SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q/A
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarter ended March 31, 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-
EXPLANATORY NOTE
This Amendment No. 1 on Form 10-Q/A amends Items 1, 2, and 6 of the Quarterly
Report on Form 10-Q of Geodyne Energy Income Limited Partnership III-E and
Geodyne Energy Limited Income Partnership III-F for the three months ended March
31, 2003 as filed with the Securities and Exchange Commission on May 15, 2003
(the "Quarterly Report"). This Form 10-Q/A does not reflect events occurring
after the filing of the original Quarterly Report or modify or update those
disclosures affected by subsequent events.
As discussed in Note 1 to the Condensed Notes to the Financial Statements in
Item 1, this Form 10-Q/A restates the balance sheets, statements of operations,
and statements of cash flows to correct an inadvertent bookkeeping error that
resulted in an over-accrual of revenue and a misstatement of production taxes.
-2-
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-A
BALANCE SHEETS
(Unaudited)
ASSETS
March 31, December 31,
2003 2002
------------ ------------
CURRENT ASSETS:
Cash and cash equivalents $ 923,766 $ 718,665
Accounts receivable:
Related party (Note 2) - 888
Oil and gas sales 834,273 617,187
---------- ----------
Total current assets $1,758,039 $1,336,740
NET OIL AND GAS PROPERTIES, utilizing
the successful efforts method 921,697 867,774
DEFERRED CHARGE 260,836 260,836
---------- ----------
$2,940,572 $2,465,350
========== ==========
LIABILITIES AND PARTNERS' CAPITAL (DEFICIT)
CURRENT LIABILITIES:
Accounts payable $ 75,866 $ 86,580
Gas imbalance payable 27,471 27,471
---------- ----------
Total current liabilities $ 103,337 $ 114,051
LONG-TERM LIABILITIES:
Accrued liability $ 33,171 $ 33,171
Asset retirement obligation
(Note 1) 110,839 -
---------- ----------
Total long-term liabilities $ 144,010 $ 33,171
PARTNERS' CAPITAL (DEFICIT):
General Partner ($ 55,801) ($ 87,091)
Limited Partners, issued and
outstanding, 263,976 units 2,749,026 2,405,219
---------- ----------
Total Partners' capital $2,693,225 $2,318,128
---------- ----------
$2,940,572 $2,465,350
========== ==========
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 THREE MONTHS ENDED MARCH 31, 2003 AND 2002
(Unaudited)
2003 2002
---------- --------
REVENUES:
Oil and gas sales $1,241,672 $959,348
Interest income 1,429 2,369
---------- --------
$1,243,101 $961,717
COSTS AND EXPENSES:
Lease operating $ 99,722 $223,782
Production tax 92,298 39,942
Depreciation, depletion, and
amortization of oil and gas
properties 56,224 99,446
General and administrative
(Note 2) 83,312 90,111
---------- --------
$ 331,556 $453,281
---------- --------
INCOME BEFORE CUMULATIVE EFFECT
OF ACCOUNTING CHANGE $ 911,545 $508,436
Cumulative effect of change in
accounting for asset retirement
obligations (Note 1) ( 673) -
---------- --------
NET INCOME $ 910,872 $508,436
========== ========
GENERAL PARTNER - NET INCOME $ 96,065 $ 59,557
========== ========
LIMITED PARTNERS - NET INCOME $ 814,807 $448,879
========== ========
NET INCOME per unit $ 3.09 $ 1.70
========== ========
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 THREE MONTHS ENDED MARCH 31, 2003 AND 2002
(Unaudited)
2003 2002
-------- --------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $910,872 $508,436
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 56,224 99,446
Decrease in accounts receivable -
related party 10 -
(Increase) decrease in accounts
receivable - oil and gas sales ( 217,086) 37,601
Decrease in deferred charge - 53,074
Decrease in accounts payable ( 10,714) ( 33,576)
-------- --------
Net cash provided by operating
activities $739,979 $664,981
-------- --------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures $ - ($ 80,816)
Proceeds from the sale of oil
and gas properties 897 5,581
-------- --------
Net cash provided (used) by investing
activities $ 897 ($ 75,235)
-------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Cash distributions ($535,775) ($869,329)
-------- --------
Net cash used by financing activities ($535,775) ($869,329)
-------- --------
NET INCREASE (DECREASE) IN CASH AND
CASH EQUIVALENTS $205,101 ($279,583)
CASH AND CASH EQUIVALENTS AT
BEGINNING OF PERIOD 718,665 874,852
-------- --------
CASH AND CASH EQUIVALENTS AT
END OF PERIOD $923,766 $595,269
======== ========
The accompanying condensed notes are an integral
part of these financial statements.
-5-
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-B
BALANCE SHEETS
(Unaudited)
ASSETS
March 31, December 31,
2003 2002
------------ ------------
CURRENT ASSETS:
Cash and cash equivalents $ 504,540 $ 397,754
Accounts receivable:
Related party (Note 2) - 586
Oil and gas sales 461,167 346,664
---------- ----------
Total current assets $ 965,707 $ 745,004
NET OIL AND GAS PROPERTIES, utilizing
the successful efforts method 504,230 461,645
DEFERRED CHARGE 184,282 184,282
---------- ----------
$1,654,219 $1,390,931
========== ==========
LIABILITIES AND PARTNERS' CAPITAL (DEFICIT)
CURRENT LIABILITIES:
Accounts payable $ 55,020 $ 57,077
Gas imbalance payable 12,396 12,396
---------- ----------
Total current liabilities $ 67,416 $ 69,473
LONG-TERM LIABILITIES:
Accrued liability $ 12,518 $ 12,518
Asset retirement obligation
(Note 1) 77,271 -
---------- ----------
Total long-term liabilities $ 89,789 $ 12,518
PARTNERS' CAPITAL (DEFICIT):
General Partner ($ 23,450) ($ 48,554)
Limited Partners, issued and
outstanding, 138,336 units 1,520,464 1,357,494
---------- ----------
Total Partners' capital $1,497,014 $1,308,940
----------- -----------
$1,654,219 $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 MARCH 31, 2003 AND 2002
(Unaudited)
2003 2002
---------- --------
REVENUES:
Oil and gas sales $700,575 $598,584
Interest income 759 1,289
-------- --------
$701,334 $599,873
COSTS AND EXPENSES:
Lease operating $ 66,123 $149,433
Production tax 53,656 32,945
Depreciation, depletion, and
amortization of oil and gas
properties 34,068 61,804
General and administrative
(Note 2) 48,421 53,049
-------- --------
$202,268 $297,231
-------- --------
INCOME BEFORE CUMULATIVE EFFECT
OF ACCOUNTING CHANGE $499,066 $302,642
Cumulative effect of change in
accounting for asset retirement
obligations (Note 1) ( 586) -
-------- --------
NET INCOME $498,480 $302,642
======== ========
GENERAL PARTNER - NET INCOME $ 79,510 $ 53,856
======== ========
LIMITED PARTNERS - NET INCOME $418,970 $248,786
======== ========
NET INCOME per unit $ 3.03 $ 1.80
======== ========
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 CASH FLOWS
FOR THE THREE MONTHS ENDED MARCH 31, 2003 AND 2002
(Unaudited)
2003 2002
--------- ---------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $498,480 $302,642
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 34,068 61,804
Decrease in accounts receivable -
Related party (Note 2) 7 -
(Increase) decrease in accounts
receivable - oil and gas sales ( 114,503) 9,487
Decrease in deferred charge - 44,544
Decrease in accounts payable ( 2,057) ( 15,954)
-------- --------
Net cash provided by operating
activities $416,581 $402,523
-------- --------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures ($ 118) ($ 53,306)
Proceeds from the sale of oil and
gas properties 729 3,130
-------- --------
Net cash provided (used) by investing
activities $ 611 ($ 50,176)
-------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Cash distributions ($310,406) ($502,603)
-------- --------
Net cash used by financing activities ($310,406) ($502,603)
-------- --------
NET INCREASE (DECREASE) IN CASH AND
CASH EQUIVALENTS $106,786 ($150,256)
CASH AND CASH EQUIVALENTS AT
BEGINNING OF PERIOD 397,754 494,899
-------- --------
CASH AND CASH EQUIVALENTS AT
END OF PERIOD $504,540 $344,643
======== ========
The accompanying condensed notes are an integral
part of these financial statements.
