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, 2003
Commission File Number:
III-A: 0-18302 III-B: 0-18636 III-C: 0-18634
III-D: 0-18936 III-E: 0-19010 III-F: 0-19102
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-A
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-B
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-C
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-D
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-E
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-F
----------------------------------------------------
(Exact name of Registrant as specified in its Articles)
III-A 73-1352993
III-B 73-1358666
III-C 73-1356542
III-D 73-1357374
III-E 73-1367188
Oklahoma III-F 73-1377737
- ---------------------------- -------------------------------
(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 III-A
BALANCE SHEETS
(Unaudited)
ASSETS
September 30, December 31,
2003 2002
------------- ------------
CURRENT ASSETS:
Cash and cash equivalents $ 962,551 $ 718,665
Accounts receivable:
Related party (Note 2) - 888
Oil and gas sales 563,567 617,187
---------- ----------
Total current assets $1,526,118 $1,336,740
NET OIL AND GAS PROPERTIES, utilizing
the successful efforts method 893,220 867,774
DEFERRED CHARGE 229,791 260,836
---------- ----------
$2,649,129 $2,465,350
========== ==========
LIABILITIES AND PARTNERS' CAPITAL (DEFICIT)
CURRENT LIABILITIES:
Accounts payable $ 85,054 $ 86,580
Gas imbalance payable 27,471 27,471
---------- ----------
Total current liabilities $ 112,525 $ 114,051
LONG-TERM LIABILITIES:
Accrued liability $ 24,706 $ 33,171
Asset retirement obligation
(Note 1) 112,951 -
---------- ----------
Total long-term liabilities $ 137,657 $ 33,171
PARTNERS' CAPITAL (DEFICIT):
General Partner ($ 91,935) ($ 87,091)
Limited Partners, issued and
outstanding, 263,976 units 2,490,882 2,405,219
---------- ----------
Total Partners' capital $2,398,947 $2,318,128
---------- ----------
$2,649,129 $2,465,350
========== ==========
The accompanying condensed notes are an integral
part of these financial statements.
-2-
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-A
STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2003 AND 2002
(Unaudited)
2003 2002
--------- ----------
REVENUES:
Oil and gas sales $944,055 $1,051,646
Interest income 1,515 1,888
-------- ----------
$945,570 $1,053,534
COSTS AND EXPENSES:
Lease operating $139,845 $ 145,060
Production tax 77,201 85,662
Depreciation, depletion, and
amortization of oil and gas
properties 35,461 242,320
General and administrative
(Note 2) 79,346 75,745
-------- ----------
$331,853 $ 548,787
-------- ----------
NET INCOME $613,717 $ 504,747
======== ==========
GENERAL PARTNER - NET INCOME $ 64,412 $ 72,095
======== ==========
LIMITED PARTNERS - NET INCOME $549,305 $ 432,652
======== ==========
NET INCOME per unit $ 2.08 $ 1.64
======== ==========
UNITS OUTSTANDING 263,976 263,976
======== ==========
The accompanying condensed notes are an integral
part of these financial statements.
-3-
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-A
STATEMENTS OF OPERATIONS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2003 AND 2002
(Unaudited)
2003 2002
---------- ----------
REVENUES:
Oil and gas sales $3,235,948 $3,039,666
Interest income 4,627 5,542
---------- ----------
$3,240,575 $3,045,208
COSTS AND EXPENSES:
Lease operating $ 355,365 $ 570,623
Production tax 245,143 152,920
Depreciation, depletion, and
amortization of oil and gas
properties 123,776 411,376
General and administrative
(Note 2) 242,950 240,419
---------- ----------
$ 967,234 $1,375,338
---------- ----------
INCOME BEFORE CUMULATIVE EFFECT
OF ACCOUNTING CHANGE $2,273,341 $1,669,870
Cumulative effect of change in
accounting for asset retirement
obligations (Note 1) ( 673) -
---------- ----------
NET INCOME $2,272,668 $1,669,870
========== ==========
GENERAL PARTNER - NET INCOME $ 238,005 $ 203,457
========== ==========
LIMITED PARTNERS - NET INCOME $2,034,663 $1,466,413
========== ==========
NET INCOME per unit $ 7.71 $ 5.56
========== ==========
UNITS OUTSTANDING 263,976 263,976
========== ==========
The accompanying condensed notes are an integral
part of these financial statements.
-4-
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-A
STATEMENTS OF CASH FLOWS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2003 AND 2002
(Unaudited)
2003 2002
---------- ----------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $2,272,668 $1,669,870
Adjustments to reconcile net income
to net cash provided by operating
activities:
Cumulative effect of change in
accounting for asset retirement
obligations (Note 1) 673 -
Depreciation, depletion, and
amortization of oil and gas
properties 123,776 411,376
Decrease in accounts receivable -
related party 10 -
(Increase) decrease in accounts
receivable - oil and gas sales 53,620 ( 80,436)
Decrease in deferred charge 31,045 89,275
Decrease in accounts payable ( 1,526) ( 154,017)
Decrease in accrued liability ( 8,465) -
---------- ----------
Net cash provided by operating
activities $2,471,801 $1,936,068
---------- ----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures ($ 36,944) ($ 119,383)
Proceeds from sale of oil and gas
properties 878 -
---------- ----------
Net cash used by investing activities ($ 36,066) ($ 119,383)
---------- ----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Cash distributions ($2,191,849) ($1,859,409)
---------- ----------
Net cash used by financing activities ($2,191,849) ($1,859,409)
---------- ----------
NET INCREASE (DECREASE) IN CASH AND
CASH EQUIVALENTS $ 243,886 ($ 42,724)
CASH AND CASH EQUIVALENTS AT
BEGINNING OF PERIOD 718,665 874,852
---------- ----------
CASH AND CASH EQUIVALENTS AT
END OF PERIOD $ 962,551 $ 832,128
========== ==========
The accompanying condensed notes are an integral
part of these financial statements.
-5-
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-B
BALANCE SHEETS
(Unaudited)
ASSETS
September 30, December 31,
2003 2002
------------ ------------
CURRENT ASSETS:
Cash and cash equivalents $ 503,074 $ 397,754
Accounts receivable:
Related party (Note 2) - 586
Oil and gas sales 310,112 346,664
---------- ----------
Total current assets $ 813,186 $ 745,004
NET OIL AND GAS PROPERTIES, utilizing
the successful efforts method 483,669 461,645
DEFERRED CHARGE 184,282 184,282
---------- ----------
$1,481,137 $1,390,931
========== ==========
LIABILITIES AND PARTNERS' CAPITAL (DEFICIT)
CURRENT LIABILITIES:
Accounts payable $ 49,313 $ 57,077
Gas imbalance payable 12,396 12,396
---------- ----------
Total current liabilities $ 61,709 $ 69,473
LONG-TERM LIABILITIES:
Accrued liability $ 9,911 $ 12,518
Asset retirement obligation
(Note 1) 78,720 -
---------- ----------
Total long-term liabilities $ 88,631 $ 12,518
PARTNERS' CAPITAL (DEFICIT):
General Partner ($ 51,219) ($ 48,554)
Limited Partners, issued and
outstanding, 138,336 units 1,382,016 1,357,494
---------- ----------
Total Partners' capital $1,330,797 $1,308,940
---------- ----------
$1,481,137 $1,390,931
========== ==========
The accompanying condensed notes are an integral
part of these financial statements.
-6-
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-B
STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2003 AND 2002
(Unaudited)
2003 2002
-------- --------
REVENUES:
Oil and gas sales $510,724 $604,146
Interest income 761 950
-------- --------
$511,485 $605,096
COSTS AND EXPENSES:
Lease operating $ 80,394 $ 99,630
Production tax 42,522 50,431
Depreciation, depletion, and
amortization of oil and gas
properties 21,374 147,244
General and administrative
(Note 2) 42,501 40,973
-------- --------
$186,791 $338,278
-------- --------
NET INCOME $324,694 $266,818
======== ========
GENERAL PARTNER - NET INCOME $ 51,583 $ 60,494
======== ========
LIMITED PARTNERS - NET INCOME $273,111 $206,324
======== ========
NET INCOME per unit $ 1.97 $ 1.50
======== ========
UNITS OUTSTANDING 138,336 138,336
======== ========
The accompanying condensed notes are an integral
part of these financial statements.
-7-
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-B
STATEMENTS OF OPERATIONS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2003 AND 2002
(Unaudited)
2003 2002
------------ ----------
REVENUES:
Oil and gas sales $1,782,665 $1,811,852
Interest income 2,387 2,888
---------- ----------
$1,785,052 $1,814,740
COSTS AND EXPENSES:
Lease operating $ 198,053 $ 390,814
Production tax 138,177 108,314
Depreciation, depletion, and
amortization of oil and gas
properties 78,951 250,421
General and administrative
(Note 2) 137,168 134,989
---------- ----------
$ 552,349 $ 884,538
---------- ----------
INCOME BEFORE CUMULATIVE EFFECT
OF ACCOUNTING CHANGE $1,232,703 $ 930,202
Cumulative effect of change in
accounting for asset retirement
obligations (Note 1) ( 586) -
---------- ----------
NET INCOME $1,232,117 $ 930,202
========== ==========
GENERAL PARTNER - NET INCOME $ 195,595 $ 174,156
========== ==========
LIMITED PARTNERS - NET INCOME $1,036,522 $ 756,046
========== ==========
NET INCOME per unit $ 7.49 $ 5.47
========== ==========
UNITS OUTSTANDING 138,336 138,336
========== ==========
The accompanying condensed notes are an integral
part of these financial statements.
-8-
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-B
STATEMENTS OF CASH FLOWS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2003 AND 2002
(Unaudited)
2003 2002
----------- -----------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $1,232,117 $ 930,202
Adjustments to reconcile net income
to net cash provided by operating
activities:
Cumulative effect of change in
accounting for asset retirement
obligations (Note 1) 586 -
Depreciation, depletion, and
amortization of oil and gas
properties 78,951 250,421
Decrease in accounts receivable -
related party 7 -
(Increase) decrease in accounts
receivable - oil and gas sales 36,552 ( 46,273)
Decrease in deferred charge - 74,926
Decrease in accounts payable ( 7,764) ( 98,295)
Decrease in accrued liability ( 2,607) -
---------- ----------
Net cash provided by operating
activities $1,337,842 $1,110,981
---------- ----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures ($ 22,723) ($ 59,227)
Proceeds from sale of oil and gas
properties 461 -
---------- ----------
Net cash used by investing activities ($ 22,262) ($ 59,227)
---------- ----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Cash distributions ($1,210,260) ($1,088,782)
---------- ----------
Net cash used by financing activities ($1,210,260) ($1,088,782)
---------- ----------
NET INCREASE (DECREASE) IN CASH AND
CASH EQUIVALENTS $ 105,320 ($ 37,028)
CASH AND CASH EQUIVALENTS AT
BEGINNING OF PERIOD 397,754 494,899
---------- ----------
CASH AND CASH EQUIVALENTS AT
END OF PERIOD $ 503,074 $ 457,871
========== ==========
The accompanying condensed notes are an integral
part of these financial statements.
-9-
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-C
BALANCE SHEETS
(Unaudited)
ASSETS
September 30, December 31,
2003 2002
------------- ------------
CURRENT ASSETS:
Cash and cash equivalents $ 882,349 $ 480,424
Accounts receivable:
Oil and gas sales 496,076 518,374
---------- ----------
Total current assets $1,378,425 $ 998,798
NET OIL AND GAS PROPERTIES, utilizing
the successful efforts method 1,744,903 1,694,533
DEFERRED CHARGE 57,867 57,867
---------- ----------
$3,181,195 $2,751,198
========== ==========
LIABILITIES AND PARTNERS' CAPITAL (DEFICIT)
CURRENT LIABILITIES:
Accounts payable $ 82,360 $ 143,943
Gas imbalance payable 43,923 43,923
---------- ----------
Total current liabilities $ 126,283 $ 187,866
LONG-TERM LIABILITIES:
Accrued liability $ 196,167 $ 196,167
Asset retirement obligation
(Note 1) 195,540 -
---------- ----------
Total long-term liabilities $ 391,707 $ 196,167
PARTNERS' CAPITAL (DEFICIT):
General Partner ($ 147,377) ($ 150,636)
Limited Partners, issued and
outstanding, 244,536 units 2,810,582 2,517,801
---------- ----------
Total Partners' capital $2,663,205 $2,367,165
---------- ----------
$3,181,195 $2,751,198
========== ==========
The accompanying condensed notes are an integral
part of these financial statements.
