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:
P-1: 0-17800 P-4: 0-18308 P-6: 0-18937
P-3: 0-18306 P-5: 0-18637
GEODYNE INSTITUTIONAL/PENSION ENERGY INCOME P-1 LIMITED PARTNERSHIP
GEODYNE INSTITUTIONAL/PENSION ENERGY INCOME LIMITED PARTNERSHIP P-3
GEODYNE INSTITUTIONAL/PENSION ENERGY INCOME LIMITED PARTNERSHIP P-4
GEODYNE INSTITUTIONAL/PENSION ENERGY INCOME LIMITED PARTNERSHIP P-5
GEODYNE INSTITUTIONAL/PENSION ENERGY INCOME LIMITED PARTNERSHIP P-6
---------------------------------------------------------------------
(Exact Name of Registrant as specified in its Articles)
P-1 73-1330245
P-3 73-1336573
P-1: Texas P-4 73-1341929
P-3 through P-6: P-5 73-1353774
Oklahoma P-6 73-1357375
---------------------------- -------------------------------
(State or other jurisdiction (I.R.S. Employer Identification
of incorporation or Number)
organization)
Two West Second Street, Tulsa, Oklahoma 74103
------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code:(918) 583-1791
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes X No
------ ------
Indicate by check mark whether the registrant is an accelerated filer (as
defined in Rule 12b-2 of the Exchange Act).
Yes No X
------ ------
-1-
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
GEODYNE INSTITUTIONAL/PENSION ENERGY INCOME P-1 LIMITED PARTNERSHIP
GEODYNE NPI PARTNERSHIP P-1
COMBINED BALANCE SHEETS
(Unaudited)
ASSETS
June 30, December 31,
2005 2004
------------- ------------
CURRENT ASSETS:
Cash and cash equivalents $ 465,734 $ 448,368
Accounts receivable:
Net Profits 282,974 77,602
---------- ----------
Total current assets $ 748,708 $ 525,970
NET PROFITS INTERESTS, net, utilizing
the successful efforts method 670,288 693,128
---------- ----------
$1,418,996 $1,219,098
========== ==========
PARTNERS' CAPITAL (DEFICIT)
PARTNERS' CAPITAL (DEFICIT):
General Partner ($ 43,152) ($ 64,846)
Limited Partners, issued and
outstanding, 108,074 units 1,462,148 1,283,944
---------- ----------
Total Partners' capital $1,418,996 $1,219,098
========== ==========
The accompanying condensed notes are an integral part of these
combined financial statements.
-2-
GEODYNE INSTITUTIONAL/PENSION ENERGY INCOME P-1 LIMITED PARTNERSHIP
GEODYNE NPI PARTNERSHIP P-1
COMBINED STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED JUNE 30, 2005 AND 2004
(Unaudited)
2005 2004
-------- --------
REVENUES:
Net Profits $439,476 $388,100
Interest income 1,867 620
Gain on sale of Net Profits
Interests - 14,928
-------- --------
$441,343 $403,648
COSTS AND EXPENSES:
Depletion of Net Profits
Interests $ 17,789 $ 13,215
General and administrative
(Note 2) 30,826 45,197
-------- --------
$ 48,615 $ 58,412
-------- --------
NET INCOME $392,728 $345,236
======== ========
GENERAL PARTNER - NET INCOME $ 40,687 $ 34,304
======== ========
LIMITED PARTNERS - NET INCOME $352,041 $310,932
======== ========
NET INCOME per unit $ 3.25 $ 2.87
======== ========
UNITS OUTSTANDING 108,074 108,074
======== ========
The accompanying condensed notes are an integral part of these
combined financial statements.
-3-
GEODYNE INSTITUTIONAL/PENSION ENERGY INCOME P-1 LIMITED PARTNERSHIP
GEODYNE NPI PARTNERSHIP P-1
COMBINED STATEMENTS OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 2005 AND 2004
(Unaudited)
2005 2004
-------- --------
REVENUES:
Net Profits $988,923 $806,477
Interest income 3,432 1,030
Gain on sale of Net Profits
Interests - 15,453
-------- --------
$992,355 $822,960
COSTS AND EXPENSES:
Depletion of Net Profits
Interests $ 33,217 $ 31,913
General and administrative
(Note 2) 82,638 81,628
-------- --------
$115,855 $113,541
-------- --------
NET INCOME $876,500 $709,419
======== ========
GENERAL PARTNER - NET INCOME $ 90,296 $ 72,364
======== ========
LIMITED PARTNERS - NET INCOME $786,204 $637,055
======== ========
NET INCOME per unit $ 7.27 $ 5.89
======== ========
UNITS OUTSTANDING 108,074 108,074
======== ========
The accompanying condensed notes are an integral part of these
combined financial statements.
-4-
GEODYNE INSTITUTIONAL/PENSION ENERGY INCOME P-1 LIMITED PARTNERSHIP
GEODYNE NPI PARTNERSHIP P-1
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 $876,500 $709,419
Adjustments to reconcile net income
to net cash provided by operating
activities:
Depletion of Net Profits
Interests 33,217 31,913
Gain on sale of Net Profits
Interests - ( 15,453)
Increase in accounts receivable -
Net Profits ( 201,722) ( 79,739)
-------- --------
Net cash provided by operating
activities $707,995 $646,140
-------- --------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures ($ 14,027) ($ 3,324)
Proceeds from the sale of Net
Profits Interests - 15,881
-------- --------
Net cash provided (used) by investing
activities ($ 14,027) $ 12,557
-------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Cash distributions ($676,602) ($663,607)
-------- --------
Net cash used by financing
activities ($676,602) ($663,607)
-------- --------
NET DECREASE IN CASH AND CASH
EQUIVALENTS ($ 17,366) ($ 4,910)
CASH AND CASH EQUIVALENTS AT
BEGINNING OF PERIOD 448,368 399,580
-------- --------
CASH AND CASH EQUIVALENTS AT
END OF PERIOD $465,734 $394,670
======== ========
The accompanying condensed notes are an integral part of these
combined financial statements.
-5-
GEODYNE INSTITUTIONAL/PENSION ENERGY INCOME LIMITED PARTNERSHIP P-3
GEODYNE NPI PARTNERSHIP P-3
COMBINED BALANCE SHEETS
(Unaudited)
ASSETS
June 30, December 31,
2005 2004
------------- ------------
CURRENT ASSETS:
Cash and cash equivalents $ 703,860 $ 633,196
Accounts receivable:
Net Profits 401,999 130,416
---------- ----------
Total current assets $1,105,859 $ 763,612
NET PROFITS INTERESTS, net, utilizing
the successful efforts method 1,033,636 1,071,849
---------- ----------
$2,139,495 $1,835,461
========== ==========
PARTNERS' CAPITAL (DEFICIT)
PARTNERS' CAPITAL (DEFICIT):
General Partner ($ 24,650) ($ 53,429)
Limited Partners, issued and
outstanding, 169,637 units 2,164,145 1,888,890
---------- ----------
Total Partners' capital $2,139,495 $1,835,461
========== ==========
The accompanying condensed notes are an integral part of these
combined financial statements.
-6-
GEODYNE INSTITUTIONAL/PENSION ENERGY INCOME LIMITED PARTNERSHIP P-3
GEODYNE NPI PARTNERSHIP P-3
COMBINED STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED JUNE 30, 2005 AND 2004
(Unaudited)
2005 2004
-------- --------
REVENUES:
Net Profits $637,978 $562,152
Interest income 2,859 960
Gain on sale of Net Profits
Interests - 18,807
-------- --------
$640,837 $581,919
COSTS AND EXPENSES:
Depletion of Net Profits
Interests $ 23,322 $ 19,208
General and administrative
(Note 2) 47,643 62,332
-------- --------
$ 70,965 $ 81,540
-------- --------
NET INCOME $569,872 $500,379
======== ========
GENERAL PARTNER - NET INCOME $ 58,800 $ 49,974
======== ========
LIMITED PARTNERS - NET INCOME $511,072 $450,405
======== ========
NET INCOME per unit $ 3.01 $ 2.65
======== ========
UNITS OUTSTANDING 169,637 169,637
======== ========
The accompanying condensed notes are an integral part of these
combined financial statements.
-7-
GEODYNE INSTITUTIONAL/PENSION ENERGY INCOME LIMITED PARTNERSHIP P-3
GEODYNE NPI PARTNERSHIP P-3
COMBINED STATEMENTS OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 2005 AND 2004
(Unaudited)
2005 2004
---------- ----------
REVENUES:
Net Profits $1,425,534 $1,183,266
Interest income 5,119 1,607
Gain on sale of Net Profits
Interests - 19,856
---------- ----------
$1,430,653 $1,204,729
COSTS AND EXPENSES:
Depletion of Net Profits
Interests $ 51,548 $ 48,602
General and administrative
(Note 2) 116,458 116,127
---------- ----------
$ 168,006 $ 164,729
---------- ----------
NET INCOME $1,262,647 $1,040,000
========== ==========
GENERAL PARTNER - NET INCOME $ 130,392 $ 106,517
========== ==========
LIMITED PARTNERS - NET INCOME $1,132,255 $ 933,483
========== ==========
NET INCOME per unit $ 6.67 $ 5.50
========== ==========
UNITS OUTSTANDING 169,637 169,637
========== ==========
The accompanying condensed notes are an integral part of these
combined financial statements.
