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:
III-A: 0-18302 III-B: 0-18636 III-C: 0-18634
III-D: 0-18936 III-E: 0-19010 III-F: 0-19102
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-A
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-B
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-C
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-D
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-E
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-F
---------------------------------------------------------
(Exact name of Registrant as specified in its Articles)
III-A 73-1352993
III-B 73-1358666
III-C 73-1356542
III-D 73-1357374
III-E 73-1367188
Oklahoma III-F 73-1377737
- ---------------------------- -------------------------------
(State or other jurisdiction (I.R.S. Employer Identification
of incorporation or Number)
organization)
Two West Second Street, Tulsa, Oklahoma 74103
------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code:(918) 583-1791
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes X No
------ ------
Indicate by check mark whether the registrant is an accelerated filer (as
defined in Rule 12b-2 of the Exchange Act).
Yes No X
------ ------
-1-
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-A
BALANCE SHEETS
(Unaudited)
ASSETS
June 30, December 31,
2005 2004
------------ ------------
CURRENT ASSETS:
Cash and cash equivalents $ 966,468 $1,038,719
Accounts receivable:
Oil and gas sales 684,827 588,829
---------- ----------
Total current assets $1,651,295 $1,627,548
NET OIL AND GAS PROPERTIES, utilizing
the successful efforts method 723,266 761,804
DEFERRED CHARGE 191,686 187,958
---------- ----------
$2,566,247 $2,577,310
========== ==========
LIABILITIES AND PARTNERS' CAPITAL (DEFICIT)
CURRENT LIABILITIES:
Accounts payable $ 89,990 $ 84,554
Gas imbalance payable 23,073 26,709
Asset retirement obligation -
current (Note 1) 3,614 18,336
---------- ----------
Total current liabilities $ 116,677 $ 129,599
LONG-TERM LIABILITIES:
Accrued liability $ 24,784 $ 28,718
Asset retirement obligation
(Note 1) 113,642 96,619
---------- ----------
Total long-term liabilities $ 138,426 $ 125,337
PARTNERS' CAPITAL (DEFICIT):
General Partner ($ 81,236) ($ 88,506)
Limited Partners, issued and
outstanding, 263,976 units 2,392,380 2,410,880
---------- ----------
Total Partners' capital $2,311,144 $2,322,374
---------- ----------
$2,566,247 $2,577,310
========== ==========
The accompanying condensed notes are an integral part of
these financial statements.
-2-
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-A
STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED JUNE 30, 2005 AND 2004
(Unaudited)
2005 2004
---------- ----------
REVENUES:
Oil and gas sales $1,136,402 $1,086,658
Interest income 4,109 1,322
---------- ----------
$1,140,511 $1,087,980
COSTS AND EXPENSES:
Lease operating $ 115,266 $ 124,234
Production tax 98,708 89,751
Depreciation, depletion, and
amortization of oil and gas
properties 22,819 52,838
General and administrative
(Note 2) 73,423 88,605
---------- ----------
$ 310,216 $ 355,428
---------- ----------
NET INCOME $ 830,295 $ 732,552
========== ==========
GENERAL PARTNER - NET INCOME $ 84,672 $ 77,879
========== ==========
LIMITED PARTNERS - NET INCOME $ 745,623 $ 654,673
========== ==========
NET INCOME per unit $ 2.82 $ 2.48
========== ==========
UNITS OUTSTANDING 263,976 263,976
========== ==========
The accompanying condensed notes are an integral part of
these financial statements.
-3-
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-A
STATEMENTS OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 2005 AND 2004
(Unaudited)
2005 2004
---------- ----------
REVENUES:
Oil and gas sales $2,170,098 $2,090,688
Interest income 7,990 2,191
Gain on sale of oil and gas
properties - 1,399
---------- ----------
$2,178,088 $2,094,278
COSTS AND EXPENSES:
Lease operating $ 378,494 $ 270,875
Production tax 197,828 175,504
Depreciation, depletion, and
amortization of oil and gas
properties 46,808 124,869
General and administrative
(Note 2) 168,387 168,174
---------- ----------
$ 791,517 $ 739,422
---------- ----------
NET INCOME $1,386,571 $1,354,856
========== ==========
GENERAL PARTNER - NET INCOME $ 142,071 $ 146,505
========== ==========
LIMITED PARTNERS - NET INCOME $1,244,500 $1,208,351
========== ==========
NET INCOME per unit $ 4.71 $ 4.58
========== ==========
UNITS OUTSTANDING 263,976 263,976
========== ==========
The accompanying condensed notes are an integral part of
these financial statements.
-4-
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-A
STATEMENTS OF CASH FLOWS
FOR THE SIX MONTHS ENDED JUNE 30, 2005 AND 2004
(Unaudited)
2005 2004
------------ ------------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $1,386,571 $1,354,856
Adjustments to reconcile net income
to net cash provided by operating
activities:
Depreciation, depletion, and
amortization of oil and gas
properties 46,808 124,869
Gain on sale of oil and gas
properties - ( 1,399)
Settlement of asset retirement
obligation - ( 165)
Increase in accounts receivable -
oil and gas sales ( 95,998) ( 163,111)
Increase (decrease) in deferred
charge ( 3,728) 4,843
Increase in accounts payable 15,048 10,906
Decrease in gas imbalance
payable ( 3,636) ( 1,385)
Decrease in accrued liability ( 3,934) ( 3,508)
---------- ----------
Net cash provided by operating
activities $1,341,131 $1,325,906
---------- ----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures ($ 15,581) ($ 69,537)
Proceeds from sale of oil and gas
properties - 375
---------- ----------
Net cash used by investing
activities ($ 15,581) ($ 69,162)
---------- ----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Cash distributions ($1,397,801) ($1,168,181)
---------- ----------
Net cash used by financing
activities ($1,397,801) ($1,168,181)
---------- ----------
The accompanying condensed notes are an integral part of
these financial statements.
-5-
NET INCREASE (DECREASE) IN CASH AND
CASH EQUIVALENTS ($ 72,251) $ 88,563
CASH AND CASH EQUIVALENTS AT
BEGINNING OF PERIOD 1,038,719 804,593
---------- ----------
CASH AND CASH EQUIVALENTS AT
END OF PERIOD $ 966,468 $ 893,156
========== ==========
The accompanying condensed notes are an integral part of
these financial statements.
-6-
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-B
BALANCE SHEETS
(Unaudited)
ASSETS
June 30, December 31,
2005 2004
------------ ------------
CURRENT ASSETS:
Cash and cash equivalents $ 499,926 $ 556,249
Accounts receivable:
Oil and gas sales 355,717 300,554
---------- ----------
Total current assets $ 855,643 $ 856,803
NET OIL AND GAS PROPERTIES, utilizing
the successful efforts method 382,291 402,168
DEFERRED CHARGE 123,389 120,451
---------- ----------
$1,361,323 $1,379,422
========== ==========
LIABILITIES AND PARTNERS' CAPITAL (DEFICIT)
CURRENT LIABILITIES:
Accounts payable $ 52,111 $ 55,739
Gas imbalance payable 13,335 14,760
Asset retirement obligation -
current (Note 1) 24,802 31,869
---------- ----------
Total current liabilities $ 90,248 $ 102,368
LONG-TERM LIABILITIES:
Accrued liability $ 7,302 $ 9,828
Asset retirement obligation
(Note 1) 56,645 47,996
---------- ----------
Total long-term liabilities $ 63,947 $ 57,824
PARTNERS' CAPITAL (DEFICIT):
General Partner ($ 52,126) ($ 58,429)
Limited Partners, issued and
outstanding, 138,336 units 1,259,254 1,277,659
---------- ----------
Total Partners' capital $1,207,128 $1,219,230
---------- ----------
$1,361,323 $1,379,422
========== ==========
The accompanying condensed notes are an integral part of
these financial statements.
-7-
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-B
STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED JUNE 30, 2005 AND 2004
(Unaudited)
2005 2004
-------- --------
REVENUES:
Oil and gas sales $605,293 $552,331
Interest income 1,942 590
-------- --------
$607,235 $552,921
COSTS AND EXPENSES:
Lease operating $ 62,270 $ 81,881
Production tax 55,744 47,638
Depreciation, depletion, and
amortization of oil and gas
properties 12,425 31,342
General and administrative
(Note 2) 39,123 53,650
-------- --------
$169,562 $214,511
-------- --------
NET INCOME $437,673 $338,410
======== ========
GENERAL PARTNER - NET INCOME $ 67,099 $ 55,061
======== ========
LIMITED PARTNERS - NET INCOME $370,574 $283,349
======== ========
NET INCOME per unit $ 2.68 $ 2.05
======== ========
UNITS OUTSTANDING 138,336 138,336
======== ========
The accompanying condensed notes are an integral part of
these financial statements.
-8-
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-B
STATEMENTS OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 2005 AND 2004
(Unaudited)
2005 2004
---------- ----------
REVENUES:
Oil and gas sales $1,130,446 $1,041,732
Interest income 3,934 1,019
---------- ----------
$1,134,380 $1,042,751
COSTS AND EXPENSES:
Lease operating $ 223,648 $ 169,093
Production tax 111,606 92,311
Depreciation, depletion, and
amortization of oil and gas
properties 16,955 76,019
General and administrative
(Note 2) 99,373 97,767
---------- ----------
$ 451,582 $ 435,190
---------- ----------
NET INCOME $ 682,798 $ 607,561
========== ==========
GENERAL PARTNER - NET INCOME $ 104,203 $ 101,624
========== ==========
LIMITED PARTNERS - NET INCOME $ 578,595 $ 505,937
========== ==========
NET INCOME per unit $ 4.18 $ 3.66
========== ==========
UNITS OUTSTANDING 138,336 138,336
========== ==========
The accompanying condensed notes are an integral part of
these financial statements.
-9-
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-B
STATEMENTS OF CASH FLOWS
FOR THE SIX MONTHS ENDED JUNE 30, 2005 AND 2004
(Unaudited)
2005 2004
---------- ----------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $682,798 $607,561
Adjustments to reconcile net income
to net cash provided by operating
activities:
Depreciation, depletion, and
amortization of oil and gas
properties 16,955 76,019
Settlement of asset retirement
obligation - ( 109)
Increase in accounts receivable -
oil and gas sales ( 55,163) ( 71,771)
(Increase) decrease in deferred
charge ( 2,938) 4,633
Increase in accounts payable 2,179 5,428
Decrease in gas imbalance
payable ( 1,425) ( 777)
Decrease in accrued liability ( 2,526) ( 2,899)
-------- --------
Net cash provided by operating
activities $639,880 $618,085
-------- --------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures ($ 1,303) ($ 46,606)
-------- --------
Net cash used by investing
activities ($ 1,303) ($ 46,606)
-------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Cash distributions ($694,900) ($549,520)
-------- --------
Net cash used by financing
activities ($694,900) ($549,520)
-------- --------
NET INCREASE (DECREASE) IN CASH AND
CASH EQUIVALENTS ($ 56,323) $ 21,959
CASH AND CASH EQUIVALENTS AT
BEGINNING OF PERIOD 556,249 417,271
-------- --------
CASH AND CASH EQUIVALENTS AT
END OF PERIOD $499,926 $439,230
======== ========
The accompanying condensed notes are an integral part of
these financial statements.
-10-
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-C
BALANCE SHEETS
(Unaudited)
ASSETS
June 30, December 31,
2005 2004
------------ ------------
CURRENT ASSETS:
Cash and cash equivalents $ 935,422 $ 682,792
Accounts receivable:
Oil and gas sales 637,671 583,009
---------- ----------
Total current assets $1,573,093 $1,265,801
NET OIL AND GAS PROPERTIES, utilizing
the successful efforts method 1,460,284 1,475,924
DEFERRED CHARGE 54,713 48,684
---------- ----------
$3,088,090 $2,790,409
========== ==========
LIABILITIES AND PARTNERS' CAPITAL (DEFICIT)
CURRENT LIABILITIES:
Accounts payable $ 109,426 $ 123,591
Gas imbalance payable 75,980 83,181
Asset retirement obligation -
current (Note 1) 26,845 38,950
---------- ----------
Total current liabilities $ 212,251 $ 245,722
LONG-TERM LIABILITIES:
Accrued liability $ 126,614 $ 170,532
Asset retirement obligation
(Note 1) 183,117 165,722
---------- ----------
Total long-term liabilities $ 309,731 $ 336,254
PARTNERS' CAPITAL (DEFICIT):
General Partner ($ 130,211) ($ 136,932)
Limited Partners, issued and
outstanding, 244,536 units 2,696,319 2,345,365
---------- ----------
Total Partners' capital $2,566,108 $2,208,433
---------- ----------
$3,088,090 $2,790,409
========== ==========
The accompanying condensed notes are an integral part of
these financial statements.
