SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarter ended September 30, 2005
Commission File Number:
P-1: 0-17800 P-4: 0-18308 P-6: 0-18937
P-3: 0-18306 P-5: 0-18637
GEODYNE INSTITUTIONAL/PENSION ENERGY INCOME P-1 LIMITED PARTNERSHIP
GEODYNE INSTITUTIONAL/PENSION ENERGY INCOME LIMITED PARTNERSHIP P-3
GEODYNE INSTITUTIONAL/PENSION ENERGY INCOME LIMITED PARTNERSHIP P-4
GEODYNE INSTITUTIONAL/PENSION ENERGY INCOME LIMITED PARTNERSHIP P-5
GEODYNE INSTITUTIONAL/PENSION ENERGY INCOME LIMITED PARTNERSHIP P-6
--------------------------------------------------------------------
(Exact Name of Registrant as specified in its Articles)
P-1 73-1330245
P-3 73-1336573
P-1: Texas P-4 73-1341929
P-3 through P-6: P-5 73-1353774
Oklahoma P-6 73-1357375
---------------------------- -------------------------------
(State or other jurisdiction (I.R.S. Employer Identification
of incorporation or Number)
organization)
Two West Second Street, Tulsa, Oklahoma 74103
------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code:(918) 583-1791
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes X No
------ ------
Indicate by check mark whether the registrant is an accelerated filer (as
defined in Rule 12b-2 of the Exchange Act).
Yes No X
------ ------
Indicate by check mark whether the registrant is a shell company (as defined in
Rule 12b-2 of the Exchange Act).
Yes No X
------ ------
-1-
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
GEODYNE INSTITUTIONAL/PENSION ENERGY INCOME P-1 LIMITED PARTNERSHIP
GEODYNE NPI PARTNERSHIP P-1
COMBINED BALANCE SHEETS
(Unaudited)
ASSETS
September 30, December 31,
2005 2004
------------- ------------
CURRENT ASSETS:
Cash and cash equivalents $ 506,985 $ 448,368
Accounts receivable:
Net Profits 380,598 77,602
---------- ----------
Total current assets $ 887,583 $ 525,970
NET PROFITS INTERESTS, net, utilizing
the successful efforts method 708,864 693,128
---------- ----------
$1,596,447 $1,219,098
========== ==========
PARTNERS' CAPITAL (DEFICIT)
PARTNERS' CAPITAL (DEFICIT):
General Partner ($ 27,002) ($ 64,846)
Limited Partners, issued and
outstanding, 108,074 units 1,623,449 1,283,944
---------- ----------
Total Partners' capital $1,596,447 $1,219,098
========== ==========
The accompanying condensed notes are an integral part of
these combined financial statements.
-2-
GEODYNE INSTITUTIONAL/PENSION ENERGY INCOME P-1 LIMITED PARTNERSHIP
GEODYNE NPI PARTNERSHIP P-1
COMBINED STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2005 AND 2004
(Unaudited)
2005 2004
-------- --------
REVENUES:
Net Profits $625,321 $389,691
Interest income 2,427 731
Gain on sale of Net Profits
Interests - 2,110
-------- --------
$627,748 $392,532
COSTS AND EXPENSES:
Depletion of Net Profits
Interests $ 25,541 $ 20,536
General and administrative
(Note 2) 30,699 30,644
-------- --------
$ 56,240 $ 51,180
-------- --------
NET INCOME $571,508 $341,352
======== ========
GENERAL PARTNER - NET INCOME $ 59,207 $ 35,798
======== ========
LIMITED PARTNERS - NET INCOME $512,301 $305,554
======== ========
NET INCOME per unit $ 4.74 $ 2.83
======== ========
UNITS OUTSTANDING 108,074 108,074
======== ========
The accompanying condensed notes are an integral part of
these combined financial statements.
-3-
GEODYNE INSTITUTIONAL/PENSION ENERGY INCOME P-1 LIMITED PARTNERSHIP
GEODYNE NPI PARTNERSHIP P-1
COMBINED STATEMENTS OF OPERATIONS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2005 AND 2004
(Unaudited)
2005 2004
---------- ----------
REVENUES:
Net Profits $1,614,244 $1,196,168
Interest income 5,859 1,761
Gain on sale of Net Profits
Interests - 17,563
---------- ----------
$1,620,103 $1,215,492
COSTS AND EXPENSES:
Depletion of Net Profits
Interests $ 58,758 $ 52,449
General and administrative
(Note 2) 113,337 112,272
---------- ----------
$ 172,095 $ 164,721
---------- ----------
NET INCOME $1,448,008 $1,050,771
========== ==========
GENERAL PARTNER - NET INCOME $ 149,503 $ 108,162
========== ==========
LIMITED PARTNERS - NET INCOME $1,298,505 $ 942,609
========== ==========
NET INCOME per unit $ 12.01 $ 8.72
========== ==========
UNITS OUTSTANDING 108,074 108,074
========== ==========
The accompanying condensed notes are an integral part of
these combined financial statements.
-4-
GEODYNE INSTITUTIONAL/PENSION ENERGY INCOME P-1 LIMITED PARTNERSHIP
GEODYNE NPI PARTNERSHIP P-1
COMBINED STATEMENTS OF CASH FLOWS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2005 AND 2004
(Unaudited)
2005 2004
------------ ------------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $1,448,008 $1,050,771
Adjustments to reconcile net income
to net cash provided by operating
activities:
Depletion of Net Profits
Interests 58,758 52,449
Gain on sale of Net Profits
Interests - ( 17,563)
Increase in accounts receivable -
Net Profits ( 361,301) ( 43,786)
---------- ----------
Net cash provided by operating
activities $1,145,465 $1,041,871
---------- ----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures ($ 16,189) ($ 10,342)
Proceeds from the sale of Net
Profits Interests - 15,792
---------- ----------
Net cash provided (used) by investing
activities ($ 16,189) $ 5,450
---------- ----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Cash distributions ($1,070,659) ($ 990,573)
---------- ----------
Net cash used by financing
activities ($1,070,659) ($ 990,573)
---------- ----------
NET INCREASE IN CASH AND CASH
EQUIVALENTS $ 58,617 $ 56,748
CASH AND CASH EQUIVALENTS AT
BEGINNING OF PERIOD 448,368 399,580
---------- ----------
CASH AND CASH EQUIVALENTS AT
END OF PERIOD $ 506,985 $ 456,328
========== ==========
The accompanying condensed notes are an integral part of
these combined financial statements.
-5-
GEODYNE INSTITUTIONAL/PENSION ENERGY INCOME LIMITED PARTNERSHIP P-3
GEODYNE NPI PARTNERSHIP P-3
COMBINED BALANCE SHEETS
(Unaudited)
ASSETS
September 30, December 31,
2005 2004
------------- ------------
CURRENT ASSETS:
Cash and cash equivalents $ 744,748 $ 633,196
Accounts receivable:
Net Profits 513,922 130,416
---------- ----------
Total current assets $1,258,670 $ 763,612
NET PROFITS INTERESTS, net, utilizing
the successful efforts method 1,097,653 1,071,849
---------- ----------
$2,356,323 $1,835,461
========== ==========
PARTNERS' CAPITAL (DEFICIT)
PARTNERS' CAPITAL (DEFICIT):
General Partner ($ 2,808) ($ 53,429)
Limited Partners, issued and
outstanding, 169,637 units 2,359,131 1,888,890
---------- ----------
Total Partners' capital $2,356,323 $1,835,461
========== ==========
The accompanying condensed notes are an integral part of
these combined financial statements.
-6-
GEODYNE INSTITUTIONAL/PENSION ENERGY INCOME LIMITED PARTNERSHIP P-3
GEODYNE NPI PARTNERSHIP P-3
COMBINED STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2005 AND 2004
(Unaudited)
2005 2004
-------- --------
REVENUES:
Net Profits $891,162 $564,291
Interest income 3,709 1,083
Gain on sale of Net Profits
Interests - 2,658
-------- --------
$894,871 $568,032
COSTS AND EXPENSES:
Depletion of Net Profits
Interests $ 43,514 $ 99,511
General and administrative
(Note 2) 47,433 47,291
-------- --------
$ 90,947 $146,802
-------- --------
NET INCOME $803,924 $421,230
======== ========
GENERAL PARTNER - NET INCOME $ 83,938 $ 50,829
======== ========
LIMITED PARTNERS - NET INCOME $719,986 $370,401
======== ========
NET INCOME per unit $ 4.25 $ 2.19
======== ========
UNITS OUTSTANDING 169,637 169,637
======== ========
The accompanying condensed notes are an integral part of
these combined financial statements.
-7-
GEODYNE INSTITUTIONAL/PENSION ENERGY INCOME LIMITED PARTNERSHIP P-3
GEODYNE NPI PARTNERSHIP P-3
COMBINED STATEMENTS OF OPERATIONS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2005 AND 2004
(Unaudited)
2005 2004
---------- ----------
REVENUES:
Net Profits $2,316,696 $1,747,557
Interest income 8,828 2,690
Gain on sale of Net Profits
Interests - 22,514
---------- ----------
$2,325,524 $1,772,761
COSTS AND EXPENSES:
Depletion of Net Profits
Interests $ 95,062 $ 148,113
General and administrative
(Note 2) 163,891 163,418
---------- ----------
$ 258,953 $ 311,531
---------- ----------
NET INCOME $2,066,571 $1,461,230
========== ==========
GENERAL PARTNER - NET INCOME $ 214,330 $ 157,346
========== ==========
LIMITED PARTNERS - NET INCOME $1,852,241 $1,303,884
========== ==========
NET INCOME per unit $ 10.92 $ 7.69
========== ==========
UNITS OUTSTANDING 169,637 169,637
========== ==========
The accompanying condensed notes are an integral part of
these combined financial statements.
-8-
GEODYNE INSTITUTIONAL/PENSION ENERGY INCOME LIMITED PARTNERSHIP P-3
GEODYNE NPI PARTNERSHIP P-3
COMBINED STATEMENTS OF CASH FLOWS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2005 AND 2004
(Unaudited)
2005 2004
------------ ------------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $2,066,571 $1,461,230
Adjustments to reconcile net income
to net cash provided by operating
activities:
Depletion of Net Profits
Interests 95,062 148,113
Gain on sale of Net Profits
Interests - ( 22,514)
Increase in accounts receivable -
Net Profits ( 479,795) ( 63,800)
---------- ----------
Net cash provided by operating
activities $1,681,838 $1,523,029
---------- ----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures ($ 24,577) ($ 31,066)
Proceeds from the sale of Net
Profits Interests - 20,324
---------- ----------
Net cash used by investing
activities ($ 24,577) ($ 10,742)
---------- ----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Cash distributions ($1,545,709) ($1,419,579)
---------- ----------
Net cash used by financing
activities ($1,545,709) ($1,419,579)
---------- ----------
NET INCREASE IN CASH AND
CASH EQUIVALENTS $ 111,552 $ 92,708
CASH AND CASH EQUIVALENTS AT
BEGINNING OF PERIOD 633,196 581,527
---------- ----------
CASH AND CASH EQUIVALENTS AT
END OF PERIOD $ 744,748 $ 674,235
========== ==========
The accompanying condensed notes are an integral part of
these combined financial statements.
