SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarter ended June 30, 2005
Commission File Number:
I-D: 0-15831 I-E: 0-15832 I-F: 0-15833
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP I-D
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP I-E
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP I-F
--------------------------------------------------------
(Exact name of Registrant as specified in its Articles)
I-D 73-1265223
I-E 73-1270110
Oklahoma I-F 73-1292669
- ---------------------------- -------------------------------
(State or other jurisdiction (I.R.S. Employer Identification
of incorporation or Number)
organization)
Two West Second Street, Tulsa, Oklahoma 74103
------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code:(918) 583-1791
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes X No
------ ------
Indicate by check mark whether the registrant is an accelerated filer (as
defined in Rule 12b-2 of the E exchange Act).
Yes No X
------ ------
-1-
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP I-D
GEODYNE ENERGY INCOME PRODUCTION PARTNERSHIP I-D
COMBINED BALANCE SHEETS
(Unaudited)
ASSETS
June 30, December 31,
2005 2004
---------- ------------
CURRENT ASSETS:
Cash and cash equivalents $248,999 $250,839
Accounts receivable:
Oil and gas sales 189,609 153,570
-------- --------
Total current assets $438,608 $404,409
NET OIL AND GAS PROPERTIES, utilizing
the successful efforts method 380,750 381,334
DEFERRED CHARGE 78,164 82,606
-------- --------
$897,522 $868,349
======== ========
LIABILITIES AND PARTNERS' CAPITAL (DEFICIT)
CURRENT LIABILITIES:
Accounts payable $ 22,787 $ 25,242
Gas imbalance payable 34,605 34,587
Asset retirement obligation -
current (Note 1) 1,686 2,453
-------- --------
Total current liabilities $ 59,078 $ 62,282
LONG-TERM LIABILITIES:
Accrued liability $ 25,436 $ 30,433
Asset retirement obligation
(Note 1) 29,795 28,648
-------- --------
Total long-term liabilities $ 55,231 $ 59,081
PARTNERS' CAPITAL (DEFICIT):
General Partner ($ 11,432) ($ 20,255)
Limited Partners, issued and
outstanding, 7,195 units 794,645 767,241
-------- --------
Total Partners' capital $783,213 $746,986
-------- --------
$897,522 $868,349
======== ========
The accompanying condensed notes are an integral part of these
combined financial statements.
-2-
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP I-D
GEODYNE ENERGY INCOME PRODUCTION PARTNERSHIP I-D
COMBINED STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED JUNE 30, 2005 AND 2004
(Unaudited)
2005 2004
-------- --------
REVENUES:
Oil and gas sales $264,614 $244,861
Interest income 1,087 315
-------- --------
$265,701 $245,176
COSTS AND EXPENSES:
Lease operating $ 28,881 $ 21,496
Production tax 17,750 16,975
Depreciation, depletion, and
amortization of oil and gas
properties 11,621 11,575
General and administrative
(Note 2) 22,858 36,180
-------- --------
$ 81,110 $ 86,226
-------- --------
NET INCOME $184,591 $158,950
======== ========
GENERAL PARTNER - NET INCOME $ 29,152 $ 25,416
======== ========
LIMITED PARTNERS - NET INCOME $155,439 $133,534
======== ========
NET INCOME per unit $ 21.61 $ 18.56
======== ========
UNITS OUTSTANDING 7,195 7,195
======== ========
The accompanying condensed notes are an integral part of these
combined financial statements.
-3-
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP I-D
GEODYNE ENERGY INCOME PRODUCTION PARTNERSHIP I-D
COMBINED STATEMENTS OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 2005 AND 2004
(Unaudited)
2005 2004
-------- --------
REVENUES:
Oil and gas sales $557,657 $463,339
Interest income 1,973 513
-------- --------
$559,630 $463,852
COSTS AND EXPENSES:
Lease operating $ 65,038 $ 56,618
Production tax 37,540 32,225
Depreciation, depletion, and
amortization of oil and gas
properties 17,685 19,085
General and administrative
(Note 2) 65,739 63,319
-------- --------
$186,002 $171,247
-------- --------
NET INCOME $373,628 $292,605
======== ========
GENERAL PARTNER - NET INCOME $ 58,224 $ 46,486
======== ========
LIMITED PARTNERS - NET INCOME $315,404 $246,119
======== ========
NET INCOME per unit $ 43.84 $ 34.21
======== ========
UNITS OUTSTANDING 7,195 7,195
======== ========
The accompanying condensed notes are an integral part of these
combined financial statements.
-4-
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP I-D
GEODYNE ENERGY INCOME PRODUCTION PARTNERSHIP I-D
COMBINED STATEMENTS OF CASH FLOWS
FOR THE SIX MONTHS ENDED JUNE 30, 2005 AND 2004
(Unaudited)
2005 2004
---------- ----------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $373,628 $292,605
Adjustments to reconcile net
income to net cash provided
by operating activities:
Depreciation, depletion, and
amortization of oil and gas
properties 17,685 19,085
Settlement of asset retirement
obligation ( 36) -
Increase in accounts receivable -
oil and gas sales ( 36,039) ( 34,127)
Decrease in deferred charge 4,442 1,754
Decrease in accounts payable ( 8,700) ( 7,276)
Increase in gas imbalance payable 18 513
Decrease in accrued liability ( 4,997) ( 1,835)
-------- --------
Net cash provided by operating
activities $346,001 $270,719
-------- --------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures ($ 13,238) ($ 8,752)
Proceeds from sale of oil and
gas properties 2,798 92
-------- --------
Net cash used by investing
activities ($ 10,440) ($ 8,660)
-------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Cash distributions ($337,401) ($298,104)
-------- --------
Net cash used by financing
activities ($337,401) ($298,104)
-------- --------
NET DECREASE IN CASH AND CASH
EQUIVALENTS ($ 1,840) ($ 36,045)
CASH AND CASH EQUIVALENTS AT
BEGINNING OF PERIOD 250,839 257,054
-------- --------
CASH AND CASH EQUIVALENTS AT
END OF PERIOD $248,999 $221,009
======== ========
The accompanying condensed notes are an integral part of these
combined financial statements.
-5-
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP I-E
GEODYNE ENERGY INCOME PRODUCTION PARTNERSHIP I-E
COMBINED BALANCE SHEETS
(Unaudited)
ASSETS
June 30, December 31,
2005 2004
------------ ------------
CURRENT ASSETS:
Cash and cash equivalents $1,536,044 $1,579,268
Accounts receivable:
Oil and gas sales 1,241,826 958,801
---------- ----------
Total current assets $2,777,870 $2,538,069
NET OIL AND GAS PROPERTIES, utilizing
the successful efforts method 2,177,364 2,176,302
DEFERRED CHARGE 397,867 424,309
---------- ----------
$5,353,101 $5,138,680
========== ==========
LIABILITIES AND PARTNERS' CAPITAL (DEFICIT)
CURRENT LIABILITIES:
Accounts payable $ 174,052 $ 233,536
Accrued liability - other (Note 1) - 88,892
Gas imbalance payable 113,067 117,263
Asset retirement obligation -
current (Note 1) 8,119 71,029
---------- ----------
Total current liabilities $ 295,238 $ 510,720
LONG-TERM LIABILITIES:
Accrued liability $ 128,792 $ 157,638
Asset retirement obligation
(Note 1) 341,258 274,480
---------- ----------
Total long-term liabilities $ 470,050 $ 432,118
PARTNERS' CAPITAL (DEFICIT):
General Partner $ 3,731 ($ 73,642)
Limited Partners, issued and
outstanding, 41,839 units 4,584,082 4,269,484
---------- ----------
Total Partners' capital $4,587,813 $4,195,842
---------- ----------
$5,353,101 $5,138,680
========== ==========
The accompanying condensed notes are an integral part of these
combined financial statements.