-8-
GEODYNE INSTITUTIONAL/PENSION ENERGY INCOME LIMITED PARTNERSHIP P-3
GEODYNE NPI PARTNERSHIP P-3
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 $1,262,647 $1,040,000
Adjustments to reconcile net income
to net cash provided by operating
activities:
Depletion of Net Profits
Interests 51,548 48,602
Gain on sale of Net Profits
Interests - ( 19,856)
Increase in accounts receivable -
Net Profits ( 263,065) ( 107,488)
---------- ----------
Net cash provided by operating
activities $1,051,130 $ 961,258
---------- ----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures ($ 21,853) ($ 20,382)
Proceeds from the sale of Net
Profits Interests - 20,161
---------- ----------
Net cash used by investing
activities ($ 21,853) ($ 221)
---------- ----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Cash distributions ($ 958,613) ($ 966,524)
---------- ----------
Net cash used by financing
activities ($ 958,613) ($ 966,524)
---------- ----------
NET INCREASE (DECREASE) IN CASH AND
CASH EQUIVALENTS $ 70,664 ($ 5,487)
CASH AND CASH EQUIVALENTS AT
BEGINNING OF PERIOD 633,196 581,527
---------- ----------
CASH AND CASH EQUIVALENTS AT
END OF PERIOD $ 703,860 $ 576,040
========== ==========
The accompanying condensed notes are an integral part of these
combined financial statements.
-9-
GEODYNE INSTITUTIONAL/PENSION ENERGY INCOME LIMITED PARTNERSHIP P-4
GEODYNE NPI PARTNERSHIP P-4
COMBINED BALANCE SHEETS
(Unaudited)
ASSETS
June 30, December 31,
2005 2004
------------ ------------
CURRENT ASSETS:
Cash and cash equivalents $ 477,507 $ 510,213
Accounts receivable:
Net Profits 313,380 281,672
---------- ----------
Total current assets $ 790,887 $ 791,885
NET PROFITS INTERESTS, net, utilizing
the successful efforts method 376,160 394,957
---------- ----------
$1,167,047 $1,186,842
========== ==========
PARTNERS' CAPITAL (DEFICIT)
PARTNERS' CAPITAL (DEFICIT):
General Partner ($ 55,525) ($ 57,646)
Limited Partners, issued and
outstanding, 126,306 units 1,222,572 1,244,488
---------- ----------
Total Partners' capital $1,167,047 $1,186,842
========== ==========
The accompanying condensed notes are an integral part of these
combined financial statements.
-10-
GEODYNE INSTITUTIONAL/PENSION ENERGY INCOME LIMITED PARTNERSHIP P-4
GEODYNE NPI PARTNERSHIP P-4
COMBINED STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED JUNE 30, 2005 AND 2004
(Unaudited)
2005 2004
-------- --------
REVENUES:
Net Profits $445,650 $438,744
Interest income 2,001 649
-------- --------
$447,651 $439,393
COSTS AND EXPENSES:
Depletion of Net Profits
Interests $ 11,015 $ 25,010
General and administrative
(Note 2) 35,807 50,270
-------- --------
$ 46,822 $ 75,280
-------- --------
NET INCOME $400,829 $364,113
======== ========
GENERAL PARTNER - NET INCOME $ 40,874 $ 38,597
======== ========
LIMITED PARTNERS - NET INCOME $359,955 $325,516
======== ========
NET INCOME per unit $ 2.85 $ 2.58
======== ========
UNITS OUTSTANDING 126,306 126,306
======== ========
The accompanying condensed notes are an integral part of these
combined financial statements..
-11-
GEODYNE INSTITUTIONAL/PENSION ENERGY INCOME LIMITED PARTNERSHIP P-4
GEODYNE NPI PARTNERSHIP P-4
COMBINED STATEMENTS OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 2005 AND 2004
(Unaudited)
2005 2004
-------- --------
REVENUES:
Net Profits $791,277 $839,003
Interest income 3,860 1,098
Gain on sale of Net Profits
Interests - 962
-------- --------
$795,137 $841,063
COSTS AND EXPENSES:
Depletion of Net Profits
Interests $ 22,765 $ 59,212
General and administrative
(Note 2) 92,653 90,910
-------- --------
$115,418 $150,122
-------- --------
NET INCOME $679,719 $690,941
======== ========
GENERAL PARTNER - NET INCOME $ 69,635 $ 74,313
======== ========
LIMITED PARTNERS - NET INCOME $610,084 $616,628
======== ========
NET INCOME per unit $ 4.83 $ 4.88
======== ========
UNITS OUTSTANDING 126,306 126,306
======== ========
The accompanying condensed notes are an integral part of these
combined financial statements.
-12-
GEODYNE INSTITUTIONAL/PENSION ENERGY INCOME LIMITED PARTNERSHIP P-4
GEODYNE NPI PARTNERSHIP P-4
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 $679,719 $690,941
Adjustments to reconcile net income
to net cash provided by operating
activities:
Depletion of Net Profits
Interests 22,765 59,212
Gain on sale of Net Profits
Interests - ( 962)
Settlement of asset retirement
obligation - ( 77)
Increase in accounts receivable -
Net Profits ( 28,365) ( 80,778)
-------- --------
Net cash provided by operating
activities $674,119 $668,336
-------- --------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures ($ 7,311) ($ 32,475)
Proceeds from sale of Net Profits
Interests - 435
-------- --------
Net cash used by investing
activities ($ 7,311) ($ 32,040)
-------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Cash distributions ($699,514) ($598,062)
-------- --------
Net cash used by financing
activities ($699,514) ($598,062)
-------- --------
NET INCREASE (DECREASE) IN CASH AND
CASH EQUIVALENTS ($ 32,706) $ 38,234
CASH AND CASH EQUIVALENTS AT
BEGINNING OF PERIOD 510,213 399,864
-------- --------
CASH AND CASH EQUIVALENTS AT
END OF PERIOD $477,507 $438,098
======== ========
The accompanying condensed notes are an integral part of these
combined financial statements.
-13-
GEODYNE INSTITUTIONAL/PENSION ENERGY INCOME LIMITED PARTNERSHIP P-5
GEODYNE NPI PARTNERSHIP P-5
COMBINED BALANCE SHEETS
(Unaudited)
ASSETS
June 30, December 31,
2005 2004
------------- ------------
CURRENT ASSETS:
Cash and cash equivalents $ 454,182 $ 393,840
Accounts receivable:
Net Profits 113,445 37,416
---------- ----------
Total current assets $ 567,627 $ 431,256
NET PROFITS INTERESTS, net, utilizing
the successful efforts method 614,378 600,879
---------- ----------
$1,182,005 $1,032,135
========== ==========
PARTNERS' CAPITAL (DEFICIT)
PARTNERS' CAPITAL (DEFICIT):
General Partner ($ 43,601) ($ 48,512)
Limited Partners, issued and
outstanding, 118,449 units 1,225,606 1,080,647
---------- ----------
Total Partners' capital $1,182,005 $1,032,135
========== ==========
The accompanying condensed notes are an integral part of these
combined financial statements.
-14-
GEODYNE INSTITUTIONAL/PENSION ENERGY INCOME LIMITED PARTNERSHIP P-5
GEODYNE NPI PARTNERSHIP P-5
COMBINED STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED JUNE 30, 2005 AND 2004
(Unaudited)
2005 2004
-------- --------
REVENUES:
Net Profits $414,044 $364,014
Interest income 1,932 522
Loss on sale of Net Profits
Interests - ( 866)
Other income 672 -
-------- --------
$416,648 $363,670
COSTS AND EXPENSES:
Depletion of Net Profits
Interests $ 9,186 $ 23,167
General and administrative
(Note 2) 33,660 48,083
-------- --------
$ 42,846 $ 71,250
-------- --------
NET INCOME $373,802 $292,420
======== ========
GENERAL PARTNER - NET INCOME $ 37,953 $ 31,275
======== ========
LIMITED PARTNERS - NET INCOME $335,849 $261,145
======== ========
NET INCOME per unit $ 2.84 $ 2.21
======== ========
UNITS OUTSTANDING 118,449 118,449
======== ========
The accompanying condensed notes are an integral part of these
combined financial statements.
-15-
GEODYNE INSTITUTIONAL/PENSION ENERGY INCOME LIMITED PARTNERSHIP P-5
GEODYNE NPI PARTNERSHIP P-5
COMBINED STATEMENTS OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 2005 AND 2004
(Unaudited)
2005 2004
-------- --------
REVENUES:
Net Profits $790,912 $679,013
Interest income 3,322 916
Loss on sale of Net Profits
Interests - ( 749)
Other income 2,136 -
-------- --------
$796,370 $679,180
COSTS AND EXPENSES:
Depletion of Net Profits
Interests $ 39,187 $ 53,547
General and administrative
(Note 2) 88,337 86,509
-------- --------
$127,524 $140,056
-------- --------
NET INCOME $668,846 $539,124
======== ========
GENERAL PARTNER - NET INCOME $ 69,887 $ 58,640
======== ========
LIMITED PARTNERS - NET INCOME $598,959 $480,484
======== ========
NET INCOME per unit $ 5.06 $ 4.06
======== ========
UNITS OUTSTANDING 118,449 118,449
======== ========
The accompanying condensed notes are an integral part of these
combined financial statements.