-11-
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-C
STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED JUNE 30, 2005 AND 2004
(Unaudited)
2005 2004
-------- ----------
REVENUES:
Oil and gas sales $982,319 $880,384
Interest income 3,918 1,134
Loss on sale of oil and gas
properties - ( 1,031)
Other income 800 -
-------- --------
$987,037 $880,487
COSTS AND EXPENSES:
Lease operating $ 83,193 $136,957
Production tax 69,352 61,182
Depreciation, depletion, and
amortization of oil and gas
properties 41,751 53,265
General and administrative
(Note 2) 68,113 83,193
-------- --------
$262,409 $334,597
-------- --------
NET INCOME $724,628 $545,890
======== ========
GENERAL PARTNER - NET INCOME $ 75,756 $ 59,269
======== ========
LIMITED PARTNERS - NET INCOME $648,872 $486,621
======== ========
NET INCOME per unit $ 2.65 $ 1.99
======== ========
UNITS OUTSTANDING 244,536 244,536
======== ========
The accompanying condensed notes are an integral part of
these financial statements.
-12-
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-C
STATEMENTS OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 2005 AND 2004
(Unaudited)
2005 2004
---------- -----------
REVENUES:
Oil and gas sales $1,936,824 $1,728,881
Interest income 6,341 1,899
Loss on sale of oil and gas
properties - ( 891)
Other income 2,541 -
---------- ----------
$1,945,706 $1,729,889
COSTS AND EXPENSES:
Lease operating $ 239,526 $ 266,974
Production tax 134,171 120,974
Depreciation, depletion, and
amortization of oil and gas
properties 93,787 110,490
General and administrative
(Note 2) 157,631 157,201
---------- ----------
$ 625,115 $ 655,639
---------- ----------
NET INCOME $1,320,591 $1,074,250
========== ==========
GENERAL PARTNER - NET INCOME $ 139,637 $ 117,179
========== ==========
LIMITED PARTNERS - NET INCOME $1,180,954 $ 957,071
========== ==========
NET INCOME per unit $ 4.83 $ 3.91
========== ==========
UNITS OUTSTANDING 244,536 244,536
========== ==========
The accompanying condensed notes are an integral part of
these financial statements.
-13-
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-C
STATEMENTS OF CASH FLOWS
FOR THE SIX MONTHS ENDED JUNE 30, 2005 AND 2004
(Unaudited)
2005 2004
------------ ------------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $1,320,591 $1,074,250
Adjustments to reconcile net income
to net cash provided by operating
activities:
Depreciation, depletion, and
amortization of oil and gas
properties 93,787 110,490
Loss on sale of oil and gas
properties - 891
Increase in accounts receivable -
oil and gas sales ( 54,662) ( 133,428)
(Increase) decrease in deferred
charge ( 6,029) 1,209
Increase in accounts payable 5,259 38,963
Increase (decrease) in gas
imbalance payable ( 7,201) 47,849
Decrease in accrued liability ( 43,918) ( 23,630)
---------- ----------
Net cash provided by operating
activities $1,307,827 $1,116,594
---------- ----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures ($ 92,281) ($ 98,318)
---------- ----------
Net cash used by investing
activities ($ 92,281) ($ 98,318)
---------- ----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Cash distributions ($ 962,916) ($ 969,210)
---------- ----------
Net cash used by financing
activities ($ 962,916) ($ 969,210)
---------- ----------
NET INCREASE IN CASH AND CASH
EQUIVALENTS $ 252,630 $ 49,066
CASH AND CASH EQUIVALENTS AT
BEGINNING OF PERIOD 682,792 711,441
---------- ----------
CASH AND CASH EQUIVALENTS AT
END OF PERIOD $ 935,422 $ 760,507
========== ==========
The accompanying condensed notes are an integral part of
these financial statements.
-14-
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-D
BALANCE SHEETS
(Unaudited)
ASSETS
June 30, December 31,
2005 2004
------------ ------------
CURRENT ASSETS:
Cash and cash equivalents $ 519,433 $ 432,834
Accounts receivable:
Oil and gas sales 351,833 340,185
---------- ----------
Total current assets $ 871,266 $ 773,019
NET OIL AND GAS PROPERTIES, utilizing
the successful efforts method 594,330 589,161
DEFERRED CHARGE 12,725 8,429
---------- ----------
$1,478,321 $1,370,609
========== ==========
LIABILITIES AND PARTNERS' CAPITAL (DEFICIT)
CURRENT LIABILITIES:
Accounts payable $ 70,159 $ 131,321
Gas imbalance payable 41,607 41,607
Asset retirement obligation -
current (Note 1) 3,510 11,975
---------- ----------
Total current liabilities $ 115,276 $ 184,903
LONG-TERM LIABILITIES:
Accrued liability $ 162,240 $ 191,685
Asset retirement obligation
(Note 1) 108,027 97,207
---------- ----------
Total long-term liabilities $ 270,267 $ 288,892
PARTNERS' CAPITAL (DEFICIT):
General Partner ($ 48,047) ($ 55,158)
Limited Partners, issued and
outstanding, 131,008 units 1,140,825 951,972
---------- ----------
Total Partners' capital $1,092,778 $ 896,814
---------- ----------
$1,478,321 $1,370,609
========== ==========
The accompanying condensed notes are an integral part of
these financial statements.
-15-
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-D
STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED JUNE 30, 2005 AND 2004
(Unaudited)
2005 2004
-------- ----------
REVENUES:
Oil and gas sales $557,045 $489,725
Interest income 2,189 655
Loss on sale of oil and gas
properties - ( 147)
Other income 115 -
-------- --------
$559,349 $490,233
COSTS AND EXPENSES:
Lease operating $ 50,814 $ 40,079
Production tax 38,410 33,962
Depreciation, depletion, and
amortization of oil and gas
properties 22,846 37,421
General and administrative
(Note 2) 37,357 52,217
-------- --------
$149,427 $163,679
-------- --------
INCOME FROM CONTINUING OPERATIONS $409,922 $326,554
Loss from discontinued
operations (Note 3) - ( 23,290)
Gain on disposal of discontinued
operations (Note 3) - 10,368
-------- --------
NET INCOME $409,922 $313,632
======== ========
GENERAL PARTNER - NET INCOME $ 42,819 $ 34,666
======== ========
LIMITED PARTNERS - NET INCOME $367,103 $278,966
======== ========
NET INCOME per unit $ 2.81 $ 2.13
======== ========
UNITS OUTSTANDING 131,008 131,008
======== ========
The accompanying condensed notes are an integral part of
these financial statements.
-16-
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-D
STATEMENTS OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 2005 AND 2004
(Unaudited)
2005 2004
---------- ----------
REVENUES:
Oil and gas sales $1,092,106 $993,642
Interest income 3,586 1,103
Loss on sale of oil and gas
properties - ( 128)
Other income 364 -
---------- --------
$1,096,056 $994,617
COSTS AND EXPENSES:
Lease operating $ 138,959 $119,181
Production tax 74,988 70,034
Depreciation, depletion, and
amortization of oil and gas
properties 39,883 60,857
General and administrative
(Note 2) 95,503 94,185
---------- --------
$ 349,333 $344,257
---------- --------
INCOME FROM CONTINUING OPERATIONS $ 746,723 $650,360
Loss from discontinued
operations (Note 3) - ( 21,002)
Gain on disposal of discontinued
operations (Note 3) - 10,368
---------- --------
NET INCOME $ 746,723 $639,726
========== ========
GENERAL PARTNER - NET INCOME $ 77,870 $ 69,593
========== ========
LIMITED PARTNERS - NET INCOME $ 668,853 $570,133
========== ========
NET INCOME per unit $ 5.11 $ 4.35
========== ========
UNITS OUTSTANDING 131,008 131,008
========== ========
The accompanying condensed notes are an integral part of
these financial statements.
-17-
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-D
STATEMENTS OF CASH FLOWS
FOR THE SIX MONTHS ENDED JUNE 30, 2005 AND 2004
(Unaudited)
2005 2004
---------- ----------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $746,723 $639,726
Adjustments to reconcile net income
to net cash provided by operating
activities:
Depreciation, depletion, and
amortization of oil and gas
properties 39,883 63,675
Loss on sale of oil and gas
properties - 128
Gain on disposal of discontinued
operations (Note 3) - ( 10,368)
Increase in accounts receivable
- oil and gas sales ( 11,648) ( 8,927)
(Increase) decrease in deferred
charge ( 4,296) 827
Decrease in accounts payable ( 66,729) ( 26,962)
Increase in gas imbalance
payable - 39,484
Decrease in accrued liability ( 29,445) ( 42,232)
-------- --------
Net cash provided by operating
activities $674,488 $655,351
-------- --------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures ($ 37,130) ($ 15,155)
Proceeds from the disposal of
discontinued operations (Note 3) - 88,586
-------- --------
Net cash provided (used) by investing
activities ($ 37,130) $ 73,431
-------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Cash distributions ($550,759) ($576,158)
-------- --------
Net cash used by financing
activities ($550,759) ($576,158)
-------- --------
NET INCREASE IN CASH AND CASH
EQUIVALENTS $ 86,599 $152,624
CASH AND CASH EQUIVALENTS AT
BEGINNING OF PERIOD 432,834 438,562
-------- --------
CASH AND CASH EQUIVALENTS AT
END OF PERIOD $519,433 $591,186
======== ========
The accompanying condensed notes are an integral part of
these financial statements.
-18-
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-E
BALANCE SHEETS
(Unaudited)
ASSETS
June 30, December 31,
2005 2004
------------- ------------
CURRENT ASSETS:
Cash and cash equivalents $1,171,518 $1,413,497
Accounts receivable:
Oil and gas sales 851,405 849,754
---------- ----------
Total current assets $2,022,923 $2,263,251
NET OIL AND GAS PROPERTIES, utilizing
the successful efforts method 1,860,515 1,942,054
DEFERRED CHARGE 39,643 48,978
---------- ----------
$3,923,081 $4,254,283
========== ==========
LIABILITIES AND PARTNERS' CAPITAL (DEFICIT)
CURRENT LIABILITIES:
Accounts payable $ 187,243 $ 768,152
Gas imbalance payable 6,129 5,643
Asset retirement obligation -
current (Note 1) 7,014 28,411
---------- ----------
Total current liabilities $ 200,386 $ 802,206
LONG-TERM LIABILITIES:
Accrued liability $ 279,193 $ 301,594
Asset retirement obligation
(Note 1) 209,234 188,764
---------- ----------
Total long-term liabilities $ 488,427 $ 490,358
PARTNERS' CAPITAL (DEFICIT):
General Partner ($ 250,422) ($ 316,058)
Limited Partners, issued and
outstanding, 418,266 units 3,484,690 3,277,777
---------- ----------
Total Partners' capital $3,234,268 $2,961,719
---------- ----------
$3,923,081 $4,254,283
========== ==========
The accompanying condensed notes are an integral part of
these financial statements.
-19-
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-E
STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED JUNE 30, 2005 AND 2004
(Unaudited)
2005 2004
---------- ------------
REVENUES:
Oil and gas sales $1,353,943 $1,131,869
Interest income 5,952 1,942
---------- ----------
$1,359,895 $1,133,811
COSTS AND EXPENSES:
Lease operating $ 213,857 $ 219,810
Production tax 94,091 77,449
Depreciation, depletion, and
amortization of oil and gas
properties 41,909 34,432
General and administrative
(Note 2) 117,026 133,247
---------- ----------
$ 466,883 $ 464,938
---------- ----------
NET INCOME FROM CONTINUING OPERATIONS $ 893,012 $ 668,873
Loss from discontinued
operations (Note 3) - ( 165,977)
Gain on disposal of discontinued
operations (Note 3) - 88,757
---------- ----------
NET INCOME $ 893,012 $ 591,653
========== ==========
GENERAL PARTNER - NET INCOME $ 92,478 $ 62,070
========== ==========
LIMITED PARTNERS - NET INCOME $ 800,534 $ 529,583
========== ==========
NET INCOME per unit $ 1.91 $ 1.27
========== ==========
UNITS OUTSTANDING 418,266 418,266
========== ==========
The accompanying condensed notes are an integral part of
these financial statements.