-6-
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP I-E
GEODYNE ENERGY INCOME PRODUCTION PARTNERSHIP I-E
COMBINED STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED JUNE 30, 2005 AND 2004
(Unaudited)
2005 2004
---------- ----------
REVENUES:
Oil and gas sales $1,687,867 $1,550,019
Interest income 6,974 2,007
---------- ----------
$1,694,841 $1,552,026
COSTS AND EXPENSES:
Lease operating $ 276,921 $ 218,760
Production tax 108,835 97,429
Depreciation, depletion, and
amortization of oil and gas
properties 49,064 51,545
General and administrative
(Note 2) 122,579 137,412
---------- ----------
$ 557,399 $ 505,146
---------- ----------
NET INCOME $1,137,442 $1,046,880
========== ==========
GENERAL PARTNER - NET INCOME $ 176,439 $ 163,947
========== ==========
LIMITED PARTNERS - NET INCOME $ 961,003 $ 882,933
========== ==========
NET INCOME per unit $ 22.97 $ 21.10
========== ==========
UNITS OUTSTANDING 41,839 41,839
========== ==========
The accompanying condensed notes are an integral part of these
combined financial statements.
-7-
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP I-E
GEODYNE ENERGY INCOME PRODUCTION PARTNERSHIP I-E
COMBINED STATEMENTS OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 2005 AND 2004
(Unaudited)
2005 2004
---------- ----------
REVENUES:
Oil and gas sales $3,536,558 $2,926,256
Interest income 12,888 3,270
---------- ----------
$3,549,446 $2,929,526
COSTS AND EXPENSES:
Lease operating $ 462,777 $ 529,992
Production tax 226,861 185,719
Depreciation, depletion, and
amortization of oil and gas
properties 91,780 107,616
General and administrative
(Note 2) 266,247 267,297
---------- ----------
$1,047,665 $1,090,624
---------- ----------
NET INCOME $2,501,781 $1,838,902
========== ==========
GENERAL PARTNER - NET INCOME $ 386,183 $ 290,411
========== ==========
LIMITED PARTNERS - NET INCOME $2,115,598 $1,548,491
========== ==========
NET INCOME per unit $ 50.57 $ 37.01
========== ==========
UNITS OUTSTANDING 41,839 41,839
========== ==========
The accompanying condensed notes are an integral part of these
combined financial statements.
-8-
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP I-E
GEODYNE ENERGY INCOME PRODUCTION PARTNERSHIP I-E
COMBINED STATEMENTS OF CASH FLOWS
FOR THE SIX MONTHS ENDED JUNE 30, 2005 AND 2004
(Unaudited)
2005 2004
------------ ------------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $2,501,781 $1,838,902
Adjustments to reconcile net
income to net cash provided
by operating activities:
Depreciation, depletion, and
amortization of oil and gas
properties 91,780 107,616
Settlement of asset retirement
obligation ( 272) -
Increase in accounts receivable -
oil and gas sale ( 283,025) ( 218,990)
Decrease in deferred charge 26,442 10,481
Decrease in accounts payable ( 64,951) ( 78,755)
Decrease in accrued liability -
other ( 88,892) -
Increase (decrease) in gas
imbalance payable ( 4,196) 5,749
Decrease in accrued liability ( 28,846) ( 15,152)
---------- ----------
Net cash provided by operating
activities $2,149,821 $1,649,851
---------- ----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures ($ 92,228) ($ 37,198)
Proceeds from the sale of oil and
gas properties 8,993 104
---------- ----------
Net cash used by investing
activities ($ 83,235) ($ 37,094)
---------- ----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Cash distributions ($2,109,810) ($1,719,459)
---------- ----------
Net cash used by financing
activities ($2,109,810) ($1,719,459)
---------- ----------
NET DECREASE IN CASH AND
CASH EQUIVALENTS ($ 43,224) ($ 106,702)
CASH AND CASH EQUIVALENTS AT
BEGINNING OF PERIOD 1,579,268 1,541,576
---------- ----------
CASH AND CASH EQUIVALENTS AT
END OF PERIOD $1,536,044 $1,434,874
========== ==========
The accompanying condensed notes are an integral part of these
combined financial statements.
-9-
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP I-F
GEODYNE ENERGY INCOME PRODUCTION PARTNERSHIP I-F
COMBINED BALANCE SHEETS
(Unaudited)
ASSETS
June 30, December 31,
2005 2004
------------ ------------
CURRENT ASSETS:
Cash and cash equivalents $ 540,510 $ 552,399
Accounts receivable:
Oil and gas sales 392,794 335,364
---------- ----------
Total current assets $ 933,304 $ 887,763
NET OIL AND GAS PROPERTIES, utilizing
the successful efforts method 849,769 840,849
DEFERRED CHARGE 304,406 326,610
---------- ----------
$2,087,479 $2,055,222
========== ==========
LIABILITIES AND PARTNERS' CAPITAL (DEFICIT)
CURRENT LIABILITIES:
Accounts payable $ 81,300 $ 102,011
Accrued liability - other (Note 1) - 62,225
Gas imbalance payable 38,136 37,860
Asset retirement obligation -
current (Note 1) 3,530 46,371
---------- ----------
Total current liabilities $ 122,966 $ 248,467
LONG-TERM LIABILITIES:
Accrued liability $ 117,885 $ 139,114
Asset retirement obligation
(Note 1) 162,978 118,400
---------- ----------
Total long-term liabilities $ 280,863 $ 257,514
PARTNERS' CAPITAL (DEFICIT):
General Partner $ 24,030 ($ 1,201)
Limited Partners, issued and
outstanding, 14,321 units 1,659,620 1,550,442
---------- ----------
Total Partners' capital $1,683,650 $1,549,241
---------- ----------
$2,087,479 $2,055,222
========== ==========
The accompanying condensed notes are an integral part of these
combined financial statements.