-8-
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-C
BALANCE SHEETS
(Unaudited)
ASSETS
March 31, December 31,
2003 2002
----------- ------------
CURRENT ASSETS:
Cash and cash equivalents $ 746,714 $ 480,424
Accounts receivable:
Oil and gas sales 775,470 518,374
---------- ----------
Total current assets $1,522,184 $ 998,798
NET OIL AND GAS PROPERTIES, utilizing
the successful efforts method 1,818,585 1,694,533
DEFERRED CHARGE 57,867 57,867
---------- ----------
$3,398,636 $2,751,198
========== ==========
LIABILITIES AND PARTNERS' CAPITAL (DEFICIT)
CURRENT LIABILITIES:
Accounts payable $ 115,296 $ 143,943
Gas imbalance payable 43,923 43,923
---------- ----------
Total current liabilities $ 159,219 $ 187,866
LONG-TERM LIABILITIES:
Accrued liability $ 196,167 $ 196,167
Asset retirement obligation
(Note 1) 191,694 -
---------- ----------
Total long-term liabilities $ 387,861 $ 196,167
PARTNERS' CAPITAL (DEFICIT):
General Partner ($ 120,433) ($ 150,636)
Limited Partners, issued and
outstanding, 244,536 units 2,971,989 2,517,801
---------- ----------
Total Partners' capital $2,851,556 $2,367,165
----------- -----------
$3,398,636 $2,751,198
=========== ===========
The accompanying condensed notes are an integral
part of these financial statements.
-9-
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-C
STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED MARCH 31, 2003 AND 2002
(Unaudited)
2003 2002
---------- --------
REVENUES:
Oil and gas sales $1,155,715 $570,569
Interest income 967 1,209
---------- --------
$1,156,682 $571,778
COSTS AND EXPENSES:
Lease operating $ 164,332 $187,843
Production tax 74,434 32,228
Depreciation, depletion, and
amortization of oil and gas
properties 43,710 67,492
General and administrative
(Note 2) 77,838 84,375
---------- --------
$ 360,314 $371,938
---------- --------
INCOME BEFORE CUMULATIVE EFFECT
OF ACCOUNTING CHANGE $ 796,368 $199,840
Cumulative effect of change in
accounting for asset retirement
obligations (Note 1) 2,317 -
---------- --------
NET INCOME $ 798,685 $199,840
========== ========
GENERAL PARTNER - NET INCOME $ 83,497 $ 25,937
========== ========
LIMITED PARTNERS - NET INCOME $ 715,188 $173,903
========== ========
NET INCOME per unit $ 2.92 $ .71
========== ========
UNITS OUTSTANDING 244,536 244,536
========== ========
The accompanying condensed notes are an integral
part of these financial statements.
-10-
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-C
STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS ENDED MARCH 31, 2003 AND 2002
(Unaudited)
2003 2002
---------- ----------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $798,685 $199,840
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 43,710 67,492
(Increase) decrease in accounts
receivable - oil and gas sales ( 257,096) 17,483
Increase (decrease) in accounts
payable ( 28,647) 41,556
-------- --------
Net cash provided by operating
activities $554,335 $326,371
-------- --------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures ($ 2,181) ($ 1,439)
Proceeds from sale of oil and gas
properties 28,430 51
-------- --------
Net cash provided (used) by investing
activities $ 26,249 ($ 1,388)
-------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Cash distributions ($314,294) ($350,348)
-------- --------
Net cash used by financing activities ($314,294) ($350,348)
-------- --------
NET INCREASE (DECREASE) IN CASH AND
CASH EQUIVALENTS $266,290 ($ 25,365)
CASH AND CASH EQUIVALENTS AT
BEGINNING OF PERIOD 480,424 371,012
-------- --------
CASH AND CASH EQUIVALENTS AT
END OF PERIOD $746,714 $345,647
======== ========
The accompanying condensed notes are an integral
part of these financial statements.
-11-
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-D
BALANCE SHEETS
(Unaudited)
ASSETS
March 31, December 31,
2003 2002
------------ ------------
CURRENT ASSETS:
Cash and cash equivalents $ 499,023 $ 306,024
Accounts receivable:
Oil and gas sales 557,438 386,024
---------- ----------
Total current assets $1,056,461 $ 692,048
NET OIL AND GAS PROPERTIES, utilizing
the successful efforts method 827,136 755,553
DEFERRED CHARGE 10,949 10,949
---------- ----------
$1,894,546 $1,458,550
========== ==========
LIABILITIES AND PARTNERS' CAPITAL (DEFICIT)
CURRENT LIABILITIES:
Accounts payable $ 110,512 $ 171,347
---------- ----------
Total current liabilities $ 110,512 $ 171,347
LONG-TERM LIABILITIES:
Accrued liability $ 251,798 $ 251,798
Asset retirement obligation
(Note 1) 107,536 -
---------- ----------
Total long-term liabilities $ 359,334 $ 251,798
PARTNERS' CAPITAL (DEFICIT):
General Partner ($ 24,821) ($ 50,949)
Limited Partners, issued and
outstanding, 131,008 units 1,449,521 1,086,354
---------- ----------
Total Partners' capital $1,424,700 $1,035,405
---------- ----------
$1,894,546 $1,458,550
========== ==========
The accompanying condensed notes are an integral
part of these financial statements.