-10-
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-C
STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2003 AND 2002
(Unaudited)
2003 2002
-------- --------
REVENUES:
Oil and gas sales $756,408 $664,913
Interest income 1,332 1,084
-------- --------
$757,740 $665,997
COSTS AND EXPENSES:
Lease operating $105,493 $106,641
Production tax 54,176 63,173
Depreciation, depletion, and
amortization of oil and gas
properties 47,365 52,043
General and administrative
(Note 2) 73,072 69,809
-------- --------
$280,106 $291,666
-------- --------
NET INCOME $477,634 $374,331
======== ========
GENERAL PARTNER - NET INCOME $ 51,893 $ 42,009
======== ========
LIMITED PARTNERS - NET INCOME $425,741 $332,322
======== ========
NET INCOME per unit $ 1.74 $ 1.36
======== ========
UNITS OUTSTANDING 244,536 244,536
======== ========
The accompanying condensed notes are an integral
part of these financial statements.
-11-
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-C
STATEMENTS OF OPERATIONS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2003 AND 2002
(Unaudited)
2003 2002
---------- ----------
REVENUES:
Oil and gas sales $2,875,739 $1,950,464
Interest income 3,657 3,110
Gain on sale of oil and gas
properties - 17,501
---------- ----------
$2,879,396 $1,971,075
COSTS AND EXPENSES:
Lease operating $ 423,962 $ 401,527
Production tax 198,867 136,950
Depreciation, depletion, and
amortization of oil and gas
properties 146,921 188,186
General and administrative
(Note 2) 225,930 223,471
---------- ----------
$ 995,680 $ 950,134
---------- ----------
INCOME BEFORE CUMULATIVE EFFECT
OF ACCOUNTING CHANGE $1,883,716 $1,020,941
Cumulative effect of change in
accounting for asset retirement
obligations (Note 1) 2,317 -
---------- ----------
NET INCOME $1,886,033 $1,020,941
========== ==========
GENERAL PARTNER - NET INCOME $ 201,252 $ 118,720
========== ==========
LIMITED PARTNERS - NET INCOME $1,684,781 $ 902,221
========== ==========
NET INCOME per unit $ 6.89 $ 3.69
========== ==========
UNITS OUTSTANDING 244,536 244,536
========== ==========
The accompanying condensed notes are an integral
part of these financial statements.
-12-
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-C
STATEMENTS OF CASH FLOWS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2003 AND 2002
(Unaudited)
2003 2002
------------ ------------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $1,886,033 $1,020,941
Adjustments to reconcile net income
to net cash provided by operating
activities:
Cumulative effect of change in
accounting for asset retirement
obligations (Note 1) ( 2,317) -
Depreciation, depletion, and
amortization of oil and gas
properties 146,921 188,186
Gain on sale of oil and gas
properties - ( 17,501)
(Increase) decrease in accounts
receivable - oil and gas sales 22,298 ( 64,000)
Increase (decrease) in accounts
payable ( 61,583) 19,307
---------- ----------
Net cash provided by operating
activities $1,991,352 $1,146,933
---------- ----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures ($ 17,815) ($ 85,587)
Proceeds from sale of oil and gas
properties 18,381 18,940
---------- ----------
Net cash provided (used) by investing
activities $ 566 ($ 66,647)
---------- ----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Cash distributions ($1,589,993) ($ 955,046)
---------- ----------
Net cash used by financing activities ($1,589,993) ($ 955,046)
---------- ----------
NET INCREASE IN CASH AND CASH
EQUIVALENTS $ 401,925 $ 125,240
CASH AND CASH EQUIVALENTS AT
BEGINNING OF PERIOD 480,424 371,012
---------- ----------
CASH AND CASH EQUIVALENTS AT
END OF PERIOD $ 882,349 $ 496,252
========== ==========
The accompanying condensed notes are an integral
part of these financial statements.
-13-
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-D
BALANCE SHEETS
(Unaudited)
ASSETS
September 30, December 31,
2003 2002
------------- ------------
CURRENT ASSETS:
Cash and cash equivalents $ 492,989 $ 306,024
Accounts receivable:
Oil and gas sales 342,893 386,024
---------- ----------
Total current assets $ 835,882 $ 692,048
NET OIL AND GAS PROPERTIES, utilizing
the successful efforts method 778,911 755,553
DEFERRED CHARGE 10,949 10,949
---------- ----------
$1,625,742 $1,458,550
========== ==========
LIABILITIES AND PARTNERS' CAPITAL (DEFICIT)
CURRENT LIABILITIES:
Accounts payable $ 92,974 $ 171,347
---------- ----------
Total current liabilities $ 92,974 $ 171,347
LONG-TERM LIABILITIES:
Accrued liability $ 251,798 $ 251,798
Asset retirement obligation
(Note 1) 109,658 -
---------- ----------
Total long-term liabilities $ 361,456 $ 251,798
PARTNERS' CAPITAL (DEFICIT):
General Partner ($ 48,788) ($ 50,949)
Limited Partners, issued and
outstanding, 131,008 units 1,220,100 1,086,354
---------- ----------
Total Partners' capital $1,171,312 $1,035,405
---------- ----------
$1,625,742 $1,458,550
========== ==========
The accompanying condensed notes are an integral
part of these financial statements.
-14-
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-D
STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2003 AND 2002
(Unaudited)
2003 2002
-------- --------
REVENUES:
Oil and gas sales $441,500 $447,909
Interest income 752 580
-------- --------
$442,252 $448,489
COSTS AND EXPENSES:
Lease operating $128,294 $145,575
Production tax 31,834 32,635
Depreciation, depletion, and
amortization of oil and gas
properties 28,131 36,541
General and administrative
(Note 2) 39,783 38,398
-------- --------
$228,042 $253,149
-------- --------
NET INCOME $214,210 $195,340
======== ========
GENERAL PARTNER - NET INCOME $ 23,877 $ 22,764
======== ========
LIMITED PARTNERS - NET INCOME $190,333 $172,576
======== ========
NET INCOME per unit $ 1.45 $ 1.32
======== ========
UNITS OUTSTANDING 131,008 131,008
======== ========
The accompanying condensed notes are an integral
part of these financial statements.
-15-
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-D
STATEMENTS OF OPERATIONS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2003 AND 2002
(Unaudited)
2003 2002
---------- ----------
REVENUES:
Oil and gas sales $1,968,194 $1,382,847
Interest income 2,153 1,341
Gain on sale of oil and gas
properties - 15,250
---------- ----------
$1,970,347 $1,399,438
COSTS AND EXPENSES:
Lease operating $ 433,673 $ 467,780
Production tax 139,268 99,154
Depreciation, depletion, and
amortization of oil and gas
properties 80,862 93,383
General and administrative
(Note 2) 131,031 128,831
---------- ----------
$ 784,834 $ 789,148
---------- ----------
INCOME BEFORE CUMULATIVE EFFECT
OF ACCOUNTING CHANGE $1,185,513 $ 610,290
Cumulative effect of change in
accounting for asset retirement
obligations (Note 1) 2,875 -
---------- ----------
NET INCOME $1,188,388 $ 610,290
========== ==========
GENERAL PARTNER - NET INCOME $ 125,642 $ 69,299
========== ==========
LIMITED PARTNERS - NET INCOME $1,062,746 $ 540,991
========== ==========
NET INCOME per unit $ 8.11 $ 4.13
========== ==========
UNITS OUTSTANDING 131,008 131,008
========== ==========
The accompanying condensed notes are an integral
part of these financial statements.
-16-
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-D
STATEMENTS OF CASH FLOWS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2003 AND 2002
(Unaudited)
2003 2002
------------ ----------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $1,188,388 $610,290
Adjustments to reconcile net income
to net cash provided by operating
activities:
Cumulative effect of change in
accounting for asset retirement
obligations (Note 1) ( 2,875) -
Depreciation, depletion, and
amortization of oil and gas
properties 80,862 93,383
Gain on sale of oil and gas
properties - ( 15,250)
(Increase) decrease in accounts
receivable - oil and gas sales 43,131 ( 49,524)
Decrease in accounts payable ( 78,373) ( 22,357)
---------- --------
Net cash provided by operating
activities $1,231,133 $616,542
---------- --------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures ($ 5,662) ($114,166)
Proceeds from the sale of oil and
gas properties 13,975 16,281
---------- --------
Net cash provided (used) by investing
activities $ 8,313 ($ 97,885)
---------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Cash distributions ($1,052,481) ($380,880)
---------- --------
Net cash used by financing activities ($1,052,481) ($380,880)
---------- --------
NET INCREASE IN CASH AND CASH
EQUIVALENTS $ 186,965 $137,777
CASH AND CASH EQUIVALENTS AT
BEGINNING OF PERIOD 306,024 160,008
---------- --------
CASH AND CASH EQUIVALENTS AT
END OF PERIOD $ 492,989 $297,785
========== ========
The accompanying condensed notes are an integral
part of these financial statements.
-17-
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-E
BALANCE SHEETS
(Unaudited)
ASSETS
September 30, December 31,
2003 2002
------------- ------------
CURRENT ASSETS:
Cash and cash equivalents $1,397,664 $ 801,420
Accounts receivable:
Oil and gas sales 1,178,469 924,827
---------- ----------
Total current assets $2,576,133 $1,726,247
NET OIL AND GAS PROPERTIES, utilizing
the successful efforts method 2,621,271 2,646,994
DEFERRED CHARGE 60,913 69,176
---------- ----------
$5,258,317 $4,442,417
========== ==========
LIABILITIES AND PARTNERS' CAPITAL (DEFICIT)
CURRENT LIABILITIES:
Accounts payable $ 468,795 $ 746,759
Accrued liability - other (Note 1) - 122,289
Gas imbalance payable 2,736 2,736
---------- ----------
Total current liabilities $ 471,531 $ 871,784
LONG-TERM LIABILITIES:
Accrued liability $ 328,632 $ 328,632
Asset retirement obligation
(Note 1) 265,364 -
---------- ----------
Total long-term liabilities $ 593,996 $ 328,632
PARTNERS' CAPITAL (DEFICIT):
General Partner ($ 177,257) ($ 250,684)
Limited Partners, issued and
outstanding, 418,266 units 4,370,047 3,492,685
---------- ----------
Total Partners' capital $4,192,790 $3,242,001
---------- ----------
$5,258,317 $4,442,417
========== ==========
The accompanying condensed notes are an integral
part of these financial statements.
-18-
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-E
STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2003 AND 2002
(Unaudited)
2003 2002
---------- ----------
REVENUES:
Oil and gas sales $1,694,268 $1,185,582
Interest income 1,705 765
---------- ----------
$1,695,973 $1,186,347
COSTS AND EXPENSES:
Lease operating $ 703,317 $ 782,879
Production tax 117,325 66,084
Depreciation, depletion, and
amortization of oil and gas
properties 100,071 114,801
General and administrative
(Note 2) 124,495 118,351
---------- ----------
$1,045,208 $1,082,115
---------- ----------
NET INCOME $ 650,765 $ 104,232
========== ==========
GENERAL PARTNER - NET INCOME $ 73,913 $ 20,679
========== ==========
LIMITED PARTNERS - NET INCOME $ 576,852 $ 83,553
========== ==========
NET INCOME per unit $ 1.38 $ .20
========== ==========
UNITS OUTSTANDING 418,266 418,266
========== ==========
The accompanying condensed notes are an integral
part of these financial statements.