-10-
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP I-F
GEODYNE ENERGY INCOME PRODUCTION PARTNERSHIP I-F
COMBINED STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED JUNE 30, 2005 AND 2004
(Unaudited)
2005 2004
-------- --------
REVENUES:
Oil and gas sales $583,939 $500,053
Interest income 2,438 714
-------- --------
$586,377 $500,767
COSTS AND EXPENSES:
Lease operating $136,633 $111,505
Production tax 37,385 29,490
Depreciation, depletion, and
amortization of oil and gas
properties 17,062 11,741
General and administrative
(Note 2) 43,371 57,002
-------- --------
$234,451 $209,738
-------- --------
NET INCOME $351,926 $291,029
======== ========
GENERAL PARTNER - NET INCOME $ 54,812 $ 45,191
======== ========
LIMITED PARTNERS - NET INCOME $297,114 $245,838
======== ========
NET INCOME per unit $ 20.75 $ 17.17
======== ========
UNITS OUTSTANDING 14,321 14,321
======== ========
The accompanying condensed notes are an integral part of these
combined financial statements.
-11-
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP I-F
GEODYNE ENERGY INCOME PRODUCTION PARTNERSHIP I-F
COMBINED STATEMENTS OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 2005 AND 2004
(Unaudited)
2005 2004
---------- --------
REVENUES:
Oil and gas sales $1,184,965 $960,226
Interest income 4,483 1,114
---------- --------
$1,189,448 $961,340
COSTS AND EXPENSES:
Lease operating $ 169,065 $226,284
Production tax 74,369 56,934
Depreciation, depletion, and
amortization of oil and gas
properties 34,009 33,610
General and administrative
(Note 2) 106,985 105,279
---------- --------
$ 384,428 $422,107
---------- --------
NET INCOME $ 805,020 $539,233
========== ========
GENERAL PARTNER - NET INCOME $ 124,842 $ 85,423
========== ========
LIMITED PARTNERS - NET INCOME $ 680,178 $453,810
========== ========
NET INCOME per unit $ 47.50 $ 31.69
========== ========
UNITS OUTSTANDING 14,321 14,321
========== ========
The accompanying condensed notes are an integral part of these
combined financial statements.
-12-
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP I-F
GEODYNE ENERGY INCOME PRODUCTION PARTNERSHIP I-F
COMBINED STATEMENTS OF CASH FLOWS
FOR THE SIX MONTHS ENDED JUNE 30, 2005 AND 2004
(Unaudited)
2005 2004
---------- ----------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $805,020 $539,233
Adjustments to reconcile net
income to net cash provided
by operating activities:
Depreciation, depletion, and
amortization of oil and gas
properties 34,009 33,610
Settlement of asset retirement
obligation ( 136) -
Increase in accounts receivable -
oil and gas sales ( 57,430) ( 63,393)
Decrease in deferred charge 22,204 7,282
Decrease in accounts payable ( 16,510) ( 35,481)
Decrease in accrued liability -
other ( 62,225) -
Increase in gas imbalance payable 276 558
Decrease in accrued liability ( 21,229) ( 4,799)
-------- --------
Net cash provided by operating
activities $703,979 $477,010
-------- --------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures ($ 48,350) ($ 17,368)
Proceeds from sale of oil and
gas properties 3,093 -
-------- --------
Net cash used by investing
activities ($ 45,257) ($ 17,368)
-------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Cash distributions ($670,611) ($495,196)
-------- --------
Net cash used by financing
activities ($670,611) ($495,196)
-------- --------
NET DECREASE IN CASH AND CASH
EQUIVALENTS ($ 11,889) ($ 35,554)
CASH AND CASH EQUIVALENTS AT
BEGINNING OF PERIOD 552,399 513,327
-------- --------
CASH AND CASH EQUIVALENTS AT
END OF PERIOD $540,510 $477,773
======== ========
The accompanying condensed notes are an integral part of these
combined financial statements.
-13-
GEODYNE ENERGY INCOME PROGRAM I LIMITED PARTNERSHIPS
CONDENSED NOTES TO THE COMBINED FINANCIAL STATEMENTS
JUNE 30, 2005
(Unaudited)
1. ACCOUNTING POLICIES
-------------------
The combined balance sheets as of June 30, 2005, combined statements of
operations for the three and six months ended June 30, 2005 and 2004, and
combined statements of cash flows for the six months ended June 30, 2005
and 2004 have been prepared by Geodyne Resources, Inc., the General
Partner of the limited partnerships, without audit. Each limited
partnership is a general partner in the related Geodyne Energy Income
Production Partnership in which Geodyne Resources, Inc. serves as the
managing partner. Unless the context indicates otherwise, all references
to a "Partnership" or the "Partnerships" are references to the limited
partnership and its related production partnership, collectively, and all
references to the "General Partner" are references to the general partner
of the limited partnerships and the managing partner of the production
partnerships, collectively. In the opinion of management the financial
statements referred to above include all necessary adjustments, consisting
of normal recurring adjustments, to present fairly the combined financial
position at June 30, 2005, the combined results of operations for the
three and six months ended June 30, 2005 and 2004, and the combined cash
flows for the six months ended June 30, 2005 and 2004.
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, 2004. The
results of operations for the period ended June 30, 2005 are not
necessarily indicative of the results to be expected for the full year.
The Limited Partners' net income or loss per unit is based upon each
$1,000 initial capital contribution.
-14-
OIL AND GAS PROPERTIES
----------------------
The Partnerships follow the successful efforts method of accounting for
their oil and gas properties. Under the successful efforts method, the
Partnerships capitalize all property acquisition costs and development
costs incurred in connection with the further development of oil and gas
reserves. Property acquisition costs include costs incurred by the
Partnerships or the General Partner to acquire producing properties,
including related title insurance or examination costs, commissions,
engineering, legal and accounting fees, and similar costs directly related
to the acquisitions plus an allocated portion, of the General Partner's
property screening costs. The acquisition cost to the Partnerships of
properties acquired by the General Partner is adjusted to reflect the net
cash results of operations, including interest incurred to finance the
acquisition, for the period of time the properties are held by the General
Partner.
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, 2004 for the I-E and I-F
Partnerships represents a charge accrued for the payment of a judgment
related to plugging liabilities. The decrease in Accrued Liability - Other
from December 31, 2004 to June 30, 2005 was due to a ruling made by the
Texas Supreme Court on April 8, 2005 that the Partnerships did not owe
this liability.
-15-
ASSET RETIREMENT OBLIGATIONS
----------------------------
The Partnerships' wells must be properly plugged and abandoned after their
oil and gas reserves are exhausted. The Partnerships follow FAS No. 143,
"Accounting for Asset Retirement Obligations" in accounting for the future
expenditures that will be necessary to plug and abandon these wells. FAS
No. 143 requires the estimated plugging and abandonment obligations to be
recognized in the period in which they are incurred (i.e. when the well is
drilled or acquired) if a reasonable estimate of fair value can be made
and to be capitalized as part of the carrying amount of the well.
The asset retirement obligation will be adjusted upwards each quarter in
order to recognize accretion of the time-related discount factor. For the
six months ended June 30, 2005, the I-D, I-E, and I-F Partnerships
recognized approximately $800, $16,000, and $10,000, 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.
The components of the change in asset retirement obligations for the three
and six months ended June 30, 2005 and 2004 are as shown below.