-16-
GEODYNE INSTITUTIONAL/PENSION ENERGY INCOME LIMITED PARTNERSHIP P-5
GEODYNE NPI PARTNERSHIP P-5
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 $668,846 $539,124
Adjustments to reconcile net income
to net cash provided by operating
activities:
Depletion of Net Profits
Interests 39,187 53,547
Loss on sale of Net Profits
Interests - 749
Increase in accounts receivable -
Net Profits ( 67,691) ( 57,056)
-------- --------
Net cash provided by operating
activities $640,342 $536,364
-------- --------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures ($ 61,024) ($ 46,913)
-------- --------
Net cash used by investing
activities ($ 61,024) ($ 46,913)
-------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Cash distributions ($518,976) ($426,390)
-------- --------
Net cash used by financing
activities ($518,976) ($426,390)
-------- --------
NET INCREASE IN CASH AND CASH
EQUIVALENTS $ 60,342 $ 63,061
CASH AND CASH EQUIVALENTS AT
BEGINNING OF PERIOD 393,840 337,494
-------- --------
CASH AND CASH EQUIVALENTS AT
END OF PERIOD $454,182 $400,555
======== ========
The accompanying condensed notes are an integral part of these
combined financial statements.
-17-
GEODYNE INSTITUTIONAL/PENSION ENERGY INCOME LIMITED PARTNERSHIP P-6
GEODYNE NPI PARTNERSHIP P-6
COMBINED BALANCE SHEETS
(Unaudited)
ASSETS
June 30, December 31,
2005 2004
------------- ------------
CURRENT ASSETS:
Cash and cash equivalents $ 602,209 $ 469,272
Accounts receivable:
Net Profits 122,659 -
---------- ----------
Total current assets $ 724,868 $ 469,272
NET PROFITS INTERESTS, net, utilizing
the successful efforts method 1,151,574 1,171,095
---------- ----------
$1,876,442 $1,640,367
========== ==========
LIABILITIES AND PARTNERS' CAPITAL (DEFICIT)
CURRENT LIABILITIES:
Accounts payable:
Net Profits $ - $ 26,403
---------- ----------
Total current liabilities $ - $ 26,403
PARTNERS' CAPITAL (DEFICIT):
General Partner ($ 39,421) ($ 52,148)
Limited Partners, issued and
outstanding, 143,041 units 1,915,863 1,666,112
---------- ----------
Total Partners' capital $1,876,442 $1,613,964
---------- ----------
$1,876,442 $1,640,367
========== ==========
The accompanying condensed notes are an integral part of these
combined financial statements.
-18-
GEODYNE INSTITUTIONAL/PENSION ENERGY INCOME LIMITED PARTNERSHIP P-6
GEODYNE NPI PARTNERSHIP P-6
COMBINED STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED JUNE 30, 2005 AND 2004
(Unaudited)
2005 2004
-------- --------
REVENUES:
Net Profits $669,517 $541,287
Interest income 2,841 833
Loss on sale of Net Profits
Interests - ( 297)
Other income 230 -
-------- --------
$672,588 $541,823
COSTS AND EXPENSES:
Depletion of Net Profits
Interests $ 51,652 $ 36,385
General and administrative
(Note 2) 40,377 54,928
-------- --------
$ 92,029 $ 91,313
-------- --------
NET INCOME $580,559 $450,510
======== ========
GENERAL PARTNER - NET INCOME $ 62,400 $ 48,242
======== ========
LIMITED PARTNERS - NET INCOME $518,159 $402,268
======== ========
NET INCOME per unit $ 3.62 $ 2.81
======== ========
UNITS OUTSTANDING 143,041 143,041
======== ========
The accompanying condensed notes are an integral part of these
combined financial statements.
-19-
GEODYNE INSTITUTIONAL/PENSION ENERGY INCOME LIMITED PARTNERSHIP P-6
GEODYNE NPI PARTNERSHIP P-6
COMBINED STATEMENTS OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 2005 AND 2004
(Unaudited)
2005 2004
---------- ----------
REVENUES:
Net Profits $1,259,050 $1,080,172
Interest income 4,340 1,475
Loss on sale of Net Profits
Interests - ( 256)
Other income 733 -
---------- ----------
$1,264,123 $1,081,391
COSTS AND EXPENSES:
Depletion of Net Profits
Interests $ 80,605 $ 72,472
General and administrative
(Note 2) 101,845 100,288
---------- ----------
$ 182,450 $ 172,760
---------- ----------
NET INCOME $1,081,673 $ 908,631
========== ==========
GENERAL PARTNER - NET INCOME $ 114,922 $ 97,238
========== ==========
LIMITED PARTNERS - NET INCOME $ 966,751 $ 811,393
========== ==========
NET INCOME per unit $ 6.76 $ 5.67
========== ==========
UNITS OUTSTANDING 143,041 143,041
========== ==========
The accompanying condensed notes are an integral part of these
combined financial statements.
-20-
GEODYNE INSTITUTIONAL/PENSION ENERGY INCOME LIMITED PARTNERSHIP P-6
GEODYNE NPI PARTNERSHIP P-6
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 $1,081,673 $908,631
Adjustments to reconcile net income
to net cash provided by operating
activities:
Depletion of Net Profits
Interests 80,605 72,472
Loss on sale of Net Profits
Interests - 256
Settlement of asset retirement
obligation ( 8) -
Net change in accounts receivable
(accounts payable) - Net
Profits ( 148,764) ( 86,570)
---------- --------
Net cash provided by operating
activities $1,013,506 $894,789
---------- --------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures ($ 61,374) ($ 17,767)
---------- --------
Net cash used by investing
activities ($ 61,374) ($ 17,767)
---------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Cash distributions ($ 819,195) ($857,612)
---------- --------
Net cash used by financing
activities ($ 819,195) ($857,612)
---------- --------
NET INCREASE IN CASH AND CASH
EQUIVALENTS $ 132,937 $ 19,410
CASH AND CASH EQUIVALENTS AT
BEGINNING OF PERIOD 469,272 567,735
---------- --------
CASH AND CASH EQUIVALENTS AT
END OF PERIOD $ 602,209 $587,145
========== ========
The accompanying condensed notes are an integral part of these
combined financial statements.
-21-
GEODYNE INSTITUTIONAL/PENSION ENERGY INCOME 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 Geodyne Institutional/Pension Energy Income Limited
Partnerships, without audit. Each limited partnership is a general partner
in the related Geodyne NPI Partnership (the "NPI Partnerships") in which
Geodyne Resources, Inc. serves as the managing partner. For the purposes
of these financial statements, the general partner and managing partner
are collectively referred to as the "General Partner" and the limited
partnerships and NPI Partnerships are collectively referred to as the
"Partnerships". 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.
As used in these financial statements, the Partnerships' net profits and
royalty interests in oil and gas sales are referred to as "Net Profits"
and the Partnerships' net profits and royalty interests in oil and gas
properties are referred to as "Net Profits Interests". The working
interests from which the Partnerships' Net Profits Interests are carved
are referred to as "Working Interests".
The Limited Partners' net income or loss per unit is based upon each $100
initial capital contribution.
-22-
NET PROFITS INTERESTS
---------------------
The Partnerships follow the successful efforts method of accounting for
their Net Profits Interests. Under the successful efforts method, the NPI
Partnerships capitalize all acquisition costs. 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 NPI Partnership of Net Profits Interests acquired
by the General Partner is adjusted to reflect the net cash results of
operations, including interest incurred to finance the acquisition, for
the period of time the properties are held by the General Partner prior to
their transfer to the Partnerships.
Depletion of the costs of Net Profits Interests is computed on the
unit-of-production method. The Partnerships' calculation of depletion of
its Net Profits Interests includes estimated dismantlement and abandonment
costs and estimated salvage value of the equipment.
The Partnerships do not directly bear capital costs. However, the
Partnerships indirectly bear certain capital costs incurred by the owners
of the Working Interests to the extent such capital costs are charged
against the applicable oil and gas revenues in calculating the Net Profits
payable to the Partnerships. For financial reporting purposes only, such
capital costs are reported as capital expenditures in the Partnerships'
Statements of Cash Flows.
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.
-23-
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 P-1, P-3, P-4, P-5, and P-6
Partnerships recognized approximately $2,000, $3,000, $1,000, $2,000, and
$5,000 of an increase in depletion of Net Profits Interests, which was
comprised of accretion of the asset retirement obligation and depletion of
the increase in Net Profits Interests.
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.