-19-
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-E
STATEMENTS OF OPERATIONS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2003 AND 2002
(Unaudited)
2003 2002
---------- ----------
REVENUES:
Oil and gas sales $5,671,907 $4,084,397
Interest income 3,973 1,681
Gain on abandonment 1,848 -
---------- ----------
$5,677,728 $4,086,078
COSTS AND EXPENSES:
Lease operating $2,042,754 $2,296,190
Production tax 390,795 249,117
Depreciation, depletion, and
amortization of oil and gas
properties 282,208 259,320
General and administrative
(Note 2) 373,638 371,420
---------- ----------
$3,089,395 $3,176,047
---------- ----------
INCOME BEFORE CUMULATIVE EFFECT
OF ACCOUNTING CHANGE $2,588,333 $ 910,031
Cumulative effect of change in
accounting for asset retirement
obligations (Note 1) 2,725 -
---------- ----------
NET INCOME $2,591,058 $ 910,031
========== ==========
GENERAL PARTNER - NET INCOME $ 283,696 $ 114,174
========== ==========
LIMITED PARTNERS - NET INCOME $2,307,362 $ 795,857
========== ==========
NET INCOME per unit $ 5.52 $ 1.90
========== ==========
UNITS OUTSTANDING 418,266 418,266
========== ==========
The accompanying condensed notes are an integral
part of these financial statements.
-20-
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-E
STATEMENTS OF CASH FLOWS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2003 AND 2002
(Unaudited)
2003 2002
------------ ----------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $2,591,058 $910,031
Adjustments to reconcile net income
to net cash provided by operating
activities:
Cumulative effect of change in
accounting for asset retirement
obligations (Note 1) ( 2,725) -
Depreciation, depletion, and
amortization of oil and gas
properties 282,208 259,320
Gain on abandonment ( 1,848) -
Increase in accounts receivable -
oil and gas sales ( 253,642) ( 190,139)
Decrease in deferred charge 8,263 -
Decrease in accounts payable ( 277,964) ( 161,451)
Decrease in accrued liability -
other ( 122,289) -
---------- --------
Net cash provided by operating
activities $2,223,061 $817,761
---------- --------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures ($ 16,896) ($411,763)
Proceeds from sale of oil and gas
properties 30,348 1,374
---------- --------
Net cash provided (used) by investing
activities $ 13,452 ($410,389)
---------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Cash distributions ($1,640,269) ($171,358)
---------- --------
Net cash used by financing activities ($1,640,269) ($171,358)
---------- --------
NET INCREASE IN CASH AND CASH
EQUIVALENTS $ 596,244 $236,014
CASH AND CASH EQUIVALENTS AT
BEGINNING OF PERIOD 801,420 440,024
---------- --------
CASH AND CASH EQUIVALENTS AT
END OF PERIOD $1,397,664 $676,038
========== ========
The accompanying condensed notes are an integral
part of these financial statements.
-21-
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-F
BALANCE SHEETS
(Unaudited)
ASSETS
September 30, December 31,
2003 2002
------------- ------------
CURRENT ASSETS:
Cash and cash equivalents $ 532,400 $ 284,588
Accounts receivable:
Oil and gas sales 470,360 348,300
---------- ----------
Total current assets $1,002,760 $ 632,888
NET OIL AND GAS PROPERTIES, utilizing
the successful efforts method 1,730,750 1,764,313
DEFERRED CHARGE 26,052 29,946
---------- ----------
$2,759,562 $2,427,147
========== ==========
LIABILITIES AND PARTNERS' CAPITAL (DEFICIT)
CURRENT LIABILITIES:
Accounts payable $ 88,422 $ 118,741
Accrued liability - other (Note 1) - 102,690
Gas imbalance payable 2,295 2,295
---------- ----------
Total current liabilities $ 90,717 $ 223,726
LONG-TERM LIABILITIES:
Accrued liability $ 126,076 $ 118,005
Asset retirement obligation
(Note 1) 141,906 -
---------- ----------
Total long-term liabilities $ 267,982 $ 118,005
PARTNERS' CAPITAL (DEFICIT):
General Partner ($ 148,093) ($ 159,621)
Limited Partners, issued and
outstanding, 221,484 units 2,548,956 2,245,037
---------- ----------
Total Partners' capital $2,400,863 $2,085,416
---------- ----------
$2,759,562 $2,427,147
========== ==========
The accompanying condensed notes are an integral
part of these financial statements.
-22-
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-F
STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2003 AND 2002
(Unaudited)
2003 2002
-------- --------
REVENUES:
Oil and gas sales $532,513 $371,424
Interest income 711 368
-------- --------
$533,224 $371,792
COSTS AND EXPENSES:
Lease operating $150,230 $132,369
Production tax 31,385 14,456
Depreciation, depletion, and
amortization of oil and gas
properties 40,193 73,126
General and administrative
(Note 2) 66,409 63,528
-------- --------
$288,217 $283,479
-------- --------
NET INCOME $245,007 $ 88,313
======== ========
GENERAL PARTNER - NET INCOME $ 13,822 $ 7,323
======== ========
LIMITED PARTNERS - NET INCOME $231,185 $ 80,990
======== ========
NET INCOME per unit $ 1.05 $ .36
======== ========
UNITS OUTSTANDING 221,484 221,484
======== ========
The accompanying condensed notes are an integral
part of these financial statements.
-23-
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-F
STATEMENTS OF OPERATIONS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2003 AND 2002
(Unaudited)
2003 2002
---------- ----------
REVENUES:
Oil and gas sales $2,019,578 $1,234,005
Interest income 1,644 1,291
Gain on abandonment 903 -
---------- ----------
$2,022,125 $1,235,296
COSTS AND EXPENSES:
Lease operating $ 459,789 $ 385,552
Production tax 113,598 57,116
Depreciation, depletion, and
amortization of oil and gas
properties 180,351 177,105
General and administrative
(Note 2) 206,977 204,621
---------- ----------
$ 960,715 $ 824,394
---------- ----------
INCOME BEFORE CUMULATIVE EFFECT
OF ACCOUNTING CHANGE $1,061,410 $ 410,902
Cumulative effect of change in
accounting for asset retirement
obligations (Note 1) 3,712 -
---------- ----------
NET INCOME $1,065,122 $ 410,902
========== ==========
GENERAL PARTNER - NET INCOME $ 60,203 $ 27,565
========== ==========
LIMITED PARTNERS - NET INCOME $1,004,919 $ 383,337
========== ==========
NET INCOME per unit $ 4.54 $ 1.73
========== ==========
UNITS OUTSTANDING 221,484 221,484
========== ==========
The accompanying condensed notes are an integral
part of these financial statements.
-24-
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-F
STATEMENTS OF CASH FLOWS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2003 AND 2002
(Unaudited)
2003 2002
------------ ----------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $1,065,122 $410,902
Adjustments to reconcile net income
to net cash provided by operating
activities:
Cumulative effect of change in
accounting for asset retirement
obligations (Note 1) ( 3,712) -
Depreciation, depletion, and
amortization of oil and gas
properties 180,351 177,105
Gain on abandonment ( 903) -
Increase in accounts receivable -
oil and gas sales ( 122,060) ( 26,373)
Decrease in deferred charge 3,894 -
Increase (decrease) in accounts
payable ( 30,319) 52,903
Decrease in accrued liability -
other ( 102,690) -
Increase in accrued liability 8,071 -
---------- --------
Net cash provided by operating
activities $ 997,754 $614,537
---------- --------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures ($ 12,842) ($ 42,290)
Proceeds from the sale of oil
and gas properties 12,575 1,273
---------- --------
Net cash used by investing activities ($ 267) ($ 41,017)
---------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Cash distributions ($ 749,675) ($483,746)
---------- --------
Net cash used by financing activities ($ 749,675) ($483,746)
---------- --------
NET INCREASE IN CASH AND CASH
EQUIVALENTS $ 247,812 $ 89,774
CASH AND CASH EQUIVALENTS AT
BEGINNING OF PERIOD 284,588 144,433
---------- --------
CASH AND CASH EQUIVALENTS AT
END OF PERIOD $ 532,400 $234,207
========== ========
The accompanying condensed notes are an integral
part of these financial statements.
-25-
GEODYNE ENERGY INCOME PROGRAM III LIMITED PARTNERSHIPS
CONDENSED NOTES TO THE FINANCIAL STATEMENTS
SEPTEMBER 30, 2003
(Unaudited)
1. ACCOUNTING POLICIES
-------------------
The balance sheets as of September 30, 2003, statements of operations for
the three and nine months ended September 30, 2003 and 2002, and
statements of cash flows for the nine months ended September 30, 2003 and
2002 have been prepared by Geodyne Resources, Inc., the General Partner of
the Partnerships (the "General Partner"), without audit. In the opinion of
management the financial statements referred to above include all
necessary adjustments, consisting of normal recurring adjustments, to
present fairly the financial position at September 30, 2003, the results
of operations for three and nine months ended September 30, 2003 and 2002,
and the cash flows for the nine months ended September 30, 2003 and 2002.
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, 2002. The
results of operations for the period ended September 30, 2003 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.
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.
-26-
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 and estimated
salvage value of the equipment.
When complete units of depreciable property are retired or sold, the asset
cost and related accumulated depreciation are eliminated with any gain or
loss (including the elimination of the asset retirement obligation)
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 December 31, 2002 for the III-E and III-F
Partnerships represents a charge accrued for the payment of refund amounts
to royalty and overriding royalty interest owners in relation to the R.W.
Scott Investments, LLC v. Samson Resources Company lawsuit. Such amounts
were repaid during the first quarter of 2003.
NEW ACCOUNTING PRONOUNCEMENTS
- -----------------------------
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). On January 1,
2003, the Partnerships adopted FAS No. 143 and recorded an increase in
capitalized cost of oil and gas properties, an increase (decrease) in net
income for the cumulative effect of the change in accounting principle,
and an asset retirement obligation in the following approximate amounts
for each Partnership:
-27-
Increase
(decrease)
Increase in
in Net Income
Capitalized for the
Cost of Oil Change in Asset
and Gas Accounting Retirement
Partnerships Properties Principle Obligation
------------ ----------- ---------- ----------
III-A $109,000 ($1,000) $110,000
III-B 76,000 ( 1,000) 77,000
III-C 192,000 2,000 190,000
III-D 109,000 3,000 106,000
III-E 264,000 3,000 261,000
III-F 144,000 4,000 140,000
These amounts differ significantly from the estimates disclosed in the
Annual Report on Form 10-K for the year ended December 31, 2002 due to a
revision of the methodology used in calculating the change in capitalized
cost of oil and gas properties.
The asset retirement obligation will be adjusted upwards each quarter in
order to recognize accretion of the time-related discount factor. For the
nine months ended September 30, 2003, the III-A, III-B, III-C, III-D,
III-E, and III-F Partnerships recognized approximately $4,000, $3,000,
$7,000, $5,000, $17,000, and $9,000, respectively, of an increase in
depreciation, depletion, and amortization expense, which was comprised of
accretion of the asset retirement obligation and depletion of the increase
in capitalized cost of oil and gas properties.
If this accounting policy had been in effect on January 1, 2002, the
proforma impact for the III-A, III-B, III-C, III-D, III-E, and III-F
Partnerships during the nine months ended September 30, 2002 would have
been an increase in depreciation, depletion, and amortization expense of
approximately $4,000, $3,000, $7,000, $4,000, $13,000, and $7,000,
respectively.
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, 2003, the following payments were made to the General
Partner or its affiliates by the Partnerships:
-28-
Direct General Administrative
Partnership and Administrative Overhead
----------- ------------------- ---------------
III-A $ 9,878 $ 69,468
III-B 6,096 36,405
III-C 8,719 64,353
III-D 5,307 34,476
III-E 14,425 110,070
III-F 8,125 58,284
During the nine months ended September 30, 2003, the following payments
were made to the General Partner or its affiliates by the Partnerships:
Direct General Administrative
Partnership and Administrative Overhead
----------- ------------------- ---------------
III-A $ 34,546 $208,404
III-B 27,953 109,215
III-C 32,871 193,059
III-D 27,603 103,428
III-E 43,428 330,210
III-F 32,125 174,852
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.
-29-
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 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.
-30-
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
----------- ------------------ ---------------
III-A November 22, 1989 $26,397,600
III-B January 24, 1990 13,833,600
III-C February 27, 1990 24,453,600
III-D September 5, 1990 13,100,800
III-E December 26, 1990 41,826,600
III-F March 7, 1991 22,148,400
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, 2003 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
may reduce or eliminate cash available for a particular quarterly cash
distribution. During the nine months ended September 30, 2002, capital
expenditures for the III-D and III-E Partnerships totaled $114,166 and
$411,763, respectively. These expenditures were primarily due to drilling
activities in a large unitized property, the Jay-Little Escambia Creek
Field Unit, located in Santa Rosa County, Florida, in which the
Partnerships own working interests of approximately 0.7% and 4.7%,
respectively. In addition, during the nine months ended September 30,
2002, capital expenditures for the III-F Partnership totaled $42,290.