I-D Partnership
---------------
Three Months Three Months
Ended Ended
6/30/2005 6/30/2004
------------- -------------
Total Asset Retirement
Obligation, April 1 $ 31,094 $ 30,135
Additions and revisions 47 -
Accretion expense 340 295
-------- --------
Total Asset Retirement
Obligation, End of Quarter $ 31,481 $ 30,430
======== ========
-16-
Six Months Six Months
Ended Ended
6/30/2005 6/30/2004
------------ ------------
Total Asset Retirement
Obligation, January 1 $ 31,101 $ 29,848
Additions and revisions 145 -
Settlements and disposals ( 448) -
Accretion expense 683 582
-------- --------
Total Asset Retirement
Obligation, End of Period $ 31,481 $ 30,430
======== ========
Asset Retirement Obligation -
Current $ 1,686 $ 1,186
Asset Retirement Obligation -
Long-Term 29,795 29,244
I-E Partnership
---------------
Three Months Three Months
Ended Ended
6/30/2005 6/30/2004
------------- -------------
Total Asset Retirement
Obligation, April 1 $346,082 $282,982
Additions and revisions 301 -
Accretion expense 2,994 1,750
-------- --------
Total Asset Retirement
Obligation, End of Quarter $349,377 $284,732
======== ========
Six Months Six Months
Ended Ended
6/30/2005 6/30/2004
------------ ------------
Total Asset Retirement
Obligation, January 1 $345,509 $281,230
Additions and revisions 794 -
Settlements and disposals ( 2,922) -
Accretion expense 5,996 3,502
-------- --------
Total Asset Retirement
Obligation, End of Period $349,377 $284,732
======== ========
Asset Retirement Obligation -
Current $ 8,119 $ 10,791
Asset Retirement Obligation -
Long-Term 341,258 273,941
-17-
I-F Partnership
---------------
Three Months Three Months
Ended Ended
6/30/2005 6/30/2004
------------- -------------
Total Asset Retirement
Obligation, April 1 $164,940 $123,158
Additions and revisions 120 -
Accretion expense 1,448 827
-------- --------
Total Asset Retirement
Obligation, End of Quarter $166,508 $123,985
======== ========
Six Months Six Months
Ended Ended
6/30/2005 6/30/2004
------------ ------------
Total Asset Retirement
Obligation, January 1 $164,771 $122,335
Additions and revisions 378 -
Settlements and disposals ( 1,533) -
Accretion expense 2,892 1,650
-------- --------
Total Asset Retirement
Obligation, End of Period $166,508 $123,985
======== ========
Asset Retirement Obligation -
Current $ 3,530 $ 5,893
Asset Retirement Obligation -
Long-Term 162,978 118,092
2. TRANSACTIONS WITH RELATED PARTIES
---------------------------------
The Partnerships' partnership agreements provide for reimbursement to the
General Partner for all direct general and administrative expenses and for
the general and administrative overhead applicable to the Partnerships
based on an allocation of actual costs incurred. During the three months
ended June 30, 2005, the following payments were made to the General
Partner or its affiliates by the Partnerships:
Direct General Administrative
Partnership and Administrative Overhead
----------- ------------------- ---------------
I-D $2,872 $ 19,986
I-E 6,359 116,220
I-F 3,591 39,780
-18-
During the six months ended June 30, 2005, the following payments were
made to the General Partner or its affiliates by the Partnerships:
Direct General Administrative
Partnership and Administrative Overhead
----------- ------------------- ---------------
I-D $25,767 $ 39,972
I-E 33,807 232,440
I-F 27,425 79,560
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.
-19-
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
USE OF FORWARD-LOOKING STATEMENTS AND ESTIMATES
- -----------------------------------------------
This Quarterly Report contains certain forward-looking statements. The
words "anticipate", "believe", "expect", "plan", "intend", "estimate",
"project", "could", "may" and similar expressions are intended to identify
forward-looking statements. Such statements reflect management's current
views with respect to future events and financial performance. This
Quarterly Report also includes certain information, which is, or is based
upon, estimates and assumptions. Such estimates and assumptions are
management's efforts to accurately reflect the condition and operation of
the Partnerships.
Use of forward-looking statements and estimates and assumptions involve
risks and uncertainties which include, but are not limited to, the
volatility of oil and gas prices, the uncertainty of reserve information,
the operating risk associated with oil and gas properties (including the
risk of personal injury, death, property damage, damage to the well or
producing reservoir, environmental contamination, and other operating
risks), the prospect of changing tax and regulatory laws, the availability
and capacity of processing and transportation facilities, the general
economic climate, the supply and price of foreign imports of oil and gas,
the level of consumer product demand, and the price and availability of
alternative fuels. Should one or more of these risks or uncertainties
occur or should estimates or underlying assumptions prove incorrect,
actual conditions or results may vary materially and adversely from those
stated, anticipated, believed, estimated, and otherwise indicated.
GENERAL
- -------
The Partnerships are engaged in the business of acquiring and operating
producing oil and gas properties located in the continental United States.
In general, a Partnership acquired producing properties and did not engage
in development drilling or enhanced recovery projects, except as an
incidental part of the management of the producing properties acquired.
Therefore, the economic life of each Partnership, and its related
Production Partnership, is limited to the period of time required to fully
produce its acquired oil and gas reserves. The net proceeds from the oil
and gas operations are distributed to the Limited Partners and the General
Partner in accordance with the terms of the Partnerships' partnership
agreements.
-20-
LIQUIDITY AND CAPITAL RESOURCES
- -------------------------------
The Partnerships began operations and investors were assigned their rights
as Limited Partners, having made capital contributions in the amounts and
on the dates set forth below:
Limited
Date of Partner Capital
Partnership Activation Contributions
----------- ------------------ ---------------
I-D March 4, 1986 $ 7,194,700
I-E September 10, 1986 41,839,400
I-F December 16, 1986 14,320,900
In general, the amount of funds available for acquisition of producing
properties was equal to the capital contributions of the Limited Partners,
less 15% for sales commissions and organization and management fees. All
of the Partnerships have fully invested their capital contributions.
Net proceeds from the operations less necessary operating capital are
distributed to the Limited Partners on a quarterly basis. Revenues and net
proceeds of a Partnership are largely dependent upon the volumes of oil
and gas sold and the prices received for such oil and gas. While the
General Partner cannot predict future pricing trends, it believes the
working capital available as of June 30, 2005 and the net revenue
generated from future operations will provide sufficient working capital
to meet current and future obligations.
Occasional expenditures for new wells or well recompletions or workovers,
however, may reduce or eliminate cash available for a particular quarterly
cash distribution.
Pursuant to the terms of the Partnerships' partnership agreements (the
"Partnership Agreements"), the Partnerships would have terminated on
December 31, 1999. However, the Partnership Agreements provide that the
General Partner may extend the term of each Partnership for up to five
periods of two years each. The General Partner has extended the terms of
the Partnerships for their third two year extension period to December 31,
2005. As of the date of this Quarterly Report, the General Partner has not
determined whether to further extend the term of any Partnership.
-21-
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 unit-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 than 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.
-22-
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 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.