-12-
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-D
STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED MARCH 31, 2003 AND 2002
(Unaudited)
2003 2002
-------- --------
REVENUES:
Oil and gas sales $857,811 $409,027
Interest income 542 433
-------- --------
$858,353 $409,460
COSTS AND EXPENSES:
Lease operating $148,308 $193,506
Production tax 58,998 28,362
Depreciation, depletion, and
amortization of oil and gas
properties 19,192 27,998
General and administrative
(Note 2) 46,306 50,878
-------- --------
$272,804 $300,744
-------- --------
INCOME BEFORE CUMULATIVE EFFECT
OF ACCOUNTING CHANGE $585,549 $108,716
Cumulative effect of change in
accounting for asset retirement
obligations (Note 1) 2,875 -
-------- --------
NET INCOME $588,424 $108,716
======== ========
GENERAL PARTNER - NET INCOME $ 60,257 $ 13,348
======== ========
LIMITED PARTNERS - NET INCOME $528,167 $ 95,368
======== ========
NET INCOME per unit $ 4.03 $ .73
======== ========
UNITS OUTSTANDING 131,008 131,008
======== ========
The accompanying condensed notes are an integral
part of these financial statements.
-13-
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-D
STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS ENDED MARCH 31, 2003 AND 2002
(Unaudited)
2003 2002
---------- ----------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $588,424 $108,716
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 19,192 27,998
(Increase) decrease in accounts
receivable - oil and gas sales ( 171,414) 7,228
Decrease in accounts payable ( 60,835) ( 5,813)
-------- --------
Net cash provided by operating
activities $372,492 $138,129
-------- --------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures ($ 1,746) ($ 26,336)
Proceeds from the sale of oil and
gas properties 21,382 -
-------- --------
Net cash provided (used) by investing
activities $ 19,636 ($ 26,336)
-------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Cash distributions ($199,129) ($101,998)
-------- --------
Net cash used by financing activities ($199,129) ($101,998)
-------- --------
NET INCREASE IN CASH AND CASH
EQUIVALENTS $192,999 $ 9,795
CASH AND CASH EQUIVALENTS AT
BEGINNING OF PERIOD 306,024 160,008
-------- --------
CASH AND CASH EQUIVALENTS AT
END OF PERIOD $499,023 $169,803
======== ========
The accompanying condensed notes are an integral
part of these financial statements.
-14-
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-E
BALANCE SHEETS
(Unaudited)
ASSETS
March 31, December 31,
2003 2002
(Restated
Note 1)
------------ ------------
CURRENT ASSETS:
Cash and cash equivalents $ 795,267 $ 801,420
Accounts receivable:
Oil and gas sales 1,351,058 924,827
---------- ----------
Total current assets $2,146,325 $1,726,247
NET OIL AND GAS PROPERTIES, utilizing
the successful efforts method 2,813,958 2,646,994
DEFERRED CHARGE 69,176 69,176
---------- ----------
$5,029,459 $4,442,417
========== ==========
LIABILITIES AND PARTNERS' CAPITAL (DEFICIT)
CURRENT LIABILITIES:
Accounts payable $ 480,512 $ 746,759
Accrued liability - other (Note 1) - 122,289
Gas imbalance payable 2,736 2,736
---------- ----------
Total current liabilities $ 483,248 $ 871,784
LONG-TERM LIABILITIES:
Accrued liability $ 328,632 $ 328,632
Asset retirement obligation
(Note 1) 260,325 -
---------- ----------
Total long-term liabilities $ 588,957 $ 328,632
PARTNERS' CAPITAL (DEFICIT):
General Partner ($ 159,464) ($ 250,684)
Limited Partners, issued and
outstanding, 418,266 units 4,116,718 3,492,685
---------- ----------
Total Partners' capital $3,957,254 $3,242,001
----------- ----------
$5,029,459 $4,442,417
=========== ==========
The accompanying condensed notes are an integral
part of these financial statements.
-15-
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-E
STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED MARCH 31, 2003 AND 2002
(Unaudited)
2003 2002
(Restated
Note 1)
----------- ----------
REVENUES:
Oil and gas sales $2,084,737 $1,379,433
Interest income 927 840
Gain on abandonment 1,848 -
---------- ----------
$2,087,512 $1,380,273
COSTS AND EXPENSES:
Lease operating $ 697,717 $ 784,681
Production tax 154,198 78,867
Depreciation, depletion, and
amortization of oil and gas
properties 111,601 80,068
General and administrative
(Note 2) 126,084 135,626
---------- ----------
$1,089,600 $1,079,242
---------- ----------
INCOME BEFORE CUMULATIVE EFFECT
OF ACCOUNTING CHANGE $ 997,912 $ 301,031
Cumulative effect of change in
accounting for asset retirement
obligations (Note 1) 2,725 -
---------- ----------
NET INCOME $1,000,637 $ 301,031
========== ==========
GENERAL PARTNER - NET INCOME $ 109,604 $ 37,225
========== ==========
LIMITED PARTNERS - NET INCOME $ 891,033 $ 263,806
========== ==========
NET INCOME per unit $ 2.13 $ .63
========== ==========
UNITS OUTSTANDING 418,266 418,266
========== ==========
The accompanying condensed notes are an integral
part of these financial statements.
-16-
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-E
STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS ENDED MARCH 31, 2003 AND 2002
(Unaudited)
2003 2002
(Restated
Note 1)
------------ ----------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $1,000,637 $301,031
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 111,601 80,068
Gain on abandonment ( 1,848) -
Increase in accounts receivable -
oil and gas sales ( 426,231) ( 92,364)
Decrease in accounts payable ( 266,247) ( 190,011)
Increase in payable to General
Partner - 105,000
Decrease in accrued liability -
other ( 122,289) -
---------- --------
Net cash provided by operating
activities $ 292,898 $203,724
---------- --------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures ($ 15,046) ($175,000)
Proceeds from sale of oil and gas
properties 1,379 416
---------- --------
Net cash used by investing activities ($ 13,667) ($174,584)
---------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Cash distributions ($ 285,384) $ -
---------- --------
Net cash used by financing activities ($ 285,384) $ -
---------- --------
NET INCREASE (DECREASE) IN CASH AND
CASH EQUIVALENTS ($ 6,153) $ 29,140
CASH AND CASH EQUIVALENTS AT
BEGINNING OF PERIOD 801,420 440,024
---------- --------
CASH AND CASH EQUIVALENTS AT
END OF PERIOD $ 795,267 $469,164
========== ========
The accompanying condensed notes are an integral
part of these financial statements.