P-1 Partnership
---------------
Three Months Three Months
Ended Ended
6/30/2005 6/30/2004
------------ ------------
Total Asset Retirement
Obligation, April 1 $ 59,672 $ 57,011
Additions and revisions 212 -
Accretion expense 691 620
-------- --------
Total Asset Retirement
Obligation, End of Quarter $ 60,575 $ 57,631
======== ========
Six Months Six Months
Ended Ended
6/30/2005 6/30/2004
------------ ------------
Total Asset Retirement
Obligation, January 1 $ 58,753 $ 56,388
Additions and revisions 441 -
Accretion expense 1,381 1,243
-------- --------
Total Asset Retirement
Obligation, End of Period $ 60,575 $ 57,631
======== ========
-24-
P-3 Partnership
---------------
Three Months Three Months
Ended Ended
6/30/2005 6/30/2004
------------ ------------
Total Asset Retirement
Obligation, April 1 $101,158 $96,695
Additions and revisions 267 -
Accretion expense 1,164 1,036
-------- -------
Total Asset Retirement
Obligation, End of Quarter $102,589 $97,731
======== =======
Six Months Six Months
Ended Ended
6/30/2005 6/30/2004
------------ ------------
Total Asset Retirement
Obligation, January 1 $ 99,718 $95,666
Additions and revisions 562 -
Accretion expense 2,309 2,065
-------- -------
Total Asset Retirement
Obligation, End of Period $102,589 $97,731
======== =======
P-4 Partnership
---------------
Three Months Three Months
Ended Ended
6/30/2005 6/30/2004
------------ ------------
Total Asset Retirement
Obligation, April 1 $ 57,494 $ 54,806
Accretion expense 573 461
-------- --------
Total Asset Retirement
Obligation, End of Quarter $ 58,067 $ 55,267
======== ========
-25-
Six Months Six Months
Ended Ended
6/30/2005 6/30/2004
------------ ------------
Total Asset Retirement
Obligation, January 1 $ 56,920 $ 56,632
Settlements and disposals - ( 2,277)
Accretion expense 1,147 912
-------- --------
Total Asset Retirement
Obligation, End of Period $ 58,067 $ 55,267
======== ========
P-5 Partnership
---------------
Three Months Three Months
Ended Ended
6/30/2005 6/30/2004
------------ ------------
Total Asset Retirement
Obligation, April 1 $ 78,380 $ 74,235
Additions and revisions 1 -
Accretion expense 771 606
-------- --------
Total Asset Retirement
Obligation, End of Quarter $ 79,152 $ 74,841
======== ========
Six Months Six Months
Ended Ended
6/30/2005 6/30/2004
------------ ------------
Total Asset Retirement
Obligation, January 1 $ 76,681 $ 72,299
Additions and revisions 912 1,332
Accretion expense 1,559 1,210
-------- --------
Total Asset Retirement
Obligation, End of Period $ 79,152 $ 74,841
======== ========
-26-
P-6 Partnership
---------------
Three Months Three Months
Ended Ended
6/30/2005 6/30/2004
------------ ------------
Total Asset Retirement
Obligation, April 1 $210,328 $208,324
Additions and revisions 4 -
Settlements and disposals ( 5,636) -
Accretion expense 1,925 1,387
-------- --------
Total Asset Retirement
Obligation, End of Quarter $206,621 $209,711
======== ========
Six Months Six Months
Ended Ended
6/30/2005 6/30/2004
------------ ------------
Total Asset Retirement
Obligation, January 1 $208,086 $206,661
Additions and revisions 322 279
Settlements and disposals ( 5,636) -
Accretion expense 3,849 2,771
-------- --------
Total Asset Retirement
Obligation, End of Period $206,621 $209,711
======== ========
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
----------- ------------------ --------------
P-1 $2,386 $28,440
P-3 3,003 44,640
P-4 2,567 33,240
P-5 2,490 31,170
P-6 2,736 37,641
-27-
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
----------- ------------------ --------------
P-1 $25,758 $56,880
P-3 27,178 89,280
P-4 26,173 66,480
P-5 25,997 62,340
P-6 26,563 75,282
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.
-28-
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 Net Profits
Interests in producing oil and gas properties located in the continental
United States. In general, a Partnership acquired passive interests in
producing properties and does not directly engage in development drilling
or enhanced recovery projects. Therefore, the economic life of each
limited partnership, and its related NPI Partnership, is limited to the
period of time required to fully produce its acquired oil and gas
reserves. A Net Profits Interest entitles the Partnerships to a portion of
the oil and gas sales less operating and production expenses and
development costs generated by the owner of the underlying Working
Interests. The net proceeds from the oil and gas operations are
distributed to the Limited Partners
-29-
and the General Partner in accordance with the terms of the Partnerships'
partnership agreements.
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
----------- ----------------- ---------------
P-1 October 25, 1988 $10,807,400
P-3 May 10, 1989 16,963,700
P-4 November 21, 1989 12,630,600
P-5 February 27, 1990 11,844,900
P-6 September 5, 1990 14,304,100
In general, the amount of funds available for acquisition of producing
properties was equal to the capital contributions of the Limited Partners,
less 15% for sales commissions and organization and management fees. All
of the Partnerships have fully invested their capital contributions.
Net proceeds from the Partnerships' Net Profits Interests 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 by the owners of the Working Interests for new
wells or well recompletions or workovers, however, may reduce or eliminate
cash available for a particular quarterly cash distribution.
The Partnerships' termination date under the partnership agreements is
December 31, 2005. The General Partner may extend the terms of the
Partnerships for up to five two-year extension periods. The General
Partner has not yet determined whether it will extend the terms of any
Partnership.
-30-
CRITICAL ACCOUNTING POLICIES
- ----------------------------
The Partnerships follow the successful efforts method of accounting for
their Net Profits Interests. Under the successful efforts method, the
Partnerships capitalize all acquisition costs. Such acquisition costs
include costs incurred by the Partnerships or the General Partner to
acquire a Net Profits Interest, 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 net
acquisition cost to the Partnerships of the Net Profits Interests in
properties acquired by the General Partner consists of the cost of
acquiring the underlying properties adjusted for the net cash results of
operations, including any interest incurred to finance the acquisition,
for the period of time the properties are held by the General Partner.
Depletion of the cost of Net Profits Interests is computed on the
unit-of-production method. The Partnerships' calculation of depletion of
their Net Profits Interests includes estimated dismantlement and
abandonment costs and estimated salvage value of the equipment.
The Partnerships evaluate the recoverability of the carrying costs of
their Net Profits Interests in proved oil and gas properties for each oil
and gas field (rather than separately for each well). If the unamortized
costs of a Net Profits Interest within a field exceeds the expected
undiscounted future cash flows from such Net Profits Interest, the cost of
the Net Profits Interest is written down to fair value, which is
determined by using the estimated discounted future cash flows from the
Net Profits Interest.
Accounts Receivable (Accounts Payable) - Net Profits
Revenues from a Net Profits Interest consist of a share of the oil and gas
sales of the property, less operating and production expenses. The
partnerships accrue for oil and gas revenues less expenses from the Net
Profits Interests. Sales of gas applicable to the Net Profits Interests
are recorded as revenue when the gas is metered and title transferred
pursuant to the gas sales contracts. During such times as sales of gas
exceed a Partnership's pro rata share of estimated total gas reserves
attributable to the underlying property, 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. This liability is recorded as a reduction of accounts
receivable.
-31-
Also included in accounts receivable (payable) - Net Profits are amounts
which represent costs deferred or accrued for Net Profits relating to
lease operating expenses incurred in connection with the net underproduced
or overproduced gas imbalance positions. The rate used in calculating the
deferred charge or accrued liability is the annual average production
costs per Mcf. Also included in accounts receivable (payable) - Net
Profits is the asset retirement obligation.
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.
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.
-32-
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.
P-1 Partnership
---------------
Crude Natural
Oil Gas
(Barrels) (Mcf)
--------- -----------
Proved reserves, Dec. 31, 2004 243,982 2,291,734
Production ( 4,945) ( 66,143)
Extensions and discoveries 325 5,603
Revisions of previous
estimates 6,385 36,466
------- ---------
Proved reserves, March 31, 2005 245,747 2,267,660
Production ( 4,637) ( 57,869)
Extensions and discoveries 1,026 9,884
Revisions of previous
estimates 5,423 64,326
------- ---------
Proved reserves, June 30, 2005 247,559 2,284,001
======= =========
-33-
P-3 Partnership
---------------
Crude Natural
Oil Gas
(Barrels) (Mcf)
--------- -----------
Proved reserves, Dec. 31, 2004 320,365 3,610,109
Production ( 6,358) ( 100,852)
Extensions and discoveries 408 7,295
Revisions of previous
estimates 8,133 61,510
------- ---------
Proved reserves, March 31, 2005 322,548 3,578,062
Production ( 5,988) ( 89,676)
Extensions and discoveries 1,291 12,323
Revisions of previous
estimates 6,993 77,887
------- ---------
Proved reserves, June 30, 2005 324,844 3,578,596
======= =========
P-4 Partnership
---------------
Crude Natural
Oil Gas
(Barrels) (Mcf)
--------- -----------
Proved reserves, Dec. 31, 2004 59,656 1,969,168
Production ( 3,857) ( 56,407)
Extensions and discoveries 362 5,946
Revisions of previous
estimates 1,573 35,147
------ ---------
Proved reserves, March 31, 2005 57,734 1,953,854
Production ( 3,888) ( 55,427)
Extensions and discoveries 97 695
Revisions of previous
estimates ( 1,750) ( 7,732)
------ ---------
Proved reserves, June 30, 2005 52,193 1,891,390
====== =========
-34-
P-5 Partnership
---------------
Crude Natural
Oil Gas
(Barrels) (Mcf)
--------- -----------
Proved reserves, Dec. 31, 2004 38,157 2,130,613
Production ( 1,287) ( 63,777)
Extensions and discoveries 25 44,460
Revisions of previous
estimates 4,114 45,712
------ ---------
Proved reserves, March 31, 2005 41,009 2,157,008
Production ( 978) ( 74,876)
Extensions and discoveries 55 21,649
Revisions of previous
estimates 2,283 131,661
------ ---------
Proved reserves, June 30, 2005 42,369 2,235,442
====== =========
P-6 Partnership
---------------
Crude Natural
Oil Gas
(Barrels) (Mcf)
--------- -----------
Proved reserves, Dec. 31, 2004 124,894 3,940,334
Production ( 3,024) ( 112,950)
Extensions and discoveries 8 14,866
Revisions of previous
estimates 7,813 109,815
------- ---------
Proved reserves, March 31, 2005 129,691 3,952,065
Production ( 2,830) ( 112,473)
Extensions and discoveries 50 9,347
Revisions of previous
estimates ( 2) 406,894
------- ---------
Proved reserves, June 30, 2005 126,909 4,255,833
======= =========
-35-
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 gas prices in effect on the dates corresponding to the
reserve valuations. Changes in the oil and gas prices have caused 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.