ASSET RETIREMENT OBLIGATIONS
- ----------------------------
The Partnerships' wells must be properly plugged and abandoned after their
oil and gas reserves are exhausted. The Partnerships follow FAS No. 143,
"Accounting for Asset Retirement Obligations" in accounting for the future
expenditures that will be necessary to plug and abandon these wells. FAS
No. 143 requires the estimated plugging and abandonment obligations to be
recognized in the period in which they are incurred (i.e. when the well is
drilled or acquired) if a reasonable estimate of fair value can be made
and to be capitalized as part of the carrying amount of the well.
NEW ACCOUNTING PRONOUNCEMENTS
- -----------------------------
The Partnerships are not aware of any recently issued accounting
pronouncements that would have an impact on the Partnerships' future
results of operations and financial position.
-23-
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.
-24-
I-D Partnership
---------------
Crude Natural
Oil Gas
(Barrels) (Mcf)
--------- -----------
Proved reserves, Dec. 31, 2004 71,201 1,516,243
Production ( 952) ( 41,416)
Extensions and discoveries 84 147
Revisions of previous estimates 204 23,496
------ ---------
Proved reserves, March 31, 2005 70,537 1,498,470
Production ( 858) ( 34,823)
Extensions and discoveries 305 2,711
Revisions of previous estimates 518 58,832
------ ---------
Proved reserves, June 30, 2005 70,502 1,525,190
====== =========
I-E Partnership
---------------
Crude Natural
Oil Gas
(Barrels) (Mcf)
--------- -----------
Proved reserves, Dec. 31, 2004 500,364 8,079,380
Production ( 10,723) ( 229,046)
Extensions and discoveries 363 635
Revisions of previous estimates 20,871 141,088
------- ---------
Proved reserves, March 31, 2005 510,875 7,992,057
Production ( 8,653) ( 195,235)
Extensions and discoveries 1,078 13,574
Revisions of previous estimates 3,176 314,743
------- ---------
Proved reserves, June 30, 2005 506,476 8,125,139
======= =========
-25-
I-F Partnership
---------------
Crude Natural
Oil Gas
(Barrels) (Mcf)
--------- -----------
Proved reserves, Dec. 31, 2004 238,894 2,401,195
Production ( 5,079) ( 61,912)
Extensions and discoveries 168 296
Revisions of previous
estimates 9,588 53,721
------- ---------
Proved reserves, March 31, 2005 243,571 2,393,300
Production ( 3,982) ( 58,488)
Extensions and discoveries 407 5,850
Revisions of previous estimates 1,283 139,067
------- ---------
Proved reserves, June 30, 2005 241,279 2,479,729
======= =========
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 June 30, 2005, March 31, 2005, and
December 31, 2004. 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 oil and 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 and gas
production subsequent to June 30, 2005. There can be no assurance that the
prices used in calculating the net present value of the Partnerships'
proved reserves at June 30, 2005 will actually be realized for such
production.
-26-
Net Present Value of Reserves
--------------------------------------------
Partnership 6/30/05 3/31/05 12/31/04
----------- ----------- ----------- -----------
I-D $ 5,497,898 $ 5,497,532 $ 4,527,378
I-E 31,683,605 31,844,972 25,701,037
I-F 10,758,354 10,736,099 8,503,429
Oil and Gas Prices
-------------------------------------------
Pricing 6/30/05 3/31/05 12/31/04
----------- ----------- ----------- -----------
Oil (Bbl) $ 56.63 $ 55.31 $ 43.36
Gas (Mcf) 7.07 7.17 6.02
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;
-27-
* The availability of pipelines for transportation; and
* Domestic and foreign government regulations and taxes.
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.
In addition to pricing, the level of net revenues is also 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. Despite this general
trend of declining production, several factors can cause the volumes of
oil and gas sold to increase or decrease at an even greater rate over a
given period. These factors include, but are not limited to, (i)
geophysical conditions which cause an acceleration of the decline in
production, (ii) the shutting in of wells (or the opening of previously
shut-in wells) due to low oil and gas prices (or high oil and gas prices),
mechanical difficulties, loss of a market or transportation, or
performance of workovers, recompletions, or other operations in the well,
(iii) prior period volume adjustments (either positive or negative) made
by the purchasers of the production, (iv) ownership adjustments in
accordance with agreements governing the operation or ownership of the
well (such as adjustments that occur at payout), and (v) completion of
enhanced recovery projects which increase production for the well. Many of
these factors are very significant as related to a single well or as
related to many wells over a short period of time. However, due to the
large number of wells owned by the Partnerships, these factors are
generally not material as compared to the normal declines in production
experienced on all remaining wells.
-28-
I-D PARTNERSHIP
THREE MONTHS ENDED JUNE 30, 2005 COMPARED TO THE THREE MONTHS ENDED JUNE
30, 2004.
Three Months Ended June 30,
---------------------------
2005 2004
-------- --------
Oil and gas sales $264,614 $244,861
Oil and gas production expenses $ 46,631 $ 38,471
Barrels produced 858 840
Mcf produced 34,823 39,049
Average price/Bbl $ 52.22 $ 37.44
Average price/Mcf $ 6.31 $ 5.47
As shown in the table above, total oil and gas sales increased $19,753
(8.1%) for the three months ended June 30, 2005 as compared to the three
months ended June 30, 2004. Of this increase, approximately $13,000 and
$29,000, respectively, were related to increases in the average prices of
oil and gas sold. These increases were partially offset by a decrease of
approximately $23,000 related to a decrease in volumes of gas sold.
Volumes of oil sold increased 18 barrels, while volumes of gas sold
decreased 4,226 Mcf for the three months ended June 30, 2005 as compared
to the three months ended June 30, 2004. The decrease in volumes of gas
sold was primarily due to normal declines in production.
Oil and gas production expenses (including lease operating expenses and
production taxes) increased $8,160 (21.2%) for the three months ended June
30, 2005 as compared to the three months ended June 30, 2004. This
increase was primarily due to (i) workover expenses incurred on one
significant well during the three months ended June 30, 2005 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 increased to
17.6% for the three months ended June 30, 2005 from 15.7% for the three
months ended June 30, 2004. This percentage increase was primarily due to
the dollar increase in oil and gas production expenses.
Depreciation, depletion, and amortization of oil and gas properties
remained relatively constant for the three months ended June 30, 2005 and
2004. An increase primarily due to one significant well being fully
depleted during the three months ended June 30, 2005 due to the lack of
remaining reserves was substantially offset by (i) several other wells
being fully depleted during the three months ended June 30, 2004 due to
the lack of remaining reserves and (ii) the decrease in volumes of gas
sold. As a percentage of oil and gas sales, this expense decreased to 4.4%
for the three months ended June 30, 2005 from 4.7% for the three months
ended June 30, 2004.
-29-
General and administrative expenses decreased $13,322 for the three months
ended June 30, 2005 as compared to the three months ended June 30, 2004.
As a percentage of oil and gas sales, these expenses decreased to 8.6% for
the three months ended June 30, 2005 from 14.8% for the three months ended
June 30, 2004. This percentage decrease was primarily due to the dollar
decrease in general and administrative expenses.