-17-
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-F
BALANCE SHEETS
(Unaudited)
ASSETS
March 31, December 31,
2003 2002
(Restated
Note 1)
----------- ------------
CURRENT ASSETS:
Cash and cash equivalents $ 293,678 $ 284,588
Accounts receivable:
Oil and gas sales 516,074 348,300
---------- ----------
Total current assets $ 809,752 $ 632,888
NET OIL AND GAS PROPERTIES, utilizing
the successful efforts method 1,807,759 1,764,313
DEFERRED CHARGE 29,946 29,946
---------- ----------
$2,647,457 $2,427,147
========== ==========
LIABILITIES AND PARTNERS' CAPITAL (DEFICIT)
CURRENT LIABILITIES:
Accounts payable $ 106,609 $ 118,741
Accrued liability - other (Note 1) - 102,690
Gas imbalance payable 2,295 2,295
---------- ----------
Total current liabilities $ 108,904 $ 223,726
LONG-TERM LIABILITIES:
Accrued liability $ 118,005 $ 118,005
Asset retirement obligation
(Note 1) 138,829 -
---------- ----------
Total long-term liabilities $ 256,834 $ 118,005
PARTNERS' CAPITAL (DEFICIT):
General Partner ($ 146,351) ($ 159,621)
Limited Partners, issued and
outstanding, 221,484 units 2,428,070 2,245,037
---------- ----------
Total Partners' capital $2,281,719 $2,085,416
---------- ----------
$2,647,457 $2,427,147
========== ==========
The accompanying condensed notes are an integral
part of these financial statements.
-18-
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-F
STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED MARCH 31, 2003 AND 2002
(Unaudited)
2003 2002
(Restated
Note 1)
----------- --------
REVENUES:
Oil and gas sales $744,486 $416,172
Interest income 434 565
Gain on abandonment 903 -
-------- --------
$745,823 $416,737
COSTS AND EXPENSES:
Lease operating $157,629 $106,564
Production tax 41,220 14,824
Depreciation, depletion, and
amortization of oil and gas
properties 108,551 54,458
General and administrative
(Note 2) 71,431 77,565
-------- --------
$378,831 $253,411
-------- --------
INCOME BEFORE CUMULATIVE EFFECT
OF ACCOUNTING CHANGE $366,992 $163,326
Cumulative effect of change in
accounting for asset retirement
obligations (Note 1) 3,712 -
-------- --------
NET INCOME $370,704 $163,326
======== ========
GENERAL PARTNER - NET INCOME $ 22,671 $ 10,316
======== ========
LIMITED PARTNERS - NET INCOME $348,033 $153,010
======== ========
NET INCOME per unit $ 1.57 $ .69
======== ========
UNITS OUTSTANDING 221,484 221,484
======== ========
The accompanying condensed notes are an integral
part of these financial statements.
-19-
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-F
STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS ENDED MARCH 31, 2003 AND 2002
(Unaudited)
2003 2002
(Restated
Note 1)
----------- ----------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $370,704 $163,326
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 108,551 54,458
Gain on abandonment ( 903) -
Increase in accounts receivable -
oil and gas sales ( 167,774) ( 3,611)
Increase (decrease) in accounts
payable ( 12,132) 32,057
Decrease in accrued liability -
other ( 102,690) -
-------- --------
Net cash provided by operating
activities $192,044 $246,230
-------- --------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures ($ 11,724) ($ 1,294)
Proceeds from the sale of oil
and gas properties 3,171 943
-------- --------
Net cash used by investing activities ($ 8,553) ($ 351)
-------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Cash distributions ($174,401) ($148,672)
-------- --------
Net cash used by financing activities ($174,401) ($148,672)
-------- --------
NET INCREASE IN CASH AND CASH
EQUIVALENTS $ 9,090 $ 97,207
CASH AND CASH EQUIVALENTS AT
BEGINNING OF PERIOD 284,588 144,433
-------- --------
CASH AND CASH EQUIVALENTS AT
END OF PERIOD $293,678 $241,640
======== ========
The accompanying condensed notes are an integral
part of these financial statements.
-20-
GEODYNE ENERGY INCOME PROGRAM III LIMITED PARTNERSHIPS
CONDENSED NOTES TO THE FINANCIAL STATEMENTS
MARCH 31, 2003
(Unaudited)
1. CORRECTION OF ERROR
-------------------
The March 31, 2003 unaudited Balance Sheets, unaudited Statements of
Operations, and unaudited Statements of Cash Flows for the Geodyne Energy
Income Limited Partnership III-E and III-F have been restated to correct
an inadvertent bookkeeping error which resulted in an over-accrual of
revenue and a misstatement of production taxes. The error correction had
no effect on previously reported total cash flows from operating,
investing or financing activities in the Statements of Cash Flows. Below
is a summary of the affected account balances "as previously reported" and
"as restated".
III-E Partnership
-----------------
Balance Sheet at March 31, 2003:
As previously As
reported restated
------------- ------------
Accounts receivable
- oil and gas sales $1,513,607 $1,351,058
Partners' Capital
(Deficit)
General Partner ( 143,210) ( 159,464)
Limited Partners 4,263,013 4,116,718
Statement of Operations for the Three Months Ended March 31, 2003:
As previously As
reported restated
------------- ------------
Oil and gas sales $2,207,026 $2,084,737
Production tax 113,938 154,198
Income before cumulative
effect of accounting
change 1,160,461 997,912
Net Income 1,163,186 1,000,637
General Partner - Net
Income 125,858 109,604
Limited Partners - Net
Income 1,037,328 891,033
Net Income per Unit 2.48 2.13
-21-
Statement of Cash Flows for the Three Months Ended March 31, 2003:
As previously As
reported restated
------------- ------------
Cash flows from
operating activities:
Net Income $1,163,186 $ 1,000,637
Increase in accounts
receivable - oil
and gas sales ( 588,780) ( 426,231)
Net cash provided
by operating
activities 292,898 292,898
III-F Partnership
-----------------
Balance Sheet at March 31, 2003:
As previously As
reported restated
------------- ------------
Accounts receivable
- oil and gas sales $ 628,501 $ 516,074
Partners' Capital
(Deficit)
General Partner ( 140,730) ( 146,351)
Limited Partners 2,534,876 2,428,070
Statement of Operations for the Three Months Ended March 31, 2003:
As previously As
reported restated
------------- ------------
Oil and gas sales $ 847,176 $ 744,486
Production tax 31,483 41,220
Income before cumulative
effect of accounting
change 479,419 366,992
Net Income 483,131 370,704
General Partner - Net
Income 28,292 22,671
Limited Partners - Net
Income 454,839 348,033
Net Income per Unit 2.05 1.57
-22-
Statement of Cash Flows for the Three Months Ended March 31, 2003:
As previously As
reported restated
------------- ------------
Cash flows from
operating activities:
Net Income $ 483,131 $ 370,704
Increase in accounts
receivable - oil
and gas sales ( 280,201) ( 167,774)
Net cash provided
by operating
activities 192,044 192,044
ACCOUNTING POLICIES
-------------------
The balance sheets as of March 31, 2003, statements of operations for the
three months ended March 31, 2003 and 2002, and statements of cash flows
for the three months ended March 31, 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 March 31, 2003, the results of operations for three
months ended March 31, 2003 and 2002, and the cash flows for the three
months ended March 31, 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 March 31, 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
-23-
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.