-9-
GEODYNE INSTITUTIONAL/PENSION ENERGY INCOME LIMITED PARTNERSHIP P-4
GEODYNE NPI PARTNERSHIP P-4
COMBINED BALANCE SHEETS
(Unaudited)
ASSETS
September 30, December 31,
2005 2004
------------ ------------
CURRENT ASSETS:
Cash and cash equivalents $ 502,531 $ 510,213
Accounts receivable:
Net Profits 272,432 281,672
---------- ----------
Total current assets $ 774,963 $ 791,885
NET PROFITS INTERESTS, net, utilizing
the successful efforts method 408,177 394,957
---------- ----------
$1,183,140 $1,186,842
========== ==========
PARTNERS' CAPITAL (DEFICIT)
PARTNERS' CAPITAL (DEFICIT):
General Partner ($ 54,520) ($ 57,646)
Limited Partners, issued and
outstanding, 126,306 units 1,237,660 1,244,488
---------- ----------
Total Partners' capital $1,183,140 $1,186,842
========== ==========
The accompanying condensed notes are an integral part of
these combined financial statements.
-10-
GEODYNE INSTITUTIONAL/PENSION ENERGY INCOME LIMITED PARTNERSHIP P-4
GEODYNE NPI PARTNERSHIP P-4
COMBINED STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2005 AND 2004
(Unaudited)
2005 2004
-------- --------
REVENUES:
Net Profits $459,079 $415,595
Interest income 2,506 727
-------- --------
$461,585 $416,322
COSTS AND EXPENSES:
Depletion of Net Profits
Interests $ 28,857 $ 12,617
General and administrative
(Note 2) 35,579 35,469
-------- --------
$ 64,436 $ 48,086
-------- --------
NET INCOME $397,149 $368,236
======== ========
GENERAL PARTNER - NET INCOME $ 42,061 $ 37,887
======== ========
LIMITED PARTNERS - NET INCOME $355,088 $330,349
======== ========
NET INCOME per unit $ 2.81 $ 2.62
======== ========
UNITS OUTSTANDING 126,306 126,306
======== ========
The accompanying condensed notes are an integral part of
these combined financial statements.
-11-
GEODYNE INSTITUTIONAL/PENSION ENERGY INCOME LIMITED PARTNERSHIP P-4
GEODYNE NPI PARTNERSHIP P-4
COMBINED STATEMENTS OF OPERATIONS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2005 AND 2004
(Unaudited)
2005 2004
---------- -----------
REVENUES:
Net Profits $1,250,356 $1,254,598
Interest income 6,366 1,825
Gain on sale of Net Profits
Interests - 962
---------- ----------
$1,256,722 $1,257,385
COSTS AND EXPENSES:
Depletion of Net Profits
Interests $ 51,622 $ 71,829
General and administrative
(Note 2) 128,232 126,379
---------- ----------
$ 179,854 $ 198,208
---------- ----------
NET INCOME $1,076,868 $1,059,177
========== ==========
GENERAL PARTNER - NET INCOME $ 111,696 $ 112,200
========== ==========
LIMITED PARTNERS - NET INCOME $ 965,172 $ 946,977
========== ==========
NET INCOME per unit $ 7.64 $ 7.50
========== ==========
UNITS OUTSTANDING 126,306 126,306
========== ==========
The accompanying condensed notes are an integral part of
these combined financial statements.
-12-
GEODYNE INSTITUTIONAL/PENSION ENERGY INCOME LIMITED PARTNERSHIP P-4
GEODYNE NPI PARTNERSHIP P-4
COMBINED STATEMENTS OF CASH FLOWS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2005 AND 2004
(Unaudited)
2005 2004
------------ ------------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $1,076,868 $1,059,177
Adjustments to reconcile net income
to net cash provided by operating
activities:
Depletion of Net Profits
Interests 51,622 71,829
Gain on sale of Net Profits
Interests - ( 962)
Settlement of asset retirement
obligation - ( 77)
Increase in accounts receivable -
Net Profits ( 46,999) ( 66,803)
---------- ----------
Net cash provided by operating
activities $1,081,491 $1,063,164
---------- ----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures ($ 8,603) ($ 32,044)
Proceeds from sale of Net Profits
Interests - 435
---------- ----------
Net cash used by investing
activities ($ 8,603) ($ 31,609)
---------- ----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Cash distributions ($1,080,570) ($ 922,865)
---------- ----------
Net cash used by financing
activities ($1,080,570) ($ 922,865)
---------- ----------
NET INCREASE (DECREASE) IN CASH AND
CASH EQUIVALENTS ($ 7,682) $ 108,690
CASH AND CASH EQUIVALENTS AT
BEGINNING OF PERIOD 510,213 399,864
---------- ----------
CASH AND CASH EQUIVALENTS AT
END OF PERIOD $ 502,531 $ 508,554
========== ==========
The accompanying condensed notes are an integral part of
these combined financial statements.
-13-
GEODYNE INSTITUTIONAL/PENSION ENERGY INCOME LIMITED PARTNERSHIP P-5
GEODYNE NPI PARTNERSHIP P-5
COMBINED BALANCE SHEETS
(Unaudited)
ASSETS
September 30, December 31,
2005 2004
------------- ------------
CURRENT ASSETS:
Cash and cash equivalents $ 473,056 $ 393,840
Accounts receivable:
Net Profits 127,329 37,416
---------- ----------
Total current assets $ 600,385 $ 431,256
NET PROFITS INTERESTS, net, utilizing
the successful efforts method 636,906 600,879
---------- ----------
$1,237,291 $1,032,135
========== ==========
PARTNERS' CAPITAL (DEFICIT)
PARTNERS' CAPITAL (DEFICIT):
General Partner ($ 35,830) ($ 48,512)
Limited Partners, issued and
outstanding, 118,449 units 1,273,121 1,080,647
---------- ----------
Total Partners' capital $1,237,291 $1,032,135
========== ==========
The accompanying condensed notes are an integral part of
these combined financial statements.
-14-
GEODYNE INSTITUTIONAL/PENSION ENERGY INCOME LIMITED PARTNERSHIP P-5
GEODYNE NPI PARTNERSHIP P-5
COMBINED STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2005 AND 2004
(Unaudited)
2005 2004
-------- --------
REVENUES:
Net Profits $441,137 $262,437
Interest income 2,464 664
-------- --------
$443,601 $263,101
COSTS AND EXPENSES:
Depletion of Net Profits
Interests $ 38,267 $ 9,775
General and administrative
(Note 2) 33,431 33,324
-------- --------
$ 71,698 $ 43,099
-------- --------
NET INCOME $371,903 $220,002
======== ========
GENERAL PARTNER - NET INCOME $ 40,388 $ 22,814
======== ========
LIMITED PARTNERS - NET INCOME $331,515 $197,188
======== ========
NET INCOME per unit $ 2.80 $ 1.66
======== ========
UNITS OUTSTANDING 118,449 118,449
======== ========
The accompanying condensed notes are an integral part of
these combined financial statements.
-15-
GEODYNE INSTITUTIONAL/PENSION ENERGY INCOME LIMITED PARTNERSHIP P-5
GEODYNE NPI PARTNERSHIP P-5
COMBINED STATEMENTS OF OPERATIONS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2005 AND 2004
(Unaudited)
2005 2004
---------- ----------
REVENUES:
Net Profits $1,232,049 $941,450
Interest income 5,786 1,580
Loss on sale of Net Profits
Interests - ( 749)
Other income 2,136 -
---------- --------
$1,239,971 $942,281
COSTS AND EXPENSES:
Depletion of Net Profits
Interests $ 77,454 $ 63,322
General and administrative
(Note 2) 121,768 119,833
---------- --------
$ 199,222 $183,155
---------- --------
NET INCOME $1,040,749 $759,126
========== ========
GENERAL PARTNER - NET INCOME $ 110,275 $ 81,454
========== ========
LIMITED PARTNERS - NET INCOME $ 930,474 $677,672
========== ========
NET INCOME per unit $ 7.86 $ 5.72
========== ========
UNITS OUTSTANDING 118,449 118,449
========== ========
The accompanying condensed notes are an integral part of
these combined financial statements.
-16-
GEODYNE INSTITUTIONAL/PENSION ENERGY INCOME LIMITED PARTNERSHIP P-5
GEODYNE NPI PARTNERSHIP P-5
COMBINED STATEMENTS OF CASH FLOWS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2005 AND 2004
(Unaudited)
2005 2004
------------ ----------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $1,040,749 $759,126
Adjustments to reconcile net income
to net cash provided by operating
activities:
Depletion of Net Profits
Interests 77,454 63,322
Loss on sale of Net Profits
Interests - 749
Settlement of asset retirement
obligation - ( 104)
Increase in accounts receivable -
Net Profits ( 136,920) ( 25,735)
---------- --------
Net cash provided by operating
activities $ 981,283 $797,358
---------- --------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures ($ 66,474) ($ 50,844)
---------- --------
Net cash used by investing
activities ($ 66,474) ($ 50,844)
---------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Cash distributions ($ 835,593) ($681,483)
---------- --------
Net cash used by financing
activities ($ 835,593) ($681,483)
---------- --------
NET INCREASE IN CASH AND CASH
EQUIVALENTS $ 79,216 $ 65,031
CASH AND CASH EQUIVALENTS AT
BEGINNING OF PERIOD 393,840 337,494
---------- --------
CASH AND CASH EQUIVALENTS AT
END OF PERIOD $ 473,056 $402,525
========== ========
The accompanying condensed notes are an integral part of
these combined financial statements.
-17-
GEODYNE INSTITUTIONAL/PENSION ENERGY INCOME LIMITED PARTNERSHIP P-6
GEODYNE NPI PARTNERSHIP P-6
COMBINED BALANCE SHEETS
(Unaudited)
ASSETS
September 30, December 31,
2005 2004
------------- ------------
CURRENT ASSETS:
Cash and cash equivalents $ 665,195 $ 469,272
---------- ----------
Total current assets $ 665,195 $ 469,272
NET PROFITS INTERESTS, net, utilizing
the successful efforts method 1,255,522 1,171,095
---------- ----------
$1,920,717 $1,640,367
========== ==========
LIABILITIES AND PARTNERS' CAPITAL (DEFICIT)
CURRENT LIABILITIES:
Accounts payable:
Net Profits $ 4,206 $ 26,403
---------- ----------
Total current liabilities $ 4,206 $ 26,403
PARTNERS' CAPITAL (DEFICIT):
General Partner ($ 32,797) ($ 52,148)
Limited Partners, issued and
outstanding, 143,041 units 1,949,308 1,666,112
---------- ----------
Total Partners' capital $1,916,511 $1,613,964
---------- ----------
$1,920,717 $1,640,367
========== ==========
The accompanying condensed notes are an integral part of
these combined financial statements.
-18-
GEODYNE INSTITUTIONAL/PENSION ENERGY INCOME LIMITED PARTNERSHIP P-6
GEODYNE NPI PARTNERSHIP P-6
COMBINED STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2005 AND 2004
(Unaudited)
2005 2004
-------- --------
REVENUES:
Net Profits $652,002 $336,118
Interest income 3,065 973
-------- --------
$655,067 $337,091
COSTS AND EXPENSES:
Depletion of Net Profits
Interests $127,556 $ 22,903
General and administrative
(Note 2) 40,157 40,033
-------- --------
$167,713 $ 62,936
-------- --------
NET INCOME $487,354 $274,155
======== ========
GENERAL PARTNER - NET INCOME $ 59,909 $ 29,380
======== ========
LIMITED PARTNERS - NET INCOME $427,445 $244,775
======== ========
NET INCOME per unit $ 2.99 $ 1.71
======== ========
UNITS OUTSTANDING 143,041 143,041
======== ========
The accompanying condensed notes are an integral part of
these combined financial statements.