SIX MONTHS ENDED JUNE 30, 2005 COMPARED TO THE SIX MONTHS ENDED JUNE 30,
2004.
Six Months Ended June 30,
-------------------------
2005 2004
-------- --------
Oil and gas sales $557,657 $463,339
Oil and gas production expenses $102,578 $ 88,843
Barrels produced 1,810 1,687
Mcf produced 76,239 78,100
Average price/Bbl $ 49.90 $ 35.48
Average price/Mcf $ 6.13 $ 5.17
As shown in the table above, total oil and gas sales increased $94,318
(20.4%) for the six months ended June 30, 2005 as compared to the six
months ended June 30, 2004. Of this increase, approximately $26,000 and
$73,000, respectively, were related to increases in the average prices of
oil and gas sold. These increases were partially offset by a decrease of
approximately $10,000 related to a decrease in volumes of gas sold.
Volumes of oil sold increased 123 barrels, while volumes of gas sold
decreased 1,861 Mcf for the six months ended June 30, 2005 as compared to
the six months ended June 30, 2004. The decrease in volumes of gas sold
was primarily due to normal declines in production. This decrease was
partially offset by (i) positive prior period volume adjustments made by
the operator on two significant wells during the six months ended June 30,
2005, (ii) an increase in production on one significant well following the
successful workover of that well during mid 2004, and (iii) the first
receipt of revenues on another significant well during early 2005.
Oil and gas production expenses (including lease operating expenses and
production taxes) increased $13,735 (15.5%) for the six months ended June
30, 2005 as compared to the six months ended June 30, 2004. This increase
was primarily due to (i) workover expenses incurred on two significant
wells during the six months ended June 30, 2005 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 18.4% for the
six months ended June 30, 2005 from 19.2% for the six months ended June
30, 2004.
-30-
Depreciation, depletion, and amortization of oil and gas properties
decreased $1,400 (7.3%) for the six months ended June 30, 2005 as compared
to the six months ended June 30, 2004. This decrease was primarily due to
(i) several wells being fully depleted during the six months ended June
30, 2004 due to the lack of remaining reserves and (ii) upward revisions
in the estimates of remaining gas reserves on two significant wells since
June 30, 2004. These decreases were partially offset by one significant
well being fully depleted during the six months ended June 30, 2005 due to
the lack of remaining reserves. As a percentage of oil and gas sales, this
expense decreased to 3.2% for the six months ended June 30, 2005 from 4.1%
for the six months ended June 30, 2004. This percentage decrease was
primarily due to the increases in the average prices of oil and gas sold.
General and administrative expenses increased $2,420 for the six months
ended June 30, 2005 as compared to the six months ended June 30, 2004. As
a percentage of oil and gas sales, these expenses decreased to 11.8% for
the six months ended June 30, 2005 from 13.7% for the six months ended
June 30, 2004. This percentage decrease was primarily due to the increase
in oil and gas sales.
The Limited Partners have received cash distributions through June 30,
2005 totaling $17,557,175 or 244.03% of Limited Partners' capital
contributions.
I-E PARTNERSHIP
THREE MONTHS ENDED JUNE 30, 2005 COMPARED TO THE THREE MONTHS ENDED JUNE
30, 2004.
Three Months Ended June 30,
---------------------------
2005 2004
---------- ----------
Oil and gas sales $1,687,867 $1,550,019
Oil and gas production expenses $ 385,756 $ 316,189
Barrels produced 8,653 11,664
Mcf produced 195,235 210,241
Average price/Bbl $ 53.32 $ 34.42
Average price/Mcf $ 6.28 $ 5.46
As shown in the table above, total oil and gas sales increased $137,848
(8.9%) for the three months ended June 30, 2005 as compared to the three
months ended June 30, 2004. Of this increase, approximately $164,000 and
$160,000, respectively, were related to increases in the average prices of
oil and gas sold. These increases were partially offset by decreases of
approximately $104,000 and $82,000, respectively, related to decreases in
volumes of oil and gas sold. Volumes of oil and gas sold decreased 3,011
barrels and 15,006 Mcf, respectively, for the three months ended June 30,
2005 as compared to the three months ended June 30,
-31-
2004. The decrease in volumes of oil sold was primarily due to (i) normal
declines in production and (ii) a negative prior period volume adjustment
made by the operator on one significant well during the three months ended
June 30, 2005. The decrease in volumes of gas sold was primarily due to
normal declines in production. This decrease was partially offset by (i)
an increase in production on two significant wells following the
successful workover of those wells during mid 2004, (ii) the successful
completion of two new wells in late 2004, and (iii) the first receipt of
revenues on one significant well during early 2005.
Oil and gas production expenses (including lease operating expenses and
production taxes) increased $69,567 (22.0%) for the three months ended
June 30, 2005 as compared to the three months ended June 30, 2004. This
increase was primarily due to (i) workover expenses incurred on several
wells during the three months ended June 30, 2005 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 increased to 22.9% for the
three months ended June 30, 2005 from 20.4% for the three months ended
June 30, 2004. This percentage increase was primarily due to the dollar
increase in oil and gas production expenses.
Depreciation, depletion, and amortization of oil and gas properties
decreased $2,481 (4.8%) for the three months ended June 30, 2005 as
compared to the three months ended June 30, 2004. This decrease was
primarily due to (i) several wells being fully depleted during the three
months ended June 30, 2004 due to the lack of remaining reserves and (ii)
the decreases in volumes of oil and gas sold. These decreases were
partially offset by (i) one significant well being fully depleted during
the three months ended June 30, 2005 due to the lack of remaining
reserves, (ii) downward revisions in the estimates of remaining gas
reserves on two other significant wells since June 30, 2004, and (iii) an
increase in depletable oil and gas properties during 2005 primarily due to
the drilling of one developmental well. As a percentage of oil and gas
sales, this expense decreased to 2.9% for the three months ended June 30,
2005 from 3.3% for the three months ended June 30, 2004. 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 decreased $14,833 for the three months
ended June 30, 2005 as compared to the three months ended June 30, 2004.
As a percentage of oil and gas sales, these expenses decreased to 7.3% for
the three months ended June 30, 2005 from 8.9% for the three months ended
June 30, 2004. This percentage decrease was primarily due to (i) the
dollar decrease in general and administrative expenses and (ii) the
increase in oil and gas sales.
-32-
SIX MONTHS ENDED JUNE 30, 2005 COMPARED TO THE SIX MONTHS ENDED JUNE 30,
2004.
Six Months Ended June 30,
-------------------------
2005 2004
---------- ----------
Oil and gas sales $3,536,558 $2,926,256
Oil and gas production expenses $ 689,638 $ 715,711
Barrels produced 19,376 23,243
Mcf produced 424,281 425,942
Average price/Bbl $ 49.38 $ 32.64
Average price/Mcf $ 6.08 $ 5.09
As shown in the table above, total oil and gas sales increased $610,302
(20.9%) for the six months ended June 30, 2005 as compared to the six
months ended June 30, 2004. Of this increase, approximately $324,000 and
$421,000, respectively, were related to increases in the average prices of
oil and gas sold. These increases were partially offset by a decrease of
approximately $126,000 related to a decrease in volumes of oil sold.