-20-
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-E
STATEMENTS OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 2005 AND 2004
(Unaudited)
2005 2004
---------- ------------
REVENUES:
Oil and gas sales $2,570,627 $2,267,961
Interest income 10,501 3,412
---------- ----------
$2,581,128 $2,271,373
COSTS AND EXPENSES:
Lease operating $ 488,730 $ 454,615
Production tax 178,186 153,835
Depreciation, depletion, and
amortization of oil and gas
properties 85,695 69,220
General and administrative
(Note 2) 254,544 256,279
---------- ----------
$1,007,155 $ 933,949
---------- ----------
NET INCOME FROM CONTINUING OPERATIONS $1,573,973 $1,337,424
Loss from discontinued
operations (Note 3) - ( 148,884)
Gain on disposal of discontinued
operations (Note 3) - 88,757
---------- ----------
NET INCOME $1,573,973 $1,277,297
========== ==========
GENERAL PARTNER - NET INCOME $ 164,060 $ 135,349
========== ==========
LIMITED PARTNERS - NET INCOME $1,409,913 $1,141,948
========== ==========
NET INCOME per unit $ 3.37 $ 2.73
========== ==========
UNITS OUTSTANDING 418,266 418,266
========== ==========
The accompanying condensed notes are an integral part of
these financial statements.
-21-
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-E
STATEMENTS OF CASH FLOWS
FOR THE SIX MONTHS ENDED JUNE 30, 2005 AND 2004
(Unaudited)
2005 2004
------------ ------------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $1,573,973 $1,277,297
Adjustments to reconcile net income
to net cash provided by operating
activities:
Depreciation, depletion, and
amortization of oil and gas
properties 85,695 88,455
Settlement of asset retirement
obligation ( 345) -
Gain on disposal of discontinued
operations (Note 3) - ( 88,757)
(Increase) decrease in accounts
receivable - oil and gas sales ( 1,651) 319,940
Decrease in deferred charge 9,335 901
Decrease in accounts payable ( 570,440) ( 254,306)
Increase in gas imbalance payable 486 -
Decrease in accrued liability ( 22,401) ( 38,937)
---------- ----------
Net cash provided by operating
activities $1,074,652 $1,304,593
---------- ----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures ($ 18,306) ($ 29,577)
Proceeds from sale of oil and
gas properties 3,099 -
Proceeds from disposal of
discontinued operations (Note 3) - 632,221
---------- ----------
Net cash used by investing activities ($ 15,207) $ 602,644
---------- ----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Cash distributions ($1,301,424) ($1,241,019)
---------- ----------
Net cash used by financing activities ($1,301,424) ($1,241,019)
---------- ----------
NET DECREASE IN CASH AND CASH
EQUIVALENTS ($ 241,979) $ 666,218
CASH AND CASH EQUIVALENTS AT
BEGINNING OF PERIOD 1,413,497 1,513,224
---------- ----------
CASH AND CASH EQUIVALENTS AT
END OF PERIOD $1,171,518 $2,179,442
========== ==========
The accompanying condensed notes are an integral part of
these financial statements.
-22-
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-F
BALANCE SHEETS
(Unaudited)
ASSETS
June 30, December 31,
2005 2004
------------ ------------
CURRENT ASSETS:
Cash and cash equivalents $ 741,842 $ 696,460
Accounts receivable:
Oil and gas sales 569,208 548,005
---------- ----------
Total current assets $1,311,050 $1,244,465
NET OIL AND GAS PROPERTIES, utilizing
the successful efforts method 1,658,110 1,727,931
DEFERRED CHARGE 17,337 21,947
---------- ----------
$2,986,497 $2,994,343
========== ==========
LIABILITIES AND PARTNERS' CAPITAL (DEFICIT)
CURRENT LIABILITIES:
Accounts payable $ 88,103 $ 92,446
Gas imbalance payable 5,120 4,721
Asset retirement obligation -
current (Note 1) 3,063 8,552
---------- ----------
Total current liabilities $ 96,286 $ 105,719
LONG-TERM LIABILITIES:
Accrued liability $ 95,107 $ 105,877
Asset retirement obligation
(Note 1) 150,547 141,647
---------- ----------
Total long-term liabilities $ 245,654 $ 247,524
PARTNERS' CAPITAL (DEFICIT):
General Partner ($ 139,134) ($ 142,055)
Limited Partners, issued and
outstanding, 221,484 units 2,783,691 2,783,155
---------- ----------
Total Partners' capital $2,644,557 $2,641,100
---------- ----------
$2,986,497 $2,994,343
========== ==========
The accompanying condensed notes are an integral part of
these financial statements.
-23-
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-F
STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED JUNE 30, 2005 AND 2004
(Unaudited)
2005 2004
-------- --------
REVENUES:
Oil and gas sales $811,137 $708,950
Interest income 3,426 831
-------- --------
$814,563 $709,781
COSTS AND EXPENSES:
Lease operating $119,778 $132,314
Production tax 43,293 38,459
Depreciation, depletion, and
amortization of oil and gas
properties 40,254 31,026
General and administrative
(Note 2) 62,124 77,109
-------- --------
$265,449 $278,908
-------- --------
NET INCOME $549,114 $430,873
======== ========
GENERAL PARTNER - NET INCOME $ 28,895 $ 22,743
======== ========
LIMITED PARTNERS - NET INCOME $520,219 $408,130
======== ========
NET INCOME per unit $ 2.35 $ 1.85
======== ========
UNITS OUTSTANDING 221,484 221,484
======== ========
The accompanying condensed notes are an integral part of
these financial statements.
-24-
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-F
STATEMENTS OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 2005 AND 2004
(Unaudited)
2005 2004
---------- ----------
REVENUES:
Oil and gas sales $1,631,089 $1,354,515
Interest income 6,011 1,373
---------- ----------
$1,637,100 $1,355,888
COSTS AND EXPENSES:
Lease operating $ 283,635 $ 277,027
Production tax 87,286 72,729
Depreciation, depletion, and
amortization of oil and gas
properties 77,405 57,998
General and administrative
(Note 2) 145,267 144,755
---------- ----------
$ 593,593 $ 552,509
---------- ----------
NET INCOME $1,043,507 $ 803,379
========== ==========
GENERAL PARTNER - NET INCOME $ 54,971 $ 42,420
========== ==========
LIMITED PARTNERS - NET INCOME $ 988,536 $ 760,959
========== ==========
NET INCOME per unit $ 4.46 $ 3.44
========== ==========
UNITS OUTSTANDING 221,484 221,484
========== ==========
The accompanying condensed notes are an integral part of
these financial statements.
-25-
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-F
STATEMENTS OF CASH FLOWS
FOR THE SIX MONTHS ENDED JUNE 30, 2005 AND 2004
(Unaudited)
2005 2004
----------- ----------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $1,043,507 $803,379
Adjustments to reconcile net income
to net cash provided by operating
activities:
Depreciation, depletion, and
amortization of oil and gas
properties 77,405 57,998
Increase in accounts receivable
- oil and gas sales ( 21,203) ( 109,369)
Decrease in deferred charge 4,610 366
Increase (decrease) in accounts
payable 3,569 ( 6,097)
Increase in gas imbalance
payable 399 -
Decrease in accrued liability ( 10,770) ( 23,327)
---------- --------
Net cash provided by operating
activities $1,097,517 $722,950
---------- --------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures ($ 15,275) ($ 5,308)
Proceeds from the sale of oil
and gas properties 3,190 4,317
---------- --------
Net cash used by investing
activities ($ 12,085) ($ 991)
---------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Cash distributions ($1,040,050) ($677,544)
---------- --------
Net cash used by financing
activities ($1,040,050) ($677,544)
---------- --------
NET INCREASE IN CASH AND CASH
EQUIVALENTS $ 45,382 $ 44,415
CASH AND CASH EQUIVALENTS AT
BEGINNING OF PERIOD 696,460 521,918
---------- --------
CASH AND CASH EQUIVALENTS AT
END OF PERIOD $ 741,842 $566,333
========== ========
The accompanying condensed notes are an integral part of
these financial statements.
-26-
GEODYNE ENERGY INCOME PROGRAM III LIMITED PARTNERSHIPS
CONDENSED NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2005
(Unaudited)
1. ACCOUNTING POLICIES
-------------------
The balance sheets as of June 30, 2005, statements of operations for the
three and six months ended June 30, 2005 and 2004, and 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 Partnerships (the
"General Partner"), without audit. In the opinion of management the
financial statements referred to above include all necessary adjustments,
consisting of normal recurring adjustments, to present fairly the
financial position at June 30, 2005, the results of operations for the
three and six months ended June 30, 2005 and 2004, and the cash flows for
the six months ended June 30, 2005 and 2004.
Information and footnote disclosures normally included in financial
statements prepared in accordance with generally accepted accounting
principles have been condensed or omitted. The accompanying interim
financial statements should be read in conjunction with the Partnerships'
Annual Report on Form 10-K filed for the year ended December 31, 2004. The
results of operations for the period ended June 30, 2005 are not
necessarily indicative of the results to be expected for the full year.
The Limited Partners' net income or loss per unit is based upon each $100
initial capital contribution.
DISCONTINUED OPERATIONS
-----------------------
As further described in Note 3, the III-D and III-E Partnerships sold all
of their oil and gas assets held in the Jay-Little Escambia Creek Field
("Jay Field") on May 12, 2004 at a large public oil and gas auction.
-27-
OIL AND GAS PROPERTIES
----------------------
The Partnerships follow the successful efforts method of accounting for
their oil and gas properties. Under the successful efforts method, the
Partnerships capitalize all property acquisition costs and development
costs incurred in connection with the further development of oil and gas
reserves. Property acquisition costs include costs incurred by the
Partnerships or the General Partner to acquire producing properties,
including related title insurance or examination costs, commissions,
engineering, legal and accounting fees, and similar costs directly related
to the acquisitions, plus an allocated portion of the General Partner's
property screening costs. The acquisition cost to the Partnerships of
properties acquired by the General Partner is adjusted to reflect the net
cash results of operations, including interest incurred to finance the
acquisition, for the period of time the properties are held by the General
Partner.
Depletion of the costs of producing oil and gas properties, amortization
of related intangible drilling and development costs, and depreciation of
tangible lease and well equipment are computed on the unit-of-production
method. The Partnerships' depletion, depreciation, and amortization
includes estimated dismantlement and abandonment costs and estimated
salvage value of the equipment.
When complete units of depreciable property are retired or sold, the asset
cost and related accumulated depreciation are eliminated with any gain or
loss (including the elimination of the asset retirement obligation)
reflected in income. When less than complete units of depreciable property
are retired or sold, the proceeds are credited to oil and gas properties.
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.
-28-
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 III-A, III-B, III-C, III-D, III-E, and
III-F Partnerships recognized approximately $3,000, $2,000, $5,000,
$3,000, $5,000, and $4,000, respectively, of an increase in depreciation,
depletion, and amortization expense, which was comprised of accretion of
the asset retirement obligation and depletion of the increase in
capitalized cost of oil and gas properties.
The components of the change in asset retirement obligations for the three
and six months ended June 30, 2005 and 2004 are as shown below.
