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:
I-D: 0-15831 I-E: 0-15832 I-F: 0-15833
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP I-D
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP I-E
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP I-F
--------------------------------------------------------
(Exact name of Registrant as specified in its Articles)
I-D 73-1265223
I-E 73-1270110
Oklahoma I-F 73-1292669
- ---------------------------- -------------------------------
(State or other jurisdiction (I.R.S. Employer Identification
of incorporation or Number)
organization)
Two West Second Street, Tulsa, Oklahoma 74103
------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code:(918) 583-1791
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes X No
------ ------
Indicate by check mark whether the registrant is an accelerated filer (as
defined in Rule 12b-2 of the 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 ENERGY INCOME LIMITED PARTNERSHIP I-D
GEODYNE ENERGY INCOME PRODUCTION PARTNERSHIP I-D
COMBINED BALANCE SHEETS
(Unaudited)
ASSETS
September 30, December 31,
2005 2004
------------- ------------
CURRENT ASSETS:
Cash and cash equivalents $ 263,315 $250,839
Accounts receivable:
Oil and gas sales 262,890 153,570
---------- --------
Total current assets $ 526,205 $404,409
NET OIL AND GAS PROPERTIES, utilizing
the successful efforts method 401,587 381,334
DEFERRED CHARGE 78,164 82,606
---------- --------
$1,005,956 $868,349
========== ========
LIABILITIES AND PARTNERS' CAPITAL (DEFICIT)
CURRENT LIABILITIES:
Accounts payable $ 35,399 $ 25,242
Accounts payable - related
party (Note 2) 1,642 -
Gas imbalance payable 34,605 34,587
Asset retirement obligation -
current (Note 1) 2,337 2,453
---------- --------
Total current liabilities $ 73,983 $ 62,282
LONG-TERM LIABILITIES:
Accrued liability $ 25,436 $ 30,433
Asset retirement obligation (Note 1) 60,227 28,648
---------- --------
Total long-term liabilities $ 85,663 $ 59,081
PARTNERS' CAPITAL (DEFICIT):
General Partner ($ 3,500) ($ 20,255)
Limited Partners, issued and
outstanding, 7,195 units 849,810 767,241
---------- --------
Total Partners' capital $ 846,310 $746,986
---------- --------
$1,005,956 $868,349
========== ========
The accompanying condensed notes are an integral part of these
combined financial statements.
-2-
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP I-D
GEODYNE ENERGY INCOME PRODUCTION PARTNERSHIP I-D
COMBINED STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2005 AND 2004
(Unaudited)
2005 2004
-------- --------
REVENUES:
Oil and gas sales $324,886 $229,257
Interest income 1,352 395
-------- --------
$326,238 $229,652
COSTS AND EXPENSES:
Lease operating $ 35,298 $ 15,980
Production tax 20,487 14,858
Depreciation, depletion, and
amortization of oil and gas
properties 16,367 6,629
General and administrative
(Note 2) 22,023 21,983
-------- --------
$ 94,175 $ 59,450
-------- --------
NET INCOME $232,063 $170,202
======== ========
GENERAL PARTNER - NET INCOME $ 36,898 $ 26,399
======== ========
LIMITED PARTNERS - NET INCOME $195,165 $143,803
======== ========
NET INCOME per unit $ 27.12 $ 19.98
======== ========
UNITS OUTSTANDING 7,195 7,195
======== ========
The accompanying condensed notes are an integral part of these
combined financial statements.
-3-
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP I-D
GEODYNE ENERGY INCOME PRODUCTION PARTNERSHIP I-D
COMBINED STATEMENTS OF OPERATIONS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2005 AND 2004
(Unaudited)
2005 2004
-------- --------
REVENUES:
Oil and gas sales $882,543 $692,596
Interest income 3,325 908
-------- --------
$885,868 $693,504
COSTS AND EXPENSES:
Lease operating $100,336 $ 72,598
Production tax 58,027 47,083
Depreciation, depletion, and
amortization of oil and gas
properties 34,052 25,714
General and administrative
(Note 2) 87,762 85,302
-------- --------
$280,177 $230,697
-------- --------
NET INCOME $605,691 $462,807
======== ========
GENERAL PARTNER - NET INCOME $ 95,122 $ 72,885
======== ========
LIMITED PARTNERS - NET INCOME $510,569 $389,922
======== ========
NET INCOME per unit $ 70.96 $ 54.19
======== ========
UNITS OUTSTANDING 7,195 7,195
======== ========
The accompanying condensed notes are an integral part of these
combined financial statements.