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.
When complete units of depreciable property are retired or sold, the asset
cost and related accumulated depreciation are eliminated with any gain or
loss reflected in income. When less than complete units of depreciable
property are retired or sold, the proceeds are credited to oil and gas
properties.
ACCRUED LIABILITY - OTHER
- ---------------------------
The accrued liability - other at 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.
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:
-24-
Increase
(decrease)
in
Change 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
three months ended March 31, 2003, the III-A, III-B, III-C, III-D, III-E,
and III-F Partnerships recognized approximately $1,000, $1,000, $2,000,
$1,000, $6,000, and $3,000, 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 three months ended March 31, 2002 would have been
an increase in depreciation, depletion, and amortization expense of
approximately $1,000, $1,000, $2,000, $1,000, $4,000, and $2,000,
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 March 31, 2003, the following payments were made to the General
Partner or its affiliates by the Partnerships:
-25-
Direct General Administrative
Partnership and Administrative Overhead
----------- ------------------- ---------------
III-A $ 13,844 $ 69,468
III-B 12,016 36,405
III-C 13,485 64,353
III-D 11,830 34,476
III-E 16,014 110,070
III-F 13,147 58,284
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.
-26-
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.
-27-
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 March 31, 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 three months ended March 31, 2002, capital
expenditures for the III-D and III-E Partnerships totaled $26,336 and
$175,000, 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.
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
-28-
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 has not 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.
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. When complete units of depreciable property are retired or sold,
the asset cost and related accumulated depreciation are eliminated with
any gain or loss reflected in income. When less 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
-29-
from such properties, the cost of the properties is written down to fair
value, which is determined by using the 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
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
-30-
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)
in
Change 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
three months ended March 31, 2003, the III-A, III-B, III-C, III-D, III-E,
and III-F Partnerships recognized approximately $1,000, $1,000, $2,000,
$1,000, $6,000, and $3,000, 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.
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
-31-
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.
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
====== =========
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
====== =========
-32-
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
======= =========
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
======= =========
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
========= =========
-33-
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
======= =========
In addition to the volume changes, the net present value of the
Partnerships' reserves may change dramatically as oil and gas prices
change or as volumes change for the reasons described above. Net present
value represents estimated future gross cash flow from the production and
sale of proved reserves, net of estimated oil and gas production costs
(including production taxes, ad valorem taxes, and operating expenses) and
estimated future development costs, discounted at 10% per annum.
The following table indicates the estimated net present value of the
Partnerships' proved reserves as of 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. Oil prices at March 31, 2003 ($27.75 per
barrel) were lower than the prices in effect on December 31, 2002 ($28.00
per barrel). Gas prices at March 31, 2003 ($5.06 per Mcf) were higher than
the prices in effect on December 31, 2002 ($4.74 per Mcf). The decrease in
oil prices and the increase in gas prices have caused the estimates of
remaining economically recoverable reserves, as well as the values placed
on said reserves, at March 31, 2003 to fluctuate from such estimates and
values at December 31, 2002. The prices used in calculating the net
present value attributable to the Partnerships' proved reserves do not
necessarily reflect market prices for oil and gas production subsequent to
March 31, 2003. There can be no assurance that the prices used in
calculating the net present value of the Partnerships' proved reserves at
March 31, 2003 will actually be realized for such production.
-34-
Net Present Value of Reserves
------------------------------
Partnership 3/31/03 12/31/02
----------- ----------- ------------
III-A $10,867,772 $10,583,968
III-B 5,089,897 5,037,182
III-C 12,887,263 12,473,256
III-D 7,660,816 7,655,634
III-E 20,366,791 20,987,455
III-F 10,485,701 10,539,573
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 Exxon-Mobil. The injection process leads to
very high operating costs. As a result, changes in natural gas and
particularly oil 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. As a result of these
costs, cash flow from this property has often been negative. This property
is very sensitive to changes in oil prices and production volumes. Until
the operator completes repairs and current drilling activities, this
property's cash flows could continue to be negative despite relatively
high oil and gas prices.
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.
-35-
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 have benefited from the political
uncertainty associated with the increase in terrorist activities in parts
of the world. In the last few years, natural gas prices have varied
significantly, from very high prices in late 2000 and early 2001, to low
prices in late 2001 and early 2002, to rising prices in the later part of
2002 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.
-36-
III-A PARTNERSHIP
THREE MONTHS ENDED MARCH 31, 2003 COMPARED TO THE THREE MONTHS ENDED MARCH
31, 2002.
Three Months Ended March 31,
-----------------------------
2003 2002
---------- --------
Oil and gas sales $1,241,672 $959,348
Oil and gas production expenses $ 192,020 $263,724
Barrels produced 13,075 18,300
Mcf produced 158,528 293,357
Average price/Bbl $ 31.62 $ 20.10
Average price/Mcf $ 5.22 $ 2.02
Total oil and gas sales increased $282,324 (29.4%) for the three months
ended March 31, 2003 as compared to the three months ended March 31, 2002.
Of this increase, approximately $150,000 and $509,000, respectively, were
related to increases in the average prices of oil and gas sold. These
increases were partially offset by decreases of approximately $105,000 and
$272,000, respectively, related to decreases in volumes of oil and gas
sold. Volumes of oil and gas sold decreased 5,225 barrels and 134,829 Mcf,
respectively, for the three months ended March 31, 2003 as compared to the
three months ended March 31, 2002. The decrease in volumes of oil sold was
primarily due to (i) increased production on several wells during the
three months ended March 31, 2002 due to successful recompletions of those
wells during mid 2001 and (ii) normal declines in production. These
decreases were partially offset by an increase in production during the
three months ended March 31, 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 positive prior period gas balancing
adjustment on one significant well during the three months ended March 31,
2002 and (ii) increased production on two significant wells during the
three months ended March 31, 2002 due to successful workovers of those
wells during mid 2001. Average oil and gas prices increased to $31.62 per
barrel and $5.22 per Mcf, respectively, for the three months ended March
31, 2003 from $20.10 per barrel and $2.02 per Mcf, respectively, for the
three months ended March 31, 2002.