These expenditures were primarily due to a recompletion of the Exxon Fee
#1-D well located in Terrebonne Parish, Louisiana, in which the
Partnership owns a working interest of approximately 3.7%. The
recompletion was successful leading to an increase in both oil and gas
reserves and production on this well. Any other capital expenditures
incurred by the Partnerships during the nine
-31-
months ended September 30, 2003 and 2002 were not material to the
Partnerships' cash flows.
Pursuant to the terms of the Partnership Agreements for the Partnerships
(the "Partnership Agreements") the Partnerships were initially scheduled
to terminate on the dates indicated in the "Initial Termination Date"
column of the following chart. 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. As of the date of this Quarterly Report,
the General Partner has extended the terms of the III-A, III-B, III-C,
III-D, III-E, and III-F Partnerships for the second two-year extension
period. Therefore, the Partnerships are currently scheduled to terminate
on the dates indicated in the "Current Termination Date" column of the
following chart.
Initial Extensions Current
Partnership Termination Date Exercised Termination Date
----------- ----------------- --------- -----------------
III-A November 22, 1999 2 November 22, 2003
III-B January 24, 2000 2 January 24, 2004
III-C February 28, 2000 2 February 28, 2004
III-D September 5, 2000 2 September 5, 2004
III-E December 26, 2000 2 December 26, 2004
III-F March 7, 2001 2 March 7, 2005
The General Partner currently intends to extend the terms of the III-A,
III-B, and III-C Partnerships for their third extension period, but has
not yet determined whether it intends to further extend the terms of any
other Partnerships.
CRITICAL ACCOUNTING POLICIES
- ----------------------------
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 the
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.
-32-
Depletion of the cost 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 units-of-production
method. The Partnerships' calculation of depreciation, depletion, and
amortization includes estimated dismantlement and abandonment costs and
estimated salvage value of the equipment. When complete units of
depreciable property are retired or sold, the asset cost and related
accumulated depreciation are eliminated with any gain or loss (including
the elimination of the asset retirement obligation) reflected in income.
When less that complete units of depreciable property are retired or sold,
the proceeds are credited to oil and gas properties.
The Partnerships evaluate the recoverability of the carrying costs of
their proved oil and gas properties for each oil and gas field (rather
than separately for each well). If the unamortized costs of oil and gas
properties within a field exceeds the expected undiscounted future cash
flows from such properties, the cost of the properties is written down to
fair value, which is determined by using the estimated discounted future
cash flows from the properties. The risk that the Partnerships will be
required to record impairment provisions in the future increases as oil
and gas prices decrease.
The Deferred Charge on the Balance Sheets represents costs deferred for
lease operating expenses incurred in connection with the Partnerships'
underproduced gas imbalance positions. Conversely, the Accrued Liability
represents charges accrued for lease operating expenses incurred in
connection with the Partnerships' overproduced gas imbalance positions.
The rate used in calculating the Deferred Charge and Accrued Liability is
the annual average production costs per Mcf.
The Partnerships' oil and condensate production is sold, title passed, and
revenue recognized at or near the Partnerships' wells under short-term
purchase contracts at prevailing prices in accordance with arrangements
which are customary in the oil and gas industry. Sales of gas applicable
to the Partnerships' interest in producing oil and gas leases are recorded
as revenue when the gas is metered and title transferred pursuant to the
gas sales contracts covering the Partnerships' interest in gas reserves.
During such times as a Partnership's sales of gas exceed its' pro rata
ownership in a well, such sales are recorded as revenues unless total
sales from the well have exceeded the Partnership's share of estimated
total gas reserves underlying the property, at which time such excess is
recorded as a liability. The rates per Mcf used to calculate this
liability are based on the average gas prices received for the volumes at
the time the overproduction occurred. This also approximates the price for
which the Partnerships are currently settling this liability. These
-33-
amounts were recorded as gas imbalance payables in accordance with the
sales method. These gas imbalance payables will be settled by either gas
production by the underproduced party in excess of current estimates of
total gas reserves for the well or by negotiated or contractual payment to
the underproduced party.
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). On January 1,
2003, the Partnerships adopted FAS No. 143 and recorded an increase in
capitalized cost of oil and gas properties, an increase (decrease) in net
income for the cumulative effect of the change in accounting principle,
and an asset retirement obligation in the following approximate amounts
for each Partnership:
Increase
(decrease)
Increase in
in Net Income
Capitalized for the
Cost of Oil Change in Asset
and Gas Accounting Retirement
Partnerships Properties Principle Obligation
------------ ----------- ---------- ----------
III-A $109,000 ($1,000) $110,000
III-B 76,000 ( 1,000) 77,000
III-C 192,000 2,000 190,000
III-D 109,000 3,000 106,000
III-E 264,000 3,000 261,000
III-F 144,000 4,000 140,000
These amounts differ significantly from the estimates disclosed in the
Annual Report on Form 10-K for the year ended December 31, 2002 due to a
revision of the methodology used in calculating the change in capitalized
cost of oil and gas properties.
The asset retirement obligation will be adjusted upwards each quarter in
order to recognize accretion of the time-related discount factor. For the
nine months ended September 30, 2003, the III-A, III-B, III-C, III-D,
III-E, and III-F Partnerships recognized approximately $4,000, $3,000,
$7,000, $5,000, $17,000, and $9,000, respectively, of an increase in
depreciation, depletion, and amortization expense, which was comprised of
accretion of the asset
-34-
retirement obligation and depletion of the increase in capitalized cost
of oil and gas properties.
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.
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.
-35-
III-A Partnership
-----------------
Crude Natural
Oil Gas
(Barrels) (Mcf)
--------- -----------
Proved reserves, Dec. 31, 2002 60,496 3,866,700
Production (13,075) ( 158,528)
Revisions of previous
estimates 3,790 49,870
------ ---------
Proved reserves, March 31, 2003 51,211 3,758,042
Production (12,045) ( 110,375)
Revisions of previous
estimates 13,010 799,504
------ ---------
Proved reserves, June 30, 2003 52,176 4,447,171
Production ( 9,725) ( 132,867)
Extensions and discoveries 82 37,109
Revisions of previous
estimates 3,229 56,355
------ ---------
Proved reserves, Sept. 30, 2003 45,762 4,407,768
====== =========
-36-
III-B Partnership
-----------------
Crude Natural
Oil Gas
(Barrels) (Mcf)
--------- -----------
Proved reserves, Dec. 31, 2002 46,684 1,676,027
Production ( 9,175) ( 80,507)
Revisions of previous
estimates 2,237 23,613
------ ---------
Proved reserves, March 31, 2003 39,746 1,619,133
Production (17,445) ( 131,405)
Revisions of previous
estimates 14,485 443,482
------ ---------
Proved reserves, June 30, 2003 36,786 1,931,210
Production ( 6,905) ( 62,163)
Extensions and discoveries 35 15,638
Revisions of previous
estimates 1,291 35,711
------ ---------
Proved reserves, Sept. 30, 2003 31,207 1,920,396
====== =========
-37-
III-C Partnership
-----------------
Crude Natural
Oil Gas
(Barrels) (Mcf)
--------- -----------
Proved reserves, Dec. 31, 2002 110,916 4,928,613
Production ( 5,914) ( 181,104)
Revisions of previous
estimates 876 ( 18,213)
------- ---------
Proved reserves, March 31, 2003 105,878 4,729,296
Production ( 3,660) ( 170,277)
Revisions of previous
estimates 184 590,139
------- ---------
Proved reserves, June 30, 2003 102,402 5,149,158
Production ( 1,918) ( 155,930)
Extensions and discoveries 12 6,491
Revisions of previous
estimates 4,312 ( 30,091)
------- ---------
Proved reserves, Sept. 30, 2003 104,808 4,969,628
======= =========
-38-
III-D Partnership
-----------------
Crude Natural
Oil Gas
(Barrels) (Mcf)
--------- -----------
Proved reserves, Dec. 31, 2002 236,192 2,667,538
Production ( 8,579) ( 113,755)
Revisions of previous
estimates 800 ( 18,987)
------- ---------
Proved reserves, March 31, 2003 228,413 2,534,796
Production ( 6,342) ( 105,200)
Revisions of previous
estimates ( 40,773) 177,661
------- ---------
Proved reserves, June 30, 2003 181,298 2,607,257
Production ( 5,752) ( 72,862)
Revisions of previous
estimates ( 33,896) ( 54,834)
------- ---------
Proved reserves, Sept. 30, 2003 141,650 2,479,561
======= =========
-39-
III-E Partnership
-----------------
Crude Natural
Oil Gas
(Barrels) (Mcf)
----------- ------------
Proved reserves, Dec. 31, 2002 1,259,858 7,254,259
Production ( 33,458) ( 198,493)
Revisions of previous
estimates ( 5,741) ( 60,612)
--------- ---------
Proved reserves, March 31, 2003 1,220,659 6,995,154
Production ( 29,243) ( 242,845)
Extensions and discoveries 310 20,701
Revisions of previous
estimates ( 320,192) 74,885
--------- ---------
Proved reserves, June 30, 2003 871,534 6,847,895
Production ( 33,971) ( 199,127)
Extensions and discoveries 20 1,712
Revisions of previous
estimates ( 246,623) ( 168,166)
--------- ---------
Proved reserves, Sept. 30, 2003 590,960 6,482,314
========= =========
-40-
III-F Partnership
-----------------
Crude Natural
Oil Gas
(Barrels) (Mcf)
--------- -----------
Proved reserves, Dec. 31, 2002 224,872 4,664,302
Production ( 5,382) ( 137,370)
Revisions of previous
estimates 13,058 98,851
------- ---------
Proved reserves, March 31, 2003 232,548 4,625,783
Production ( 4,914) ( 84,148)
Extensions and discoveries 266 17,879
Revisions of previous
estimates 66,707 ( 65,453)
------- ---------
Proved reserves, June 30, 2003 294,607 4,494,061
Production ( 5,094) ( 94,683)
Extensions and discoveries 11 986
Revisions of previous
estimates ( 22,750) ( 144,072)
------- ---------
Proved reserves, Sept. 30, 2003 266,774 4,256,292
======= =========
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 September 30, 2003, June 30, 2003,
March 31, 2003, and December 31, 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 not
escalated except in certain circumstances where escalations were fixed and
readily determinable in accordance with applicable contract provisions.
The table also indicates the gas prices in effect on the dates
corresponding to the reserve valuations. Changes in the oil and gas prices
cause the estimates of remaining economically recoverable reserves, as
well as the values placed on said reserves to fluctuate. The prices used
in calculating the net present value attributable to the Partnerships'
proved reserves do not necessarily reflect market prices for oil
-41-
and gas production subsequent to September 30, 2003. There can be no
assurance that the prices used in calculating the net present value of the
Partnerships' proved reserves at September 30, 2003 will actually be
realized for such production.
Net Present Value of Reserves (In 000's)
---------------------------------------------------
Partnership 9/30/03 6/30/03 3/31/03 12/31/02
----------- ------- ------- ------- --------
III-A $10,292 $11,647 $10,868 $10,584
III-B 4,816 5,431 5,090 5,037
III-C 10,375 13,014 12,887 12,473
III-D 5,486 7,347 7,661 7,656
III-E 13,846 17,664 20,367 20,987
III-F 8,917 10,522 10,486 10,539
Oil and Gas Prices
---------------------------------------------------
Pricing 9/30/03 6/30/03 3/31/03 12/31/02
----------- ------- ------- ------- --------
Oil (Bbl) $ 26.00 $ 27.00 $ 27.75 $ 28.00
Gas (Mcf) 4.58 5.18 5.06 4.74
The Jay-Little Escambia Creek Field Unit located in Santa Rosa County,
Florida is a material oil and gas property for the III-D and III-E
Partnerships. This property, consisting of several oil and gas producing
wells, several nitrogen gas injection wells (to stimulate production), and
a gas plant, is operated by ExxonMobil. The injection process leads to
very high operating costs. As a result, changes in oil (in particular) and
natural gas prices can significantly impact net cash flow and the
estimated net present value of this property's proved reserves. Based on
information received from the operator, in late 2001 through early 2003
this property experienced mechanical and operational difficulties
primarily associated with the nitrogen injection system and gas plant
operations. Also, the drilling of a directional well has significantly
exceeded the operator's original cost estimates. Recently, the operator
notified the working interest owners that additional costs would be
incurred in order to plug several wells. As a result of these costs, cash
flow from this property has been reduced and at times has been negative.
