil and gas reserves
at September 30, 2002. As a percentage of oil and gas sales, this expense
decreased to 5.3% for the nine months ended September 30, 2002 from 7.5%
for the nine months ended September 30, 2001. This percentage decrease was
primarily due to the dollar decrease in depreciation, depletion, and
amortization.
General and administrative expenses increased $2,550 (1.8%) for the nine
months ended September 30, 2002 as compared to the nine months ended
September 30, 2001. As a percentage of oil and gas sales, these expenses
increased to 14.9% for the nine months ended September 30, 2002 from 10.6%
for the nine months ended September 30, 2001. This percentage increase was
primarily due to the decrease in oil and gas sales.
The Limited Partners have received cash distributions through September
30, 2002 totaling $20,577,664 or 143.69% of Limited Partners' capital
contributions.
-32-
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET
RISK.
The Partnerships do not hold any market risk sensitive instruments.
ITEM 4. EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES
Within the 90 days prior to the date of this report, the
Partnerships carried out an evaluation under the supervision and
with the participation of the Partnerships' management, including
their chief executive officer and chief financial officer, of the
effectiveness of the design and operation of the Partnerships'
disclosure controls and procedures pursuant to Rule 13a-14 of the
Securities Exchange Act of 1934. Based upon that evaluation, the
Partnerships' chief executive officer and chief financial officer
concluded that the Partnerships' disclosure controls and procedures
are effective in timely alerting them to material information
relating to the Partnerships required to be included in the
Partnerships' periodic filings with the SEC. There have been no
significant changes in the Partnerships' internal controls or in
other factors which could significantly affect the Partnerships'
internal controls subsequent to the date the Partnerships carried
out this evaluation.
-33-
PART II. OTHER INFORMATION
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 I-D 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 I-E Partnership.
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 I-F Partnership.
(b) Reports on Form 8-K.
None.
-34-
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 I-D
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP I-E
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP I-F
(Registrant)
BY: GEODYNE RESOURCES, INC.
General Partner
Date: November 14, 2002 By: /s/Dennis R. Neill
--------------------------------
(Signature)
Dennis R. Neill
President
Date: November 14, 2002 By: /s/Craig D. Loseke
--------------------------------
(Signature)
Craig D. Loseke
Chief Accounting Officer
-35-
CERTIFICATION
-------------
I, Dennis R. Neill, certify that:
1. I have reviewed this quarterly report on Form 10-Q of Geodyne Energy Income
Limited Partnership I-D;
2. Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this quarterly
report;
3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this quarterly report;
4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:
a) designed such disclosure controls and procedures to ensure that material
information relating to the registrant, including its consolidated subsidiaries,
is made known to us by others within those entities, particularly during the
period in which this quarterly report is being prepared;
b) evaluated the effectiveness of the registrant's disclosure controls and
procedures as of a date within 90 days prior to the filing date of this
quarterly report (the "Evaluation Date"); and
c) presented in this quarterly report our conclusions about the effectiveness of
the disclosure controls and procedures based on our evaluation as of the
Evaluation Date;
5. The registrant's other certifying officers and I have disclosed, based on our
most recent evaluation, to the registrant's auditors and the audit committee of
registrant's board of directors (or persons performing the equivalent function):
a) all significant deficiencies in the design or operation of internal controls
which could adversely affect the registrant's ability to record, process,
summarize and report financial data and have identified for the registrant's
auditors any material weaknesses in internal controls; and
b) any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal controls; and
-36-
6. The registrant's other certifying officers and I have indicated in this
quarterly report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal controls
subsequent to the date of our most recent evaluation, including any corrective
actions with regard to significant deficiencies and material weaknesses.
Dated this 14th day of November, 2002.
//s// Dennis R. Neill
- ----------------------------------
Dennis R. Neill
President (Chief Executive Officer)
-37-
CERTIFICATION
-------------
I, Craig D. Loseke, certify that:
1. I have reviewed this quarterly report on Form 10-Q of Geodyne Energy Income
Limited Partnership I-D;
2. Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this quarterly
report;
3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this quarterly report;
4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:
a) designed such disclosure controls and procedures to ensure that material
information relating to the registrant, including its consolidated subsidiaries,
is made known to us by others within those entities, particularly during the
period in which this quarterly report is being prepared;
b) evaluated the effectiveness of the registrant's disclosure controls and
procedures as of a date within 90 days prior to the filing date of this
quarterly report (the "Evaluation Date"); and
c) presented in this quarterly report our conclusions about the effectiveness of
the disclosure controls and procedures based on our evaluation as of the
Evaluation Date;
5. The registrant's other certifying officers and I have disclosed, based on our
most recent evaluation, to the registrant's auditors and the audit committee of
registrant's board of directors (or persons performing the equivalent function):
a) all significant deficiencies in the design or operation of internal controls
which could adversely affect the registrant's ability to record, process,
summarize and report financial data and have identified for the registrant's
auditors any material weaknesses in internal controls; and
b) any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal controls; and
-38-
6. The registrant's other certifying officers and I have indicated in this
quarterly report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal controls
subsequent to the date of our most recent evaluation, including any corrective
actions with regard to significant deficiencies and material weaknesses.
Dated this 14th day of November, 2002.