Volumes of oil and gas sold decreased 3,867 barrels and 1,661 Mcf,
respectively, for the six months ended June 30, 2005 as compared to the
six months ended June 30, 2004. The decrease in volumes of oil sold was
primarily due to (i) normal declines in production and (ii) a negative
prior period volume adjustment made by the operator on one significant
well during the six months ended June 30, 2005. The decrease in volumes of
gas sold was primarily due to normal declines in production. This decrease
was substantially offset by (i) an increase in production on two
significant wells following the successful workover of those wells during
mid 2004, (ii) the first receipt of revenues on one significant well
during early 2005, and (iii) the successful completion of two new wells in
late 2004.
Oil and gas production expenses (including lease operating expenses and
production taxes) decreased $26,073 (3.6%) for the six months ended June
30, 2005 as compared to the six months ended June 30, 2004. This decrease
was primarily due to (i) a reversal during the six months ended June 30,
2005 of approximately $89,000 of a charge previously accrued for a
judgment, (ii) workover expenses incurred on several wells during the six
months ended June 30, 2004, and (iii) a decrease in repair and maintenance
expenses incurred on another significant well during the six months ended
June 30, 2005 as compared to the six months ended June 30, 2004. These
decreases were partially offset by (i) workover expenses incurred on
several wells during the six months ended June 30, 2005 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
19.5% for the six months ended June 30, 2005 from 24.5% for the six months
ended June 30, 2004. This percentage decrease was primarily due to the
increase in oil and gas sales.
-33-
Depreciation, depletion, and amortization of oil and gas properties
decreased $15,836 (14.7%) for the six months ended June 30, 2005 as
compared to the six months ended June 30, 2004. This decrease was
primarily due to (i) several wells being fully depleted during the six
months ended June 30, 2004 due to the lack of remaining reserves and (ii)
upward revisions in the estimates of remaining gas reserves on one
significant well since June 30, 2004. These decreases were partially
offset by (i) one significant well being fully depleted during the six
months ended June 30, 2005 due to the lack of remaining reserves, (ii)
downward revisions in the estimates of remaining oil and gas reserves on
two other significant wells since June 30, 2004, and (iii) an increase in
depletable oil and gas properties during 2005 primarily due to the
drilling of one developmental well. As a percentage of oil and gas sales,
this expense decreased to 2.6% for the six months ended June 30, 2005 from
3.7% for the six months ended June 30, 2004. 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 remained relatively constant for the
six months ended June 30, 2005 and 2004. As a percentage of oil and gas
sales, these expenses decreased to 7.5% for the six months ended June 30,
2005 from 9.1% for the six months ended June 30, 2004. This percentage
decrease was primarily due to the increase in oil and gas sales.
The Limited Partners have received cash distributions through June 30,
2005 totaling $73,051,552 or 174.60% of Limited Partners' capital
contributions.
I-F PARTNERSHIP
THREE MONTHS ENDED JUNE 30, 2005 COMPARED TO THE THREE MONTHS ENDED JUNE
30, 2004.
Three Months Ended June 30,
---------------------------
2005 2004
-------- --------
Oil and gas sales $583,939 $500,053
Oil and gas production expenses $174,018 $140,995
Barrels produced 3,982 5,084
Mcf produced 58,488 58,914
Average price/Bbl $ 52.52 $ 34.77
Average price/Mcf $ 6.41 $ 5.49
As shown in the table above, total oil and gas sales increased $83,886
(16.8%) for the three months ended June 30, 2005 as compared to the three
months ended June 30, 2004. Of this increase, approximately $71,000 and
$54,000, respectively, were related to increases in the average
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prices of oil and gas sold. These increases were partially offset by a
decrease of approximately $38,000 related to a decrease in volumes of oil
sold. Volumes of oil and gas sold decreased 1,102 barrels and 426 Mcf,
respectively, for the three months ended June 30, 2005 as compared to the
three months ended June 30, 2004. The decrease in volumes of oil sold was
primarily due to (i) normal declines in production and (ii) a negative
prior period volume adjustment made by the operator on one significant
well during the three months ended June 30, 2005. The decrease in volumes
of gas sold was primarily due to normal declines in production. This
decrease was substantially offset by (i) the successful completion of two
new wells during late 2004, (ii) a positive prior period volume adjustment
made by the operator on one significant well during the three months ended
June 30, 2005, and (iii) an increase in production on another significant
well following the successful workover of that well during mid 2004.
Oil and gas production expenses (including lease operating expenses and
production taxes) increased $33,023 (23.4%) for the three months ended
June 30, 2005 as compared to the three months ended June 30, 2004. This
increase was primarily due to (i) workover expenses incurred on several
wells during the three months ended June 30, 2005 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 increased to 29.8% for the
three months ended June 30, 2005 from 28.2% for the three months ended
June 30, 2004.
Depreciation, depletion, and amortization of oil and gas properties
increased $5,321 (45.3%) for the three months ended June 30, 2005 as
compared to the three months ended June 30, 2004. This increase was
primarily due to (i) downward revisions in the estimates of remaining gas
reserves on two significant wells since June 30, 2004 and (ii) an increase
in depletable oil and gas properties during 2005 primarily due to the
drilling of another developmental well. As a percentage of oil and gas
sales, this expense increased to 2.9% for the three months ended June 30,
2005 from 2.3% for the three months ended June 30, 2004. 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 $13,631 for the three months
ended June 30, 2005 as compared to the three months ended June 30, 2004.
As a percentage of oil and gas sales, these expenses decreased to 7.4% for
the three months ended June 30, 2005 from 11.4% for the three months ended
June 30, 2004. This percentage decrease was primarily due to (i) the
dollar decrease in general and administrative expenses and (ii) the
increase in oil and gas sales.
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SIX MONTHS ENDED JUNE 30, 2005 COMPARED TO THE SIX MONTHS ENDED JUNE 30,
2004.
Six Months Ended June 30,
-------------------------
2005 2004
---------- --------
Oil and gas sales $1,184,965 $960,226
Oil and gas production expenses $ 243,434 $283,218
Barrels produced 9,061 10,321
Mcf produced 120,400 120,343
Average price/Bbl $ 48.87 $ 32.97
Average price/Mcf $ 6.16 $ 5.15
As shown in the table above, total oil and gas sales increased $224,739
(23.4%) for the six months ended June 30, 2005 as compared to the six
months ended June 30, 2004. Of this increase, approximately $144,000 and
$122,000, respectively, were related to increases in the average prices of
oil and gas sold. These increases were partially offset by a decrease of
approximately $42,000 related to a decrease in volumes of oil sold.