-19-
GEODYNE INSTITUTIONAL/PENSION ENERGY INCOME LIMITED PARTNERSHIP P-6
GEODYNE NPI PARTNERSHIP P-6
COMBINED STATEMENTS OF OPERATIONS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2005 AND 2004
(Unaudited)
2005 2004
---------- ----------
REVENUES:
Net Profits $1,911,052 $1,416,290
Interest income 7,405 2,448
Loss on sale of Net Profits
Interests - ( 256)
Other income 733 -
---------- ----------
$1,919,190 $1,418,482
COSTS AND EXPENSES:
Depletion of Net Profits
Interests $ 208,161 $ 95,375
General and administrative
(Note 2) 142,002 140,321
---------- ----------
$ 350,163 $ 235,696
---------- ----------
NET INCOME $1,569,027 $1,182,786
========== ==========
GENERAL PARTNER - NET INCOME $ 174,831 $ 126,618
========== ==========
LIMITED PARTNERS - NET INCOME $1,394,196 $1,056,168
========== ==========
NET INCOME per unit $ 9.75 $ 7.38
========== ==========
UNITS OUTSTANDING 143,041 143,041
========== ==========
The accompanying condensed notes are an integral part of
these combined financial statements.
-20-
GEODYNE INSTITUTIONAL/PENSION ENERGY INCOME LIMITED PARTNERSHIP P-6
GEODYNE NPI PARTNERSHIP P-6
COMBINED STATEMENTS OF CASH FLOWS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2005 AND 2004
(Unaudited)
2005 2004
------------ ------------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $1,569,027 $1,182,786
Adjustments to reconcile net income
to net cash provided by operating
activities:
Depletion of Net Profits
Interests 208,161 95,375
Loss on sale of Net Profits
Interests - 256
Settlement of asset retirement
obligation ( 382) ( 36)
Net change in accounts receivable/
accounts payable - Net Profits ( 247,255) 114,027
---------- ----------
Net cash provided by operating
activities $1,529,551 $1,392,408
---------- ----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures ($ 67,148) ($ 19,114)
---------- ----------
Net cash used by investing
activities ($ 67,148) ($ 19,114)
---------- ----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Cash distributions ($1,266,480) ($1,287,054)
---------- ----------
Net cash used by financing
activities ($1,266,480) ($1,287,054)
---------- ----------
NET INCREASE IN CASH AND CASH
EQUIVALENTS $ 195,923 $ 86,240
CASH AND CASH EQUIVALENTS AT
BEGINNING OF PERIOD 469,272 567,735
---------- ----------
CASH AND CASH EQUIVALENTS AT
END OF PERIOD $ 665,195 $ 653,975
========== ==========
The accompanying condensed notes are an integral part of
these combined financial statements.
-21-
GEODYNE INSTITUTIONAL/PENSION ENERGY INCOME LIMITED PARTNERSHIPS
CONDENSED NOTES TO THE COMBINED FINANCIAL STATEMENTS
SEPTEMBER 30, 2005
(Unaudited)
1. ACCOUNTING POLICIES
-------------------
The combined balance sheets as of September 30, 2005, combined statements
of operations for the three and nine months ended September 30, 2005 and
2004, and combined statements of cash flows for the nine months ended
September 30, 2005 and 2004 have been prepared by Geodyne Resources, Inc.,
the General Partner of the Geodyne Institutional/Pension Energy Income
Limited Partnerships, without audit. Each limited partnership is a general
partner in the related Geodyne NPI Partnership (the "NPI Partnerships") in
which Geodyne Resources, Inc. serves as the managing partner. For the
purposes of these financial statements, the general partner and managing
partner are collectively referred to as the "General Partner" and the
limited partnerships and NPI Partnerships are collectively referred to as
the "Partnerships". In the opinion of management the financial statements
referred to above include all necessary adjustments, consisting of normal
recurring adjustments, to present fairly the combined financial position
at September 30, 2005, the combined results of operations for the three
and nine months ended September 30, 2005 and 2004, and the combined cash
flows for the nine months ended September 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 September 30, 2005 are not
necessarily indicative of the results to be expected for the full year.
As used in these financial statements, the Partnerships' net profits and
royalty interests in oil and gas sales are referred to as "Net Profits"
and the Partnerships' net profits and royalty interests in oil and gas
properties are referred to as "Net Profits Interests". The working
interests from which the Partnerships' Net Profits Interests are carved
are referred to as "Working Interests".
The Limited Partners' net income or loss per unit is based upon each $100
initial capital contribution.
-22-
NET PROFITS INTERESTS
---------------------
The Partnerships follow the successful efforts method of accounting for
their Net Profits Interests. Under the successful efforts method, the NPI
Partnerships capitalize all acquisition costs. Property acquisition costs
include costs incurred by the Partnerships or the General Partner to
acquire producing properties, including related title insurance or
examination costs, commissions, engineering, legal and accounting fees,
and similar costs directly related to the acquisitions, plus an allocated
portion, of the General Partner's property screening costs. The
acquisition cost to the NPI Partnership of Net Profits Interests acquired
by the General Partner is adjusted to reflect the net cash results of
operations, including interest incurred to finance the acquisition, for
the period of time the properties are held by the General Partner prior to
their transfer to the Partnerships.
Depletion of the costs of Net Profits Interests is computed on the
unit-of-production method. The Partnerships' calculation of depletion of
its Net Profits Interests includes estimated dismantlement and abandonment
costs and estimated salvage value of the equipment.
The Partnerships do not directly bear capital costs. However, the
Partnerships indirectly bear certain capital costs incurred by the owners
of the Working Interests to the extent such capital costs are charged
against the applicable oil and gas revenues in calculating the Net Profits
payable to the Partnerships. For financial reporting purposes only, such
capital costs are reported as capital expenditures in the Partnerships'
Statements of Cash Flows.
ASSET RETIREMENT OBLIGATIONS
----------------------------
The Partnerships' wells must be properly plugged and abandoned after their
oil and gas reserves are exhausted. The Partnerships follow FAS No. 143,
"Accounting for Asset Retirement Obligations" in accounting for the future
expenditures that will be necessary to plug and abandon these wells. FAS
No. 143 requires the estimated plugging and abandonment obligations to be
recognized in the period in which they are incurred (i.e. when the well is
drilled or acquired) if a reasonable estimate of fair value can be made
and to be capitalized as part of the carrying amount of the well.
Estimated abandonment dates will be revised in the future based on changes
to related economic lives, which vary with product prices and production
costs. Estimated plugging costs may also be adjusted to reflect changing
industry experience. The Partnerships' asset retirement obligations were
revised upward for the three months ended September 30, 2005 due to an
increase in both the labor and
-23-
rig costs associated with plugging wells. Cash flows would not be affected
until wells are actually plugged and abandoned.
The asset retirement obligation will be adjusted upwards each quarter in
order to recognize accretion of the time-related discount factor. For the
nine months ended September 30, 2005, the P-1, P-3, P-4, P-5, and P-6
Partnerships recognized approximately $13,000, $23,000, $21,000, $23,000,
and $76,000 of an increase in depletion of Net Profits Interests, which
was comprised of accretion of the asset retirement obligation and
depletion of the increase in Net Profits Interests.
The components of the change in asset retirement obligations for the three
and nine months ended September 30, 2005 and 2004 are as shown below.
P-1 Partnership
---------------
Three Months Three Months
Ended Ended
9/30/2005 9/30/2004
------------ ------------
Total Asset Retirement
Obligation, July 1 $ 60,575 $ 57,631
Additions and revisions 58,767 -
Settlements and disposals - ( 238)
Accretion expense 3,105 598
-------- --------
Total Asset Retirement
Obligation, End of Quarter $122,447 $ 57,991
======== ========
Nine Months Nine Months
Ended Ended
9/30/2005 9/30/2004
------------ ------------
Total Asset Retirement
Obligation, January 1 $ 58,753 $ 56,388
Additions and revisions 59,208 -
Settlements and disposals - ( 238)
Accretion expense 4,486 1,841
-------- --------
Total Asset Retirement
Obligation, End of Period $122,447 $ 57,991
======== ========
-24-
P-3 Partnership
---------------
Three Months Three Months
Ended Ended
9/30/2005 9/30/2004
------------ ------------
Total Asset Retirement
Obligation, July 1 $102,589 $97,731
Additions and revisions 99,476 -
Settlements and disposals - ( 300)
Accretion expense 5,227 982
-------- -------
Total Asset Retirement
Obligation, End of Quarter $207,292 $98,413
======== =======
Nine Months Nine Months
Ended Ended
9/30/2005 9/30/2004
------------ ------------
Total Asset Retirement
Obligation, January 1 $ 99,718 $95,666
Additions and revisions 100,038 -
Settlements and disposals - ( 300)
Accretion expense 7,536 3,047
-------- -------
Total Asset Retirement
Obligation, End of Period $207,292 $98,413
======== =======
P-4 Partnership
---------------
Three Months Three Months
Ended Ended
9/30/2005 9/30/2004
------------ ------------
Total Asset Retirement
Obligation, July 1 $ 58,067 $ 55,267
Additions and revisions 57,024 -
Accretion expense 2,847 451
-------- --------
Total Asset Retirement
Obligation, End of Quarter $117,938 $ 55,718
======== ========
-25-
Nine Months Nine Months
Ended Ended
9/30/2005 9/30/2004
------------ ------------
Total Asset Retirement
Obligation, January 1 $ 56,920 $ 56,632
Additions and revisions 57,024 -
Settlements and disposals - ( 2,277)
Accretion expense 3,994 1,363
-------- --------
Total Asset Retirement
Obligation, End of Period $117,938 $ 55,718
======== ========
P-5 Partnership
---------------
Three Months Three Months
Ended Ended
9/30/2005 9/30/2004
------------ ------------
Total Asset Retirement
Obligation, July 1 $ 79,152 $ 74,841
Additions and revisions 56,546 ( 451)
Settlements and disposals - ( 104)
Accretion expense 3,075 584
-------- --------
Total Asset Retirement
Obligation, End of Quarter $138,773 $ 74,870
======== ========
Nine Months Nine Months
Ended Ended
9/30/2005 9/30/2004
------------ ------------
Total Asset Retirement
Obligation, January 1 $ 76,681 $ 72,299
Additions and revisions 57,458 881
Settlements and disposals - ( 104)
Accretion expense 4,634 1,794
-------- --------
Total Asset Retirement
Obligation, End of Period $138,773 $ 74,870
======== ========
-26-
P-6 Partnership
---------------
Three Months Three Months
Ended Ended
9/30/2005 9/30/2004
------------ ------------
Total Asset Retirement
Obligation, July 1 $206,621 $209,711
Additions and revisions 184,738 29
Settlements and disposals - ( 36)
Accretion expense 9,300 1,371
-------- --------
Total Asset Retirement
Obligation, End of Quarter $400,659 $211,075
======== ========
Nine Months Nine Months
Ended Ended
9/30/2005 9/30/2004
------------ ------------
Total Asset Retirement
Obligation, January 1 $208,086 $206,661
Additions and revisions 185,060 308
Settlements and disposals ( 5,636) ( 36)
Accretion expense 13,149 4,142
-------- --------
Total Asset Retirement
Obligation, End of Period $400,659 $211,075
======== ========
2. TRANSACTIONS WITH RELATED PARTIES
---------------------------------
The Partnerships' partnership agreements provide for reimbursement to the
General Partner for all direct general and administrative expenses and for
the general and administrative overhead applicable to the Partnerships
based on an allocation of actual costs incurred. During the three months
ended September 30, 2005, the following payments were made to the General
Partner or its affiliates by the Partnerships:
-27-
Direct General Administrative
Partnership and Administrative Overhead
----------- ------------------ --------------
P-1 $2,259 $28,440
P-3 2,793 44,640
P-4 2,339 33,240
P-5 2,261 31,170
P-6 2,516 37,641
During the nine months ended September 30, 2005, the following payments
were made to the General Partner or its affiliates by the Partnerships:
Direct General Administrative
Partnership and Administrative Overhead
----------- ------------------ --------------
P-1 $28,017 $ 85,320
P-3 29,971 133,920
P-4 28,512 99,720
P-5 28,258 93,510
P-6 29,079 112,923
Affiliates of the Partnerships operate certain of the Partnerships'
properties and their policy is to bill the Partnerships for all customary
charges and cost reimbursements associated with their activities.