//s// Craig D. Loseke
- ----------------------------------
Craig D. Loseke
Chief Financial Officer
-39-
CERTIFICATION
-------------
I, Dennis R. Neill, certify that:
1. I have reviewed this quarterly report on Form 10-Q of Geodyne Energy Income
Limited Partnership I-E;
2. Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this quarterly
report;
3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this quarterly report;
4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:
a) designed such disclosure controls and procedures to ensure that material
information relating to the registrant, including its consolidated subsidiaries,
is made known to us by others within those entities, particularly during the
period in which this quarterly report is being prepared;
b) evaluated the effectiveness of the registrant's disclosure controls and
procedures as of a date within 90 days prior to the filing date of this
quarterly report (the "Evaluation Date"); and
c) presented in this quarterly report our conclusions about the effectiveness of
the disclosure controls and procedures based on our evaluation as of the
Evaluation Date;
5. The registrant's other certifying officers and I have disclosed, based on our
most recent evaluation, to the registrant's auditors and the audit committee of
registrant's board of directors (or persons performing the equivalent function):
a) all significant deficiencies in the design or operation of internal controls
which could adversely affect the registrant's ability to record, process,
summarize and report financial data and have identified for the registrant's
auditors any material weaknesses in internal controls; and
b) any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal controls; and
-40-
6. The registrant's other certifying officers and I have indicated in this
quarterly report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal controls
subsequent to the date of our most recent evaluation, including any corrective
actions with regard to significant deficiencies and material weaknesses.
Dated this 14th day of November, 2002.
//s// Dennis R. Neill
- ----------------------------------
Dennis R. Neill
President (Chief Executive Officer)
-41-
CERTIFICATION
-------------
I, Craig D. Loseke, certify that:
1. I have reviewed this quarterly report on Form 10-Q of Geodyne Energy Income
Limited Partnership I-E;
2. Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this quarterly
report;
3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this quarterly report;
4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:
a) designed such disclosure controls and procedures to ensure that material
information relating to the registrant, including its consolidated subsidiaries,
is made known to us by others within those entities, particularly during the
period in which this quarterly report is being prepared;
b) evaluated the effectiveness of the registrant's disclosure controls and
procedures as of a date within 90 days prior to the filing date of this
quarterly report (the "Evaluation Date"); and
c) presented in this quarterly report our conclusions about the effectiveness of
the disclosure controls and procedures based on our evaluation as of the
Evaluation Date;
5. The registrant's other certifying officers and I have disclosed, based on our
most recent evaluation, to the registrant's auditors and the audit committee of
registrant's board of directors (or persons performing the equivalent function):
a) all significant deficiencies in the design or operation of internal controls
which could adversely affect the registrant's ability to record, process,
summarize and report financial data and have identified for the registrant's
auditors any material weaknesses in internal controls; and
b) any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal controls; and
-42-
6. The registrant's other certifying officers and I have indicated in this
quarterly report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal controls
subsequent to the date of our most recent evaluation, including any corrective
actions with regard to significant deficiencies and material weaknesses.
Dated this 14th day of November, 2002.
//s// Craig D. Loseke
- ----------------------------------
Craig D. Loseke
Chief Financial Officer
-43-
CERTIFICATION
-------------
I, Dennis R. Neill, certify that:
1. I have reviewed this quarterly report on Form 10-Q of Geodyne Energy Income
Limited Partnership I-F;
2. Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this quarterly
report;
3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this quarterly report;
4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:
a) designed such disclosure controls and procedures to ensure that material
information relating to the registrant, including its consolidated subsidiaries,
is made known to us by others within those entities, particularly during the
period in which this quarterly report is being prepared;
b) evaluated the effectiveness of the registrant's disclosure controls and
procedures as of a date within 90 days prior to the filing date of this
quarterly report (the "Evaluation Date"); and
c) presented in this quarterly report our conclusions about the effectiveness of
the disclosure controls and procedures based on our evaluation as of the
Evaluation Date;
5. The registrant's other certifying officers and I have disclosed, based on our
most recent evaluation, to the registrant's auditors and the audit committee of
registrant's board of directors (or persons performing the equivalent function):
a) all significant deficiencies in the design or operation of internal controls
which could adversely affect the registrant's ability to record, process,
summarize and report financial data and have identified for the registrant's
auditors any material weaknesses in internal controls; and
b) any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal controls; and
-44-
6. The registrant's other certifying officers and I have indicated in this
quarterly report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal controls
subsequent to the date of our most recent evaluation, including any corrective
actions with regard to significant deficiencies and material weaknesses.
Dated this 14th day of November, 2002.
//s// Dennis R. Neill
- ----------------------------------
Dennis R. Neill
President (Chief Executive Officer)
-45-
CERTIFICATION
-------------
I, Craig D. Loseke, certify that:
1. I have reviewed this quarterly report on Form 10-Q of Geodyne Energy Income
Limited Partnership I-F;
2. Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this quarterly
report;
3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this quarterly report;
4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:
a) designed such disclosure controls and procedures to ensure that material
information relating to the registrant, including its consolidated subsidiaries,
is made known to us by others within those entities, particularly during the
period in which this quarterly report is being prepared;
b) evaluated the effectiveness of the registrant's disclosure controls and
procedures as of a date within 90 days prior to the filing date of this
quarterly report (the "Evaluation Date"); and
c) presented in this quarterly report our conclusions about the effectiveness of
the disclosure controls and procedures based on our evaluation as of the
Evaluation Date;
5. The registrant's other certifying officers and I have disclosed, based on our
most recent evaluation, to the registrant's auditors and the audit committee of
registrant's board of directors (or persons performing the equivalent function):
a) all significant deficiencies in the design or operation of internal controls
which could adversely affect the registrant's ability to record, process,
summarize and report financial data and have identified for the registrant's
auditors any material weaknesses in internal controls; and
b) any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal controls; and
-46-
6. The registrant's other certifying officers and I have indicated in this
quarterly report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal controls
subsequent to the date of our most recent evaluation, including any corrective
actions with regard to significant deficiencies and material weaknesses.
Dated this 14th day of November, 2002.
//s// Craig D. Loseke
- ----------------------------------
Craig D. Loseke
Chief Financial Officer
-47-
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 I-D.
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 I-E.
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 I-F.
-48-