Net Present Value of Reserves
---------------------------------------------
Partnership 6/30/05 3/31/05 12/31/04
----------- ----------- ----------- -----------
P-1 $10,627,714 $10,488,767 $ 8,498,702
P-3 15,517,812 15,405,046 12,485,054
P-4 7,098,095 7,466,153 6,180,522
P-5 6,824,935 6,666,402 5,260,713
P-6 13,668,801 12,940,542 10,217,705
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
-36-
RESULTS OF OPERATIONS
- ---------------------
GENERAL DISCUSSION
The following general discussion should be read in conjunction with the
analysis of results of operations provided below.
The primary source of liquidity and Partnership cash distributions comes
from the net revenues generated from the sale of oil and gas produced from
the Partnerships' oil and gas properties. The level of net revenues is
highly dependent upon the total volumes of oil and natural gas sold. Oil
and gas reserves are depleting assets and will experience production
declines over time, thereby likely resulting in reduced net revenues. The
level of net revenues is also highly dependent upon the prices received
for oil and gas sales, which prices have historically been very volatile
and may continue to be so.
Additionally, lower oil and natural gas prices may reduce the amount of
oil and gas that is economic to produce and reduce the Partnerships'
revenues and cash flow. Various factors beyond the Partnerships' control
will affect prices for oil and natural gas, such as:
* Worldwide and domestic supplies of oil and natural gas;
* The ability of the members of the Organization of Petroleum
Exporting Countries ("OPEC") to agree to and maintain oil
prices and production quotas;
* Political instability or armed conflict in oil-producing
regions or around major shipping areas;
* The level of consumer demand and overall economic activity;
* The competitiveness of alternative fuels;
* Weather conditions;
* The availability of pipelines for transportation; and
* Domestic and foreign government regulations and taxes.
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.
-37-
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.
P-1 PARTNERSHIP
THREE MONTHS ENDED JUNE 30, 2005 COMPARED TO THE THREE MONTHS ENDED JUNE
30, 2004.
Three Months Ended June 30,
---------------------------
2005 2004
-------- --------
Net Profits $439,476 $388,100
Barrels produced 4,637 4,426
Mcf produced 57,869 57,246
Average price/Bbl $ 48.22 $ 34.71
Average price/Mcf $ 5.26 $ 5.13
As shown in the table above, total Net Profits increased $51,376 (13.2%)
for the three months ended June 30, 2005 as compared to the three months
ended June 30, 2004. Of this increase, approximately (i) $63,000 and
$8,000, respectively, were related to increases in the average prices of
oil and gas sold and (ii) $7,000 and $3,000, respectively, were related to
increases in volumes of oil and gas sold. These increases were partially
offset by a decrease of approximately $30,000 related to an increase in
production expenses. Volumes of oil and gas sold increased 211 barrels and
623 Mcf, respectively, for the three months ended June 30, 2005 as
compared to the three months ended June 30, 2004. The increases in volumes
of oil and gas sold
-38-
were primarily due to positive prior period volume adjustments made by the
operators on several wells during the three months ended June 30, 2005.
These increases were partially offset by a negative prior period volume
adjustment made by the operator on another significant well during the
three months ended June 30, 2005. The increase in production expenses was
primarily due to (i) workover expenses incurred on several wells during
the three months ended June 30, 2005, (ii) an increase in production taxes
associated with the increase in oil and gas sales, and (iii) an increase
in salt water disposal expenses incurred on one significant well during
the three months ended June 30, 2005 as compared to the three months ended
June 30, 2004.
Depletion of Net Profits Interests increased $4,574 (34.6%) 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 since June 30, 2004, (ii) an increase
in depletable Net Profits Interests during 2005 primarily due to the
drilling of one developmental well, and (iii) the increases in volumes of
oil and gas sold. As a percentage of Net Profits, this expense increased
to 4.0% for the three months ended June 30, 2005 from 3.4% for the three
months ended June 30, 2004. This percentage increase was primarily due to
the dollar increase in depletion of Net Profits Interests.
General and administrative expenses decreased $14,371 for the three months
ended June 30, 2005 as compared to the three months ended June 30, 2004.
As a percentage of Net Profits, these expenses decreased to 7.0% for the
three months ended June 30, 2005 from 11.6% 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
-------- --------
Net Profits $988,923 $806,477
Barrels produced 9,582 10,070
Mcf produced 124,012 133,947
Average price/Bbl $ 46.55 $ 32.44
Average price/Mcf $ 5.69 $ 4.68
As shown in the table above, total Net Profits increased $182,446 (22.6%)
for the six months ended June 30, 2005 as compared to the six months ended
June 30, 2004. Of this increase, approximately $135,000 and $124,000,
respectively, were related to increases in the average prices of oil and
gas sold. These increases were partially offset by
-39-
decreases of approximately (i) $16,000 and $46,000, respectively, related
to decreases in volumes of oil and gas sold and (ii) $15,000 related to an
increase in production expenses. Volumes of oil and gas sold decreased 488
barrels and 9,935 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) a negative
prior period volume adjustment made by the operator on one significant
well during the six months ended June 30, 2005, (ii) positive prior period
volume adjustments made by the operators on several wells during the six
months ended June 30, 2004, and (iii) normal declines in production. These
decreases were partially offset by positive prior period volume
adjustments made by the operators on several wells during the six months
ended June 30, 2005. The decrease in volumes of gas sold was primarily due
to (i) a negative prior period volume adjustment made by the operator on
one significant well during the six months ended June 30, 2005, (ii)
normal declines in production, and (iii) a positive prior period volume
adjustment made by the operator on another significant well during the six
months ended June 30, 2004. These decreases were partially offset by
positive prior period volume adjustments made by the operators on several
wells during the six months ended June 30, 2005.
The increase in production expenses was primarily due to (i) an increase
in production taxes associated with the increase in oil and gas sales,
(ii) workover expenses incurred on several wells during the six months
ended June 30, 2005, and (iii) an increase in salt water disposal expenses
incurred on one significant well during the six months ended June 30, 2005
as compared to the six months ended June 30, 2004. These increases were
partially offset by the receipt of ad valorem tax credits on one
significant well during the six months ended June 30, 2005.
Depletion of Net Profits Interests increased $1,304 (4.1%) 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) an increase in depletable Net
Profits Interests during 2005 primarily due to the drilling of two
developmental wells and (ii) downward revisions in the estimates of
remaining gas reserves since June 30, 2004. These increases were partially
offset by the decreases in volumes of oil and gas sold. As a percentage of
Net Profits, this expense decreased to 3.4% for the six months ended June
30, 2005 from 4.0% 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.
-40-
General and administrative expenses increased $1,010 for the six months
ended June 30, 2005 as compared to the six months ended June 30, 2004. As
a percentage of Net Profits, these expenses decreased to 8.4% for the six
months ended June 30, 2005 from 10.1% for the six months ended June 30,
2004. This percentage decrease was primarily due to the increase in Net
Profits.
Cumulative cash distributions to the Limited Partners through June 30,
2005 were $17,468,558 or 161.64% of Limited Partners' capital
contributions.
P-3 PARTNERSHIP
THREE MONTHS ENDED JUNE 30, 2005 COMPARED TO THE THREE MONTHS ENDED JUNE
30, 2004.