Oil and gas production expenses (including lease operating expenses and
production taxes) decreased $71,704 (27.2%) for the three months ended
March 31, 2003 as compared to the three months ended March 31, 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) a
positive prior period lease operating expense adjustment on one
significant well during the three months ended March 31, 2002, and (iii)
workover expenses incurred on two significant wells during the three
months ended March
-37-
31, 2002. As a percentage of oil and gas sales, these expenses decreased
to 15.5% for the three months ended March 31, 2003 from 27.5% for the
three months ended March 31, 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 $43,222 (43.5%) for the three months ended March 31, 2003 as
compared to the three months ended March 31, 2002. This decrease was
primarily due to the decreases in volumes of oil and gas sold. As a
percentage of oil and gas sales, this expense decreased to 4.5% for the
three months ended March 31, 2003 from 10.4% for the three months ended
March 31, 2002. This percentage decrease was primarily due to the
increases in the average prices of oil and gas sold.
General and administrative expenses decreased $6,799 (7.5%) for the three
months ended March 31, 2003 as compared to the three months ended March
31, 2002. As a percentage of oil and gas sales, these expenses decreased
to 6.7% for the three months ended March 31, 2003 from 9.4% for the three
months ended March 31, 2002. This percentage decrease was primarily due to
the increase in oil and gas sales.
The Limited Partners have received cash distributions through March 31,
2003 totaling $34,419,701 or 130.39% of Limited Partners' capital
contributions.
III-B PARTNERSHIP
THREE MONTHS ENDED MARCH 31, 2003 COMPARED TO THE THREE MONTHS ENDED MARCH
31, 2002.
Three Months Ended March 31,
----------------------------
2003 2002
-------- --------
Oil and gas sales $700,575 $598,584
Oil and gas production expenses $119,779 $182,378
Barrels produced 9,175 13,435
Mcf produced 80,507 164,970
Average price/Bbl $ 31.83 $ 20.23
Average price/Mcf $ 5.07 $ 1.98
Total oil and gas sales increased $101,991 (17.0%) for the three months
ended March 31, 2003 as compared to the three months ended March 31, 2002.
Of this increase, approximately $106,000 and $249,000, respectively, were
related to increases in the average prices of oil and gas sold. These
increases were partially offset by decreases of approximately $86,000 and
$167,000, respectively, related to decreases in volumes of oil and gas
sold. Volumes of oil and gas sold decreased 4,260 barrels and 84,463 Mcf,
respectively, for the three months ended March 31, 2003 as compared to the
three months ended March 31, 2002. The
-38-
decrease in volumes of oil sold was primarily due to (i) increased
production on several wells during the three months ended March 31, 2002
due to successful recompletions of those wells during mid 2001 and (ii)
normal declines in production. These decreases were partially offset by an
increase in production during the three months ended March 31, 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
positive prior period gas balancing adjustment on one significant well
during the three months ended March 31, 2002 and (ii) increased production
on two significant wells during the three months ended March 31, 2002 due
to successful workovers of those wells during mid 2001. Average oil and
gas prices increased to $31.83 per barrel and $5.07 per Mcf, respectively,
for the three months ended March 31, 2003 from $20.23 per barrel and $1.98
per Mcf, respectively, for the three months ended March 31, 2002.
Oil and gas production expenses (including lease operating expenses and
production taxes) decreased $62,599 (34.3%) for the three months ended
March 31, 2003 as compared to the three months ended March 31, 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) a
positive prior period lease operating expense adjustment on one
significant well during the three months ended March 31, 2002, and (iii)
workover expenses incurred on two significant wells during the three
months ended March 31, 2002. As a percentage of oil and gas sales, these
expenses decreased to 17.1% for the three months ended March 31, 2003 from
30.5% for the three months ended March 31, 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 $27,736 (44.9%) for the three months ended March 31, 2003 as
compared to the three months ended March 31, 2002. This decrease was
primarily due to the decreases in volumes of oil and gas sold. As a
percentage of oil and gas sales, this expense decreased to 4.9% for the
three months ended March 31, 2003 from 10.3% for the three months ended
March 31, 2002. This percentage decrease was primarily due to the
increases in the average prices of oil and gas sold.
General and administrative expenses decreased $4,628 (8.7%) for the three
months ended March 31, 2003 as compared to the three months ended March
31, 2002. As a percentage of oil and gas sales, these expenses decreased
to 6.9% for the three months ended March 31, 2003 from 8.9% for the three
months ended March 31, 2002. This percentage decrease was primarily due to
the increase in oil and gas sales.
The Limited Partners have received cash distributions through March 31,
2003 totaling $19,682,353 or 142.28% of Limited Partners' capital
contributions.
-39-
III-C PARTNERSHIP
THREE MONTHS ENDED MARCH 31, 2003 COMPARED TO THE THREE MONTHS ENDED MARCH
31, 2002.
Three Months Ended March 31,
----------------------------
2003 2002
---------- --------
Oil and gas sales $1,155,715 $570,569
Oil and gas production expenses $ 238,766 $220,071
Barrels produced 5,914 3,692
Mcf produced 181,104 209,251
Average price/Bbl $ 31.78 $ 20.05
Average price/Mcf $ 5.34 $ 2.37
Total oil and gas sales increased $585,146 (102.6%) for the three months
ended March 31, 2003 as compared to the three months ended March 31, 2002.
Of this increase, approximately $69,000 and $538,000, respectively, were
related to increases in the average prices of oil and gas sold. These
increases were partially offset by a decrease of approximately $67,000
related to a decrease in volumes of gas sold. Volumes of oil sold
increased 2,222 barrels, while volumes of gas sold decreased 28,147 Mcf,
respectively, for the three months ended March 31, 2003 as compared to the
three months ended March 31, 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 one significant well during the three months
ended March 31, 2003 in order to perform a workover. The shut-in well is
expected to return to production in mid 2003. These decreases were
partially offset by an increase in production on another significant well
due to the successful recompletion of that well during late 2002. Average
oil and gas prices increased to $31.78 per barrel and $5.34 per Mcf,
respectively, for the three months ended March 31, 2003 from $20.05 per
barrel and $2.37 per Mcf, respectively, for the three months ended March
31, 2002.
Oil and gas production expenses (including lease operating expenses and
production taxes) increased $18,695 (8.5%) for the three months ended
March 31, 2003 as compared to the three months ended March 31, 2002. This
increase was primarily due to an increase in production taxes associated
with the increase in oil and gas sales. This increase was partially offset
by (i) lower workover expenses incurred on one significant well during the
three months ended March 31, 2003 than similar expenses incurred on the
same well during the three months ended March 31, 2002, (ii) workover
expenses incurred on another significant well during the three months
ended March 31, 2002, and (iii) a decrease in lease operating expenses
associated with the decrease in
-40-
volumes of gas sold. As a percentage of oil and gas sales, these expenses
decreased to 20.7% for the three months ended March 31, 2003 from 38.6%
for the three months ended March 31, 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 $23,782 (35.2%) for the three months ended March 31, 2003 as
compared to the three months ended March 31, 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 3.8% for the three months
ended March 31, 2003 from 11.8% for the three months ended March 31, 2002.