This property is very sensitive to changes in oil prices and production
volumes. Until the operator completes repairs, drilling, and plugging
activities, this property's cash flows could continue to be low or
negative despite relatively high oil and gas prices. Compared to June 30,
2003 reserve estimates, the September 30, 2003 reserve estimates include a
significant downward adjustment in future oil production as well as an
increase in estimated future operating expenses, thereby reducing reserve
value estimates. These changes have been made as a result of the continued
performance (reduced oil production and higher production expenses over
the last several months) associated with this property. While Geodyne has
received verbal assurances from ExxonMobil that production issues
-42-
were expected to improve, this has not been evidenced in results to date.
The Partnerships had downward revisions in the estimated net present value
of reserves at September 30, 2003 as compared to June 30, 2003 primarily
due to decreases in the oil and gas prices used to value the reserves.
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:
* 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, to an extent, 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
-43-
early 2002, to rising prices in the later part of 2002 and early 2003. 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 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.
III-A PARTNERSHIP
THREE MONTHS ENDED SEPTEMBER 30, 2003 COMPARED TO THE THREE MONTHS ENDED
SEPTEMBER 30, 2002.
Three Months Ended September 30,
--------------------------------
2003 2002
-------- ----------
Oil and gas sales $944,055 $1,051,646
Oil and gas production expenses $217,046 $ 230,722
Barrels produced 9,725 14,389
Mcf produced 132,867 251,519
Average price/Bbl $ 28.14 $ 26.65
Average price/Mcf $ 5.05 $ 2.66
As shown in the table above, total oil and gas sales decreased $107,591
(10.2%) for the three months ended September 30, 2003 as compared to the
three months ended September 30, 2002. Of this decrease, approximately
$124,000 and $315,000, respectively, were related to decreases in volumes
of oil and gas sold. These decreases were partially offset by increases of
approximately $14,000 and $317,000, respectively, related to increases in
the average prices of oil and gas sold. Volumes of oil and gas sold
decreased 4,664 barrels and 118,652 Mcf, respectively, for the three
months ended September 30, 2003 as compared to the three months ended
September 30, 2002. 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 on
one significant well during the three months ended September 30, 2002,
(ii) a substantial decline in
-44-
production during the three months ended September 30, 2003 on one
significant well following the workover of that well during early 2002,
and (iii) normal declines in production. The well with a substantial
decline in production is not expected to return to previously high levels
of production. Average oil and gas prices increased to $28.14 per barrel
and $5.05 per Mcf, respectively, for the three months ended September 30,
2003 from $26.65 per barrel and $2.66 per Mcf, respectively, for the three
months ended September 30, 2002.
Oil and gas production expenses (including lease operating expenses and
production taxes) decreased $13,676 (5.9%) for the three months ended
September 30, 2003 as compared to the three months ended September 30,
2002. As a percentage of oil and gas sales, these expenses increased to
23.0% for the three months ended September 30, 2003 from 21.9% for the
three months ended September 30, 2002.
Depreciation, depletion, and amortization of oil and gas properties
decreased $206,859 (85.4%) for the three months ended September 30, 2003
as compared to the three months ended September 30, 2002. This decrease
was primarily due to (i) the decreases in volumes of oil and gas sold and
(ii) two significant wells being fully depleted during the three months
ended September 30, 2002 due to the lack of remaining economically
recoverable reserves. As a percentage of oil and gas sales, this expense
decreased to 3.8% for the three months ended September 30, 2003 from 23.0%
for the three months ended September 30, 2002. This percentage decrease
was primarily due to the dollar decrease in depreciation, depletion, and
amortization of oil and gas properties.
General and administrative expenses increased $3,601 (4.8%) for the three
months ended September 30, 2003 as compared to the three months ended
September 30, 2002. As a percentage of oil and gas sales, these expenses
increased to 8.4% for the three months ended September 30, 2003 from 7.2%
for the three months ended September 30, 2002. This percentage increase
was primarily due to the decrease in oil and gas sales.
NINE MONTHS ENDED SEPTEMBER 30, 2003 COMPARED TO THE NINE MONTHS ENDED
SEPTEMBER 30, 2002.
Nine Months Ended September 30,
-------------------------------
2003 2002
---------- ----------
Oil and gas sales $3,235,948 $3,039,666
Oil and gas production expenses $ 600,508 $ 723,543
Barrels produced 34,845 42,011
Mcf produced 401,770 771,150
Average price/Bbl $ 29.56 $ 23.42
Average price/Mcf $ 5.49 $ 2.67
As shown in the table above, total oil and gas sales increased $196,282
(6.5%) for the nine months ended
-45-
September 30, 2003 as compared to the nine months ended September 30,
2002. Of this increase, approximately $214,000 and $1,135,000,
respectively, were related to increases in the average prices of oil and
gas sold. These increases were partially offset by decreases of
approximately $168,000 and $985,000, respectively, related to decreases in
volumes of oil and gas sold. Volumes of oil and gas sold decreased 7,166
barrels and 369,380 Mcf, respectively, for the nine months ended September
30, 2003 as compared to the nine months ended September 30, 2002. The
decrease in volumes of oil sold was primarily due to normal declines in
production. This decrease was partially offset by an increase in
production during the nine months ended September 30, 2003 on one
significant well due to the successful workover of that well during mid
2002. The decrease in volumes of gas sold was primarily due to (i) a
substantial decline in production during the nine months ended September
30, 2003 on one significant well following the workover of that well
during early 2002, (ii) positive prior period gas balancing adjustments on
two significant wells during the nine months ended September 30, 2002, and
(iii) normal declines in production. The well with a substantial decline
in production is not expected to return to previously high levels of
production. Average oil and gas prices increased to $29.56 per barrel and
$5.49 per Mcf, respectively, for the nine months ended September 30, 2003
from $23.42 per barrel and $2.67 per Mcf, respectively, for the nine
months ended September 30, 2002.
Oil and gas production expenses (including lease operating expenses and
production taxes) decreased $123,035 (17.0%) for the nine months ended
September 30, 2003 as compared to the nine months ended September 30,
2002. This decrease was primarily due to (i) a decrease in lease operating
expenses associated with the decreases in volumes of oil and gas sold,
(ii) positive prior period lease operating expense adjustments on two
significant wells during the nine months ended September 30, 2002, and
(iii) workover expenses incurred on two significant wells during the nine
months ended September 30, 2002. As a percentage of oil and gas sales,
these expenses decreased to 18.6% for the nine months ended September 30,
2003 from 23.8% for the nine months ended September 30, 2002. This
percentage decrease was primarily due to the increases in the average
prices of oil and gas sold.
Depreciation, depletion, and amortization of oil and gas properties
decreased $287,600 (69.9%) for the nine months ended September 30, 2003 as
compared to the nine months ended September 30, 2002. This decrease was
primarily due to (i) the decreases in volumes of oil and gas sold, (ii)
two significant wells being fully depleted during the nine months ended
September 30, 2002 due to the lack of remaining economically recoverable
reserves, and (iii) upward revisions in the estimates of remaining oil and
gas reserves for the nine months ended September 30, 2003. As a percentage
of oil and gas sales, this expense decreased to
-46-
3.8% for the nine months ended September 30, 2003 from 13.5% for the nine
months ended September 30, 2002. This percentage decrease was primarily
due to dollar decrease in depreciation, depletion, and amortization of oil
and gas properties.
General and administrative expenses increased $2,531 (1.1%) for the nine
months ended September 30, 2003 as compared to the nine months ended
September 30, 2002. As a percentage of oil and gas sales, these expenses
decreased to 7.5% for the nine months ended September 30, 2003 from 7.9%
for the nine months ended September 30, 2002.
The Limited Partners have received cash distributions through September
30, 2003 totaling $35,897,701 or 135.99% of Limited Partners' capital
contributions.
III-B PARTNERSHIP
THREE MONTHS ENDED SEPTEMBER 30, 2003 COMPARED TO THE THREE MONTHS ENDED
SEPTEMBER 30, 2002.
Three Months Ended September 30,
--------------------------------
2003 2002
-------- --------
Oil and gas sales $510,724 $604,146
Oil and gas production expenses $122,916 $150,061
Barrels produced 6,905 10,164
Mcf produced 62,163 133,451
Average price/Bbl $ 28.62 $ 26.59
Average price/Mcf $ 5.04 $ 2.50
As shown in the table above, total oil and gas sales decreased $93,422
(15.5%) for the three months ended September 30, 2003 as compared to the
three months ended September 30, 2002. Of this decrease, approximately
$87,000 and $178,000, respectively, were related to decreases in volumes
of oil and gas sold. These decreases were partially offset by increases of
approximately $14,000 and $158,000, respectively, related to increases in
the average prices of oil and gas sold. Volumes of oil and gas sold
decreased 3,259 barrels and 71,288 Mcf, respectively, for the three months
ended September 30, 2003 as compared to the three months ended September
30, 2002. 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 on one
significant well during the three months ended September 30, 2002, (ii) a
substantial decline in production during the three months ended September
30, 2003 on one significant well following the workover of that well
during early 2002, and (iii) normal declines in production. The well with
a substantial decline in production is not expected to return to
previously high levels of production. Average oil and gas prices increased
to $28.62 per barrel and $5.04 per Mcf, respectively, for the three months
ended
-47-
September 30, 2003 from $26.59 per barrel and $2.50 per Mcf, respectively,
for the three months ended September 30, 2002.
Oil and gas production expenses (including lease operating expenses and
production taxes) decreased $27,145 (18.1%) for the three months ended
September 30, 2003 as compared to the three months ended September 30,
2002. This decrease was primarily due to (i) a positive prior period lease
operating expense adjustment on one significant well during the three
months ended September 30, 2002, (ii) workover expenses incurred on two
wells within the same unit during the three months ended September 30,
2002, and (iii) workover expenses incurred on another significant well
during the three months ended September 30, 2002. As a percentage of oil
and gas sales, these expenses decreased to 24.1% for the three months
ended September 30, 2003 from 24.8% for the three months ended September
30, 2002.
Depreciation, depletion, and amortization of oil and gas properties
decreased $125,870 (85.5%) for the three months ended September 30, 2003
as compared to the three months ended September 30, 2002. This decrease
was primarily due to (i) the decreases in volumes of oil and gas sold and
(ii) two significant wells being fully depleted during the three months
ended September 30, 2002 due to the lack of remaining economically
recoverable reserves. As a percentage of oil and gas sales, this expense
decreased to 4.2% for the three months ended September 30, 2003 from 24.4%
for the three months ended September 30, 2002. This percentage decrease
was primarily due to the dollar decrease in depreciation, depletion, and
amortization of oil and gas properties.
General and administrative expenses increased $1,528 (3.7%) for the three
months ended September 30, 2003 as compared to the three months ended
September 30, 2002. As a percentage of oil and gas sales, these expenses
increased to 8.3% for the three months ended September 30, 2003 from 6.8%
for the three months ended September 30, 2002.
-48-
NINE MONTHS ENDED SEPTEMBER 30, 2003 COMPARED TO THE NINE MONTHS ENDED
SEPTEMBER 30, 2002.