Three Months Ended June 30,
---------------------------
2005 2004
-------- --------
Net Profits $637,978 $562,152
Barrels produced 5,988 5,754
Mcf produced 89,676 89,392
Average price/Bbl $ 47.89 $ 34.78
Average price/Mcf $ 5.55 $ 5.22
As shown in the table above, total Net Profits increased $75,826 (13.5%)
for the three months ended June 30, 2005 as compared to the three months
ended June 30, 2004. Of this increase, approximately (i) $79,000 and
$30,000, respectively, were related to increases in the average prices of
oil and gas sold and (ii) $8,000 and $1,000, respectively, were related to
the increases in volumes of oil and gas sold. These increases were
partially offset by a decrease of approximately $42,000 related to an
increase in production expenses. Volumes of oil and gas sold increased 234
barrels and 284 Mcf, respectively, for the three months ended June 30,
2005 as compared to the three months ended June 30, 2004. The increases in
volumes of oil and gas sold were primarily due to positive prior period
volume adjustments made by the operators on several wells during the three
months ended June 30, 2005. These increases were partially offset by a
negative prior period volume adjustment made by the operator on another
significant well during the three months ended June 30, 2005. The increase
in production expenses was primarily due to (i) workover expenses incurred
on several wells during the three months ended June 30, 2005, (ii) an
increase in production taxes associated with the increase in oil and gas
sales, and (iii) an increase in salt water disposal expenses incurred on
one significant well during the three months ended June 30, 2005 as
compared to the three months ended June 30, 2004.
-41-
Depletion of Net Profits Interests increased $4,114 (21.4%) 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) 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 since June 30, 2004, and (iii) an increase in
depletable Net Profits Interests during 2005 primarily due to the drilling
of one developmental well. As a percentage of Net Profits, this expense
increased to 3.7% for the three months ended June 30, 2005 from 3.4% for
the three months ended June 30, 2004.
General and administrative expenses decreased $14,689 for the three months
ended June 30, 2005 as compared to the three months ended June 30, 2004.
As a percentage of Net Profits, these expenses decreased to 7.5% for the
three months ended June 30, 2005 from 11.1% 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
---------- ----------
Net Profits $1,425,534 $1,183,266
Barrels produced 12,346 12,962
Mcf produced 190,528 208,125
Average price/Bbl $ 46.66 $ 32.51
Average price/Mcf $ 5.79 $ 4.80
As shown in the table above, total Net Profits increased $242,268 (20.5%)
for the six months ended June 30, 2005 as compared to the six months ended
June 30, 2004. Of this increase, approximately $175,000 and $188,000,
respectively, were related to increases in the average prices of oil and
gas sold. These increases were partially offset by decreases of
approximately (i) $20,000 and $85,000, respectively, related to decreases
in volumes of oil and gas sold and (ii) $15,000 related to an increase in
production expenses. Volumes of oil and gas sold decreased 616 barrels and
17,597 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) a negative
prior period volume adjustment made by the operator on one significant
well during the six months ended June 30, 2005, (ii) positive prior period
volume adjustments made by the operators on several wells during the six
months ended June 30, 2004, and (iii) normal declines in production. These
decreases were partially offset by positive prior period volume
adjustments made by the
-42-
operators on several other wells during the six months ended June 30,
2005. The decrease in volumes of gas sold was primarily due to (i) a
negative prior period volume adjustment made by the operator on one
significant well during the six months ended June 30, 2005, (ii) normal
declines in production, and (iii) a positive prior period volume
adjustment made by the operator on another significant well during the six
months ended June 30, 2004. These decreases were partially offset by
positive prior period volume adjustments made by the operators on several
other wells during the six months ended June 30, 2005.
The increase in production expenses was primarily due to (i) an increase
in production taxes associated with the increase in oil and gas sales,
(ii) workover expenses incurred on several wells during the six months
ended June 30, 2005, and (iii) an increase in salt water disposal expenses
incurred on one significant well during the six months ended June 30, 2005
as compared to the six months ended June 30, 2004. These increases were
partially offset by the receipt of ad valorem tax credits on one
significant well during the six months ended June 30, 2005.
Depletion of Net Profits Interests increased $2,946 (6.1%) 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) an increase in depletable Net
Profits Interests during 2005 primarily due to the drilling of two
developmental wells, (ii) downward revisions in the estimates of remaining
gas reserves since June 30, 2004, and (iii) one significant well being
fully depleted during the six months ended June 30, 2005 due to the lack
of remaining reserves. These increases were partially offset by the
decreases in volumes of oil and gas sold. As a percentage of Net Profits,
this expense decreased to 3.6% 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 remained relatively constant for the
six months ended June 30, 2005 and 2004. As a percentage of Net Profits,
these expenses decreased to 8.2% for the six months ended June 30, 2005
from 9.8% for the six months ended June 30, 2004. This percentage decrease
was primarily due to the increase in Net Profits.
Cumulative cash distributions to the Limited Partners through June 30,
2005 were $24,411,401 or 143.9% of Limited Partners' capital
contributions.
-43-
P-4 PARTNERSHIP
THREE MONTHS ENDED JUNE 30, 2005 COMPARED TO THE THREE MONTHS ENDED JUNE
30, 2004.
Three Months Ended June 30,
---------------------------
2005 2004
-------- --------
Net Profits $445,650 $438,744
Barrels produced 3,888 4,799
Mcf produced 55,427 61,180
Average price/Bbl $ 52.42 $ 37.18
Average price/Mcf $ 6.55 $ 5.97
As shown in the table above, total Net Profits increased $6,906 (1.6%) for
the three months ended June 30, 2005 as compared to the three months ended
June 30, 2004. Of this increase, approximately $59,000 and $32,000,
respectively, were related to increases in the average prices of oil and
gas sold. These increases were partially offset by decreases of
approximately (i) $33,000 and $34,000, respectively, related to decreases
in volumes of oil and gas sold and (ii) $17,000 related to an increase in
production expenses. Volumes of oil and gas sold decreased 911 barrels and
5,753 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) the shutting-in of several wells during early 2005 due to mechanical
problems. As of the date of this Quarterly Report, the shut-in wells have
returned to production at a lower rate than previously experienced. The
decrease in volumes of gas sold was primarily due to normal declines in
production. The increase in production expenses was primarily due to (i)
workover expenses incurred on several wells during the three months ended
June 30, 2005, (ii) compression expenses incurred on several other wells
during the three months ended June 30, 2005, and (iii) an increase in
production taxes associated with the increase in oil and gas sales.
Depletion of Net Profits Interests decreased $13,995 (56.0%) 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) upward revisions in the
estimates of remaining oil and gas reserves on one significant well since
June 30, 2004, (ii) the abandonment of another significant well during
2004 following an unsuccessful recompletion attempt, and (iii) the
decreases in volumes of oil and gas sold. As a percentage of Net Profits,
this expense decreased to 2.5% for the three months ended June 30, 2005
from 5.7% for the three months ended June 30, 2004. This percentage
decrease was primarily due to the dollar decrease in depletion of Net
Profits Interests.
-44-
General and administrative expenses decreased $14,463 for the three months
ended June 30, 2005 as compared to the three months ended June 30, 2004.
As a percentage of Net Profits, these expenses decreased to 8.0% for the
three months ended June 30, 2005 from 11.5% 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
-------- --------
Net Profits $791,277 $839,003
Barrels produced 7,745 9,574
Mcf produced 111,834 128,114
Average price/Bbl $ 48.90 $ 35.42
Average price/Mcf $ 6.34 $ 5.61
As shown in the table above, total Net Profits decreased $47,726 (5.7%)
for the six months ended June 30, 2005 as compared to the six months ended
June 30, 2004. Of this decrease, approximately (i) $65,000 and $91,000,
respectively, were related to decreases in volumes of oil and gas sold and
(ii) $78,000 was related to an increase in production expenses. These
decreases were partially offset by increases of approximately $104,000 and
$82,000, respectively, related to increases in the average prices of oil
and gas sold. Volumes of oil and gas sold decreased 1,829 barrels and
16,280 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) the shutting-in of one significant well
during late 2004 and early 2005 due to mechanical problems, (ii) the
shutting-in of several other wells during early 2005 due to mechanical
problems, and (iii) normal declines in production. As of the date of this
Quarterly Report, the shut-in wells have returned to production at a lower
rate than previously experienced. The decrease in volumes of gas sold was
primarily due to (i) a positive prior period volume adjustment made by the
operator on one significant well during the six months ended June 30, 2004
and (ii) normal declines in production. The increase in production
expenses was primarily due to (i) workover expenses incurred on several
wells during the six months ended June 30, 2005, (ii) a positive prior
period production tax adjustment made by the operator on one significant
well during the six months ended June 30, 2005, and (iii) an increase in
salt water disposal expenses incurred on several other wells during the
six months ended June 30, 2005 as compared to the six months ended June
30, 2004.
-45-
Depletion of Net Profits Interests decreased $36,447 (61.6%) 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) the abandonment of one
significant well during 2004 following an unsuccessful recompletion
attempt, (ii) the decreases in volumes of oil and gas sold, and (iii)
upward revisions in the estimates of remaining oil and gas reserves on one
significant well since June 30, 2004. As a percentage of Net Profits, this
expense decreased to 2.9% for the six months ended June 30, 2005 from 7.1%
for the six months ended June 30, 2004. This percentage decrease was
primarily due to the dollar decrease in depletion of Net Profits
Interests.
General and administrative expenses increased $1,743 for the six months
ended June 30, 2005 as compared to the six months ended June 30, 2004. As
a percentage of Net Profits, these expenses increased to 11.7% for the six
months ended June 30, 2005 from 10.8% for the six months ended June 30,
2004.
Cumulative cash distributions to the Limited Partners through June 30,
2005 were $19,529,945 or 154.62% of Limited Partners' capital
contributions.