III-A Partnership
-----------------
Three Months Three Months
Ended Ended
6/30/2005 6/30/2004
------------ ------------
Total Asset Retirement
Obligation, April 1 $116,105 $111,076
Accretion expense 1,151 949
-------- --------
Total Asset Retirement
Obligation, End of Quarter $117,256 $112,025
======== ========
Six Months Six Months
Ended Ended
6/30/2005 6/30/2004
------------ ------------
Total Asset Retirement
Obligation, January 1 $114,955 $114,993
Settlements and disposals - ( 4,865)
Accretion expense 2,301 1,897
-------- --------
Total Asset Retirement
Obligation, End of Period $117,256 $112,025
======== ========
Asset Retirement Obligation -
Current $ 3,614 $ 15,499
Asset Retirement Obligation -
Long-Term 113,642 96,526
-29-
III-B Partnership
-----------------
Three Months Three Months
Ended Ended
6/30/2005 6/30/2004
------------ ------------
Total Asset Retirement
Obligation, April 1 $ 80,639 $ 80,672
Additions and revisions - ( 670)
Accretion expense 808 75
-------- --------
Total Asset Retirement
Obligation, End of Quarter $ 81,447 $ 80,077
======== ========
Six Months Six Months
Ended Ended
6/30/2005 6/30/2004
------------ ------------
Total Asset Retirement
Obligation, January 1 $ 79,865 $ 83,211
Settlements and disposals - ( 3,209)
Accretion expense 1,582 75
-------- --------
Total Asset Retirement
Obligation, End of Period $ 81,447 $ 80,077
======== ========
Asset Retirement Obligation -
Current $ 24,802 $ 30,053
Asset Retirement Obligation -
Long-Term 56,645 50,024
III-C Partnership
-----------------
Three Months Three Months
Ended Ended
6/30/2005 6/30/2004
------------ ------------
Total Asset Retirement
Obligation, April 1 $207,836 $197,201
Additions and revisions 14 -
Accretion expense 2,112 1,738
-------- --------
Total Asset Retirement
Obligation, End of Quarter $209,962 $198,939
======== ========
-30-
Six Months Six Months
Ended Ended
6/30/2005 6/30/2004
------------ ------------
Total Asset Retirement
Obligation, January 1 $204,672 $194,453
Additions and revisions 1,083 1,022
Accretion expense 4,207 3,464
-------- --------
Total Asset Retirement
Obligation, End of Period $209,962 $198,939
======== ========
Asset Retirement Obligation -
Current $ 26,845 $ 33,832
Asset Retirement Obligation -
Long-Term 183,117 165,107
III-D Partnership
-----------------
Three Months Three Months
Ended Ended
6/30/2005 6/30/2004
------------ ------------
Total Asset Retirement
Obligation, April 1 $110,431 $105,022
Accretion expense 1,106 856
-------- --------
Total Asset Retirement
Obligation, End of Quarter $111,537 $105,878
======== ========
Six Months Six Months
Ended Ended
6/30/2005 6/30/2004
------------ ------------
Total Asset Retirement
Obligation, January 1 $109,182 $314,031
Additions and revisions 155 146
Accretion expense 2,200 4,528
Discontinued operations - ( 212,827)
-------- --------
Total Asset Retirement
Obligation, End of Period $111,537 $105,878
======== ========
Asset Retirement Obligation -
Current $ 3,510 $ 11,718
Asset Retirement Obligation -
Long-Term 108,027 94,160
-31-
III-E Partnership
-----------------
Three Months Three Months
Ended Ended
6/30/2005 6/30/2004
------------ ------------
Total Asset Retirement
Obligation, April 1 $219,243 $ 216,104
Settlements and disposals ( 5,091) -
Accretion expense 2,096 1,615
-------- ----------
Total Asset Retirement
Obligation, End of Quarter $216,248 $ 217,719
======== ==========
Six Months Six Months
Ended Ended
6/30/2005 6/30/2004
------------ ------------
Total Asset Retirement
Obligation, January 1 $217,175 $1,768,863
Settlements and disposals ( 5,091) -
Accretion expense 4,164 22,459
Discontinued operations - ( 1,573,603)
-------- ----------
Total Asset Retirement
Obligation, End of Period $216,248 $ 217,719
======== ==========
Asset Retirement Obligation -
Current $ 7,014 $ 23,170
Asset Retirement Obligation -
Long-Term 209,234 194,549
III-F Partnership
-----------------
Three Months Three Months
Ended Ended
6/30/2005 6/30/2004
------------ ------------
Total Asset Retirement
Obligation, April 1 $151,897 $ 144,520
Accretion expense 1,713 1,550
-------- ----------
Total Asset Retirement
Obligation, End of Quarter $153,610 $ 146,070
======== ==========
-32-
Six Months Six Months
Ended Ended
6/30/2005 6/30/2004
------------ ------------
Total Asset Retirement
Obligation, January 1 $150,199 $ 142,977
Accretion expense 3,411 3,093
-------- ----------
Total Asset Retirement
Obligation, End of Period $153,610 $ 146,070
======== ==========
Asset Retirement Obligation -
Current $ 3,063 $ 4,476
Asset Retirement Obligation -
Long-Term 150,547 141,594
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
----------- ------------------- ---------------
III-A $3,955 $ 69,468
III-B 2,718 36,405
III-C 3,760 64,353
III-D 2,881 34,476
III-E 6,956 110,070
III-F 3,840 58,284
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
----------- ------------------- ---------------
III-A $29,451 $138,936
III-B 26,563 72,810
III-C 28,925 128,706
III-D 26,551 68,952
III-E 34,404 220,140
III-F 28,699 116,568
-33-
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.
3. DISCONTINUED OPERATIONS
-----------------------
On May 12, 2004, the III-D and III-E Partnerships sold all of their
interests in the Jay Field located in Santa Rosa County, Florida at a
large public oil and gas auction for approximately $721,000, subject to
standard transaction requirements and adjustments. These proceeds were
allocated approximately $89,000 and $632,000, respectively, to the III-D
and III-E Partnerships. This represents the sale of all oil and gas assets
held by the III-D and III-E Partnerships in the Jay Field and is therefore
a disposal of a business segment under Statement of Financial Accounting
Standards No. 144, "Accounting for the Impairment or Disposal of
Long-Lived Assets" (FAS 144). The sale resulted in a gain on disposal of
discontinued operations of approximately $10,000 and $89,000,
respectively, for the III-D and III-E Partnerships. Accordingly, prior
year results of the Jay Field segment have been classified as
discontinued.
Results from discontinued operations for the three and six months ended
June 30, 2004 were as follows:
III-D Partnership
-----------------
Three Months Six Months
Ended Ended
6/30/2004 6/30/2004
------------ ------------
Oil and gas sales $21,798 $149,236
Lease operating ( 43,444) ( 157,602)
Production tax ( 1,644) ( 9,818)
Depreciation, depletion, and
amortization of oil and gas
properties - ( 2,818)
------- --------
Loss from discontinued
operations ($23,290) ($ 21,002)
======= ========
-34-
III-E Partnership
-----------------
Three Months Six Months
Ended Ended
6/30/2004 6/30/2004
------------ ------------
Oil and gas sales $155,826 $1,065,194
Lease operating ( 310,053) ( 1,124,762)
Production tax ( 11,750) ( 70,081)
Depreciation, depletion, and
amortization of oil and gas
properties - ( 19,235)
-------- ----------
Loss from discontinued
operations ($165,977) ($ 148,884)
======== ==========
-35-
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.
DISCONTINUED OPERATIONS
- -----------------------
The III-D and III-E Partnerships owned working interests in the Jay Field
located in Santa Rosa County, Florida. This property, consisting of
several oil and gas producing wells, several nitrogen gas injection wells
(to stimulate production), and a gas plant, is operated by ExxonMobil. The
injection process leads to very high operating costs. As a result, changes
in oil (in particular) and natural gas prices can significantly impact net
cash flow and the estimated net present value of this property's proved
reserves. Based on information received from the operator, in late 2001
through early 2004 this property experienced mechanical and operational
difficulties primarily associated with the nitrogen injection system and
gas plant operations. Also, the drilling of a directional well
significantly exceeded the operator's original cost estimates. The
operator notified the working interest owners that
-36-
additional costs would be incurred in order to plug several wells. As a
result of these costs, cash flow from this property had been reduced and
at times had been negative. This property is very sensitive to changes in
oil prices and production volumes.
In May 2004, the III-D and III-E Partnerships sold all of their interests
in the Jay Field and the disposal was treated as a discontinued operation.
The sales proceeds consisting of approximately $89,000 and $632,000,
respectively, were included in the August 15, 2004 cash distributions to
the III-D and III-E Partnerships. The sale of the Jay Field interests will
impact the continuing future operations of the III-D and III-E
Partnerships. It is anticipated that these Partnerships will have lower
lease operating costs, lower oil and gas sales, and a reduction in their
asset retirement obligations. The reader should refer to Note 3 -
Discontinued Operations to the consolidated financial statements included
in PART I, ITEM 1 of this Quarterly Report on Form 10-Q for additional
information regarding this matter.
GENERAL
- -------
The Partnerships are engaged in the business of acquiring and operating
producing oil and gas properties located in the continental United States.
In general, a Partnership acquired producing properties and did not engage
in development drilling or enhanced recovery projects, except as an
incidental part of the management of the producing properties acquired.
Therefore, the economic life of each Partnership is limited to the period
of time required to fully produce its acquired oil and gas reserves. The
net proceeds from the oil and gas operations are distributed to the
Limited Partners and the General Partner in accordance with the terms of
the Partnerships' partnership agreements.
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:
-37-
Limited
Date of Partner Capital
Partnership Activation Contributions
----------- ------------------ ---------------
III-A November 22, 1989 $26,397,600
III-B January 24, 1990 13,833,600
III-C February 27, 1990 24,453,600
III-D September 5, 1990 13,100,800
III-E December 26, 1990 41,826,600
III-F March 7, 1991 22,148,400
In general, the amount of funds available for acquisition of producing
properties was equal to the capital contributions of the Limited Partners,
less 15% for sales commissions and organization and management fees. All
of the Partnerships have fully invested their capital contributions.
Net proceeds from the operations less necessary operating capital are
distributed to the Limited Partners on a quarterly basis. Revenues and net
proceeds of a Partnership are largely dependent upon the volumes of oil
and gas sold and the prices received for such oil and gas. While the
General Partner cannot predict future pricing trends, it believes the
working capital available as of June 30, 2005 and the net revenue
generated from future operations will provide sufficient working capital
to meet current and future obligations.
Occasional expenditures for new wells or well recompletions or workovers
may, however, reduce or eliminate cash available for a particular
quarterly distribution.
Pursuant to the terms of the Partnership Agreements for the Partnerships
(the "Partnership Agreements") the Partnerships were initially scheduled
to terminate on the dates indicated in the "Initial Termination Date"
column of the following chart. However, the Partnership Agreements provide
that the General Partner may extend the term of each Partnership for up to
five periods of two years each. As of the date of this Quarterly Report,
the General Partner has extended the terms of the Partnerships for their
third extension period. Therefore, the Partnerships are currently
scheduled to terminate on the dates indicated in the "Current Termination
Date" column of the following chart.
Initial Extensions Current
Partnership Termination Date Exercised Termination Date
----------- ----------------- --------- -----------------
III-A November 22, 1999 3 November 22, 2005
III-B January 24, 2000 3 December 31, 2005
III-C February 28, 2000 3 December 31, 2005
III-D September 5, 2000 3 December 31, 2005
III-E December 26, 2000 3 December 31, 2005
III-F March 7, 2001 3 December 31, 2005
-38-
The General Partner has not determined whether it will further extend the
terms of any Partnership.
In May 2004 the III-D and III-E Partnerships sold their working interests
in the Jay Field located in Santa Rosa County, Florida. A routine audit by
an unaffiliated non-operator of joint interest billings after the
effective date of the sale resulted in the III-D and III-E Partnerships
making additional expense payments of approximately $68,000 and $484,000,
respectively, for costs represented to have been incurred before the
effective date of the sale. However, the General Partner's independent
review of the expenses revealed that approximately $30,000 and $215,000,
respectively, paid by the III-D and III-E Partnerships were actually not
applicable to periods before the effective date of the sale and were
therefore improper. The General Partner has demanded that the purchaser
return the excess payments to the III-D and III-E Partnerships; however,
the purchaser has ignored these demands. The General Partner intends to
initiate litigation in order to recover the overpaid expenses.