-28-
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
USE OF FORWARD-LOOKING STATEMENTS AND ESTIMATES
- -----------------------------------------------
This Quarterly Report contains certain forward-looking statements. The
words "anticipate", "believe", "expect", "plan", "intend", "estimate",
"project", "could", "may" and similar expressions are intended to identify
forward-looking statements. Such statements reflect management's current
views with respect to future events and financial performance. This
Quarterly Report also includes certain information, which is, or is based
upon, estimates and assumptions. Such estimates and assumptions are
management's efforts to accurately reflect the condition and operation of
the Partnerships.
Use of forward-looking statements and estimates and assumptions involve
risks and uncertainties which include, but are not limited to, the
volatility of oil and gas prices, the uncertainty of reserve information,
the operating risk associated with oil and gas properties (including the
risk of personal injury, death, property damage, damage to the well or
producing reservoir, environmental contamination, and other operating
risks), the prospect of changing tax and regulatory laws, the availability
and capacity of processing and transportation facilities, the general
economic climate, the supply and price of foreign imports of oil and gas,
the level of consumer product demand, and the price and availability of
alternative fuels. Should one or more of these risks or uncertainties
occur or should estimates or underlying assumptions prove incorrect,
actual conditions or results may vary materially and adversely from those
stated, anticipated, believed, estimated, and otherwise indicated.
GENERAL
- -------
The Partnerships are engaged in the business of acquiring Net Profits
Interests in producing oil and gas properties located in the continental
United States. In general, a Partnership acquired passive interests in
producing properties and does not directly engage in development drilling
or enhanced recovery projects. Therefore, the economic life of each
limited partnership, and its related NPI Partnership, is limited to the
period of time required to fully produce its acquired oil and gas
reserves. A Net Profits Interest entitles the Partnerships to a portion of
the oil and gas sales less operating and production expenses and
development costs generated by the owner of the underlying Working
Interests. The net proceeds from the oil and gas operations are
distributed to the Limited Partners
-29-
and the General Partner in accordance with the terms of the Partnerships'
partnership agreements.
LIQUIDITY AND CAPITAL RESOURCES
- -------------------------------
The Partnerships began operations and investors were assigned their rights
as Limited Partners, having made capital contributions in the amounts and
on the dates set forth below:
Limited
Date of Partner Capital
Partnership Activation Contributions
----------- ----------------- ---------------
P-1 October 25, 1988 $10,807,400
P-3 May 10, 1989 16,963,700
P-4 November 21, 1989 12,630,600
P-5 February 27, 1990 11,844,900
P-6 September 5, 1990 14,304,100
In general, the amount of funds available for acquisition of producing
properties was equal to the capital contributions of the Limited Partners,
less 15% for sales commissions and organization and management fees. All
of the Partnerships have fully invested their capital contributions.
Net proceeds from the Partnerships' Net Profits Interests less necessary
operating capital are distributed to the Limited Partners on a quarterly
basis. Revenues and net proceeds of a Partnership are largely dependent
upon the volumes of oil and gas sold and the prices received for such oil
and gas. While the General Partner cannot predict future pricing trends,
it believes the working capital available as of September 30, 2005 and the
net revenue generated from future operations will provide sufficient
working capital to meet current and future obligations.
Occasional expenditures by the owners of the Working Interests for new
wells or well recompletions or workovers, however, may reduce or eliminate
cash available for a particular quarterly cash distribution.
Pursuant to the terms of the Partnerships' partnership agreements (the
"Partnership Agreements"), the Partnerships are scheduled to terminate on
December 31, 2005. 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 first
two year extension period to December 31, 2007.
-30-
CRITICAL ACCOUNTING POLICIES
- ----------------------------
The Partnerships follow the successful efforts method of accounting for
their Net Profits Interests. Under the successful efforts method, the
Partnerships capitalize all acquisition costs. Such acquisition costs
include costs incurred by the Partnerships or the General Partner to
acquire a Net Profits Interest, including related title insurance or
examination costs, commissions, engineering, legal and accounting fees,
and similar costs directly related to the acquisitions plus an allocated
portion of the General Partner's property screening costs. The net
acquisition cost to the Partnerships of the Net Profits Interests in
properties acquired by the General Partner consists of the cost of
acquiring the underlying properties adjusted for the net cash results of
operations, including any interest incurred to finance the acquisition,
for the period of time the properties are held by the General Partner.
Depletion of the cost of Net Profits Interests is computed on the
unit-of-production method. The Partnerships' calculation of depletion of
their Net Profits Interests includes estimated dismantlement and
abandonment costs and estimated salvage value of the equipment.
The Partnerships evaluate the recoverability of the carrying costs of
their Net Profits Interests in proved oil and gas properties for each oil
and gas field (rather than separately for each well). If the unamortized
costs of a Net Profits Interest within a field exceeds the expected
undiscounted future cash flows from such Net Profits Interest, the cost of
the Net Profits Interest is written down to fair value, which is
determined by using the estimated discounted future cash flows from the
Net Profits Interest.
Accounts Receivable (Accounts Payable) - Net Profits
Revenues from a Net Profits Interest consist of a share of the oil and gas
sales of the property, less operating and production expenses. The
partnerships accrue for oil and gas revenues less expenses from the Net
Profits Interests. Sales of gas applicable to the Net Profits Interests
are recorded as revenue when the gas is metered and title transferred
pursuant to the gas sales contracts. During such times as sales of gas
exceed a Partnership's pro rata share of estimated total gas reserves
attributable to the underlying property, such excess is recorded as a
liability. The rates per Mcf used to calculate this liability are based on
the average gas price for which the Partnerships are currently settling
this liability. This liability is recorded as a reduction of accounts
receivable.
-31-
Also included in accounts receivable (payable) - Net Profits are amounts
which represent costs deferred or accrued for Net Profits relating to
lease operating expenses incurred in connection with the net underproduced
or overproduced gas imbalance positions. The rate used in calculating the
deferred charge or accrued liability is the annual average production
costs per Mcf. Also included in accounts receivable (payable) - Net
Profits is the asset retirement obligation.
ASSET RETIREMENT OBLIGATIONS
- ----------------------------
The Partnerships' wells must be properly plugged and abandoned after their
oil and gas reserves are exhausted. The Partnerships follow FAS No. 143,
"Accounting for Asset Retirement Obligations" in accounting for the future
expenditures that will be necessary to plug and abandon these wells. FAS
No. 143 requires the estimated plugging and abandonment obligations to be
recognized in the period in which they are incurred (i.e. when the well is
drilled or acquired) if a reasonable estimate of fair value can be made
and to be capitalized as part of the carrying amount of the well.
Estimated abandonment dates will be revised in the future based on changes
to related economic lives, which vary with product prices and production
costs. Estimated plugging costs may also be adjusted to reflect changing
industry experience. The Partnerships' asset retirement obligations were
revised upward for the three months ended September 30, 2005 due to an
increase in both the labor and rig costs associated with plugging wells.
Cash flows would not be affected until wells are actually plugged and
abandoned.
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
-32-
future. Although every reasonable effort has been made to ensure that
these reserve estimates represent the most accurate assessment possible,
the significance of the subjective decisions required and variances in
available data for various reservoirs make these estimates generally less
precise than other estimates presented in connection with financial
statement disclosures.
The following tables summarize changes in net quantities of the
Partnerships' proved reserves, all of which are located in the United
States, for the periods indicated. The proved reserves were estimated by
petroleum engineers employed by affiliates of the Partnerships, and are
annually reviewed by an independent engineering firm. "Proved reserves"
refers to those estimated quantities of crude oil, gas, and gas liquids
which geological and engineering data demonstrate with reasonable
certainty to be recoverable in future years from known oil and gas
reservoirs under existing economic and operating conditions. The following
information includes certain gas balancing adjustments which cause the gas
volume to differ from the reserve reports prepared by the General Partner.
-33-
P-1 Partnership
---------------
Crude Natural
Oil Gas
(Barrels) (Mcf)
--------- -----------
Proved reserves, Dec. 31, 2004 243,982 2,291,734
Production ( 4,945) ( 66,143)
Extensions and discoveries 325 5,603
Revisions of previous
estimates 6,385 36,466
------- ---------
Proved reserves, March 31, 2005 245,747 2,267,660
Production ( 4,637) ( 57,869)
Extensions and discoveries 1,026 9,884
Revisions of previous
estimates 5,423 64,326
------- ---------
Proved reserves, June 30, 2005 247,559 2,284,001
Production ( 4,649) ( 64,320)
Extensions and discoveries 1,268 557
Revisions of previous
estimates ( 1,795) 49,150
------- ---------
Proved reserves, Sept. 30, 2005 242,383 2,269,388
======= =========
-34-
P-3 Partnership
---------------
Crude Natural
Oil Gas
(Barrels) (Mcf)
--------- -----------
Proved reserves, Dec. 31, 2004 320,365 3,610,109
Production ( 6,358) ( 100,852)
Extensions and discoveries 408 7,295
Revisions of previous
estimates 8,133 61,510
------- ---------
Proved reserves, March 31, 2005 322,548 3,578,062
Production ( 5,988) ( 89,676)
Extensions and discoveries 1,291 12,323
Revisions of previous
estimates 6,993 77,887
------- ---------
Proved reserves, June 30, 2005 324,844 3,578,596
Production ( 5,998) ( 96,403)
Extensions and discoveries 1,605 1,099
Revisions of previous
estimates ( 2,034) 69,618
------- ---------
Proved reserves, Sept. 30, 2005 318,417 3,552,910
======= =========
-35-
P-4 Partnership
---------------
Crude Natural
Oil Gas
(Barrels) (Mcf)
--------- -----------
Proved reserves, Dec. 31, 2004 59,656 1,969,168
Production ( 3,857) ( 56,407)
Extensions and discoveries 362 5,946
Revisions of previous
estimates 1,573 35,147
------ ---------
Proved reserves, March 31, 2005 57,734 1,953,854
Production ( 3,888) ( 55,427)
Extensions and discoveries 97 695
Revisions of previous
estimates ( 1,750) ( 7,732)
------ ---------
Proved reserves, June 30, 2005 52,193 1,891,390
Production ( 3,906) ( 46,137)
Extensions and discoveries 46 954
Revisions of previous
estimates 2,320 58,924
------ ---------
Proved reserves, Sept. 30, 2005 50,653 1,905,131
====== =========
-36-
P-5 Partnership
---------------
Crude Natural
Oil Gas
(Barrels) (Mcf)
--------- -----------
Proved reserves, Dec. 31, 2004 38,157 2,130,613
Production ( 1,287) ( 63,777)
Extensions and discoveries 25 44,460
Revisions of previous
estimates 4,114 45,712
------ ---------
Proved reserves, March 31, 2005 41,009 2,157,008
Production ( 978) ( 74,876)
Extensions and discoveries 55 21,649
Revisions of previous
estimates 2,283 131,661
------ ---------
Proved reserves, June 30, 2005 42,369 2,235,442
Production ( 1,300) ( 71,120)
Extensions and discoveries 485 24,480
Revisions of previous
estimates 4,083 127,583
------ ---------
Proved reserves, Sept. 30, 2005 45,637 2,316,385
====== =========
-37-
P-6 Partnership
---------------
Crude Natural
Oil Gas
(Barrels) (Mcf)
--------- -----------
Proved reserves, Dec. 31, 2004 124,894 3,940,334
Production ( 3,024) ( 112,950)
Extensions and discoveries 8 14,866
Revisions of previous
estimates 7,813 109,815
------- ---------
Proved reserves, March 31, 2005 129,691 3,952,065
Production ( 2,830) ( 112,473)
Extensions and discoveries 50 9,347
Revisions of previous
estimates ( 2) 406,894
------- ---------
Proved reserves, June 30, 2005 126,909 4,255,833
Production ( 2,480) ( 101,382)
Extensions and discoveries 368 22,729
Revisions of previous
estimates 5,954 ( 57,735)
------- ---------
Proved reserves, Sept. 30, 2005 130,751 4,119,445
======= =========
The net present value of the Partnerships' reserves may change
dramatically as oil and gas prices change or as volumes change for the
reasons described above. Net present value represents estimated future
gross cash flow from the production and sale of proved reserves, net of
estimated oil and gas production costs (including production taxes, ad
valorem taxes, and operating expenses) and estimated future development
costs, discounted at 10% per annum.