P-5 PARTNERSHIP
THREE MONTHS ENDED JUNE 30, 2005 COMPARED TO THE THREE MONTHS ENDED JUNE
30, 2004.
Three Months Ended June 30,
---------------------------
2005 2004
-------- --------
Net Profits $414,044 $364,014
Barrels produced 978 1,308
Mcf produced 74,876 60,761
Average price/Bbl $ 50.64 $ 36.14
Average price/Mcf $ 5.75 $ 6.31
As shown in the table above, total Net Profits increased $50,030 (13.7%)
for the three months ended June 30, 2005 as compared to the three months
ended June 30, 2004. Of this increase, approximately (i) $89,000 was
related to an increase in volumes of gas sold and (ii) $14,000 was related
to an increase in the average price of oil sold. These increases were
partially offset by decreases of approximately (i) $42,000 related to a
decrease in the average price of gas sold and (ii) $12,000 related to a
decrease in volumes of oil sold. Volumes of oil sold decreased 330
barrels, while volumes of gas sold increased 14,115 Mcf for the three
months ended June 30, 2005 as compared to the three months ended June 30,
2004.
-46-
The decrease in volumes of oil sold was primarily due to (i) normal
declines in production and (ii) positive prior period volume adjustments
made by the operators on two significant wells during the three months
ended June 30, 2004. The increase in volumes of gas sold was primarily due
to (i) downward revisions in the estimates of remaining gas reserves
during the three months ended June 30, 2004 on one significant well
resulting in the P-5 Partnership becoming over produced past ultimate
reserves thereby increasing gas imbalance payable, (ii) the successful
completion of several new wells during mid and late 2004, and (iii)
positive prior period volume adjustments made by the operators on several
wells during the three months ended June 30, 2005. These increases were
partially offset by (i) a substantial decline in production during 2005 on
one significant well following the workover of that well during mid 2004
and (ii) normal declines in production. The well with the substantial
decline in production is not expected to return to its previously high
levels of production.
The average gas price decreased to $5.75 per Mcf for the three months
ended June 30, 2005 from $6.31 per Mcf for the three months ended June 30,
2004. Due to a gas imbalance situation on one significant well discussed
above, gas volumes for that well were recorded as a liability at a
substantially lower rate per Mcf than the average price per Mcf received
by the P-5 Partnership during the three months ended June 30, 2004. This
resulted in a higher average price per Mcf for the three months ended June
30, 2004 than if the liability had not been recorded. No such material
adjustments were recorded during the three months ended June 30, 2005.
A decrease in production expenses primarily due to (i) workover expenses
incurred on several wells during the three months ended June 30, 2004 and
(ii) a decrease in repair and maintenance expenses incurred on several
other wells during the three months ended June 30, 2005 as compared to the
three months ended June 30, 2004 was substantially offset by (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.
Depletion of Net Profits Interests decreased $13,981 (60.3%) for the three
months ended June 30, 2005 as compared to the three months ended June 30,
2004. This decrease was primarily due to two significant wells being fully
depleted during the three months ended June 30, 2004 due to the lack of
remaining reserves. As a percentage of Net Profits, this expense decreased
to 2.2% for the three months ended June 30, 2005 from 6.4% for the three
months ended June 30, 2004. This percentage decrease was primarily due to
the dollar decrease in depletion of Net Profits Interests.
-47-
General and administrative expenses decreased $14,423 for the three months
ended June 30, 2005 as compared to the three months ended June 30, 2004.
As a percentage of Net Profits, these expenses decreased to 8.1% for the
three months ended June 30, 2005 from 13.2% 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
-------- --------
Net Profits $790,912 $679,013
Barrels produced 2,265 2,695
Mcf produced 138,653 134,685
Average price/Bbl $ 47.93 $ 34.06
Average price/Mcf $ 6.06 $ 5.44
As shown in the table above, total Net Profits increased $111,899 (16.5%)
for the six months ended June 30, 2005 as compared to the six months ended
June 30, 2004. Of this increase, approximately (i) $31,000 and $86,000,
respectively, were related to increases in the average prices of oil and
gas sold and (ii) $22,000 was related to an increase in volumes of gas
sold. These increases were partially offset by decreases of approximately
(i) $15,000 related to a decrease in volumes of oil sold and (ii) $12,000
related to an increase in production expenses. Volumes of oil sold
decreased 430 barrels, while volumes of gas sold increased 3,968 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) positive
prior period volume adjustments made by the operators on two significant
wells during the six months ended June 30, 2004 and (ii) normal declines
in production. The increase in volumes of gas sold was primarily due to
(i) downward revisions in the estimates of remaining gas reserves during
the six months ended June 30, 2004 on one significant well resulting in
the P-5 Partnership becoming over produced past ultimate reserves thereby
increasing gas imbalance payable, (ii) the successful completion of
several new wells during mid and late 2004, and (iii) positive prior
period volume adjustments made by the operators on several other wells
during the six months ended June 30, 2005. These increases were partially
offset by (i) normal declines in production and (ii) a substantial decline
in production during 2005 on one significant well following the workover
of that well during mid 2004. The well with the substantial decline in
production is not expected to return to its
-48-
previously high levels of production. The average gas price increased to
$6.06 per Mcf for the six months ended June 30, 2005 from $5.44 per Mcf
for the six months ended June 30, 2004. Due to a gas imbalance situation
on one significant well discussed above, gas volumes for that well were
recorded as a liability at a substantially lower rate per Mcf than the
average price per Mcf received by the P-5 Partnership during the six
months ended June 30, 2004. This resulted in a higher average price per
Mcf for the six months ended June 30, 2004 than if the liability had not
been recorded. No such material adjustments were recorded during the six
months ended June 30, 2005.
The increase in production expenses was primarily due to (i) workover
expenses incurred on several wells during the six months ended June, 30,
2005, (ii) an increase in production taxes associated with the increase in
oil and gas sales, and (iii) an increase in repair and maintenance
expenses incurred on two significant wells during the six months ended
June 30, 2005 as compared to the six months ended June 30, 2004. These
increases were partially offset by workover expenses incurred on several
other wells during the six months ended June 30, 2004.
Depletion of Net Profits Interests decreased $14,360 (26.8%) for the six
months ended June 30, 2005 as compared to the six months ended June 30,
2004. This decrease was primarily due to two significant wells being fully
depleted during the six months ended June 30, 2004 due to the lack of
remaining reserves. This decrease was partially offset by an increase in
depletable Net Profits Interests during 2005 primarily due to the drilling
of two developmental wells. As a percentage of Net Profits, this expense
decreased to 5.0% for the six months ended June 30, 2005 from 7.9% for the
six months ended June 30, 2004. This percentage decrease was primarily due
to (i) the dollar decrease in depletion of Net Profits Interests and (ii)
the increases in the average prices of oil and gas sold.
General and administrative expenses increased $1,828 for the six months
ended June 30, 2005 as compared to the six months ended June 30, 2004. As
a percentage of Net Profits, these expenses decreased to 11.2% for the six
months ended June 30, 2005 from 12.7% for the six months ended June 30,
2004. This percentage decrease was primarily due to the increase in Net
Profits.
Cumulative cash distributions to the Limited Partners through June 30,
2005 were $13,666,759 or 115.38% of Limited Partners' capital
contributions.
-49-
P-6 PARTNERSHIP
THREE MONTHS ENDED JUNE 30, 2005 COMPARED TO THE THREE MONTHS ENDED JUNE
30, 2004.
Three Months Ended June 30,
---------------------------
2005 2004
---------- --------
Net Profits $669,517 $541,287
Barrels produced 2,830 2,502
Mcf produced 112,473 107,645
Average price/Bbl $ 51.17 $ 37.56
Average price/Mcf $ 6.10 $ 5.70
As shown in the table above, total Net Profits increased $128,230 (23.7%)
for the three months ended June 30, 2005 as compared to the three months
ended June 30, 2004. Of this increase, approximately (i) $39,000 and
$45,000, respectively, were related to increases in the average prices of
oil and gas sold, (ii) $28,000 was related to an increase in volumes of
gas sold, and (iii) $5,000 was related to a decrease in production
expenses. Volumes of oil and gas sold increased 328 barrels and 4,828 Mcf,
respectively, for the three months ended June 30, 2005 as compared to the
three months ended June 30, 2004.
The increase in volumes of gas sold was primarily due to (i) downward
revisions in the estimates of remaining gas reserves during the three
months ended June 30, 2004 on one significant well resulting in the P-6
Partnership becoming over produced past ultimate reserves thereby
increasing gas imbalance payable, (ii) positive prior period volume
adjustments made by the operators on several wells during the three months
ended June 30, 2005, and (iii) the successful completion of several new
wells during mid and late 2004. These increases were partially offset by
(i) normal declines in production and (ii) a substantial decline in
production during 2005 on one significant well following a workover of
that well during mid 2004. The well with the substantial decline in
production is not expected to return to its previously high levels of
production. The average gas price increased to $6.10 per Mcf for the three
months ended June 30, 2005 from $5.70 per Mcf for the three months ended
June 30, 2004. Due to a gas imbalance situation on one significant well
discussed above, gas volumes for that well were recorded as a liability at
a substantially lower rate per Mcf than the average price per Mcf received
by the P-6 Partnership during the three months ended June 30, 2004. This
resulted in a higher average price per Mcf for the three months ended June
30, 2004 than if the liability had not been recorded. No such material
adjustments were recorded during the three months ended June 30, 2005.