This percentage decrease was primarily due to the increases in the average
prices of oil and gas sold.
General and administrative expenses decreased $6,537 (7.7%) for the three
months ended March 31, 2003 as compared to the three months ended March
31, 2002. As a percentage of oil and gas sales, these expenses decreased
to 6.7% for the three months ended March 31, 2003 from 14.8% for the three
months ended March 31, 2002. This percentage decrease was primarily due to
the increase in oil and gas sales.
The Limited Partners have received cash distributions through March 31,
2003 totaling $25,934,795 or 106.06% of Limited Partners' capital
contributions.
III-D PARTNERSHIP
THREE MONTHS ENDED MARCH 31, 2003 COMPARED TO THE THREE MONTHS ENDED MARCH
31, 2002.
Three Months Ended March 31,
----------------------------
2003 2002
-------- --------
Oil and gas sales $857,811 $409,027
Oil and gas production expenses $207,306 $221,868
Barrels produced 8,579 6,510
Mcf produced 113,755 128,930
Average price/Bbl $ 29.56 $ 17.14
Average price/Mcf $ 5.31 $ 2.31
Total oil and gas sales increased $448,784 (109.7%) for the three months
ended March 31, 2003 as compared to the three months ended March 31, 2002.
Of this increase, approximately $107,000 and $342,000, respectively, were
related to increases in the average prices of oil and gas sold. Volumes of
oil sold increased 2,069 barrels, while volumes of gas sold decreased
15,175 Mcf, respectively, for the three months ended March 31, 2003 as
compared to the three months ended March 31, 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
-41-
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
March 31, 2003 in order to perform a workover. The shut-in well is
expected to return to production in mid 2003. These decreases were
partially offset by an increase in production on another significant well
due to the successful recompletion of that well during late 2002. Average
oil and gas prices increased to $29.56 per barrel and $5.31 per Mcf,
respectively, for the three months ended March 31, 2003 from $17.14 per
barrel and $2.31 per Mcf, respectively, for the three months ended March
31, 2002.
Oil and gas production expenses (including lease operating expenses and
production taxes) decreased $14,562 (6.6%) for the three months ended
March 31, 2003 as compared to the three months ended March 31, 2002. This
decrease was primarily due to (i) lower workover expenses incurred on one
significant well during the three months ended March 31, 2003 than similar
expenses incurred on the same well during the three months ended March 31,
2002 and (ii) workover expenses incurred on another significant well
during the three months ended March 31, 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 24.2% for the three months ended March 31, 2003 from
54.2% for the three months ended March 31, 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 $8,806 (31.5%) for the three months ended March 31, 2003 as
compared to the three months ended March 31, 2002. This decrease was
primarily due to two significant wells being fully depleted in 2002 due to
a lack of remaining economically recoverable reserves. As a percentage of
oil and gas sales, these expenses decreased to 2.2% for the three months
ended March 31, 2003 from 6.8% for the three months ended March 31, 2002.
This percentage decrease was primarily due to the increases in the average
prices of oil and gas sold.
General and administrative expenses decreased $4,572 (9.0%) for the three
months ended March 31, 2003 as compared to the three months ended March
31, 2002. As a percentage of oil and gas sales, these expenses decreased
to 5.4% for the three months ended March 31, 2003 from 12.4% for the three
months ended March 31, 2002. This percentage decrease was primarily due to
the increase in oil and gas sales.
The Limited Partners have received cash distributions through March 31,
2003 totaling $14,225,669 or 108.59% of Limited Partners' capital
contributions.
-42-
III-E PARTNERSHIP
Certain information presented below for the III-E Partnership has been
restated to reflect the correction of an error more fully described in
Note 1 to the Condensed Notes to the Financial Statements in Item 1.
THREE MONTHS ENDED MARCH 31, 2003 COMPARED TO THE THREE MONTHS ENDED MARCH
31, 2002.
Three Months Ended March 31,
----------------------------
2003 2002
---------- ----------
Oil and gas sales $2,084,737 $1,379,433
Oil and gas production expenses $ 851,915 $ 863,548
Barrels produced 33,458 37,600
Mcf produced 198,493 326,594
Average price/Bbl $ 29.02 $ 16.38
Average price/Mcf $ 5.61 $ 2.34
As shown in the table above, total oil and gas sales increased $705,304
(51.1%) for the three months ended March 31, 2003 as compared to the three
months ended March 31, 2002. Of this increase, approximately $423,000 and
$650,000, respectively, were related to increases in the average prices of
oil and gas sold. These increases were partially offset by a decrease of
approximately $299,000 related to a decrease in volumes of gas sold.
Volumes of oil and gas sold decreased 4,142 barrels and 128,101 Mcf,
respectively, for the three months ended March 31, 2003 as compared to the
three months ended March 31, 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) normal declines in production, (ii)
production difficulties on one significant well during 2002 and early
2003(which have now been remedied), and (iii) the shutting-in of another
significant well during the three months ended March 31, 2003 in order to
perform a recompletion. The operator has not yet determined when the
shut-in well will return to production. Average oil and gas prices
increased to $29.02 per barrel and $5.61 per Mcf, respectively, for the
three months ended March 31, 2003 from $16.38 per barrel and $2.34 per
Mcf, respectively, for the three months ended March 31, 2002.
Oil and gas production expenses (including lease operating expenses and
production taxes) decreased $11,633 (1.3%) for the three months ended
March 31, 2003 as compared to the three months ended March 31, 2002. This
decrease was primarily due to a decrease in workover expenses incurred on
several wells within one unit during the three months ended March 31, 2003
as compared to the three months ended March 31, 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
-43-
expenses decreased to 40.9% for the three months ended March 31, 2003 from
62.6% for the three months ended March 31, 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
increased $31,533 (39.4%) for the three months ended March 31, 2003 as
compared to the three months ended March 31, 2002. This increase was
primarily due to (i) an increase in depletable oil and gas properties
primarily due to drilling activities on two significant wells during the
three months ended March 31, 2003 and (ii) the abandonment of one
significant well during the three months ended March 31, 2003 due to
severe mechanical problems. As a percentage of oil and gas sales, this
expense decreased to 5.4% for the three months ended March 31, 2003 from
5.8% for the three months ended March 31, 2002.