CRITICAL ACCOUNTING POLICIES
- ----------------------------
The Partnerships follow the successful efforts method of accounting for
their oil and gas properties. Under the successful efforts method, the
Partnerships capitalize all property acquisition costs and development
costs incurred in connection with the further development of oil and gas
reserves. Property acquisition costs include costs incurred by the
Partnerships or the General Partner to acquire producing properties,
including related title insurance or examination costs, commissions,
engineering, legal and accounting fees, and similar costs directly related
to the acquisitions plus an allocated portion of the General Partner's
property screening costs. The acquisition cost to the Partnerships of the
properties acquired by the General Partner is adjusted to reflect the net
cash results of operations, including interest incurred to finance the
acquisition, for the period of time the properties are held by the General
Partner.
Depletion of the cost of producing oil and gas properties, amortization of
related intangible drilling and development costs, and depreciation of
tangible lease and well equipment are computed on the unit-of-production
method. The Partnerships' calculation of depreciation, depletion, and
amortization includes estimated dismantlement and abandonment costs and
estimated salvage value of the equipment. When complete units of
depreciable property are retired or sold, the asset cost and related
accumulated depreciation are eliminated with any gain or loss (including
the elimination of the asset retirement obligation) reflected in income.
When less that complete units of
-39-
depreciable property are retired or sold, the proceeds are credited to
oil and gas properties.
The Partnerships evaluate the recoverability of the carrying costs of
their proved oil and gas properties for each oil and gas field (rather
than separately for each well). If the unamortized costs of oil and gas
properties within a field exceeds the expected undiscounted future cash
flows from such properties, the cost of the properties is written down to
fair value, which is determined by using the estimated discounted future
cash flows from the properties. The risk that the Partnerships will be
required to record impairment provisions in the future increases as oil
and gas prices decrease.
The Deferred Charge on the Balance Sheets represents costs deferred for
lease operating expenses incurred in connection with the Partnerships'
underproduced gas imbalance positions. Conversely, the Accrued Liability
represents charges accrued for lease operating expenses incurred in
connection with the Partnerships' overproduced gas imbalance positions.
The rate used in calculating the Deferred Charge and Accrued Liability is
the annual average production costs per Mcf.
The Partnerships' oil and condensate production is sold, title passed, and
revenue recognized at or near the Partnerships' wells under short-term
purchase contracts at prevailing prices in accordance with arrangements
which are customary in the oil and gas industry. Sales of gas applicable
to the Partnerships' interest in producing oil and gas leases are recorded
as revenue when the gas is metered and title transferred pursuant to the
gas sales contracts covering the Partnerships' interest in gas reserves.
During such times as a Partnership's sales of gas exceed its pro rata
ownership in a well, such sales are recorded as revenues unless total
sales from the well have exceeded the Partnership's share of estimated
total gas reserves underlying the property, at which time such excess is
recorded as a liability. The rates per Mcf used to calculate this
liability are based on the average gas prices for which the Partnerships
are currently settling this liability. These amounts were recorded as gas
imbalance payables in accordance with the sales method. These gas
imbalance payables will be settled by either gas production by the
underproduced party in excess of current estimates of total gas reserves
for the well or by negotiated or contractual payment to the underproduced
party.
-40-
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.
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
-41-
includes certain gas balancing adjustments which cause the gas volume to
differ from the reserve reports prepared by the General Partner.
III-A Partnership
-----------------
Crude Natural
Oil Gas
(Barrels) (Mcf)
--------- -----------
Proved reserves, Dec. 31, 2004 123,403 3,772,737
Production ( 8,034) ( 108,487)
Extensions and discoveries 774 12,699
Revisions of previous
estimates 3,094 69,293
------- ---------
Proved reserves, March 31, 2005 119,237 3,746,242
Production ( 8,162) ( 105,753)
Extensions and discoveries 206 1,490
Revisions of previous
estimates ( 3,749) ( 5,379)
------- ---------
Proved reserves, June 30, 2005 107,532 3,636,600
======= =========
III-B Partnership
-----------------
Crude Natural
Oil Gas
(Barrels) (Mcf)
--------- -----------
Proved reserves, Dec. 31, 2004 74,694 1,557,071
Production ( 5,398) ( 44,794)
Extensions and discoveries 502 6,191
Revisions of previous
estimates 2,659 27,821
------ ---------
Proved reserves, March 31, 2005 72,457 1,546,289
Production ( 5,712) ( 45,921)
Extensions and discoveries 135 861
Revisions of previous
estimates ( 2,343) ( 17,857)
------ ---------
Proved reserves, June 30, 2005 64,537 1,483,372
====== =========
-42-
III-C Partnership
-----------------
Crude Natural
Oil Gas
(Barrels) (Mcf)
--------- -----------
Proved reserves, Dec. 31, 2004 81,674 4,632,503
Production ( 2,469) ( 134,206)
Extensions and discoveries 39 55,001
Revisions of previous
estimates 7,915 102,271
------ ---------
Proved reserves, March 31, 2005 87,159 4,655,569
Production ( 2,286) ( 143,514)
Extensions and discoveries 105 64,663
Revisions of previous
estimates 3,431 173,523
------ ---------
Proved reserves, June 30, 2005 88,409 4,750,241
====== =========
III-D Partnership
-----------------
Crude Natural
Oil Gas
(Barrels) (Mcf)
--------- -----------
Proved reserves, Dec. 31, 2004 81,073 2,409,961
Production ( 2,399) ( 76,715)
Extensions and discoveries 4 7,610
Revisions of previous
estimates 6,793 54,632
------ ---------
Proved reserves, March 31, 2005 85,471 2,395,488
Production ( 2,101) ( 75,890)
Extensions and discoveries 69 6,673
Revisions of previous
estimates ( 105) 132,644
------ ---------
Proved reserves, June 30, 2005 83,334 2,458,915
====== =========
-43-
III-E Partnership
-----------------
Crude Natural
Oil Gas
(Barrels) (Mcf)
--------- ------------
Proved reserves, Dec. 31, 2004 158,508 6,440,079
Production ( 6,185) ( 172,223)
Extensions and discoveries 11 2,322
Revisions of previous
estimates 6,975 59,406
------- ---------
Proved reserves, March 31, 2005 159,309 6,329,584
Production ( 6,195) ( 172,213)
Extensions and discoveries 10,189 34,407
Revisions of previous
estimates 2,252 62,569
------- ---------
Proved reserves, June 30, 2005 165,555 6,254,347
======= =========
III-F Partnership
-----------------
Crude Natural
Oil Gas
(Barrels) (Mcf)
--------- -----------
Proved reserves, Dec. 31, 2004 314,866 4,140,725
Production ( 5,389) ( 100,250)
Extensions and discoveries 9 1,950
Revisions of previous
estimates 6,292 3,196
------- ---------
Proved reserves, March 31, 2005 315,778 4,045,621
Production ( 4,989) ( 89,254)
Extensions and discoveries 8,565 30,840
Revisions of previous
estimates 313 ( 275,088)
------- ---------
Proved reserves, June 30, 2005 319,667 3,712,119
======= =========
-44-
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 cause the estimates
of remaining economically recoverable reserves, as well as the values
placed on said reserves to fluctuate. The prices used in calculating the
net present value attributable to the Partnerships' proved reserves do not
necessarily reflect market prices for oil and gas production subsequent to
June 30, 2005. There can be no assurance that the prices used in
calculating the net present value of the Partnerships' proved reserves at
June 30, 2005 will actually be realized for such production.
Net Present Value of Reserves
--------------------------------------------
Partnership 6/30/05 3/31/05 12/31/04
----------- ----------- ----------- -----------
III-A $13,839,484 $14,546,731 $12,009,256
III-B 6,335,002 6,764,144 5,576,342
III-C 14,277,235 14,227,089 11,292,927
III-D 7,812,298 7,969,895 6,265,244
III-E 20,799,597 21,237,057 17,294,504
III-F 15,561,528 16,358,502 13,190,015
Oil and Gas Prices
-------------------------------------------
Pricing 6/30/05 3/31/05 12/31/04
----------- ----------- ----------- ----------
Oil (Bbl) $ 56.63 $ 55.31 $ 43.36
Gas (Mcf) 7.07 7.17 6.02
RESULTS OF OPERATIONS
- ---------------------
GENERAL DISCUSSION
The following general discussion should be read in conjunction with the
analysis of results of operations provided below.
-45-
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.
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
-46-
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.
III-A PARTNERSHIP
THREE MONTHS ENDED JUNE 30, 2005 COMPARED TO THE THREE MONTHS ENDED JUNE
30, 2004.
Three Months Ended June 30,
---------------------------
2005 2004
---------- ----------
Oil and gas sales $1,136,402 $1,086,658
Oil and gas production expenses $ 213,974 $ 213,985
Barrels produced 8,162 10,053
Mcf produced 105,753 119,410
Average price/Bbl $ 52.45 $ 37.17
Average price/Mcf $ 6.70 $ 5.97
As shown in the table above, total oil and gas sales increased $49,744
(4.6%) for the three months ended June 30, 2005 as compared to the three
months ended June 30, 2004. Of this increase, approximately $125,000 and
$77,000, respectively, were related to increases in the average prices of
oil and gas sold. These increases were partially offset by decreases of
approximately $70,000 and $82,000, respectively, related to decreases in
volumes of oil and gas sold. Volumes of oil and gas sold decreased 1,891
barrels and 13,657 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 late 2004 and early 2005
due to mechanical problems. As of the date of this Quarterly Report, the
shut-in wells have returned to production. The decrease in volumes of gas
sold was primarily due to normal declines in production.
Oil and gas production expenses (including lease operating expenses and
production taxes) remained relatively constant for the three months ended
June 30, 2005 and 2004. As a percentage of oil and gas sales, these
expenses decreased to 18.8% for the three months ended June 30, 2005 from
19.7% for the three months ended June 30, 2004.
-47-
Depreciation, depletion, and amortization of oil and gas properties
decreased $30,019 (56.8%) for the three months ended June 30, 2005 as
compared to the three months ended June 30, 2004. This decrease was
primarily due to (i) one significant well being substantially depleted
during the three months ended June 30, 2004, (ii) the abandonment of
another significant well during the three months ended June 30, 2004
following an unsuccessful recompletion attempt, and (iii) the decreases in
volumes of oil and gas sold. As a percentage of oil and gas sales, this
expense decreased to 2.0% for the three months ended June 30, 2005 from
4.9% for the three months ended June 30, 2004. This percentage decrease
was primarily due to the dollar decrease in depreciation, depletion, and
amortization of oil and gas properties.
General and administrative expenses decreased $15,182 for the three months
ended June 30, 2005 as compared to the three months ended June 30, 2004.
As a percentage of oil and gas sales, these expenses decreased to 6.5% for
the three months ended June 30, 2005 from 8.2% 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
---------- ----------
Oil and gas sales $2,170,098 $2,090,688
Oil and gas production expenses $ 576,322 $ 446,379
Barrels produced 16,196 20,071
Mcf produced 214,240 245,885
Average price/Bbl $ 48.95 $ 35.41
Average price/Mcf $ 6.43 $ 5.61
As shown in the table above, total oil and gas sales increased $79,410
(3.8%) for the six months ended June 30, 2005 as compared to the six
months ended June 30, 2004. Of this increase, approximately $219,000 and
$175,000, respectively, were related to increases in the average prices of
oil and gas sold. These increases were partially offset by decreases of
approximately $137,000 and $178,000, respectively, related to decreases in
volumes of oil and gas sold. Volumes of oil and gas sold decreased 3,875
barrels and 31,645 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 several
wells during late 2004 and early 2005 due to mechanical problems and (ii)
normal declines in production. As of the date of this Quarterly Report,
the shut-in wells have returned to production. The decrease in volumes of
gas sold was primarily due to (i) a positive prior period volume
adjustment made by the operator on one
-48-
significant well during the six months ended June 30, 2004, (ii) normal
declines in production, and (iii) the shutting-in of another significant
well during late 2004 and early 2005 due to mechanical problems. As of the
date of this Quarterly Report, the shut-in well has returned to
production.
Oil and gas production expenses (including lease operating expenses and
production taxes) increased $129,943 (29.1%) 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) 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 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 a negative prior period
production tax adjustment made by the operator on another significant well
during the six months ended June 30, 2005. As a percentage of oil and gas
sales, these expenses increased to 26.6% for the six months ended June 30,
2005 from 21.4% for the six months ended June 30, 2004. This percentage
increase was primarily due to the dollar increase in oil and gas
production expenses.