Nine Months Ended September 30,
-------------------------------
2003 2002
---------- ----------
Oil and gas sales $1,782,665 $1,811,852
Oil and gas production expenses $ 336,230 $ 499,128
Barrels produced 24,350 30,381
Mcf produced 193,568 422,121
Average price/Bbl $ 29.73 $ 23.54
Average price/Mcf $ 5.47 $ 2.60
As shown in the table above, total oil and gas sales decreased $29,187
(1.6%) for the nine months ended September 30, 2003 as compared to the
nine months ended September 30, 2002. Of this decrease, approximately
$142,000 and $594,000, respectively, were related to decreases in volumes
of oil and gas sold. These decreases were partially offset by increases of
approximately $151,000 and $556,000, respectively, related to increases in
the average prices of oil and gas sold. Volumes of oil and gas sold
decreased 6,031 barrels and 228,553 Mcf, respectively, for the nine months
ended September 30, 2003 as compared to the nine months ended September
30, 2002. The decrease in volumes of oil sold was primarily due to normal
declines in production. This decrease was partially offset by an increase
in production during the nine months ended September 30, 2003 on one
significant well due to the successful workover of that well during mid
2002. The decrease in volumes of gas sold was primarily due to (i) a
substantial decline in production during the nine months ended September
30, 2003 on one significant well following the workover of that well
during early 2002, (ii) positive prior period gas balancing adjustments on
two significant wells during the nine months ended September 30, 2002, and
(iii) normal declines in production. The well with a substantial decline
in production is not expected to return to previously high levels of
production. Average oil and gas prices increased to $29.73 per barrel and
$5.47 per Mcf, respectively, for the nine months ended September 30, 2003
from $23.54 per barrel and $2.60 per Mcf, respectively, for the nine
months ended September 30, 2002.
Oil and gas production expenses (including lease operating expenses and
production taxes) decreased $162,898 (32.6%) for the nine months ended
September 30, 2003 as compared to the nine months ended September 30,
2002. This decrease was primarily due to (i) a decrease in lease operating
expenses associated with the decreases in volumes of oil and gas sold,
(ii) positive prior period lease operating expense adjustments on two
significant wells during the nine months ended September 30, 2002, and
(iii) workover expenses incurred on two significant wells during the nine
months ended September 30, 2002. As a percentage of oil and gas
-49-
sales, these expenses decreased to 18.9% for the nine months ended
September 30, 2003 from 27.5% for the nine months ended September 30,
2002. This percentage decrease was primarily due to the increases in the
average prices of oil and gas sold.
Depreciation, depletion, and amortization of oil and gas properties
decreased $171,470 (68.5%) for the nine months ended September 30, 2003 as
compared to the nine months ended September 30, 2002. This decrease was
primarily due to (i) the decreases in volumes of oil and gas sold, (ii)
two wells being fully depleted during the nine months ended September 30,
2002 due to the lack of remaining economically recoverable reserves, and
(iii) upward revisions in the estimates of remaining oil and gas reserves
for the nine months ended September 30, 2003. As a percentage of oil and
gas sales, this expense decreased to 4.4% for the nine months ended
September 30, 2003 from 13.8% for the nine months ended September 30,
2002. This percentage decrease was primarily due to the dollar decrease in
deprecation, depletion, and amortization of oil and gas properties.
General and administrative expenses increased $2,179 (1.6%) for the nine
months ended September 30, 2003 as compared to the nine months ended
September 30, 2002. As a percentage of oil and gas sales, these expenses
increased to 7.7% for the nine months ended September 30, 2003 from 7.5%
for the nine months ended September 30, 2002.
The Limited Partners have received cash distributions through September
30, 2003 totaling $20,438,353 or 147.74% of Limited Partners' capital
contributions.
III-C PARTNERSHIP
THREE MONTHS ENDED SEPTEMBER 30, 2003 COMPARED TO THE THREE MONTHS ENDED
SEPTEMBER 30, 2002.
Three Months Ended September 30,
--------------------------------
2003 2002
-------- --------
Oil and gas sales $756,408 $664,913
Oil and gas production expenses $159,669 $169,814
Barrels produced 1,918 2,684
Mcf produced 155,930 208,418
Average price/Bbl $ 27.95 $ 28.00
Average price/Mcf $ 4.51 $ 2.83
As shown in the table above, total oil and gas sales increased $91,495
(13.8%) for the three months ended September 30, 2003 as compared to the
three months ended September 30, 2002. Of this increase, approximately
$262,000 was related to an increase in the average price of gas sold. This
increase was partially offset by decreases of approximately $21,000 and
$149,000, respectively, related to decreases in volumes of oil and gas
sold. Volumes of oil
-50-
and gas sold decreased 766 barrels and 52,488 Mcf, respectively, for the
three months ended September 30, 2003 as compared to the three months
ended September 30, 2002. The decrease in volumes of oil sold was
primarily due to normal declines in production. This decrease was
partially offset by an increase in production on one significant well due
to the successful recompletion of that well during late 2002. The decrease
in volumes of gas sold was primarily due to (i) normal declines in
production and (ii) the shutting-in of one significant well during three
months ended September 30, 2003 in order to perform a workover on that
well. The shut-in well is expected to return to production in late 2003.
These decreases were partially offset by a positive prior period volume
adjustment made by the operator on one significant well during the three
months ended September 30, 2003. Average oil prices decreased to $27.95
per barrel for the three months ended September 30, 2003 from $28.00 per
barrel for the three months ended September 30, 2002. Average gas prices
increased to $4.51 per Mcf for the three months ended September 30, 2003
from $2.83 per Mcf for the three months ended September 30, 2002.
Oil and gas production expenses (including lease operating expenses and
production taxes) decreased $10,145 (6.0%) for the three months ended
September 30, 2003 as compared to the three months ended September 30,
2002. This decrease was primarily due to (i) workover expenses incurred on
several wells during the three months ended September 30, 2002, (ii) a
decrease in lease operating expenses associated with the decreases in
volumes of oil and gas sold, and (iii) negative prior period production
tax adjustments on one significant well during the three months ended
September 30, 2003. These decreases were partially offset by workover
expenses incurred on one significant well during the three months ended
September 30, 2003. As a percentage of oil and gas sales, these expenses
decreased to 21.1% for the three months ended September 30, 2003 from
25.5% for the three months ended September 30, 2002. This percentage
decrease was primarily due to the increase in the average price of gas
sold.
Depreciation, depletion, and amortization of oil and gas properties
decreased $4,678 (9.0%) for the three months ended September 30, 2003 as
compared to the three months ended September 30, 2002. As a percentage of
oil and gas sales, this expense decreased to 6.3% for the three months
ended September 30, 2003 from 7.8% for the three months ended September
30, 2002. This percentage decrease was primarily due to the increase in
the average price of gas sold.
General and administrative expenses increased $3,263 (4.7%) for the three
months ended September 30, 2003 as compared to the three months ended
September 30, 2002. As a percentage of oil and gas sales, these expenses
decreased to 9.7% for the three months ended September 30, 2003 from 10.5%
for the three months ended September 30, 2002.
-51-
NINE MONTHS ENDED SEPTEMBER 30, 2003 COMPARED TO THE NINE MONTHS ENDED
SEPTEMBER 30, 2002.
Nine Months Ended September 30,
-------------------------------
2003 2002
---------- ----------
Oil and gas sales $2,875,739 $1,950,464
Oil and gas production expenses $ 622,829 $ 538,477
Barrels produced 11,492 9,026
Mcf produced 507,311 637,144
Average price/Bbl $ 30.09 $ 23.96
Average price/Mcf $ 4.99 $ 2.72
As shown in the table above, total oil and gas sales increased $925,275
(47.4%) for the nine months ended September 30, 2003 as compared to the
nine months ended September 30, 2002. Of this increase, approximately
$1,149,000 was related to an increase in the average price of gas sold,
which increase was partially offset by a decrease of approximately
$353,000 related to a decrease in volumes of gas sold. Volumes of oil sold
increased 2,466 barrels, while volumes of gas sold decreased 129,833 Mcf
for the nine months ended September 30, 2003 as compared to the nine
months ended September 30, 2002. The increase in volumes of oil sold was
primarily due to an increase in production on one significant well due to
the successful recompletion of that well during late 2002. The decrease in
volumes of gas sold was primarily due to (i) normal declines in production
and (ii) the shutting-in of two significant wells during the nine months
ended September 30, 2003 in order to perform workovers on those wells. One
shut-in well has returned to production and the other well is expected to
return to production in late 2003. These decreases were partially offset
by an increase in production on another significant well due to the
successful completion of that well during early 2003. Average oil and gas
prices increased to $30.09 per barrel and $4.99 per Mcf, respectively, for
the nine months ended September 30, 2003 from $23.96 per barrel and $2.72
per Mcf, respectively, for the nine months ended September 30, 2002.
Oil and gas production expenses (including lease operating expenses and
production taxes) increased $84,352 (15.7%) for the nine months ended
September 30, 2003 as compared to the nine months ended September 30,
2002. This increase was primarily due to (i) an increase in production
taxes associated with the increase in oil and gas sales and (ii) workover
expenses incurred on one significant well during the nine months ended
September 30, 2003. These increases were partially offset by (i) a
decrease in lease operating expenses associated with the decrease in
volumes of gas sold, (ii) workover expenses incurred on several wells
during the nine months ended September 30, 2002, and (iii) lower workover
expenses incurred on one significant well during the nine months ended
September 30, 2003 than similar
-52-
expenses incurred on the same well during the nine months ended September
30, 2002. As a percentage of oil and gas sales, these expenses decreased
to 21.7% for the nine months ended September 30, 2003 from 27.6% for the
nine months ended September 30, 2002. This percentage decrease was
primarily due to the increases in the average prices of oil and gas sold.
Depreciation, depletion, and amortization of oil and gas properties
decreased $41,265 (21.9%) for the nine months ended September 30, 2003 as
compared to the nine months ended September 30, 2002. 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 5.1% for the nine months
ended September 30, 2003 from 9.6% for the nine months ended September 30,
2002. This percentage decrease was primarily due to the increases in the
average prices of oil and gas sold.
General and administrative expenses increased $2,459 (1.1%) for the nine
months ended September 30, 2003 as compared to the nine months ended
September 30, 2002. As a percentage of oil and gas sales, these expenses
decreased to 7.9% for the nine months ended September 30, 2003 from 11.5%
for the nine months ended September 30, 2002. This percentage decrease was
primarily due to the increase in oil and gas sales.
The Limited Partners have received cash distributions through September
30, 2003 totaling $27,065,795 or 110.68% of Limited Partners' capital
contributions.
III-D PARTNERSHIP
THREE MONTHS ENDED SEPTEMBER 30, 2003 COMPARED TO THE THREE MONTHS ENDED
SEPTEMBER 30, 2002.
Three Months Ended September 30,
--------------------------------
2003 2002
-------- --------
Oil and gas sales $441,500 $447,909
Oil and gas production expenses $160,128 $178,210
Barrels produced 5,752 5,045
Mcf produced 72,862 121,285
Average price/Bbl $ 25.91 $ 24.76
Average price/Mcf $ 4.01 $ 2.66
As shown in the table above, total oil and gas sales decreased $6,409
(1.4%) for the three months ended September 30, 2003 as compared to the
three months ended September 30, 2002. Of this decrease, approximately
$129,000 was related to a decrease in volumes of gas sold. This decrease
was partially offset by increases of approximately (i) $7,000 and $98,000,
respectively, related to increases in the average prices of oil and gas
sold and (ii) $18,000 related to an increase in volumes of oil sold.
Volumes of oil sold
-53-
increased 707 barrels, while volumes of gas sold decreased 48,423 Mcf for
the three months ended September 30, 2003 as compared to the three months
ended September 30, 2002. The increase in volumes of oil sold was
primarily due to an increase in production on one significant well due to
the successful recompletion of that well during late 2002. The decrease in
volumes of gas sold was primarily due to (i) normal declines in
production, (ii) the shutting-in of one significant well during the three
months ended September 30, 2003 in order to perform a workover on that
well, and (iii) a positive prior period volume adjustment made by the
purchaser on another significant well during the three months ended
September 30, 2002. The shut-in well is expected to return to production
in late 2003. Average oil and gas prices increased to $25.91 per barrel
and $4.01 per Mcf, respectively, for the three months ended September 30,
2003 from $24.76 per barrel and $2.66 per Mcf, respectively, for the three
months ended September 30, 2002.
Oil and gas production expenses (including lease operating expenses and
production taxes) decreased $18,082 (10.1%) for the three months ended
September 30, 2003 as compared to the three months ended September 30,
2002. This decrease was primarily due to (i) one-time repair and
maintenance expenses incurred on one significant well during the three
months ended September 30, 2002 and (ii) workover expenses incurred on
several wells within the same unit during the three months ended September
30, 2002. As a percentage of oil and gas sales, these expenses decreased
to 36.3% for the three months ended September 30, 2003 from 39.8% for the
three months ended September 30, 2002.