-50-
The decrease in production expenses was primarily due to (i) workover
expenses incurred on several wells during the three months ended June 30,
2004 and (ii) a decrease in repair and maintenance expenses incurred on
several other wells during the three months ended June 30, 2005 as
compared to the three months ended June 20, 2004. These decreases were
partially offset by (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.
Depletion of Net Profits Interests increased $15,267 (42.0%) for the three
months ended June 30, 2005 as compared to the three months ended June 30,
2004. This increase was primarily due to an increase in depletable Net
Profits Interests during 2005 primarily due to the recompletion of one
significant well, which increase was partially offset by several wells
being fully depleted during the three months ended June 30, 2004 due to
the lack of remaining reserves. As a percentage of Net Profits, this
expense increased to 7.7% for the three months ended June 30, 2005 from
6.7% for the three months ended June 30, 2004. This percentage increase
was primarily due to the dollar increase in depletion of Net Profits
Interests.
General and administrative expenses decreased $14,551 for the three months
ended June 30, 2005 as compared to the three months ended June 30, 2004.
As a percentage of Net Profits, these expenses decreased to 6.0% for the
three months ended June 30, 2005 from 10.1% 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 Net Profits.
SIX MONTHS ENDED JUNE 30, 2005 COMPARED TO THE SIX MONTHS ENDED JUNE 30,
2004.
Six Months Ended June 30,
-------------------------
2005 2004
------------ ----------
Net Profits $1,259,050 $1,080,172
Barrels produced 5,854 5,809
Mcf produced 225,423 235,149
Average price/Bbl $ 49.20 $ 34.15
Average price/Mcf $ 5.82 $ 5.17
As shown in the table above, total Net Profits increased $178,878 (16.6%)
for the six months ended June 30, 2005 as compared to the six months ended
June 30, 2004. Of this increase, approximately (i) $88,000 and $146,000,
respectively, were related to increases in the average prices of oil and
gas sold and (ii) $2,000 was related to an increase in volumes of oil
sold. These increases were
-51-
partially offset by decreases of approximately (i) $50,000 related to a
decrease in volumes of gas sold and (ii) $7,000 related to an increase in
production expenses. Volumes of oil sold increased 45 barrels, while
volumes of gas sold decreased 9,726 Mcf for the six months ended June 30,
2005 as compared to the six months ended June 30, 2004.
The increase in volumes of oil sold was primarily due to a positive prior
period volume adjustment made by the operator on one significant well
during the six months ended June 30, 2005, which increase was
substantially offset by normal declines in production. The decrease in
volumes of gas sold was primarily due to (i) normal declines in production
and (ii) a substantial decline in production during 2005 on one
significant well following a workover of that well during mid 2004. The
well with the substantial decline in production is not expected to return
to its previously high levels of production. These decreases were
partially offset by (i) downward revisions in the estimates of remaining
gas reserves during the six months ended June 30, 2004 on one significant
well resulting in the P-6 Partnership becoming over produced past ultimate
reserves thereby increasing gas imbalance payable and (ii) the successful
completion of several new wells during mid and late 2004. The average gas
price increased to $5.82 per Mcf for the six months ended June 30, 2005
from $5.17 per Mcf for the six months ended June 30, 2004. Due to a gas
imbalance situation on one significant well discussed above, gas volumes
for that well were recorded as a liability at a substantially lower rate
per Mcf than the average price per Mcf received by the P-6 Partnership
during the six months ended June 30, 2004. This resulted in a higher
average price per Mcf for the six months ended June 30, 2004 than if the
liability had not been recorded. No such material adjustments were
recorded during the six months ended June 30, 2005.
The increase in production expenses was primarily due to (i) workover
expenses incurred on one significant well during the six months ended June
30, 2005 and (ii) an increase in production taxes associated with the
increase in oil and gas sales. These increases were partially offset by
(i) workover expenses incurred on several wells during the six months
ended June 30, 2004 and (ii) a decrease in repair and maintenance expenses
incurred on several other wells during the six months ended June 30, 2005
as compared to the six months ended June 20, 2004.
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Depletion of Net Profits Interests increased $8,133 (11.2%) for the six
months ended June 30, 2005 as compared to the six months ended June 30,
2004. This increase was primarily due to an increase in depletable Net
Profits Interests during 2005 primarily due to the recompletion of one
significant well. This increase was partially offset by (i) several wells
being fully depleted during the six 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 Net Profits, this expense decreased to 6.4% for the six
months ended June 30, 2005 from 6.7% for the six months ended June 30,
2004.
General and administrative expenses increased $1,557 for the six months
ended June 30, 2005 as compared to the six months ended June 30, 2004. As
a percentage of Net Profits, these expenses decreased to 8.1% for the six
months ended June 30, 2005 from 9.3% for the six months ended June 30,
2004. This percentage decrease was primarily due to the increase in Net
Profits.
Cumulative cash distributions to the Limited Partners through June 30,
2005 were $20,188,248 or 141.14% of Limited Partners' capital
contribution.
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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 6. EXHIBITS
31.1 Certification by Dennis R. Neill required by Rule
13a-14(a)/15d-14(a) for the P-1 Partnership.
31.2 Certification by Craig D. Loseke required by Rule
Rule 13a-14(a)/15d-14(a) for the P-1 Partnership.
31.3 Certification by Dennis R. Neill required by Rule
13a-14(a)/15d-14(a) for the P-3 Partnership.
31.4 Certification by Craig D. Loseke required by Rule
13a-14(a)/15d-14(a) for the P-3 Partnership.
31.5 Certification by Dennis R. Neill required by Rule
13a-14(a)/15d-14(a) for the P-4 Partnership.
31.6 Certification by Craig D. Loseke required by Rule
13a-14(a)/15d-14(a) for the P-4 Partnership.
31.7 Certification by Dennis R. Neill required by Rule
13a-14(a)/15d-14(a) for the P-5 Partnership.
31.8 Certification by Craig D. Loseke required by Rule
13a-14(a)/15d-14(a) for the P-5 Partnership.
31.9 Certification by Dennis R. Neill required by Rule
13a-14(a)/15d-14(a) for the P-6 Partnership.
31.10 Certification by Craig D. Loseke required by Rule
13a-14(a)/15d-14(a) for the P-6 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 P-1 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 P-3 Partnership.
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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 P-4 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 P-5 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 P-6 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 INSTITUTIONAL/PENSION ENERGY
INCOME P-1 LIMITED PARTNERSHIP
GEODYNE INSTITUTIONAL/PENSION ENERGY
INCOME LIMITED PARTNERSHIP P-3
GEODYNE INSTITUTIONAL/PENSION ENERGY
INCOME LIMITED PARTNERSHIP P-4
GEODYNE INSTITUTIONAL/PENSION ENERGY
INCOME LIMITED PARTNERSHIP P-5
GEODYNE INSTITUTIONAL/PENSION ENERGY
INCOME LIMITED PARTNERSHIP P-6
(Registrant)
BY: GEODYNE RESOURCES, INC.
General Partner
/s/Dennis R. Neill
Date: August 12, 2005 ---------------------------------
(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 Institutional/Pension Energy
Income P-1 Limited Partnership.
31.2 Certification by Craig D. Loseke required by Rule
13a-14(a)/15d-14(a) for the Geodyne Institutional/Pension Energy
Income P-1 Limited Partnership.
31.3 Certification by Dennis R. Neill required by Rule
13a-14(a)/15d-14(a) for the Geodyne Institutional/Pension Energy
Income P-3 Limited Partnership.
31.4 Certification by Craig D. Loseke required by Rule
13a-14(a)/15d-14(a) for the Geodyne Institutional/Pension Energy
Income P-3 Limited Partnership.
31.5 Certification by Dennis R. Neill required by Rule
13a-14(a)/15d-14(a) for the Geodyne Institutional/Pension Energy
Income P-4 Limited Partnership.
31.6 Certification by Craig D. Loseke required by Rule
13a-14(a)/15d-14(a) for the Geodyne Institutional/Pension Energy
Income P-4 Limited Partnership.
31.7 Certification by Dennis R. Neill required by Rule
13a-14(a)/15d-14(a) for the Geodyne Institutional/Pension Energy
Income P-5 Limited Partnership.
31.8 Certification by Craig D. Loseke required by Rule
13a-14(a)/15d-14(a) for the Geodyne Institutional/Pension Energy
Income P-5 Limited Partnership.
31.9 Certification by Dennis R. Neill required by Rule
13a-14(a)/15d-14(a) for the Geodyne Institutional/Pension Energy
Income P-6 Limited Partnership.
31.10 Certification by Craig D. Loseke required by Rule
13a-14(a)/15d-14(a) for the Geodyne Institutional/Pension Energy
Income P-6 Limited 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
Geodyne Institutional/Pension Energy Income P-1 Limited Partnership.
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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 Institutional/Pension Energy Income Limited Partnership P-3.
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 Institutional/Pension Energy Income Limited Partnership P-4.
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 Institutional/Pension Energy Income Limited Partnership P-5.
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 Institutional/Pension Energy Income Limited Partnership P-6.
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