Depreciation, depletion, and amortization of oil and gas properties
decreased $78,061 (62.5%) 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 the
six months ended June 30, 2004 following an unsuccessful recompletion
attempt, (ii) the decreases in volumes of oil and gas sold, and (iii) one
significant well being substantially depleted during the six months ended
June 30, 2004. As a percentage of oil and gas sales, this expense
decreased to 2.2% for the six months ended June 30, 2005 from 6.0% for the
six months ended June 30, 2004. This percentage decrease was primarily due
to the dollar decrease in depreciation, depletion, and amortization of oil
and gas properties.
General and administrative expenses remained relatively constant for the
six months ended June 30, 2005 and 2004. As a percentage of oil and gas
sales, these expenses decreased to 7.8% for the six months ended June 30,
2005 from 8.0% for the six months ended June 30, 2004.
The Limited Partners have received cash distributions through June 30,
2005 totaling $40,159,701 or 152.13% of Limited Partners' capital
contributions.
-49-
III-B PARTNERSHIP
THREE MONTHS ENDED JUNE 30, 2005 COMPARED TO THE THREE MONTHS ENDED JUNE
30, 2004.
Three Months Ended June 30,
---------------------------
2005 2004
-------- --------
Oil and gas sales $605,293 $552,331
Oil and gas production expenses $118,014 $129,519
Barrels produced 5,712 6,752
Mcf produced 45,921 50,491
Average price/Bbl $ 52.35 $ 37.46
Average price/Mcf $ 6.67 $ 5.93
As shown in the table above, total oil and gas sales increased $52,962
(9.6%) for the three months ended June 30, 2005 as compared to the three
months ended June 30, 2004. Of this increase, approximately $85,000 and
$34,000, respectively, were related to increases in the average prices of
oil and gas sold. These increases were partially offset by decreases of
approximately $39,000 and $27,000, respectively, related to decreases in
volumes of oil and gas sold. Volumes of oil and gas sold decreased 1,040
barrels and 4,570 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 late 2004 and early 2005
due to mechanical problems. As of the date of this Quarterly Report, the
shut-in wells have returned to production. The decrease in volumes of gas
sold was primarily due to normal declines in production.
Oil and gas production expenses (including lease operating expenses and
production taxes) decreased $11,505 (8.9%) for the three months ended June
30, 2005 as compared to the three months ended June 30, 2004. As a
percentage of oil and gas sales, these expenses decreased to 19.5% for the
three months ended June 30, 2005 from 23.4% for the three months ended
June 30, 2004. This percentage decrease was primarily due to (i) the
dollar decrease in oil and gas production expenses and (ii) the increase
in oil and gas sales.
Depreciation, depletion, and amortization of oil and gas properties
decreased $18,917 (60.4%) 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) one significant well being substantially depleted
during the three months ended June 30, 2004, (ii) the abandonment of
another significant well during the three months ended June 30, 2004
following an unsuccessful recompletion attempt, and (iii) the decreases in
volumes of oil and gas sold. As a percentage of oil and gas sales, this
expense decreased to 2.1% for the three months ended June 30, 2005 from
5.7% for
-50-
the three months ended June 30, 2004. This percentage decrease was
primarily due to the dollar decrease in depreciation, depletion, and
amortization of oil and gas properties.
General and administrative expenses decreased $14,527 for the three months
ended June 30, 2005 as compared to the three months ended June 30, 2004.
As a percentage of oil and gas sales, these expenses decreased to 6.5% for
the three months ended June 30, 2005 from 9.7% for the three months ended
June 30, 2004. This percentage decrease was primarily due to the dollar
decrease in general and administrative expenses.
SIX MONTHS ENDED JUNE 30, 2005 COMPARED TO THE SIX MONTHS ENDED JUNE 30,
2004.
Six Months Ended June 30,
-------------------------
2005 2004
---------- ----------
Oil and gas sales $1,130,446 $1,041,732
Oil and gas production expenses $ 335,254 $ 261,404
Barrels produced 11,110 13,779
Mcf produced 90,715 97,772
Average price/Bbl $ 49.06 $ 35.35
Average price/Mcf $ 6.45 $ 5.67
As shown in the table above, total oil and gas sales increased $88,714
(8.5%) for the six months ended June 30, 2005 as compared to the six
months ended June 30, 2004. Of this increase, approximately $152,000 and
$71,000, respectively, were related to increases in the average prices of
oil and gas sold. These increases were partially offset by decreases of
approximately $94,000 and $40,000, respectively, related to decreases in
volumes of oil and gas sold. Volumes of oil and gas sold decreased 2,669
barrels and 7,057 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 several
wells during late 2004 and early 2005 due to mechanical problems and (ii)
normal declines in production. As of the date of this Quarterly Report,
the shut-in wells have returned to production. The decrease in volumes of
gas sold was primarily due to (i) normal declines in production and (ii)
the shutting-in of one significant well during late 2004 and early 2005
due to mechanical problems. As of the date of this Quarterly Report, the
shut-in well has returned to production.
Oil and gas production expenses (including lease operating expenses and
production taxes) increased $73,850 (28.3%) for the six months ended June
30, 2005 as compared to the six months ended June 30, 2004. This increase
was primarily due to (i) workover expenses incurred on several wells
during the six months ended June 30, 2005, (ii) a positive prior period
production tax adjustment made by the operator on one
-51-
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. These increases were partially offset by a negative
prior period production tax adjustment made by the operator on another
significant well during the six months ended June 30, 2005. As a
percentage of oil and gas sales, these expenses increased to 29.7% for the
six months ended June 30, 2005 from 25.1% for the six months ended June
30, 2004. This percentage increase was primarily due to the dollar
increase in oil and gas production expenses.
Depreciation, depletion, and amortization of oil and gas properties
decreased $59,064 (77.7%) for the six months ended June 30, 2005 as
compared to the six months ended June 30, 2004. This decrease was
primarily due to (i) the abandonment of one significant well during the
six months ended June 30, 2004 following an unsuccessful recompletion
attempt, (ii) the decreases in volumes of oil and gas sold, and (iii) one
significant well being substantially depleted during the six months ended
June 30, 2004. As a percentage of oil and gas sales, this expense
decreased to 1.5% for the six months ended June 30, 2005 from 7.3% for the
six months ended June 30, 2004. This percentage decrease was primarily due
to the dollar decrease in depreciation, depletion, and amortization of oil
and gas properties.
General and administrative expenses increased $1,606 for the six months
ended June 30, 2005 as compared to the six months ended June 30, 2004. As
a percentage of oil and gas sales, these expenses decreased to 8.8% for
the six months ended June 30, 2005 from 9.4% for the six months ended June
30, 2004.
The Limited Partners have received cash distributions through June 30,
2005 totaling $22,429,353 or 162.14% of Limited Partners' capital
contributions.
III-C PARTNERSHIP
THREE MONTHS ENDED JUNE 30, 2005 COMPARED TO THE THREE MONTHS ENDED JUNE
30, 2004.
Three Months Ended June 30,
---------------------------
2005 2004
-------- --------
Oil and gas sales $982,319 $880,384
Oil and gas production expenses $152,545 $198,139
Barrels produced 2,286 2,672
Mcf produced 143,514 121,950
Average price/Bbl $ 50.81 $ 36.69
Average price/Mcf $ 6.04 $ 6.42
As shown in the table above, total oil and gas sales increased $101,935
(11.6%) for the three months ended June
-52-
30, 2005 as compared to the three months ended June 30, 2004. Of this
increase, approximately (i) $138,000 was related to an increase in volumes
of gas sold and (ii) $32,000 was related to an increase in the average
price of oil sold. These increases were partially offset by decreases of
approximately (i) $54,000 related to a decrease in the average price of
gas sold and (ii) $14,000 related to a decrease in volumes of oil sold.
Volumes of oil sold decreased 386 barrels, while volumes of gas sold
increased 21,564 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) production difficulties on one significant well during the three
months ended June 30, 2005. As of the date of this Quarterly Report, the
well with production difficulties is producing at a lower rate than
previously experienced. 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 III-C Partnership becoming over produced past ultimate
reserves thereby increasing gas imbalance payable, (ii) positive prior
period volume adjustments made by the operator on two significant wells
during the three months ended June 30, 2005, and (iii) an increase in
production on one significant well following the successful workover of
that well during 2004. These increases were partially offset by a
substantial decline in production on another significant well following
the workover of that well during mid 2004. The well with a substantial
decline in production during 2005 is not expected to return to its
previously high levels of production.
The average gas price decreased to $6.04 per Mcf for the three months
ended June 30, 2005 from $6.42 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 III-C 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.
Oil and gas production expenses (including lease operating expenses and
production taxes) decreased $45,594 (23.0%) for the three months ended
June 30, 2005 as compared to the three months ended June 30, 2004. This
decrease was primarily due to workover expenses incurred on one
significant well during the three months ended June 30, 2004. This
decrease was partially offset by (i) an increase in production taxes
associated with the increase in oil and gas sales and (ii) workover
expenses incurred on another
-53-
significant well during the three months ended June 30, 2005. As a
percentage of oil and gas sales, these expenses decreased to 15.5% for the
three months ended June 30, 2005 from 22.5% for the three months ended
June 30, 2004. This percentage decrease was primarily due to the dollar
decrease in oil and gas production expenses.
Depreciation, depletion, and amortization of oil and gas properties
decreased $11,514 (21.6%) 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.
This decrease was partially offset by (i) another significant well being
fully depleted during the three months ended June 30, 2005 due to the lack
of remaining reserves and (ii) the increase in volumes of gas sold. As a
percentage of oil and gas sales, this expense decreased to 4.3% for the
three months ended June 30, 2005 from 6.1% for the three months ended June
30, 2004. This percentage decrease was primarily due to the dollar
decrease in depreciation, depletion, and amortization of oil and gas
properties.
General and administrative expenses decreased $15,080 for the three months
ended June 30, 2005 as compared to the three months ended June 30, 2004.
As a percentage of oil and gas sales, these expenses decreased to 6.9% for
the three months ended June 30, 2005 from 9.4% for the three months ended
June 30, 2004. This percentage decrease was primarily due to (i) the
dollar decrease in general and administrative expenses and (ii) the
increase in oil and gas sales.
SIX MONTHS ENDED JUNE 30, 2005 COMPARED TO THE SIX MONTHS ENDED JUNE 30,
2004.
Six Months Ended June 30,
-------------------------
2005 2004
---------- ----------
Oil and gas sales $1,936,824 $1,728,881
Oil and gas production expenses $ 373,697 $ 387,948
Barrels produced 4,755 5,527
Mcf produced 277,720 278,514
Average price/Bbl $ 48.74 $ 34.61
Average price/Mcf $ 6.14 $ 5.52
As shown in the table above, total oil and gas sales increased $207,943
(12.0%) for the six months ended June 30, 2005 as compared to the six
months ended June 30, 2004. Of this increase, approximately $67,000 and
$172,000, respectively, were related to increases in the average prices of
oil and gas sold. These increases were partially offset by decreases of
approximately $27,000 and $4,000, respectively, related to decreases in
volumes of oil and gas sold. Volumes of oil and gas sold decreased 772
barrels and
-54-
794 Mcf, respectively, for the six months ended June 30, 2005 as compared
to the six months ended June 30, 2004. The decrease in volumes of oil sold
was primarily due to (i) normal declines in production and (ii) a positive
prior period volume adjustment made by the operator on one significant
well during the six months ended June 30, 2004. 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 the workover of that well during mid 2004. The well with a
substantial decline in production during 2005 is not expected to return to
its previously high levels of production. These decreases were
substantially 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 III-C Partnership becoming over produced
past ultimate reserves thereby increasing gas imbalance payable, (ii) the
successful completion of a new well during late 2004, and (iii) an
increase in production on another significant well following the
successful workover of that well during 2004.
The average gas price increased to $6.14 per Mcf for the six months ended
June 30, 2005 from $5.52 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 III-C
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.