The following table indicates the estimated net present value of the
Partnerships' proved reserves as of September 30, 2005, June 30, 2005,
March 31, 2005, and December 31, 2004. Net present value attributable to
the Partnerships' proved reserves was calculated on the basis of current
costs and prices as of the date of estimation. Such prices were not
escalated except in certain circumstances where escalations were fixed and
readily determinable in accordance with applicable contract provisions.
The table also indicates the gas prices in effect on the dates
corresponding to the reserve valuations. Changes in the oil and gas prices
have caused the estimates of remaining economically recoverable reserves,
as well as the values placed on said reserves to fluctuate. The prices
used in calculating the net present value attributable to the
Partnerships' proved reserves do not necessarily reflect
-38-
market prices for oil and gas production subsequent to September 30, 2005.
There can be no assurance that the prices used in calculating the net
present value of the Partnerships' proved reserves at September 30, 2005
will actually be realized for such production.
Net Present Value of Reserves (In 000's)
------------------------------------------------
Partnership 9/30/05 6/30/05 3/31/05 12/31/04
----------- ------- ------- ------- --------
P-1 $17,816 $10,628 $10,489 $ 8,499
P-3 27,084 15,518 15,405 12,485
P-4 14,325 7,098 7,466 6,181
P-5 15,779 6,825 6,666 5,261
P-6 28,678 13,669 12,941 10,218
Oil and Gas Prices
------------------------------------------------
Pricing 9/30/05 6/30/05 3/31/05 12/31/04
----------- ------- ------- ------- --------
Oil (Bbl) $ 66.21 $ 56.63 $ 55.31 $ 43.36
Gas (Mcf) 15.21 7.07 7.17 6.02
RESULTS OF OPERATIONS
- ---------------------
GENERAL DISCUSSION
The following general discussion should be read in conjunction with the
analysis of results of operations provided below.
The primary source of liquidity and Partnership cash distributions comes
from the net revenues generated from the sale of oil and gas produced from
the Partnerships' oil and gas properties. The level of net revenues is
highly dependent upon the total volumes of oil and natural gas sold. Oil
and gas reserves are depleting assets and will experience production
declines over time, thereby likely resulting in reduced net revenues. The
level of net revenues is also highly dependent upon the prices received
for oil and gas sales, which prices have historically been very volatile
and may continue to be so.
Additionally, lower oil and natural gas prices may reduce the amount of
oil and gas that is economic to produce and reduce the Partnerships'
revenues and cash flow. Various factors beyond the Partnerships' control
will affect prices for oil and natural gas, such as:
* Worldwide and domestic supplies of oil and natural gas;
* The ability of the members of the Organization of Petroleum
Exporting Countries ("OPEC") to agree to and maintain oil prices
and production quotas;
-39-
* 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 and the impact of weather-related events;
* The availability of pipelines for transportation; and
* Domestic and foreign government regulations and taxes.
It is not possible to predict the future direction of oil or natural gas
prices or whether the above discussed trends will remain. Operating costs,
including General and Administrative Expenses, may not decline over time
or may experience only a gradual decline, thus adversely affecting net
revenues as either production or oil and natural gas prices decline. In
any particular period, net revenues may also be affected by either the
receipt of proceeds from property sales or the incursion of additional
costs as a result of well workovers, recompletions, new well drilling, and
other events.
In addition to pricing, the level of net revenues is also highly dependent
upon the total volumes of oil and natural gas sold. Oil and gas reserves
are depleting assets and will experience production declines over time,
thereby likely resulting in reduced net revenues. Despite this general
trend of declining production, several factors can cause the volumes of
oil and gas sold to increase or decrease at an even greater rate over a
given period. These factors include, but are not limited to, (i)
geophysical conditions which cause an acceleration of the decline in
production, (ii) the shutting in of wells (or the opening of previously
shut-in wells) due to low oil and gas prices (or high oil and gas prices),
mechanical difficulties, loss of a market or transportation, or
performance of workovers, recompletions, or other operations in the well,
(iii) prior period volume adjustments (either positive or negative) made
by the purchasers of the production, (iv) ownership adjustments in
accordance with agreements governing the operation or ownership of the
well (such as adjustments that occur at payout), and (v) completion of
enhanced recovery projects which increase production for the well. Many of
these factors are very significant as related to a single well or as
related to many wells over a short period of time. However, due to the
large number of wells owned by the Partnerships, these factors are
generally not material as compared to the normal declines in production
experienced on all remaining wells.
-40-
P-1 PARTNERSHIP
THREE MONTHS ENDED SEPTEMBER 30, 2005 COMPARED TO THE THREE MONTHS ENDED
SEPTEMBER 30, 2004.
Three Months Ended September 30,
--------------------------------
2005 2004
-------- --------
Net Profits $625,321 $389,691
Barrels produced 4,649 4,267
Mcf produced 64,320 72,900
Average price/Bbl $ 58.40 $ 39.47
Average price/Mcf $ 6.96 $ 4.57
As shown in the table above, total Net Profits increased $235,630 (60.5%)
for the three months ended September 30, 2005 as compared to the three
months ended September 30, 2004. Of this increase, approximately (i)
$88,000 and $154,000, respectively, were related to increases in the
average prices of oil and gas sold, (ii) $18,000 was related to a decrease
in production expenses, and (iii) $15,000 was related to an increase in
volumes of oil sold. These increases were partially offset by a decrease
of approximately $39,000 related to a decrease in volumes of gas sold.
Volumes of oil sold increased 382 barrels, while volumes of gas sold
decreased 8,580 Mcf for the three months ended September 30, 2005 as
compared to the three months ended September 30, 2004. The increase in
volumes of oil sold was primarily due to (i) the successful completion of
two new wells during late 2004, (ii) an increase in production on one
significant well following the successful workover of that well during
late 2004, and (iii) a positive prior period volume adjustment made by the
operator on another significant well during the three months ended
September 30, 2005. 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 September 30, 2004. The decrease in production expenses was
primarily due to workover expenses incurred on two significant wells
during the three months ended September 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
several wells during the three months ended September 30, 2005.
Depletion of Net Profits Interests increased $5,005 (24.4%) for the three
months ended September 30, 2005 as compared to the three months ended
September 30, 2004. Of this increase (i) approximately $8,000 was due to
the depletion of additional Net Profits Interests as a result of the
upward revision in the estimate of the asset retirement obligations, of
which approximately $5,000 was related to previously fully depleted wells,
and (ii) approximately $2,000 was due to accretion of these additional
asset retirement obligations. These increases were partially offset by the
decrease in volumes of gas sold. As a percentage of Net Profits, this
expense decreased to 4.1%
-41-
for the three months ended September 30, 2005 from 5.3% for the three
months ended September 30, 2004. This percentage decrease was primarily
due to the increases in the average prices of oil and gas sold.
General and administrative expenses remained relatively constant for the
three months ended September 30, 2005 and 2004. As a percentage of Net
Profits, these expenses decreased to 4.9% for the three months ended
September 30, 2005 from 7.9% for the three months ended September 30,
2004. This percentage decrease was primarily due to the increase in Net
Profits.
NINE MONTHS ENDED SEPTEMBER 30, 2005 COMPARED TO THE NINE MONTHS ENDED
SEPTEMBER 30, 2004.
Nine Months Ended September 30,
-------------------------------
2005 2004
---------- ----------
Net Profits $1,614,244 $1,196,168
Barrels produced 14,231 14,337
Mcf produced 188,332 206,847
Average price/Bbl $ 50.42 $ 34.53
Average price/Mcf $ 6.12 $ 4.64
As shown in the table above, total Net Profits increased $418,076 (35.0%)
for the nine months ended September 30, 2005 as compared to the nine
months ended September 30, 2004. Of this increase, approximately (i)
$226,000 and $279,000, respectively, were related to increases in the
average prices of oil and gas sold and (ii) $3,000 was related to a
decrease in production expenses. These increases were partially offset by
decreases of approximately $4,000 and $86,000, respectively, related to
decreases in volumes of oil and gas sold.
Volumes of oil and gas sold decreased 106 barrels and 18,515 Mcf,
respectively, for the nine months ended September 30, 2005 as compared to
the nine months ended September 30, 2004. A decrease in volumes of oil
sold primarily due to (i) a negative prior period volume adjustment made
by the operator on one significant well during the nine months ended
September 30, 2005, (ii) normal declines in production, and (iii) positive
prior period volume adjustments made by the operators on several wells
during the nine months ended September 30, 2004 was substantially offset
by positive prior period volume adjustments made by the operators on
several other wells during the nine months ended September 30, 2005. The
decrease in volumes of gas sold was primarily due to (i) a negative prior
period volume adjustment made by the operator on one significant well
during the nine months ended September 30, 2005, (ii) normal declines in
production, and (iii) positive prior period volume adjustments made by the
operators on several wells during the nine months ended September 30,
2004. These decreases were partially offset by positive prior period
-42-
volume adjustments made by the operators on several wells during the nine
months ended September 30, 2005. The decrease in production expenses was
primarily due to (i) workover expenses incurred on two significant wells
during the nine months ended September 30, 2004 and (ii) the receipt of ad
valorem tax credits on one significant well during the nine months ended
September 30, 2005. These decreases were partially offset by (i) an
increase in production taxes associated with the increase in oil and gas
sales, (ii) workover expenses incurred on several wells during the nine
months ended September 30, 2005, and (iii) an increase in salt water
disposal expenses incurred on one significant well during the nine months
ended September 30, 2005 as compared to the nine months ended September
30, 2004.