Depreciation, depletion, and amortization of oil and gas properties
decreased $8,410 (23.0%) for the three months ended September 30, 2003 as
compared to the three months ended September 30, 2002. This decrease was
primarily due to the decrease in volumes of gas sold. This decrease was
partially offset by substantial downward revisions in the estimates of
remaining oil and gas reserves on a large unitized property during the
three months ended September 30, 2003 as compared to the three months
ended September 30, 2002. As a percentage of oil and gas sales, these
expenses decreased to 6.4% for three months ended September 30, 2003 from
8.2% for the three months ended September 30, 2002. This percentage
decrease was primarily due to the increases in the average prices of oil
and gas sold.
General and administrative expenses increased $1,385 (3.6%) for the three
months ended September 30, 2003 as compared to the three months ended
September 30, 2002. As a percentage of oil and gas sales, these expenses
increased to 9.0% for the three months ended September 30, 2003 from 8.6%
for the three months ended September 30, 2002.
-54-
NINE MONTHS ENDED SEPTEMBER 30, 2003 COMPARED TO THE NINE MONTHS ENDED
SEPTEMBER 30, 2002.
Nine Months Ended September 30,
-------------------------------
2003 2002
---------- ----------
Oil and gas sales $1,968,194 $1,382,847
Oil and gas production expenses $ 572,941 $ 566,934
Barrels produced 20,673 17,127
Mcf produced 291,817 389,844
Average price/Bbl $ 27.00 $ 21.25
Average price/Mcf $ 4.83 $ 2.61
As shown in the table above, total oil and gas sales increased $585,347
(42.3%) for the nine months ended September 30, 2003 as compared to the
nine months ended September 30, 2002. Of this increase, approximately (i)
$119,000 and $647,000, respectively, were related to increases in the
average prices of oil and gas sold and (ii) $75,000 was related to an
increase in volumes of oil sold. These increases were partially offset by
a decrease of approximately $256,000 related to a decrease in volumes of
gas sold. Volumes of oil sold increased 3,546 barrels, while volumes of
gas sold decreased 98,027 Mcf for the nine months ended September 30, 2003
as compared to the nine months ended September 30, 2002. The increase in
volumes of oil sold was primarily due to an increase in production on one
significant well due to the successful recompletion of that well during
late 2002. The decrease in volumes of gas sold was primarily due to (i)
normal declines in production and (ii) the shutting-in of two significant
wells during the nine months ended September 30, 2003 in order to perform
workovers on those wells. One of the shut-in wells has returned to
production and the other well is expected to return to production in late
2003. These decreases were partially offset by the successful completion
of one significant well during early 2003. Average oil and gas prices
increased to $27.00 per barrel and $4.83 per Mcf, respectively, for the
nine months ended September 30, 2003 from $21.25 per barrel and $2.61 per
Mcf, respectively, for the nine months ended September 30, 2002.
Oil and gas production expenses (including lease operating expenses and
production taxes) increased $6,007 (1.1%) for the nine months ended
September 30, 2003 as compared to the nine months ended September 30,
2002. This increase was primarily due to (i) an increase in production
taxes associated with the increase in oil and gas sales and (ii) workover
expenses incurred on one significant well during the nine months ended
September 30, 2003. These increases were partially offset by (i) a
decrease in lease operating expenses associated with the decrease in
volumes of gas sold, (ii) lower workover expenses incurred on one
significant well during the nine months ended September 30, 2003 than
similar expenses incurred on the same wells during
-55-
the nine months ended September 30, 2002, and (iii) workover expenses
incurred on several wells within the same unit during the nine months
ended September 30, 2002. As a percentage of oil and gas sales, these
expenses decreased to 29.1% for the nine months ended September 30, 2003
from 41.0% for the nine months ended September 30, 2002. This percentage
decrease was primarily due to the increases in the average prices of oil
and gas sold.
Depreciation, depletion, and amortization of oil and gas properties
decreased $12,521 (13.4%) for the nine months ended September 30, 2003 as
compared to the nine months ended September 30, 2002. This decrease was
primarily due to the decrease in volumes of gas sold. This decrease was
partially offset by substantial downward revisions in the estimates of
remaining oil and gas reserves on a large unitized property during the
nine months ended September 30, 2003 as compared to the nine months ended
September 30, 2002. As a percentage of oil and gas sales, these expenses
decreased to 4.1% for the nine months ended September 30, 2003 from 6.8%
for the nine months ended September 30, 2002. This percentage decrease was
primarily due to the increases in the average prices of oil and gas sold.
General and administrative expenses increased $2,200 (1.7%) for the nine
months ended September 30, 2003 as compared to the nine months ended
September 30, 2002. As a percentage of oil and gas sales, these expenses
decreased to 6.7% for the nine months ended September 30, 2003 from 9.3%
for the nine months ended September 30, 2002. This percentage decrease was
primarily due to the increase in oil and gas sales.
The Limited Partners have received cash distributions through September
30, 2003 totaling $14,989,669 or 114.42% of Limited Partners' capital
contributions.
III-E PARTNERSHIP
THREE MONTHS ENDED SEPTEMBER 30, 2003 COMPARED TO THE THREE MONTHS ENDED
SEPTEMBER 30, 2002.
Three Months Ended September 30,
--------------------------------
2003 2002
---------- ----------
Oil and gas sales $1,694,268 $1,185,582
Oil and gas production expenses $ 820,642 $ 848,963
Barrels produced 33,971 29,212
Mcf produced 199,127 202,835
Average price/Bbl $ 25.39 $ 23.97
Average price/Mcf $ 4.18 $ 2.39
As shown in the table above, total oil and gas sales increased $508,686
(42.9%) for the three months ended September 30, 2003 as compared to the
three months ended September 30, 2002. Of this increase, approximately (i)
-56-
$48,000 and $355,000, respectively, were related to increases in the
average prices of oil and gas sold and (ii) $114,000 was related to an
increase in volumes of oil sold. Volumes of oil sold increased 4,759
barrels, while volumes of gas sold decreased 3,708 Mcf for the three
months ended September 30, 2003 as compared to the three months ended
September 30, 2002. The increase in volumes of oil sold was primarily due
to (i) the successful completion of two new wells within the same unit
during mid 2003 and (ii) an increase in production on one significant well
due to the successful workover of that well during early 2003. Average oil
and gas prices increased to $25.39 per barrel and $4.18 per Mcf,
respectively, for the three months ended September 30, 2003 from $23.97
per barrel and $2.39 per Mcf, respectively, for the three months ended
September 30, 2002.
Oil and gas production expenses (including lease operating expenses and
production taxes) decreased $28,321 (3.3%) for the three months ended
September 30, 2003 as compared to the three months ended September 30,
2002. This decrease was primarily due to workover expenses incurred on
several wells within one unit during the three months ended September 30,
2002. This decrease was partially offset by an increase in production
taxes associated with the increase in oil and gas sales. As a percentage
of oil and gas sales, these expenses decreased to 48.4% for the three
months ended September 30, 2003 from 71.6% for the three months ended
September 30, 2002. This percentage decrease was primarily due to the
increases in the average prices of oil and gas sold.
Depreciation, depletion, and amortization of oil and gas properties
decreased $14,730 (12.8%) for the three months ended September 30, 2003 as
compared to the three months ended September 30, 2002. This decrease was
primarily due to one significant well being fully depleted during the
three months ended September 30, 2002 due to the lack of remaining
economically recoverable reserves. This decrease was partially offset by
substantial downward revisions in the estimates of remaining oil and gas
reserves on a large unitized property during the three months ended
September 30, 2003 as compared to the three months ended September 30,
2002. As a percentage of oil and gas sales, this expense decreased to 5.9%
for the three months ended September 30, 2003 from 9.7% for the three
months ended September 30, 2002. This percentage decrease was primarily
due to the increases in the average prices of oil and gas sold.
General and administrative expenses increased $6,144 (5.2%) for the three
months ended September 30, 2003 as compared to the three months ended
September 30, 2002. As a percentage of oil and gas sales, these expenses
decreased to 7.3% for the three months ended September 30, 2003 from 10.0%
for the three months ended September 30, 2002. This percentage decrease
was primarily due to the increase in oil and gas sales.
-57-
NINE MONTHS ENDED SEPTEMBER 30, 2003 COMPARED TO THE NINE MONTHS ENDED
SEPTEMBER 30, 2002.
Nine Months Ended September 30,
-------------------------------
2003 2002
---------- ----------
Oil and gas sales $5,671,907 $4,084,397
Oil and gas production expenses $2,433,549 $2,545,307
Barrels produced 96,672 100,957
Mcf produced 640,465 769,051
Average price/Bbl $ 26.13 $ 20.71
Average price/Mcf $ 4.91 $ 2.59
As shown in the table above, total oil and gas sales increased $1,587,510
(38.9%) for the nine months ended September 30, 2003 as compared to the
nine months ended September 30, 2002. Of this increase, approximately
$524,000 and $1,486,000, respectively, were related to increases in the
average prices of oil and gas sold. These increases were partially offset
by a decrease of approximately $333,000 related to a decrease in volumes
of gas sold. Volumes of oil and gas sold decreased 4,285 barrels and
128,586 Mcf, respectively, for the nine months ended September 30, 2003 as
compared to the nine months ended September 30, 2002. The decrease in
volumes of oil sold was primarily due to normal declines in production,
which decrease was partially offset by an increase in production on one
significant well due to the successful workover of that well during early
2003. The decrease in volumes of gas sold was primarily due to (i) normal
declines in production and (ii) the shutting-in of one significant well
during the nine months ended September 30, 2003 in order to perform a
workover on that well. The shut-in well is expected to return to
production in late 2003. Average oil and gas prices increased to $26.13
per barrel and $4.91 per Mcf, respectively, for the nine months ended
September 30, 2003 from $20.71 per barrel and $2.59 per Mcf, respectively,
for the nine months ended September 30, 2002.
Oil and gas production expenses (including lease operating expenses and
production taxes) decreased $111,758 (4.4%) for the nine months ended
September 30, 2003 as compared to the nine months ended September 30,
2002. This decrease was primarily due to (i) a decrease in lease operating
expenses associated with the decreases in volumes of oil and gas sold and
(ii) workover expenses incurred on several wells within one unit during
the nine months ended September 30, 2002. These decreases were partially
offset by an increase in production taxes associated with the increase in
oil and gas sales. As a percentage of oil and gas sales, these expenses
decreased to 42.9% for the nine months ended September 30, 2003 from 62.3%
for the nine months ended September 30, 2002. This percentage decrease was
primarily due to the increases in the average prices of oil and gas sold.
-58-
Depreciation, depletion, and amortization of oil and gas properties
increased $22,888 (8.8%) for the nine months ended September 30, 2003 as
compared to the nine months ended September 30, 2002. This increase was
primarily due to (i) substantial downward revisions in the estimates of
remaining oil and gas reserves on a large unitized property during the
nine months ended September 30, 2003 as compared to the nine months ended
September 30, 2002, (ii) another significant well being fully depleted
during the nine months ended September 30, 2003 due to the lack of
remaining economically recoverable reserves, and (iii) the abandonment of
another significant well during the nine months ended September 30, 2003
due to severe mechanical problems. These increases were partially offset
by (i) another well being fully depleted during the nine months ended
September 30, 2002 due to the lack of remaining economically recoverable
reserves and (ii) the decreases in volumes of oil and gas sold. As a
percentage of oil and gas sales, this expense decreased to 5.0% for the
nine months ended September 30, 2003 from 6.3% for the nine months ended
September 30, 2002. This percentage decrease was primarily due to the
increases in the average prices of oil and gas sold.
General and administrative expenses remained relatively constant for the
nine months ended September 30, 2003 and 2002. As a percentage of oil and
gas sales, these expenses decreased to 6.6% for the nine months ended
September 30, 2003 from 9.1% for the nine months ended September 30, 2002.
This percentage decrease was primarily due to the increase in oil and gas
sales.
The Limited Partners have received cash distributions through September
30, 2003 totaling $45,787,016 or 109.47% of Limited Partners' capital
contributions.