Oil and gas production expenses (including lease operating expenses and
production taxes) decreased $14,251 (3.7%) for the six months ended June
30, 2005 as compared to the six months ended June 30, 2004. This decrease
was primarily due to workover expenses incurred on one significant well
during the six months ended June 30, 2004. This decrease was partially
offset by (i) workover expenses incurred on several other wells during the
six months ended June 30, 2005 and (ii) an increase in production taxes
associated with the increase in oil and gas sales. As a percentage of oil
and gas sales, these expenses decreased to 19.3% for the six months ended
June 30, 2005 from 22.4% for the six months ended June 30, 2004. This
percentage decrease was primarily due to the increase in oil and gas
sales.
-55-
Depreciation, depletion, and amortization of oil and gas properties
decreased $16,703 (15.1%) 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 (i) another significant well being fully
depleted during the six months ended June 30, 2005 due to the lack of
remaining reserves and (ii) an increase in depletable oil and gas
properties during 2005 primarily due to the drilling of two developmental
wells. As a percentage of oil and gas sales, this expense decreased to
4.8% for the six months ended June 30, 2005 from 6.4% for the six months
ended June 30, 2004. This percentage decrease was primarily due to (i) the
dollar decrease in depreciation, depletion and amortization of oil and gas
properties and (ii) 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 oil and gas
sales, these expenses decreased to 8.1% for the six months ended June 30,
2005 from 9.1% for the six months ended June 30, 2004. This percentage
decrease was primarily due to the increase in oil and gas sales.
The Limited Partners have received cash distributions through June 30,
2005 totaling $30,223,795 or 123.60% of Limited Partners' capital
contributions.
III-D PARTNERSHIP
THREE MONTHS ENDED JUNE 30, 2005 COMPARED TO THE THREE MONTHS ENDED JUNE
30, 2004.
Three Months Ended June 30,
---------------------------
2005 2004
-------- --------
Oil and gas sales $557,045 $489,725
Oil and gas production expenses $ 89,224 $ 74,041
Barrels produced 2,101 2,557
Mcf produced 75,890 59,892
Average price/Bbl $ 49.88 $ 35.41
Average price/Mcf $ 5.96 $ 6.67
As shown in the table above, total oil and gas sales increased $67,320
(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) $107,000
was related to an increase in volumes of gas sold and (ii) $30,000 was
related to an increase in the average price of oil sold. These increases
were partially offset by decreases of approximately (i) $54,000 related to
a decrease in the average price of gas sold and (ii) $16,000 related to a
decrease in volumes of oil sold. Volumes of oil sold
-56-
decreased 456 barrels, while volumes of gas sold increased 15,998 Mcf 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) production difficulties on one significant
well during the three months ended June 30, 2005. As of the date of this
Quarterly Report, the well with production difficulties is producing at a
lower rate than previously experienced. 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 III-D Partnership becoming over produced
past ultimate reserves thereby increasing gas imbalance payable, (ii)
positive prior period volume adjustments made by the operator on several
wells during the three months ended June 30, 2005, and (iii) an increase
in production on one significant well following the successful workover of
that well during late 2004. These increases were partially offset by a
substantial decline in production on another significant well following
the workover of that well during mid 2004. The well with a substantial
decline in production during 2005 is not expected to return to its
previously high levels of production.
The average gas price decreased to $5.96 per Mcf for the three months
ended June 30, 2005 from $6.67 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 III-D 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.
Oil and gas production expenses (including lease operating expenses and
production taxes) increased $15,183 (20.5%) for the three months ended
June 30, 2005 as compared to the three months ended June 30, 2004. This
increase was primarily due to (i) workover expenses incurred on two
significant wells during the three months ended June 30, 2005 and (ii) an
increase in production taxes associated with the increase in oil and gas
sales. As a percentage of oil and gas sales, these expenses increased to
16.0% for the three months ended June 30, 2005 from 15.1% for the three
months ended June 30, 2004.
-57-
Depreciation, depletion, and amortization of oil and gas properties
decreased $14,575 (38.9%) 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) two significant wells being fully depleted during the
three months ended June 30, 2004 due to the lack of remaining reserves and
(ii) upward revisions in the estimates of remaining gas reserves on one
significant well since June 30, 2004. These decreases were partially
offset by an increase in depletable oil and gas properties during 2005
primarily due to the recompletion of another significant well. As a
percentage of oil and gas sales, these expenses decreased to 4.1% for the
three months ended June 30, 2005 from 7.6% for the three months ended June
30, 2004. This percentage decrease was primarily due to the dollar
decrease in depreciation, depletion, and amortization of oil and gas
properties.
General and administrative expenses decreased $14,860 for the three months
ended June 30, 2005 as compared to the three months ended June 30, 2004.
As a percentage of oil and gas sales, these expenses decreased to 6.7% for
the three months ended June 30, 2005 from 10.7% for the three months ended
June 30, 2004. This percentage decrease was primarily due to the dollar
decrease in general and administrative expenses.
SIX MONTHS ENDED JUNE 30, 2005 COMPARED TO THE SIX MONTHS ENDED JUNE 30,
2004.
Six Months Ended June 30,
--------------------------
2005 2004
---------- --------
Oil and gas sales $1,092,106 $993,642
Oil and gas production expenses $ 213,947 $189,215
Barrels produced 4,500 4,830
Mcf produced 152,605 149,476
Average price/Bbl $ 47.61 $ 33.82
Average price/Mcf $ 5.75 $ 5.55
As shown in the table above, total oil and gas sales increased $98,464
(9.9%) for the six months ended June 30, 2005 as compared to the six
months ended June 30, 2004. Of this increase, approximately (i) $62,000
and $30,000, respectively, were related to increases in the average prices
of oil and gas sold and (ii) $17,000 was related to an increase in volumes
of gas sold. Volumes of oil sold decreased 330 barrels, while volumes of
gas sold increased 3,129 Mcf for the six months ended June 30, 2005 as
compared to the six 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 six months ended June 30, 2004 on one
significant well resulting in the III-D Partnership becoming over produced
past ultimate reserves thereby increasing gas imbalance payable, (ii) an
increase in production on one significant
-58-
well following the workover of that well during late 2004, and (iii) the
successful completion of one new well during late 2004. These increases
were partially offset by (i) normal declines in production and (ii) a
substantial decline in production on one significant well following the
workover of that well during mid 2004. The well with a substantial decline
in production during 2005 is not expected to return to its previously high
levels of production.
The average gas price increased to $5.75 per Mcf for the six months ended
June 30, 2005 from $5.55 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 III-D
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.
Oil and gas production expenses (including lease operating expenses and
production taxes) increased $24,732 (13.1%) 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) workover expenses incurred on two significant
wells during the six months ended June 30, 2005 and (ii) an increase in
production taxes associated with the increase in oil and gas sales. As a
percentage of oil and gas sales, these expenses increased to 19.6% for the
six months ended June 30, 2005 from 19.0% for the six months ended June
30, 2004.
Depreciation, depletion, and amortization of oil and gas properties
decreased $20,974 (34.5%) 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) two significant wells being fully depleted during the
six months ended June 30, 2004 due to the lack of remaining reserves and
(ii) upward revisions in the estimates of remaining gas reserves on one
significant well since June 30, 2004. These decreases were partially
offset by an increase in depletable oil and gas properties during 2005
primarily due to the recompletion of one significant well. As a percentage
of oil and gas sales, these expenses decreased to 3.7% for the six months
ended June 30, 2005 from 6.1% for the six months ended June 30, 2004. This
percentage decrease was primarily due to the dollar decrease in
depreciation, depletion, and amortization of oil and gas properties.
General and administrative expenses increased $1,318 for the six months
ended June 30, 2005 as compared to the six months ended June 30, 2004. As
a percentage of oil and gas sales, these expenses decreased to 8.7% for
the six months ended June 30, 2005 from 9.5% for the six months ended June
30, 2004.
-59-
The Limited Partners have received cash distributions through June 30,
2005 totaling $16,905,669 or 129.04% of Limited Partners' capital
contributions.
III-E PARTNERSHIP
THREE MONTHS ENDED JUNE 30, 2005 COMPARED TO THE THREE MONTHS ENDED JUNE
30, 2004.
Three Months Ended June 30,
---------------------------
2005 2004
---------- ----------
Oil and gas sales $1,353,943 $1,131,869
Oil and gas production expenses $ 307,948 $ 297,259
Barrels produced 6,195 6,329
Mcf produced 172,213 177,447
Average price/Bbl $ 47.24 $ 32.84
Average price/Mcf $ 6.16 $ 5.21
As shown in the table above, total oil and gas sales increased $222,074
(19.6%) for the three months ended June 30, 2005 as compared to the three
months ended June 30, 2004. Of this increase, approximately $89,000 and
$165,000, respectively, were related to increases in the average prices of
oil and gas sold. Volumes of oil and gas sold decreased 134 barrels and
5,234 Mcf, respectively, for the three months ended June 30, 2005 as
compared to the three months ended June 30, 2004.
Oil and gas production expenses (including lease operating expenses and
production taxes) increased $10,689 (3.6%) for the three months ended June
30, 2005 as compared to the three months ended June 30, 2004. As a
percentage of oil and gas sales, these expenses decreased to 22.7% for the
three months ended June 30, 2005 from 26.3% for the three months ended
June 30, 2004. This percentage decrease was primarily due to the increase
in oil and gas sales.
Depreciation, depletion, and amortization of oil and gas properties
increased $7,477 (21.7%) 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 oil and gas properties during
2005 primarily due to the recompletion of one significant well. As a
percentage of oil and gas sales, this expense increased to 3.1% for the
three months ended June 30, 2005 from 3.0% for the three months ended June
30, 2004.
-60-
General and administrative expenses decreased $16,221 for the three months
ended June 30, 2005 as compared to the three months ended June 30, 2004.
As a percentage of oil and gas sales, these expenses decreased to 8.6% for
the three months ended June 30, 2005 from 11.8% for the three months ended
June 30, 2004. This percentage decrease was primarily due to (i) the
increase in oil and gas sales and (ii) the dollar decrease in general and
administrative expenses.
SIX MONTHS ENDED JUNE 30, 2005 COMPARED TO THE SIX MONTHS ENDED JUNE 30,
2004.
Six Months Ended June 30,
---------------------------
2005 2004
---------- ----------
Oil and gas sales $2,570,627 $2,267,961
Oil and gas production expenses $ 666,916 $ 608,450
Barrels produced 12,380 13,762
Mcf produced 344,436 358,608
Average price/Bbl $ 45.37 $ 31.68
Average price/Mcf $ 5.83 $ 5.11
As shown in the table above, total oil and gas sales increased $302,666
(13.3%) for the six months ended June 30, 2005 as compared to the six
months ended June 30, 2004. Of this increase, approximately $170,000 and
$249,000, respectively, were related to increases in the average prices of
oil and gas sold. These increases were partially offset by decreases of
approximately $44,000 and $72,000, respectively, related to decreases in
volumes of oil and gas sold. Volumes of oil and gas sold decreased 1,382
barrels and 14,172 Mcf, respectively, for the six months ended June 30,
2005 as compared to the six months ended June 30, 2004. The decreases in
volumes of oil and gas sold were primarily due to normal declines in
production.
Oil and gas production expenses (including lease operating expenses and
production taxes) increased $58,466 (9.6%) for the six months ended June
30, 2005 as compared to the six months ended June 30, 2004. As a
percentage of oil and gas sales, these expenses decreased to 25.9% for the
six months ended June 30, 2005 from 26.8% for the six months ended June
30, 2004.
Depreciation, depletion, and amortization of oil and gas properties
increased $16,475 (23.8%) 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 oil and gas properties
during 2005 primarily due to the recompletion of two significant wells and
(ii) the receipt of equipment credits on one fully depleted well during
the six months ended June 30, 2004. These increases were partially offset
by the decreases in volumes of oil and gas sold. As a percentage of oil
and gas
-61-
sales, this expense increased to 3.3% for the six months ended June 30,
2005 from 3.1% for the six months ended June 30, 2004.
General and administrative expenses remained relatively constant for the
six months ended June 30, 2005 and 2004. As a percentage of oil and gas
sales, these expenses decreased to 9.9% for the six months ended June 30,
2005 from 11.3% for the six months ended June 30, 2004. This percentage
decrease was primarily due to the increase in oil and gas sales.