Depletion of Net Profits Interests increased $6,309 (12.0%) for the nine
months ended September 30, 2005 as compared to the nine months ended
September 30, 2004. Of this increase (i) approximately $8,000 was due to
the depletion of additional Net Profits Interests as a result of the
upward revision in the estimate of the asset retirement obligations, of
which approximately $5,000 was related to previously fully depleted wells,
and (ii) approximately $2,000 was due to accretion of these additional
asset retirement obligations. These increases were partially offset by the
decreases in volumes of oil and gas sold. As a percentage of Net Profits,
this expense decreased to 3.6% for the nine months ended September 30,
2005 from 4.4% for the nine months ended September 30, 2004. This
percentage decrease was primarily due to the increases in the average
prices of oil and gas sold.
General and administrative expenses remained relatively constant for the
nine months ended September 30, 2005 and 2004. As a percentage of Net
Profits, these expenses decreased to 7.0% for the nine months ended
September 30, 2005 from 9.4% for the nine months ended September 30, 2004.
This percentage decrease was primarily due to the increase in Net Profits.
Cumulative cash distributions to the Limited Partners through September
30, 2005 were $17,819,558 or 164.88% of Limited Partners' capital
contributions.
-43-
P-3 PARTNERSHIP
THREE MONTHS ENDED SEPTEMBER 30, 2005 COMPARED TO THE THREE MONTHS ENDED
SEPTEMBER 30, 2004.
Three Months Ended September 30,
--------------------------------
2005 2004
-------- --------
Net Profits $891,162 $564,291
Barrels produced 5,998 5,516
Mcf produced 96,403 109,226
Average price/Bbl $ 58.45 $ 39.42
Average price/Mcf $ 7.15 $ 4.68
As shown in the table above, total Net Profits increased $326,871 (57.9%)
for the three months ended September 30, 2005 as compared to the three
months ended September 30, 2004. Of this increase, approximately (i)
$114,000 and $238,000, respectively, were related to increases in the
average prices of oil and gas sold, (ii) $19,000 was related to an
increase in volumes of oil sold, and (iii) $16,000 was related to a
decrease in production expenses. These increases were partially offset by
a decrease of approximately $60,000 related to a decrease in volumes of
gas sold.
Volumes of oil sold increased 482 barrels, while volumes of gas sold
decreased 12,823 Mcf for the three months ended September 30, 2005 as
compared to the three months ended September 30, 2004. The increase in
volumes of oil sold was primarily due to (i) the successful completion of
two new wells during late 2004, (ii) an increase in production on one
significant well following the successful workover of that well during
late 2004, and (iii) a positive prior period volume adjustment made by the
operator on another significant well during the three months ended
September 30, 2005. 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 September 30, 2004. The decrease in production expenses was
primarily due to workover expenses incurred on two significant wells
during the three months ended September 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
several wells during the three months ended September 30, 2005.
Depletion of Net Profits Interests decreased $55,997 (56.3%) for the three
months ended September 30, 2005 as compared to the three months ended
September 30, 2004. This decrease was primarily due to (i) one significant
well being fully depleted during the three months ended September 30, 2004
due to the lack of remaining reserves and (ii) the decrease in volumes of
gas sold. These decreases were partially offset by increases of (i)
approximately $15,000 due to the depletion of additional Net Profits
Interests as a result of the upward revision in the estimate of the asset
retirement obligations, of which approximately $8,000 was related to
previously fully depleted wells, and (ii) approximately $4,000 due to
accretion of these additional asset retirement
-44-
obligations. As a percentage of Net Profits, this expense decreased to
4.9% for the three months ended September 30, 2005 from 17.6% for the
three months ended September 30, 2004. This percentage decrease was
primarily due to (i) the dollar decrease in depletion of Net Profits
Interests and (ii) the increases in the average prices of oil and gas
sold.
General and administrative expenses remained relatively constant for the
three months ended September 30, 2005 and 2004. As a percentage of Net
Profits, these expenses decreased to 5.3% for the three months ended
September 30, 2005 from 8.4% for the three months ended September 30,
2004. This percentage decrease was primarily due to the increase in Net
Profits.
NINE MONTHS ENDED SEPTEMBER 30, 2005 COMPARED TO THE NINE MONTHS ENDED
SEPTEMBER 30, 2004.
Nine Months Ended September 30,
-------------------------------
2005 2004
---------- ----------
Net Profits $2,316,696 $1,747,557
Barrels produced 18,344 18,478
Mcf produced 286,931 317,351
Average price/Bbl $ 50.51 $ 34.57
Average price/Mcf $ 6.25 $ 4.76
As shown in the table above, total Net Profits increased $569,139 (32.6%)
for the nine months ended September 30, 2005 as compared to the nine
months ended September 30, 2004. Of this increase, approximately $292,000
and $427,000, respectively, were related to increases in the average
prices of oil and gas sold. These increases were partially offset by
decreases of approximately $5,000 and $145,000, respectively, related to
decreases in volumes of oil and gas sold.
Volumes of oil and gas sold decreased 134 barrels and 30,420 Mcf,
respectively, for the nine months ended September 30, 2005 as compared to
the nine months ended September 30, 2004. The decrease in volumes of oil
sold was primarily due to (i) a negative prior period volume adjustment
made by the operator on one significant well during the nine months ended
September 30, 2005, (ii) normal declines in production, and (iii) positive
prior period volume adjustments made by the operators on several wells
during the nine months ended September 30, 2004. These decreases were
substantially offset by positive prior period volume adjustments made by
the operators on several other wells during the nine months ended
September 30, 2005. The decrease in volumes of gas sold was primarily due
to (i) normal declines in production, (ii) a negative prior period volume
adjustment made by the operator on one significant well during the nine
months ended September 30, 2005, and (iii) positive prior period volume
adjustments made by the
-45-
operators on several wells during the nine months ended September 30,
2004. These decreasee were partially offset by positive prior period
volume adjustments made by the operators on several wells during the nine
months ended September 30, 2005. An increase in production expenses
primarily due to (i) an increase in production taxes associated with the
increase in oil and gas sales, (ii) workover expenses incurred on several
wells during the nine months ended September 30, 2005, and (iii) an
increase in salt water disposal expenses incurred on one significant well
during the nine months ended September 30, 2005 as compared to the nine
months ended September 30, 2004 was substantially offset by (i) workover
expenses incurred on several wells during the nine months ended September
30, 2004 and (ii) the receipt of ad valorem tax credits on one significant
well during the nine months ended September 30, 2005.
Depletion of Net Profits Interests decreased $53,051 (35.8%) for the nine
months ended September 30, 2005 as compared to the nine months ended
September 30, 2004. This decrease was primarily due to (i) one significant
well being fully depleted during the nine months ended September 30, 2004
due to the lack of remaining reserves and (ii) the decreases in volumes of
oil and gas sold. These decreases were partially offset by increases of
(i) approximately $15,000 due to the depletion of additional Net Profits
Interests as a result of the upward revision in the estimate of the asset
retirement obligations, of which approximately $8,000 was related to
previously fully depleted wells, and (ii) approximately $4,000 due to
accretion of these additional asset retirement obligations. As a
percentage of Net Profits, this expense decreased to 4.1% for the nine
months ended September 30, 2005 from 8.5% for the nine months ended
September 30, 2004. This percentage decrease was primarily due to (i) the
dollar decrease in depletion of Net Profits Interests and (ii) the
increases in the average prices of oil and gas sold.
General and administrative expenses remained relatively constant for the
nine months ended September 30, 2005 and 2004. As a percentage of Net
Profits, these expenses decreased to 7.1% for the nine months ended
September 30, 2005 from 9.4% for the nine months ended September 30, 2004.
This percentage decrease was primarily due to the increase in Net Profits.
Cumulative cash distributions to the Limited Partners through September
30, 2005 were $24,936,401 or 147.00% of Limited Partners' capital
contributions.
-46-
P-4 PARTNERSHIP
THREE MONTHS ENDED SEPTEMBER 30, 2005 COMPARED TO THE THREE MONTHS ENDED
SEPTEMBER 30, 2004.
Three Months Ended September 30,
--------------------------------
2005 2004
-------- --------
Net Profits $459,079 $415,595
Barrels produced 3,906 4,790
Mcf produced 46,137 57,728
Average price/Bbl $ 59.88 $ 41.75
Average price/Mcf $ 8.03 $ 5.36
As shown in the table above, total Net Profits increased $43,484 (10.5%)
for the three months ended September 30, 2005 as compared to the three
months ended September 30, 2004. Of this increase, approximately $71,000
and $122,000, respectively, were related to increases in the average
prices of oil and gas sold. These increases were partially offset by
decreases of approximately (i) $37,000 and $62,000, respectively, related
to decreases in volumes of oil and gas sold and (ii) $51,000 related to an
increase in production expenses.
Volumes of oil and gas sold decreased 884 barrels and 11,591 Mcf,
respectively, for the three months ended September 30, 2005 as compared to
the three months ended September 30, 2004. The decrease in volumes of oil
sold was primarily due to (i) normal declines in production and (ii) the
shutting-in of one significant well during mid 2005 in order to perform a
workover. As of the date of this Quarterly Report, the shut-in well has
returned to production at a lower rate than previously experienced. The
decrease in volumes of gas sold was primarily due to (i) normal declines
in production, (ii) positive prior period volume adjustments made by the
operators on two significant wells during the three months ended September
30, 2004, and (iii) the shutting-in of two significant wells during early
2005 in order to perform workovers. As of the date of this Quarterly
Report, the operator has not yet determined when the shut-in wells will
return to production. The increase in production expenses was primarily
due to (i) workover expenses incurred on two significant wells during the
three months ended September 30, 2005, (ii) an increase in production
taxes associated with the increase in oil and gas sales, and (iii) salt
water disposal expenses incurred on several wells during the three months
ended September 30, 2005.
Depletion of Net Profits Interests increased $16,240 (128.7%) for the
three months ended September 30, 2005 as compared to the three months
ended September 30, 2004. Of this increase (i) approximately $17,000 was
due to the depletion of additional Net Profits Interests as a result of
the upward revision in the estimate of the asset retirement obligations,
of which approximately $10,000 was related to previously fully depleted
wells, and (ii) approximately
-47-
$2,000 was due to accretion of these additional asset retirement
obligations. These increases were partially offset by (i) the decreases in
volumes of oil and gas sold and (ii) one significant well being fully
depleted during the nine months ended September 30, 2004 due to the lack
of remaining reserves. As a percentage of Net Profits, this expense
increased to 6.3% for the three months ended September 30, 2005 from 3.0%
for the three months ended September 30, 2004. This percentage increase
was primarily due to the dollar increase in depletion of Net Profits
Interests.
General and administrative expenses remained relatively constant for the
three months ended September 30, 2005 and 2004. As a percentage of Net
Profits, these expenses decreased to 7.8% for the three months ended
September 30, 2005 from 8.5% for the three months ended September 30,
2004.
NINE MONTHS ENDED SEPTEMBER 30, 2005 COMPARED TO THE NINE MONTHS ENDED
SEPTEMBER 30, 2004.