III-F PARTNERSHIP
THREE MONTHS ENDED SEPTEMBER 30, 2003 COMPARED TO THE THREE MONTHS ENDED
SEPTEMBER 30, 2002.
Three Months Ended September 30,
--------------------------------
2003 2002
-------- --------
Oil and gas sales $532,513 $371,424
Oil and gas production expenses $181,615 $146,825
Barrels produced 5,094 5,448
Mcf produced 94,683 115,952
Average price/Bbl $ 27.38 $ 23.83
Average price/Mcf $ 4.15 $ 2.08
As shown in the table above, total oil and gas sales increased $161,089
(43.4%) for the three months ended September 30, 2003 as compared to the
three months ended September 30, 2002. Of this increase, approximately
$18,000 and $196,000, respectively, were related to increases in the
-59-
average prices of oil and gas sold. These increases were partially offset
by a decrease of approximately $44,000 related to a decrease in volumes of
gas sold. Volumes of oil and gas sold decreased 354 barrels and 21,269
Mcf, respectively, for the three months ended September 30, 2003 as
compared to the three months ended September 30, 2002. The decrease in
volumes of gas sold was primarily due to (i) normal declines in production
and (ii) the shutting-in of one significant well during the three months
ended September 30, 2003 in order to perform repairs and maintenance on
that well. The shut-in well is expected to return to production in late
2003. Average oil and gas prices increased to $27.38 per barrel and $4.15
per Mcf, respectively, for the three months ended September 30, 2003 from
$23.83 per barrel and $2.08 per Mcf, respectively, for the three months
ended September 30, 2002.
Oil and gas production expenses (including lease operating expenses and
production taxes) increased $34,790 (23.7%) for the three months ended
September 30, 2003 as compared to the three months ended September 30,
2002. This increase was primarily due to (i) workover expenses incurred on
one significant well during the three months ended September 30, 2003 and
(ii) an increase in production taxes associated with the increase in oil
and gas sales. As a percentage of oil and gas sales, these expenses
decreased to 34.1% for the three months ended September 30, 2003 from
39.5% for the three months ended September 30, 2002. This percentage
decrease was primarily due to the increases in the average prices of oil
and gas sold.
Depreciation, depletion, and amortization of oil and gas properties
decreased $32,933 (45.0%) for the three months ended September 30, 2003 as
compared to the three months ended September 30, 2002. This decrease was
primarily due to (i) one significant well being fully depleted during the
three months ended September 30, 2002 due to the lack of remaining
economically recoverable reserves and (ii) the decreases in volumes of oil
and gas sold. As a percentage of oil and gas sales, this expense decreased
to 7.5% for the three months ended September 30, 2003 from 19.7% for the
three months ended September 30, 2002. This percentage decrease was
primarily due to (i) the increases in the average prices of oil and gas
sold and (ii) the dollar decrease in depreciation, depletion, and
amortization of oil and gas properties.
General and administrative expenses increased $2,881 (4.5%) for the three
months ended September 30, 2003 as compared to the three months ended
September 30, 2002. As a percentage of oil and gas sales, these expenses
decreased to 12.5% for the three months ended September 30, 2003 from
17.1% for the three months ended September 30, 2002. This percentage
decrease was primarily due to the increase in oil and gas sales.
-60-
NINE MONTHS ENDED SEPTEMBER 30, 2003 COMPARED TO THE NINE MONTHS ENDED
SEPTEMBER 30, 2002.
Nine Months Ended September 30,
------------------------------
2003 2002
---------- ----------
Oil and gas sales $2,019,578 $1,234,005
Oil and gas production expenses $ 573,387 $ 442,668
Barrels produced 15,390 18,000
Mcf produced 316,201 354,147
Average price/Bbl $ 28.92 $ 21.84
Average price/Mcf $ 4.98 $ 2.37
As shown in the table above, total oil and gas sales increased $785,573
(63.7%) for the nine months ended September 30, 2003 as compared to the
nine months ended September 30, 2002. Of this increase, approximately
$109,000 and $824,000, respectively, were related to increases in the
average prices of oil and gas sold. These increases were partially offset
by a decrease of approximately $90,000 related to a decrease in volumes of
gas sold. Volumes of oil and gas sold decreased 2,610 barrels and 37,946
Mcf, respectively, for the nine months ended September 30, 2003 as
compared to the nine months ended September 30, 2002. The decrease in
volumes of oil sold was primarily due to (i) normal declines in
production, (ii) the abandonment of one significant well during early 2003
due to severe mechanical problems, and (iii) the shutting-in of another
significant well during the nine months ended September 30, 2003 in order
to perform a workover on that well. The operator has not yet determined
when the shut-in well will return to production. The decrease in volumes
of gas sold was primarily due to (i) normal declines in production and
(ii) the shutting-in of one significant well in order to perform repairs
and maintenance on that well. The shut-in well is expected to return to
production in late 2003. Average oil and gas prices increased to $28.92
per barrel and $4.98 per Mcf, respectively, for the nine months ended
September 30, 2003 from $21.84 per barrel and $2.37 per Mcf, respectively,
for the nine months ended September 30, 2002.
Oil and gas production expenses (including lease operating expenses and
production taxes) increased $130,719 (29.5%) for the nine months ended
September 30, 2003 as compared to the nine months ended September 30,
2002. This increase was primarily due to (i) a negative prior period lease
operating expense adjustment made by the operator on one significant well
during the nine months ended September 30, 2002, (ii) an increase in
production taxes associated with the increase in oil and gas sales, and
(iii) workover expenses incurred on another significant well during the
nine months ended September 30, 2003. As a percentage of oil and gas
sales, these expenses decreased to 28.4% for the nine months ended
September 30, 2003 from 35.9% for the nine months ended September 30,
2002. This percentage decrease was primarily
-61-
due to the increases in the average prices of oil and gas sold.
Depreciation, depletion, and amortization of oil and gas properties
increased $3,246 (1.8%) for the nine months ended September 30, 2003 as
compared to the nine months ended September 30, 2002. This increase was
primarily due to (i) the abandonment of one significant well during the
nine months ended September 30, 2003 due to severe mechanical problems and
(ii) another significant well being fully depleted during the nine months
ended September 30, 2003 due to the lack of remaining economically
recoverable reserves. These increases were partially offset by (i) one
significant well being fully depleted during the nine months ended
September 30, 2002 due to the lack of remaining economically recoverable
reserves and (ii) the decreases in volumes of oil and gas sold. As a
percentage of oil and gas sales, this expense decreased to 8.9% for the
nine months ended September 30, 2003 from 14.4% for the nine months ended
September 30, 2002. This percentage decrease was primarily due to the
increases in the average prices of oil and gas sold.
General and administrative expenses increased $2,356 (1.2%) for the nine
months ended September 30, 2003 as compared to the nine months ended
September 30, 2002. As a percentage of oil and gas sales, these expenses
decreased to 10.2% for the nine months ended September 30, 2003 from 16.6%
for the nine months ended September 30, 2002. This percentage decrease was
primarily due to the increase in oil and gas sales.
The Limited Partners have received cash distributions through September
30, 2003 totaling $18,040,904 or 81.45% of Limited Partners' capital
contributions.
-62-
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
As of the end of this period covered by this report, the principal
executive officer and principal financial officer conducted an
evaluation of the Partnerships' disclosure controls and procedures
(as defined in Rules 13a-15(e) and 15d-15(e) under the Securities
and Exchange Act of 1934). Based on this evaluation, such officers
concluded that the Partnerships' disclosure controls and procedures
are effective to ensure that information required to be disclosed by
the Partnerships in reports filed under the Exchange Act is
recorded, processed, summarized, and reported accurately and within
the time periods specified in the Securities and Exchange Commission
rules and forms.
-63-
PART II. OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
31.1 Certification by Dennis R. Neill required by Rule 13a-14(a)/15d-14(a)
for the Geodyne Energy Income Limited Partnership III-A.
31.2 Certification by Craig D. Loseke required by Rule 13a-14(a)/15d-14(a)
for the Geodyne Energy Income Limited Partnership III-A.
31.3 Certification by Dennis R. Neill required by Rule 13a-14(a)/15d-14(a)
for the Geodyne Energy Income Limited Partnership III-B.
31.4 Certification by Craig D. Loseke required by Rule 13a-14(a)/15d-14(a)
for the Geodyne Energy Income Limited Partnership III-B.
31.5 Certification by Dennis R. Neill required by Rule 13a-14(a)/15d-14(a)
for the Geodyne Energy Income Limited Partnership III-C.
31.6 Certification by Craig D. Loseke required by Rule 13a-14(a)/15d-14(a)
for the Geodyne Energy Income Limited Partnership III-C.
31.7 Certification by Dennis R. Neill required by Rule 13a-14(a)/15d-14(a)
for the Geodyne Energy Income Limited Partnership III-D.
31.8 Certification by Craig D. Loseke required by Rule 13a-14(a)/15d-14(a)
for the Geodyne Energy Income Limited Partnership III-D.
31.9 Certification by Dennis R. Neill required by Rule 13a-14(a)/15d-14(a)
for the Geodyne Energy Income Limited Partnership III-E.
31.10 Certification by Craig D. Loseke required by Rule 13a-14(a)/15d-14(a)
for the Geodyne Energy Income Limited Partnership III-E.
31.11 Certification by Dennis R. Neill required by Rule 13a-14(a)/15d-14(a)
for the Geodyne Energy Income Limited Partnership III-F.
31.12 Certification by Craig D. Loseke required by Rule 13a-14(a)/15d-14(a)
for the Geodyne Energy Income Limited Partnership III-F.
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32.1 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 III-A.
32.2 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 III-B.
32.3 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 III-C.
32.4 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 III-F.
32.5 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 III-E.
32.6 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 III-F.
(b) Reports on Form 8-K.
None.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-A
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-B
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-C
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-D
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-E
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-F
(Registrant)
BY: GEODYNE RESOURCES, INC.
General Partner
Date: November 14, 2003 By: /s/Dennis R. Neill
--------------------------------
(Signature)
Dennis R. Neill
President
Date: November 14, 2003 By: /s/Craig D. Loseke
--------------------------------
(Signature)
Craig D. Loseke
Chief Accounting Officer
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INDEX TO EXHIBITS
-----------------
Exh.
No. Exhibit
- ---- -------
31.1 Certification by Dennis R. Neill required by Rule 13a-14(a)/15d-14(a)
for the Geodyne Energy Income Limited Partnership III-A.
31.2 Certification by Craig D. Loseke required by Rule 13a-14(a)/15d-14(a)
for the Geodyne Energy Income Limited Partnership III-A.
31.3 Certification by Dennis R. Neill required by Rule 13a-14(a)/15d-14(a)
for the Geodyne Energy Income Limited Partnership III-B.
31.4 Certification by Craig D. Loseke required by Rule 13a-14(a)/15d-14(a)
for the Geodyne Energy Income Limited Partnership III-B.
31.5 Certification by Dennis R. Neill required by Rule 13a-14(a)/15d-14(a)
for the Geodyne Energy Income Limited Partnership III-C.
31.6 Certification by Craig D. Loseke required by Rule 13a-14(a)/15d-14(a)
for the Geodyne Energy Income Limited Partnership III-C.
31.7 Certification by Dennis R. Neill required by Rule 13a-14(a)/15d-14(a)
for the Geodyne Energy Income Limited Partnership III-D.
31.8 Certification by Craig D. Loseke required by Rule 13a-14(a)/15d-14(a)
for the Geodyne Energy Income Limited Partnership III-D.
31.9 Certification by Dennis R. Neill required by Rule 13a-14(a)/15d-14(a)
for the Geodyne Energy Income Limited Partnership III-E.
31.10 Certification by Craig D. Loseke required by Rule 13a-14(a)/15d-14(a)
for the Geodyne Energy Income Limited Partnership III-E.
31.11 Certification by Dennis R. Neill required by Rule 13a-14(a)/15d-14(a)
for the Geodyne Energy Income Limited Partnership III-F.
31.12 Certification by Craig D. Loseke required by Rule 13a-14(a)/15d-14(a)
for the Geodyne Energy Income Limited Partnership III-F.
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32.1 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 III-A.
32.2 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 III-B.
32.3 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 III-C.
32.4 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 III-D.
32.5 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 III-E.
32.6 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 III-F.
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