Volumes of oil sold decreased 1,260 barrels, while volumes of gas sold
increased 57 Mcf for the six months ended June 30, 2005 as compared to the
six months ended June 30, 2004. The decrease in volumes of oil sold was
primarily due to (i) normal declines in production and (ii) a negative
prior period volume adjustment made by the operator on one significant
well during the six months ended June 30, 2005. The increase in volumes of
gas sold was primarily due to (i) the successful completion of two new
wells during late 2004, (ii) a positive prior period volume adjustment
made by the operator on one significant well during the six months ended
June 30, 2005, and (iii) an increase in production on another significant
well following the successful workover of that well during mid 2004. These
increases were substantially offset by normal declines in production.
Oil and gas production expenses (including lease operating expenses and
production taxes) decreased $39,784 (14.0%) for the six months ended June
30, 2005 as compared to the six months ended June 30, 2004. This decrease
was primarily due to (i) a reversal during the six months ended June 30,
2005 of approximately $62,000 of a charge previously accrued for a
judgment, (ii) workover expenses incurred on several wells during the six
months ended June 30, 2004, and (iii) a decrease in repair and maintenance
expenses incurred on another significant well during the six months ended
June 30, 2005 as compared to the six months ended June 30, 2004. These
decreases were partially offset by (i) workover expenses incurred on
several wells during the six months ended June 30, 2005 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
20.5% for the six months ended June 30, 2005 from 29.5% for the six months
ended June 30, 2004. This percentage
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decrease was primarily due to (i) the increase in oil and gas sales and
(ii) the dollar decrease in oil and gas production expenses.
Depreciation, depletion, and amortization of oil and gas properties
increased $399 (1.2%) for the six months ended June 30, 2005 as compared
to the six months ended June 30, 2004. This increase was primarily due to
(i) downward revisions in the estimates of remaining oil and gas reserves
on two significant wells since June 30, 2004 and (ii) an increase in
depletable oil and gas properties during 2005 primarily due to the
drilling of one developmental well. These increases were partially offset
by upward revisions in the estimates of remaining gas reserves on another
significant well since June 30, 2004. As a percentage of oil and gas
sales, this expense decreased to 2.9% for the six months ended June 30,
2005 from 3.5% for the six months ended June 30, 2004. This percentage
decrease was primarily due to the increases in the average prices of oil
and gas sold.
General and administrative expenses increased $1,706 for the six months
ended June 30, 2005 as compared to the six months ended June 30, 2004. As
a percentage of oil and gas sales, these expenses decreased to 9.0% for
the six months ended June 30, 2005 from 11.0% for the six months ended
June 30, 2004. This percentage decrease was primarily due to the increase
in oil and gas sales.
The Limited Partners have received cash distributions through June 30,
2005 totaling $22,964,664 or 160.36% of Limited Partners' capital
contributions.
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ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET
RISK
The Partnerships do not hold any market risk sensitive instruments.
ITEM 4. CONTROLS AND PROCEDURES
As of the end of the 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.
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PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
A lawsuit styled Xplor Energy Operating Co. v. The Newton Corp, et al.,
Case No. 99-04-01960-CV, 284th Judicial District Court of Montgomery
County, Texas was filed on May 12, 1999. The Newton Corp. ("Newton")
acquired an interest at auction in the State 87-S1 (the "Well") owned by
the I-E Partnership, the I-F Partnership, and a related partnership
(collectively the "Prior Owners"). Eight months after Newton's acquisition
of the Prior Owners' interest, the operator of the Well, Xplor Energy
Operating Co. ("Xplor"), plugged and abandoned the Well. Xplor filed this
lawsuit on May 12, 1999 alleging that the Prior Owners were the record
owners of the lease when it expired and that the Prior Owners were
responsible for the costs of plugging and abandoning the Well. Xplor
sought to recover the Prior Owners' proportionate share of the costs to
plug and abandon the well along with attorneys' fees and interest. The
Prior Owners denied liability and cross-claimed against Newton for
indemnity for any amounts that may be awarded to Xplor. Newton in turn
alleged that the Prior Owners were liable for the plugging costs. Trial
was held on August 6, 2001. At the conclusion of the trial the Court
awarded Xplor $86,000 plus $200,000 in attorney fees and awarded Newton
$300 plus $161,000 in attorney fees to be divided among the Prior Owners.
On January 15, 2002 the Prior Owners filed an appeal of the matter with
the Court of Appeals, Fifth District of Texas, Dallas, Texas, Case No.
05-02-00070-CV. The I-E Partnership and I-F Partnership have approximately
50% and 35%, respectively, of the liability with respect to the trial
court judgment rendered in the matter.
On April 23, 2002 the Prior Owners entered into a settlement agreement
with Xplor thereby settling for $165,000 the judgment in favor of Xplor.
On January 23, 2003 the Court of Appeals ruled against Newton on all
issues except one claim resulting in the $300 liability to the Prior
Owners, and remanded the case to the trial court to determine and award to
Newton any portion of the alleged attorneys' fees awarded to them that is
attributable solely to the $300 award against the Prior Owners. On April
8, 2005 the Texas Supreme Court reversed this decision and ruled that the
Prior Owners had no liability to Newton. The Texas Supreme Court remanded
the case to the trial court to render a judgment in favor of the Prior
Owners against Newton in an amount to be determined in order to reimburse
the Prior Owners for the costs to plug and abandon the Well.
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ITEM 6. EXHIBITS
31.1 Certification by Dennis R. Neill required by Rule
13a-14(a)/15d-14(a) for the I-D Partnership.
31.2 Certification by Craig D. Loseke required by Rule
13a-14(a)/15d-14(a) for the I-D Partnership.
31.3 Certification by Dennis R. Neill required by Rule
13a-14(a)/15d-14(a) for the I-E Partnership.
31.4 Certification by Craig D. Loseke required by Rule
13a-14(a)/15d-14(a) for the I-E Partnership.
31.5 Certification by Dennis R. Neill required by Rule
13a-14(a)/15d-14(a) for the I-F Partnership.
31.6 Certification by Craig D. Loseke required by Rule
13a-14(a)/15d-14(a) for the I-F Partnership.
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 I-D 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 I-E 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 I-F Partnership.
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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 I-D
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP I-E
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP I-F
(Registrant)
BY: GEODYNE RESOURCES, INC.
General Partner
Date: August 12, 2005 By: /s/Dennis R. Neill
--------------------------------
(Signature)
Dennis R. Neill
President
Date: August 12, 2005 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 I-D.
31.2 Certification by Craig D. Loseke required by Rule 13a-14(a)/15d-14(a) for
the Geodyne Energy Income Limited Partnership I-D.
31.3 Certification by Dennis R. Neill required by Rule 13a-14(a)/15d-14(a) for
the Geodyne Energy Income Limited Partnership I-E.
31.4 Certification by Craig D. Loseke required by Rule 13a-14(a)/15d-14(a) for
the Geodyne Energy Income Limited Partnership I-E.
31.5 Certification by Dennis R. Neill required by Rule 13a-14(a)/15d-14(a) for
the Geodyne Energy Income Limited Partnership I-F.
31.6 Certification by Craig D. Loseke required by Rule 13a-14(a)/15d-14(a) for
the Geodyne Energy Income Limited Partnership I-F.
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 I-D.
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 I-E.
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 I-F.
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