Nine Months Ended September 30,
-------------------------------
2005 2004
---------- ----------
Net Profits $1,250,356 $1,254,598
Barrels produced 11,651 14,364
Mcf produced 157,971 185,842
Average price/Bbl $ 52.58 $ 37.53
Average price/Mcf $ 6.83 $ 5.54
As shown in the table above, total Net Profits remained relatively
constant for the nine months ended September 30, 2005 and 2004. Decreases
of approximately (i) $102,000 and $154,000, respectively, related to
decreases in volumes of oil and gas sold and (ii) $128,000 related to an
increase in production expenses were substantially offset by increases of
approximately $175,000 and $205,000, respectively, related to increases in
the average prices of oil and gas sold.
Volumes of oil and gas sold decreased 2,713 barrels and 27,871 Mcf,
respectively, for the nine months ended September 30, 2005 as compared to
the nine months ended September 30, 2004. The decrease in volumes of oil
sold was primarily due to (i) the shutting-in of two significant wells
during late 2004 and early to mid 2005 in order to perform workovers, (ii)
the shutting-in of two other wells during early 2005 due to mechanical
problems, and (iii) normal declines in production. As of the date of this
Quarterly Report, the shut-in wells have returned to production at a lower
rate than previously experienced. The decrease in volumes of gas sold was
primarily due to (i) a positive prior period volume adjustment made by the
operator on one significant well during the nine months ended September
30, 2004, (ii) normal declines in production, and
-48-
(iii) the shutting-in of two significant wells during early 2005 in order
to perform workovers. As of the date of this Quarterly Report, the
operator has not yet determined when the shut-in wells will return to
production. The increase in production expenses was primarily due to (i)
workover expenses incurred on several wells during the nine months ended
September 30, 2005, (ii) an increase in production taxes associated with
the increase in oil and gas sales, and (iii) a positive prior period
production tax adjustment made by the operator on one significant well
during the nine months ended September 30, 2005.
Depletion of Net Profits Interests decreased $20,207 (28.1%) for the nine
months ended September 30, 2005 as compared to the nine months ended
September 30, 2004. This decrease was primarily due to (i) the abandonment
of one significant well during 2004 following an unsuccessful recompletion
attempt, (ii) the decreases in volumes of oil and gas sold, and (iii) one
significant well being fully depleted during the nine months ended
September 30, 2004 due to the lack of remaining reserves. These decreases
were partially offset by increases of (i) approximately $17,000 due to the
depletion of additional Net Profits Interests as a result of the upward
revision in the estimate of the asset retirement obligations, of which
approximately $10,000 was related to previously fully depleted wells, and
(ii) approximately $2,000 due to accretion of these additional asset
retirement obligations. As a percentage of Net Profits, this expense
decreased to 4.1% for the nine months ended September 30, 2005 from 5.7%
for the nine months ended September 30, 2004. This percentage decrease was
primarily due to the dollar decrease in depletion of Net Profits
Interests.
General and administrative expenses increased $1,853 (1.5%) for the nine
months ended September 30, 2005 as compared to the nine months ended
September 30, 2004. As a percentage of Net Profits, these expenses
increased to 10.3% for the nine months ended September 30, 2005 from 10.1%
for the nine months ended September 30, 2004.
Cumulative cash distributions to the Limited Partners through September
30, 2005 were $19,869,945 or 157.32% of Limited Partners' capital
contributions.
-49-
P-5 PARTNERSHIP
THREE MONTHS ENDED SEPTEMBER 30, 2005 COMPARED TO THE THREE MONTHS ENDED
SEPTEMBER 30, 2004.
Three Months Ended September 30,
--------------------------------
2005 2004
-------- --------
Net Profits $441,137 $262,437
Barrels produced 1,300 748
Mcf produced 71,120 74,039
Average price/Bbl $ 58.38 $ 43.20
Average price/Mcf $ 6.63 $ 4.40
As shown in the table above, total Net Profits increased $178,700 (68.1%)
for the three months ended September 30, 2005 as compared to the three
months ended September 30, 2004. Of this increase, approximately (i)
$20,000 and $158,000, respectively, were related to increases in the
average prices of oil and gas sold and (ii) $24,000 was related to an
increase in volumes of oil sold. These increases were partially offset by
decreases of approximately (i) $13,000 related to a decrease in volumes of
gas sold and (ii) $10,000 related to an increase in production expenses.
Volumes of oil sold increased 552 barrels, while volumes of gas sold
decreased 2,919 Mcf for the three months ended September 30, 2005 as
compared to the three months ended September 30, 2004. The increase in
volumes of oil sold was primarily due to (i) positive prior period volume
adjustments made by the operators on two significant wells during the
three months ended September 30, 2005, (ii) the successful completion of
two new wells during early and mid 2005, and (iii) the successful
completion of another new well during mid 2004. The decrease in volumes of
gas sold was primarily due to normal declines in production. This decrease
was partially offset by (i) the successful completion of two new wells
during mid 2004, (ii) the successful completion of another new well during
early 2005, and (iii) positive prior period volume adjustments made by the
operators on two significant wells during the three months ended September
30, 2005. The increase in production expenses was primarily due to (i) an
increase in production taxes associated with the increase in oil and gas
sales, (ii) workover expenses incurred on one significant well during the
three months ended September 30, 2005, and (iii) an increase in repair and
maintenance expenses incurred on another significant well during the three
months ended September 30, 2005 as compared to the three months ended
September 30, 2004. These increases were partially offset by workover
expenses incurred on two significant wells during the three months ended
September 30, 2004.
-50-
Depletion of Net Profits Interests increased $28,492 (291.5%) for the
three months ended September 30, 2005 as compared to the three months
ended September 30, 2004. Of this increase (i) approximately $18,000 was
due to the depletion of additional Net Profits Interests as a result of
the upward revision in the estimate of the asset retirement obligations,
of which approximately $14,000 was related to previously fully depleted
wells, and (ii) approximately $2,000 was due to accretion of these
additional asset retirement obligations. This increase was also due to two
significant wells being fully depleted during the nine months ended
September 30, 2005 due to the lack of remaining reserves. As a percentage
of Net Profits, this expense increased to 8.7% for the three months ended
September 30, 2005 from 3.7% for the three months ended September 30,
2004. This percentage increase was primarily due to the dollar increase in
depletion of Net Profits Interests.
General and administrative expenses remained relatively constant for the
three months ended September 30, 2005 and 2004. As a percentage of Net
Profits, these expenses decreased to 7.6% for the three months ended
September 30, 2005 from 12.7% for the three months ended September 30,
2004. This percentage decrease was primarily due to the increase in Net
Profits.
NINE MONTHS ENDED SEPTEMBER 30, 2005 COMPARED TO THE NINE MONTHS ENDED
SEPTEMBER 30, 2004.
Nine Months Ended September 30,
-------------------------------
2005 2004
---------- --------
Net Profits $1,232,049 $941,450
Barrels produced 3,565 3,443
Mcf produced 209,773 208,724
Average price/Bbl $ 51.74 $ 36.05
Average price/Mcf $ 6.25 $ 5.08
As shown in the table above, total Net Profits increased $290,599 (30.9%)
for the nine months ended September 30, 2005 as compared to the nine
months ended September 30, 2004. Of this increase, approximately (i)
$56,000 and $247,000, respectively, were related to increases in the
average prices of oil and gas sold and (ii) $4,000 and $5,000,
respectively, were related to the increases in volumes of oil and gas
sold.
Volumes of oil and gas sold increased 122 barrels and 1,049 Mcf,
respectively, for the nine months ended September 30, 2005 as compared to
the nine months ended September 30, 2004. The increase in volumes of oil
sold was primarily due to (i) positive prior period volume adjustments
made by the operators on two significant wells during the nine months
ended September 30, 2005, (ii) the successful completion of two new wells
during early and mid 2005, and (iii) the successful completion of another
new well during mid 2004.
-51-
The increase in volumes of gas sold was primarily due to (i) downward
revisions in the estimates of remaining gas reserves during the nine
months ended September 30, 2004 on one significant well resulting in the
P-5 Partnership becoming over produced in excess of estimated ultimate
reserves thereby increasing gas imbalance payable, (ii) the successful
completion of several new wells during mid and late 2004, and (iii) the
successful completion of one new well during early 2005. These increases
were substantially offset by (i) normal declines in production, (ii) a
substantial decline in production during 2005 on one significant well
following a workover of that well during mid 2004, and (iii) the
shutting-in of one significant well during the nine months ended September
30, 2005 in order to perform a workover. As of the date of this Quarterly
Report, the shut-in well is producing at a lower rate than previously
experienced.
The average gas price increased to $6.25 per Mcf for the nine months ended
September 30, 2005 from $5.08 per Mcf for the nine months ended September
30, 2004. Due to the gas imbalance situation on one significant well as
discussed above, gas volumes for that well were recorded as a liability at
a substantially lower rate per Mcf than the average price per Mcf received
by the P-5 Partnership during the nine months ended September 30, 2004.
This resulted in a higher average price per Mcf for the nine months ended
September 30, 2004 than if the liability had not been recorded. No such
material adjustments were recorded during the nine months ended September
30, 2005.
Depletion of Net Profits Interests increased $14,132 (22.3%) for the nine
months ended September 30, 2005 as compared to the nine months ended
September 30, 2004. Of this increase (i) approximately $18,000 was due to
the depletion of additional Net Profits Interests as a result of the
upward revision in the estimate of the asset retirement obligations, of
which approximately $14,000 was related to previously fully depleted
wells, and (ii) approximately $2,000 was due to accretion of these
additional asset retirement obligations. This increase was also due to an
increase in depletable Net Profits Interests during 2005 primarily due to
the drilling of two developmental wells. These increases were partially
offset by two significant wells being fully depleted during the nine
months ended September 30, 2004 due to the lack of remaining reserves. As
a percentage of Net Profits, this expense decreased to 6.3% for the nine
months ended September 30, 2005 from 6.7% for the nine months ended
September 30, 2004.
-52-
General and administrative expenses increased $1,935 (1.6%) for the nine
months ended September 30, 2005 as compared to the nine months ended
September 30, 2004. As a percentage of Net Profits, these expenses
decreased to 9.9% for the nine months ended September 30, 2005 from 12.7%
for the nine months ended September 30, 2004. This percentage decrease was
primarily due to the increase in Net Profits.
Cumulative cash distributions to the Limited Partners through September
30, 2005 were $13,950,759 or 117.78% of Limited Partners' capital
contributions.
P-6 PARTNERSHIP
THREE MONTHS ENDED SEPTEMBER 30, 2005 COMPARED TO THE THREE MONTHS ENDED
SEPTEMBER 30, 2004.
Three Months Ended September 30,
--------------------------------
2005 2004
---------- ----------
Net Profits $652,002 $336,118
Barrels produced 2,480 ( 870)
Mcf produced 101,382 95,096
Average price/Bbl $ 61.46 $ -
Average price/Mcf $ 7.00 $ 5.41
As shown in the table above, total Net Profits increased $315,884 (94.0%)
for the three months ended September 30, 2005 as compared to the three
months ended September 30, 2004. Of this increase, approximately (i)
$47,000 and $161,000, respectively, were related to increases in the
average prices of oil and gas sold and (ii) $94,000 and $34,000,
respectively, were related to increases in volumes of oil and gas sold.
These increases were partially offset by a decrease of approximately
$20,000 related to an increase in production expenses.