General and administrative expenses decreased $9,542 (7.0%) for the three
months ended March 31, 2003 as compared to the three months ended March
31, 2002. As a percentage of oil and gas sales, these expenses decreased
to 6.0% for the three months ended March 31, 2003 from 9.8% for the three
months ended March 31, 2002. This percentage decrease was primarily due to
the increase in oil and gas sales.
The Limited Partners have received cash distributions through March 31,
2003 totaling $44,624,016 or 106.69% of Limited Partners' capital
contributions.
III-F PARTNERSHIP
Certain information presented below for the III-F Partnership has been
restated to reflect the correction of an error more fully described in
Note 1 to the Condensed Notes to the Financial Statements in Item 1.
THREE MONTHS ENDED MARCH 31, 2003 COMPARED TO THE THREE MONTHS ENDED MARCH
31, 2002.
Three Months Ended March 31,
----------------------------
2003 2002
-------- --------
Oil and gas sales $744,486 $416,172
Oil and gas production expenses $198,849 $121,388
Barrels produced 5,382 6,439
Mcf produced 137,370 125,563
Average price/Bbl $ 30.79 $ 18.99
Average price/Mcf $ 4.21 $ 2.34
Total oil and gas sales increased $328,314 (78.9%) for the three months
ended March 31, 2003 as compared to the three months ended March 31, 2002.
Of this increase, approximately $64,000 and $257,000, respectively, were
related to increases in the average prices of oil and gas sold. Volumes of
oil sold decreased 1,057 barrels, while volumes of gas sold
-44-
increased 11,807 Mcf, respectively, for the three months ended March 31,
2003 as compared to the three months ended March 31, 2002. The decrease in
volumes of oil sold was primarily due to (i) normal declines in production
and (ii) a positive prior period volume adjustment made by the operator on
one significant well during the three months ended March 31, 2002. Average
oil and gas prices increased to $30.79 per barrel and $4.21 per Mcf,
respectively, for the three months ended March 31, 2003 from $18.99 per
barrel and $2.34 per Mcf, respectively, for the three months ended March
31, 2002.
Oil and gas production expenses (including lease operating expenses and
production taxes) increased $77,461 (63.8%) for the three months ended
March 31, 2003 as compared to the three months ended March 31, 2002. This
increase was primarily due to (i) a negative prior period lease operating
expense adjustment on one significant well during the three months ended
March 31, 2002 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 26.7% for the three months ended March 31,
2003 from 29.2% for the three months ended March 31, 2002.
Depreciation, depletion, and amortization of oil and gas properties
increased $54,093 (99.3%) for the three months ended March 31, 2003 as
compared to the three months ended March 31, 2002. This increase was
primarily due to (i) the abandonment of one significant well during the
three months ended March 31, 2003 due to severe mechanical problems and
(ii) an increase in depletable oil and gas properties primarily due to
drilling activities on two significant wells during the three months ended
March 31, 2003. As a percentage of oil and gas sales, this expense
increased to 14.6% for the three months ended March 31, 2003 from 13.1%
for the three months ended March 31, 2002. This percentage increase was
primarily due to the dollar increase in depreciation, depletion, and
amortization of oil and gas properties.
General and administrative expenses decreased $6,134 (7.9%) for the three
months ended March 31, 2003 as compared to the three months ended March
31, 2002. As a percentage of oil and gas sales, these expenses decreased
to 9.6% for the three months ended March 31, 2003 from 18.6% for the three
months ended March 31, 2002. This percentage decrease was primarily due to
the increase in oil and gas sales.
The Limited Partners have received cash distributions through March 31,
2003 totaling $17,504,904 or 79.03% of Limited Partners' capital
contributions.
-45-
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
The Partnerships do not hold any market risk sensitive instruments.
ITEM 4. EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES
Within the 90 days prior to the date of this report, the
Partnerships carried out an evaluation under the supervision and
with the participation of the Partnerships' management, including
their chief executive officer and chief financial officer, of the
effectiveness of the design and operation of the Partnerships'
disclosure controls and procedures pursuant to Rule 13a-14 of the
Securities Exchange Act of 1934. Based upon that evaluation, the
Partnerships' chief executive officer and chief financial officer
concluded that the Partnerships' disclosure controls and procedures
are effective in timely alerting them to material information
relating to the Partnerships required to be included in the
Partnerships' periodic filings with the SEC. There have been no
significant changes in the Partnerships' internal controls or in
other factors which could significantly affect the Partnerships'
internal controls subsequent to the date the Partnerships carried
out this evaluation.
-46-
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 III-A Partnership.
31.2 Certification by Craig D. Loseke required by Rule
13a-14(a)/15d-14(a) for the III-A Partnership.
31.3 Certification by Dennis R. Neill required by Rule
13a-14(a)/15d-14(a) for the III-B Partnership.
31.4 Certification by Craig D. Loseke required by Rule
13a-14(a)/15d-14(a) for the III-B Partnership.
31.5 Certification by Dennis R. Neill required by Rule
13a-14(a)/15d-14(a) for the III-C Partnership.
31.6 Certification by Craig D. Loseke required by Rule
13a-14(a)/15d-14(a) for the III-C Partnership.
31.7 Certification by Dennis R. Neill required by Rule
13a-14(a)/15d-14(a) for the III-D Partnership.
31.8 Certification by Craig D. Loseke required by Rule
13a-14(a)/15d-14(a) for the III-D Partnership.
31.9 Certification by Dennis R. Neill required by Rule
13a-14(a)/15d-14(a) for the III-E Partnership.
31.10 Certification by Craig D. Loseke required by Rule
13a-14(a)/15d-14(a) for the III-E Partnership.
31.11 Certification by Dennis R. Neill required by Rule
13a-14(a)/15d-14(a) for the III-F Partnership.
31.12 Certification by Craig D. Loseke required by Rule
13a-14(a)/15d-14(a) for the III-F Partnership.
-47-
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
III-A Partnership.
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
III-B Partnership.
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
III-C Partnership.
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
III-D Partnership.
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
III-E Partnership.
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
III-F Partnership.
(b) Reports on Form 8-K.
Current Report on Form 8-K filed during the first quarter of 2003:
Date of event: January 28, 2003
Date filed with the SEC: January 28, 2003
Items Included: Item 5 - Other Events
Item 7 - Exhibits
-48-
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: March 29, 2004 By: /s/Dennis R. Neill
--------------------------------
(Signature)
Dennis R. Neill
President
Date: March 29, 2004 By: /s/Craig D. Loseke
--------------------------------
(Signature)
Craig D. Loseke
Chief Accounting Officer
-49-
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 Dennis R. Neill required by Rule 13a-14(a)/15d-14(a) for the
Geodyne Energy Income Limited Partnership III-B.
31.4 Certification 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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