The Limited Partners have received cash distributions through June 30,
2005 totaling $50,498,016 or 120.73% of Limited Partners' capital
contributions.
III-F PARTNERSHIP
THREE MONTHS ENDED JUNE 30, 2005 COMPARED TO THE THREE MONTHS ENDED JUNE
30, 2004.
Three Months Ended June 30,
---------------------------
2005 2004
-------- --------
Oil and gas sales $811,137 $708,950
Oil and gas production expenses $163,071 $170,773
Barrels produced 4,989 4,860
Mcf produced 89,254 103,452
Average price/Bbl $ 52.40 $ 36.80
Average price/Mcf $ 6.16 $ 5.12
As shown in the table above, total oil and gas sales increased $102,187
(14.4%) for the three months ended June 30, 2005 as compared to the three
months ended June 30, 2004. Of this increase, approximately $78,000 and
$92,000, respectively, were related to increases in the average prices of
oil and gas sold. These increases were partially offset by a decrease of
approximately $73,000 related to a decrease in volumes of gas sold.
Volumes of oil sold increased 129 barrels, while volumes of gas sold
decreased 14,198 Mcf for the three months ended June 30, 2005 as compared
to the three months ended June 30, 2004. The decrease in volumes of gas
sold was primarily due to (i) normal declines in production and (ii)
positive prior period volume adjustments made by the operators on several
wells during the three months ended June 30, 2004.
Oil and gas production expenses (including lease operating expenses and
production taxes) decreased $7,702 (4.5%) for the three months ended June
30, 2005 as compared to the three months ended June 30, 2004. As a
percentage of oil and gas sales, these expenses decreased to 20.1% for the
three months ended June 30, 2005 from 24.1% for the three months ended
June 30, 2004. This percentage decrease was primarily due to the increase
in oil and gas sales.
-62-
Depreciation, depletion, and amortization of oil and gas properties
increased $9,228 (29.7%) 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) an increase in depletable oil and gas properties
during 2005 primarily due to the recompletion of one significant well and
(ii) downward revisions in the estimates of remaining gas reserves since
June 30, 2004. These increases were partially offset by the decrease in
volumes of gas sold. As a percentage of oil and gas sales, this expense
increased to 5.0% for the three months ended June 30, 2005 from 4.4% for
the three months ended June 30, 2004. This percentage increase was
primarily due to the dollar increase in depreciation, depletion, and
amortization of oil and gas properties.
General and administrative expenses decreased $14,985 for the three months
ended June 30, 2005 as compared to the three months ended June 30, 2004.
As a percentage of oil and gas sales, these expenses decreased to 7.7% for
the three months ended June 30, 2005 from 10.9% for the three months ended
June 30, 2004. This percentage decrease was primarily due to (i) the
dollar decrease in general and administrative expenses and (ii) the
increase in oil and gas sales
SIX MONTHS ENDED JUNE 30, 2005 COMPARED TO THE SIX MONTHS ENDED JUNE 30,
2004.
Six Months Ended June 30,
-------------------------
2005 2004
---------- ----------
Oil and gas sales $1,631,089 $1,354,515
Oil and gas production expenses $ 370,921 $ 349,756
Barrels produced 10,378 9,787
Mcf produced 189,504 202,087
Average price/Bbl $ 49.42 $ 34.46
Average price/Mcf $ 5.90 $ 5.03
As shown in the table above, total oil and gas sales increased $276,574
(20.4%) for the six months ended June 30, 2005 as compared to the six
months ended June 30, 2004. Of this increase, approximately $155,000 and
$164,000, respectively, were related to increases in the average prices of
oil and gas sold. These increases were partially offset by a decrease of
approximately $63,000 related to a decrease in volumes of gas sold.
Volumes of oil sold increased 591 barrels, while volumes of gas sold
decreased 12,583 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 gas sold was primarily due to normal declines in production.
-63-
Oil and gas production expenses (including lease operating expenses and
production taxes) increased $21,165 (6.1%) for the six months ended June
30, 2005 as compared to the six months ended June 30, 2004. As a
percentage of oil and gas sales, these expenses decreased to 22.7% for the
six months ended June 30, 2005 from 25.8% for the six months ended June
30, 2004. This percentage decrease was primarily due to the increase in
oil and gas sales.
Depreciation, depletion, and amortization of oil and gas properties
increased $19,407 (33.5%) for the six months ended June 30, 2005 as
compared to the six months ended June 30, 2004. This increase was
primarily due to (i) an increase in depletable oil and gas properties
during 2005 primarily due to the recompletion of two significant wells,
(ii) the receipt of equipment credits on one fully depleted well during
the six months ended June 30 2004, and (iii) downward revisions in the
estimates of remaining gas reserves since June 30, 2004. As a percentage
of oil and gas sales, this expense increased to 4.7% for the six months
ended June 30, 2005 from 4.3% for the six months ended June 30, 2004.
General and administrative expenses remained relatively constant for the
six months ended June 30, 2005 and 2004. As a percentage of oil and gas
sales, these expenses decreased to 8.9% for the six months ended June 30,
2005 from 10.7% for the six months ended June 30, 2004. This percentage
decrease was primarily due to the increase in oil and gas sales.
The Limited Partners have received cash distributions through June 30,
2005 totaling $20,660,904 or 93.28% of Limited Partners' capital
contributions.
-64-
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.
-65-
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
A lawsuit styled Robert W. Scott, Individually and as Managing Member of
R.W. Scott Investments, LLC v. Samson Resources Company, Case No.
C-01-385, was filed in the District Court of Sweetwater County, Wyoming on
June 29, 2001. The lawsuit seeks class action certification and alleges
that Samson deducted from its payments to royalty and overriding royalty
owners certain charges which were improper under the Wyoming royalty
payment statutes. A number of these royalty and overriding royalty
payments burdened the interests of the Partnerships. In February 2003,
Samson made a supplemental payment to the royalty and overriding royalty
interest owners who were potential class members of amounts which were
then thought to have been improperly deducted plus statutory interest
thereon. The applicable portions of these refunds were recouped from the
Partnerships in the first quarter of 2003 as follows:
Partnership Amount
------------ ----------
III-A $ 5,380
III-B 3,548
III-C -
III-D -
III-E 122,289
III-F 102,690
The lawsuit also alleges that Samson's check stubs did not fully comply
with the Wyoming Royalty Payment Act. Samson intends to vigorously defend
this claim. On May 13, 2005 the trial court certified this lawsuit as a
class action and denied Samson's motion for summary judgment. On June 15,
2005 the Wyoming Supreme Court denied Samson's request for it to review
these decisions.
ITEM 6. EXHIBITS
31.1 Certification by Dennis R. Neill required by Rule
13a-14(a)/15d-14(a) for the III-A Partnership.
31.2 Certification by Craig D. Loseke required by Rule
13a-14(a)/15d-14(a) for the III-A Partnership.
31.3 Certification by Dennis R. Neill required by Rule
13a-14(a)/15d-14(a) for the III-B Partnership.
31.4 Certification by Craig D. Loseke required by Rule
13a-14(a)/15d-14(a) for the III-B Partnership.
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31.5 Certification by Dennis R. Neill required by Rule
13a-14(a)/15d-14(a) for the III-C Partnership.
31.6 Certification by Craig D. Loseke required by Rule
13a-14(a)/15d-14(a) for the III-C Partnership.
31.7 Certification by Dennis R. Neill required by Rule
13a-14(a)/15d-14(a) for the III-D Partnership.
31.8 Certification by Craig D. Loseke required by Rule
13a-14(a)/15d-14(a) for the III-D Partnership.
31.9 Certification by Dennis R. Neill required by Rule
13a-14(a)/15d-14(a) for the III-E Partnership.
31.10 Certification by Craig D. Loseke required by Rule
13a-14(a)/15d-14(a) for the III-E Partnership.
31.11 Certification by Dennis R. Neill required by Rule
13a-14(a)/15d-14(a) for the III-F Partnership.
31.12 Certification by Craig D. Loseke required by Rule
13a-14(a)/15d-14(a) for the III-F Partnership.
32.1 Certification pursuant to 18 U.S.C. Section 1350, as
adopted pursuant to Section 906 of the Sarbanes-Oxley
Act of 2002 for the III-A Partnership.
32.2 Certification pursuant to 18 U.S.C. Section 1350, as
adopted pursuant to Section 906 of the Sarbanes-Oxley
Act of 2002 for the III-B Partnership.
32.3 Certification pursuant to 18 U.S.C. Section 1350, as
adopted pursuant to Section 906 of the Sarbanes-Oxley
Act of 2002 for the III-C Partnership.
32.4 Certification pursuant to 18 U.S.C. Section 1350, as
adopted pursuant to Section 906 of the Sarbanes-Oxley
Act of 2002 for the III-D Partnership.
32.5 Certification pursuant to 18 U.S.C. Section 1350, as
adopted pursuant to Section 906 of the Sarbanes-Oxley
Act of 2002 for the III-E Partnership.
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32.6 Certification pursuant to 18 U.S.C. Section 1350, as
adopted pursuant to Section 906 of the Sarbanes-Oxley
Act of 2002 for the III-F Partnership.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-A
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-B
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-C
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-D
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-E
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-F
(Registrant)
BY: GEODYNE RESOURCES, INC.
General Partner
Date: August 12, 2005 By: /s/Dennis R. Neill
--------------------------------
(Signature)
Dennis R. Neill
President
Date: August 12, 2005 By: /s/Craig D. Loseke
--------------------------------
(Signature)
Craig D. Loseke
Chief Accounting Officer
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INDEX TO EXHIBITS
-----------------
Exh.
No. Exhibit
- ---- -------
31.1 Certification by Dennis R. Neill required by Rule
13a-14(a)/15d-14(a) for the Geodyne Energy Income Limited
Partnership III-A.
31.2 Certification by Craig D. Loseke required by Rule
13a-14(a)/15d-14(a) for the Geodyne Energy Income Limited
Partnership III-A.
31.3 Certification Dennis R. Neill required by Rule
13a-14(a)/15d-14(a) for the Geodyne Energy Income Limited
Partnership III-B.
31.4 Certification Craig D. Loseke required by Rule
13a-14(a)/15d-14(a) for the Geodyne Energy Income Limited
Partnership III-B.
31.5 Certification by Dennis R. Neill required by Rule
13a-14(a)/15d-14(a) for the Geodyne Energy Income Limited
Partnership III-C.
31.6 Certification by Craig D. Loseke required by Rule
13a-14(a)/15d-14(a) for the Geodyne Energy Income Limited
Partnership III-C.
31.7 Certification by Dennis R. Neill required by Rule
13a-14(a)/15d-14(a) for the Geodyne Energy Income Limited
Partnership III-D.
31.8 Certification by Craig D. Loseke required by Rule
13a-14(a)/15d-14(a) for the Geodyne Energy Income Limited
Partnership III-D.
31.9 Certification by Dennis R. Neill required by Rule
13a-14(a)/15d-14(a) for the Geodyne Energy Income Limited
Partnership III-E.
31.10 Certification by Craig D. Loseke required by Rule
13a-14(a)/15d-14(a) for the Geodyne Energy Income Limited
Partnership III-E.
31.11 Certification by Dennis R. Neill required by Rule
13a-14(a)/15d-14(a) for the Geodyne Energy Income Limited
Partnership III-F.
31.12 Certification by Craig D. Loseke required by Rule
13a-14(a)/15d-14(a) for the Geodyne Energy Income Limited
Partnership III-F.
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32.1 Certification pursuant to 18 U.S.C. Section 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 for the
Geodyne Energy Income Limited Partnership III-A.
32.2 Certification pursuant to 18 U.S.C. Section 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 for the
Geodyne Energy Income Limited Partnership III-B.
32.3 Certification pursuant to 18 U.S.C. Section 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 for the
Geodyne Energy Income Limited Partnership III-C.
32.4 Certification pursuant to 18 U.S.C. Section 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 for the
Geodyne Energy Income Limited Partnership III-D.
32.5 Certification pursuant to 18 U.S.C. Section 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 for the
Geodyne Energy Income Limited Partnership III-E.
32.6 Certification pursuant to 18 U.S.C. Section 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 for the
Geodyne Energy Income Limited Partnership III-F.