Volumes of oil and gas sold increased 3,350 barrels and 6,286 Mcf,
respectively, for the three months ended September 30, 2005 as compared to
the three months ended September 30, 2004. The increase in volumes of oil
sold was primarily due to (i) a substantial negative prior period volume
adjustment made by the operator on one significant well during the three
months ended September 30, 2004, (ii) the successful completion of two new
wells during mid 2005, and (iii) the successful completion of one new well
during late 2004. Without the negative prior period adjustment volumes of
oil sold for the three months ended September 30, 2004 would have been
1,629 barrels with an average price of $42.63. The increase in volumes of
gas sold was primarily due to (i) a negative prior period volume
adjustment made by the operator on one significant well during the three
months ended September 30, 2004 and (ii) an increase in production on one
significant well following the successful workover of that well during mid
and late 2004. These increases were partially offset by normal declines in
production. The
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increase in production expenses was primarily due to an increase in
production taxes associated with the increase in oil and gas sales.
Depletion of Net Profits Interests increased $104,653 (456.9%) for the
three months ended September 30, 2005 as compared to the three months
ended September 30, 2004. Of this increase (i) approximately $62,000 was
due to the depletion of additional Net Profits Interests as a result of
the upward revision in the estimate of the asset retirement obligations,
of which approximately $45,000 was related to previously fully depleted
wells, and (ii) approximately $7,000 was due to accretion of these
additional asset retirement obligations. This increase was also due to an
increase in depletable Net Profits Interests during 2005 primarily due to
the recompletion of two significant wells. As a percentage of Net Profits,
this expense increased to 19.6% for the three months ended September 30,
2005 from 6.8% for the three months ended September 30, 2004. This
percentage increase was primarily due to the dollar increase in depletion
of Net Profits Interests.
General and administrative expenses remained relatively constant for the
three months ended September 30, 2005 and 2004. As a percentage of Net
Profits, these expenses decreased to 6.2% for the three months ended
September 30, 2005 from 11.9% for the three months ended September 30,
2004. This percentage decrease was primarily due to the increase in Net
Profits.
NINE MONTHS ENDED SEPTEMBER 30, 2005 COMPARED TO THE NINE MONTHS ENDED
SEPTEMBER 30, 2004.
Nine Months Ended September 30,
-------------------------------
2005 2004
---------- ----------
Net Profits $1,911,052 $1,416,290
Barrels produced 8,334 4,939
Mcf produced 326,805 330,245
Average price/Bbl $ 52.85 $ 42.44
Average price/Mcf $ 6.18 $ 5.24
As shown in the table above, total Net Profits increased $494,762 (34.9%)
for the nine months ended September 30, 2005 as compared to the nine
months ended September 30, 2004. Of this increase, approximately (i)
$87,000 and $309,000, respectively, were related to increases in the
average prices of oil and gas sold and (ii) $144,000 was related to an
increase in volumes of oil sold. These increases were partially offset by
a decrease of approximately $18,000 related to a decrease in volumes of
gas sold.
Volumes of oil sold increased 3,395 barrels, while volumes of gas sold
decreased 3,440 Mcf for the nine months ended September 30, 2005 as
compared to the nine months ended
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September 30, 2004. The increase in volumes of oil sold was primarily due
to (i) a negative prior period volume adjustment made by the operator on
one significant well during the nine months ended September 30, 2004, (ii)
the successful completion of two new wells during mid 2005, and (iii) the
successful completion of one new well during late 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 a workover of that well during mid 2004. These
decreases were partially offset by (i) downward revisions in the estimates
of remaining gas reserves during the nine months ended September 30, 2004
on one significant well resulting in the P-6 Partnership becoming over
produced in excess of estimated ultimate reserves thereby increasing gas
imbalance payable and (ii) a negative prior period volume adjustment made
by the operator on one significant well during the nine months ended
September 30, 2004.
The average gas price increased to $6.18 per Mcf for the nine months ended
September 30, 2005 from $5.24 per Mcf for the nine months ended September
30, 2004. Due to the gas imbalance situation on one significant well as
discussed above, gas volumes for that well were recorded as a liability at
a substantially lower rate per Mcf than the average price per Mcf received
by the P-6 Partnership during the nine months ended September 30, 2004.
This resulted in a higher average price per Mcf for the nine months ended
September 30, 2004 than if the liability had not been recorded. No such
material adjustments were recorded during the nine months ended September
30, 2005.
Depletion of Net Profits Interests increased $112,786 (118.3%) for the
nine months ended September 30, 2005 as compared to the nine months ended
September 30, 2004. Of this increase (i) approximately $62,000 was due to
the depletion of additional Net Profits Interests as a result of the
upward revision in the estimate of the asset retirement obligations, of
which approximately $45,000 was related to previously fully depleted
wells, and (ii) approximately $7,000 was due to accretion of these
additional asset retirement obligations. This increase was also due to an
increase in depletable Net Profits Interests during 2005 primarily due to
the recompletion of two significant wells. As a percentage of Net Profits,
this expense increased to 10.9% for the nine months ended September 30,
2005 from 6.7% for the nine months ended September 30, 2004. This
percentage increase was primarily due to the dollar increase in depletion
of Net Profits Interests.
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General and administrative expenses increased $1,681 (1.2%) for the nine
months ended September 30, 2005 as compared to the nine months ended
September 30, 2004. As a percentage of Net Profits, these expenses
decreased to 7.4% for the nine months ended September 30, 2005 from 9.9%
for the nine months ended September 30, 2004. This percentage decrease was
primarily due to the increase in Net Profits.
Cumulative cash distributions to the Limited Partners through September
30, 2005 were $20,582,248 or 143.89% of Limited Partners' capital
contribution.
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ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET
RISK
The Partnerships do not hold any market risk sensitive instruments.
ITEM 4. CONTROLS AND PROCEDURES
As of the end of the period covered by this report, the principal
executive officer and principal financial officer conducted an
evaluation of the Partnerships' disclosure controls and procedures
(as defined in Rules 13a-15(e) and 15d-15(e) under the Securities
and Exchange Act of 1934). Based on this evaluation, such officers
concluded that the Partnerships' disclosure controls and procedures
are effective to ensure that information required to be disclosed by
the Partnerships in reports filed under the Exchange Act is
recorded, processed, summarized, and reported accurately and within
the time periods specified in the Securities and Exchange Commission
rules and forms.
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PART II. OTHER INFORMATION
ITEM 6. EXHIBITS
31.1 Certification by Dennis R. Neill required by Rule
13a-14(a)/15d-14(a) for the P-1 Partnership.
31.2 Certification by Craig D. Loseke required by Rule
13a-14(a)/15d-14(a) for the P-1 Partnership.
31.3 Certification by Dennis R. Neill required by Rule
13a-14(a)/15d-14(a) for the P-3 Partnership.
31.4 Certification by Craig D. Loseke required by Rule
13a-14(a)/15d-14(a) for the P-3 Partnership.
31.5 Certification by Dennis R. Neill required by Rule
13a-14(a)/15d-14(a) for the P-4 Partnership.
31.6 Certification by Craig D. Loseke required by Rule
13a-14(a)/15d-14(a) for the P-4 Partnership.
31.7 Certification by Dennis R. Neill required by Rule
13a-14(a)/15d-14(a) for the P-5 Partnership.
31.8 Certification by Craig D. Loseke required by Rule
13a-14(a)/15d-14(a) for the P-5 Partnership.
31.9 Certification by Dennis R. Neill required by Rule
13a-14(a)/15d-14(a) for the P-6 Partnership.
31.10 Certification by Craig D. Loseke required by Rule
13a-14(a)/15d-14(a) for the P-6 Partnership.
32.1 Certification pursuant to 18 U.S.C. Section 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 for
the P-1 Partnership.
32.2 Certification pursuant to 18 U.S.C. Section 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 for
the P-3 Partnership.
32.3 Certification pursuant to 18 U.S.C. Section 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 for
the P-4 Partnership.
<
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32.4 Certification pursuant to 18 U.S.C. Section 1350, as
adopted pursuant to Section 906 of the Sarbanes-Oxley Act
of 2002 for the P-5 Partnership.
32.5 Certification pursuant to 18 U.S.C. Section 1350, as
adopted pursuant to Section 906 of the Sarbanes-Oxley Act
of 2002 for the P-6 Partnership.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
GEODYNE INSTITUTIONAL/PENSION ENERGY
INCOME P-1 LIMITED PARTNERSHIP
GEODYNE INSTITUTIONAL/PENSION ENERGY
INCOME LIMITED PARTNERSHIP P-3
GEODYNE INSTITUTIONAL/PENSION ENERGY
INCOME LIMITED PARTNERSHIP P-4
GEODYNE INSTITUTIONAL/PENSION ENERGY
INCOME LIMITED PARTNERSHIP P-5
GEODYNE INSTITUTIONAL/PENSION ENERGY
INCOME LIMITED PARTNERSHIP P-6
(Registrant)
BY: GEODYNE RESOURCES, INC.
General Partner
Date: November 14, 2005 By: /s/Dennis R. Neill
--------------------------------
(Signature)
Dennis R. Neill
President
Date: November 14, 2005 By: /s/Craig D. Loseke
--------------------------------
(Signature)
Craig D. Loseke
Chief Accounting Officer
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INDEX TO EXHIBITS
-----------------
Exh
No. Exhibit
---- -------
31.1 Certification by Dennis R. Neill required by Rule
13a-14(a)/15d-14(a) for the Geodyne Institutional/Pension Energy
Income P-1 Limited Partnership.
31.2 Certification by Craig D. Loseke required by Rule
13a-14(a)/15d-14(a) for the Geodyne Institutional/Pension Energy
Income P-1 Limited Partnership.
31.3 Certification by Dennis R. Neill required by Rule
13a-14(a)/15d-14(a) for the Geodyne Institutional/Pension Energy
Income Limited Partnership P-3.
31.4 Certification by Craig D. Loseke required by Rule
13a-14(a)/15d-14(a) for the Geodyne Institutional/Pension Energy
Income Limited Partnership P-3.
31.5 Certification by Dennis R. Neill required by Rule
13a-14(a)/15d-14(a) for the Geodyne Institutional/Pension Energy
Income Limited Partnership P-4.
31.6 Certification by Craig D. Loseke required by Rule
13a-14(a)/15d-14(a) for the Geodyne Institutional/Pension Energy
Income Limited Partnership P-4.
31.7 Certification by Dennis R. Neill required by Rule
13a-14(a)/15d-14(a) for the Geodyne Institutional/Pension Energy
Income Limited Partnership P-5.
31.8 Certification by Craig D. Loseke required by Rule
13a-14(a)/15d-14(a) for the Geodyne Institutional/Pension Energy
Income Limited Partnership P-5.
31.9 Certification by Dennis R. Neill required by Rule
13a-14(a)/15d-14(a) for the Geodyne Institutional/Pension Energy
Income Limited Partnership P-6.
31.10 Certification by Craig D. Loseke required by Rule
13a-14(a)/15d-14(a) for the Geodyne Institutional/Pension Energy
Income Limited Partnership P-6.
32.1 Certification pursuant to 18 U.S.C. Section 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 for the
Geodyne Institutional/Pension Energy Income P-1 Limited Partnership.
32.2 Certification pursuant to 18 U.S.C. Section 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 for the
Geodyne Institutional/Pension Energy Income Limited Partnership P-3.
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32.3 Certification pursuant to 18 U.S.C. Section 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 for the
Geodyne Institutional/Pension Energy Income Limited Partnership P-4.
32.4 Certification pursuant to 18 U.S.C. Section 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 for the
Geodyne Institutional/Pension Energy Income Limited Partnership P-5.
32.5 Certification pursuant to 18 U.S.C. Section 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 for the
Geodyne Institutional/Pension Energy Income Limited Partnership P-6.
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