-4-
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP I-D
GEODYNE ENERGY INCOME PRODUCTION PARTNERSHIP I-D
COMBINED STATEMENTS OF CASH FLOWS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2005 AND 2004
(Unaudited)
2005 2004
---------- ----------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $605,691 $462,807
Adjustments to reconcile net
income to net cash provided
by operating activities:
Depreciation, depletion, and
amortization of oil and gas
properties 34,052 25,714
Settlement of asset retirement
obligation ( 36) -
Increase in accounts receivable -
oil and gas sales ( 109,320) ( 21,596)
Decrease in deferred charge 4,442 1,754
Increase (decrease) in accounts
payable 8,497 ( 13,216)
Increase in accounts payable -
related party (Note 2) 1,642 -
Increase in gas imbalance payable 18 513
Decrease in accrued liability ( 4,997) ( 1,835)
-------- --------
Net cash provided by operating
activities $539,989 $454,141
-------- --------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures ($ 23,944) ($ 14,502)
Proceeds from sale of oil and
gas properties 2,798 507
-------- --------
Net cash used by investing
activities ($ 21,146) ($ 13,995)
-------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Cash distributions ($506,367) ($441,838)
-------- --------
Net cash used by financing
activities ($506,367) ($441,838)
-------- --------
NET INCREASE (DECREASE) IN CASH AND
CASH EQUIVALENTS $ 12,476 ($ 1,692)
CASH AND CASH EQUIVALENTS AT
BEGINNING OF PERIOD 250,839 257,054
-------- --------
CASH AND CASH EQUIVALENTS AT
END OF PERIOD $263,315 $255,362
======== ========
The accompanying condensed notes are an integral part of these
combined financial statements.
-5-
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP I-E
GEODYNE ENERGY INCOME PRODUCTION PARTNERSHIP I-E
COMBINED BALANCE SHEETS
(Unaudited)
ASSETS
September 30, December 31,
2005 2004
------------ ------------
CURRENT ASSETS:
Cash and cash equivalents $1,529,953 $1,579,268
Accounts receivable:
Oil and gas sales 1,692,002 958,801
Related party (Note 2) 1,490 -
---------- ----------
Total current assets $3,223,445 $2,538,069
NET OIL AND GAS PROPERTIES, utilizing
the successful efforts method 2,467,633 2,176,302
DEFERRED CHARGE 397,867 424,309
---------- ----------
$6,088,945 $5,138,680
========== ==========
LIABILITIES AND PARTNERS' CAPITAL (DEFICIT)
CURRENT LIABILITIES:
Accounts payable $ 247,694 $ 233,536
Accrued liability - other (Note 1) - 88,892
Gas imbalance payable 113,067 117,263
Asset retirement obligation -
current (Note 1) 13,433 71,029
---------- ----------
Total current liabilities $ 374,194 $ 510,720
LONG-TERM LIABILITIES:
Accrued liability $ 128,792 $ 157,638
Asset retirement obligation
(Note 1) 718,957 274,480
---------- ----------
Total long-term liabilities $ 847,749 $ 432,118
PARTNERS' CAPITAL (DEFICIT):
General Partner $ 59,919 ($ 73,642)
Limited Partners, issued and
outstanding, 41,839 units 4,807,083 4,269,484
---------- ----------
Total Partners' capital $4,867,002 $4,195,842
---------- ----------
$6,088,945 $5,138,680
========== ==========
The accompanying condensed notes are an integral part of these
combined financial statements.
-6-
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP I-E
GEODYNE ENERGY INCOME PRODUCTION PARTNERSHIP I-E
COMBINED STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2005 AND 2004
(Unaudited)
2005 2004
---------- ----------
REVENUES:
Oil and gas sales $2,092,219 $1,492,508
Interest income 8,356 2,642
---------- ----------
$2,100,575 $1,495,150
COSTS AND EXPENSES:
Lease operating $ 287,757 $ 177,686
Production tax 123,639 90,032
Depreciation, depletion, and
amortization of oil and gas
properties 138,031 40,137
General and administrative
(Note 2) 121,651 121,601
---------- ----------
$ 671,078 $ 429,456
---------- ----------
NET INCOME $1,429,497 $1,065,694
========== ==========
GENERAL PARTNER - NET INCOME $ 232,496 $ 165,077
========== ==========
LIMITED PARTNERS - NET INCOME $1,197,001 $ 900,617
========== ==========
NET INCOME per unit $ 28.60 $ 21.53
========== ==========
UNITS OUTSTANDING 41,839 41,839
========== ==========
The accompanying condensed notes are an integral part of these
combined financial statements.
-7-
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP I-E
GEODYNE ENERGY INCOME PRODUCTION PARTNERSHIP I-E
COMBINED STATEMENTS OF OPERATIONS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2005 AND 2004
(Unaudited)
2005 2004
---------- ----------
REVENUES:
Oil and gas sales $5,628,777 $4,418,764
Interest income 21,244 5,912
---------- ----------
$5,650,021 $4,424,676
COSTS AND EXPENSES:
Lease operating $ 750,534 $ 707,678
Production tax 350,500 275,751
Depreciation, depletion, and
amortization of oil and gas
properties 229,811 147,753
General and administrative
(Note 2) 387,898 388,898
---------- ----------
$1,718,743 $1,520,080
---------- ----------
NET INCOME $3,931,278 $2,904,596
========== ==========
GENERAL PARTNER - NET INCOME $ 618,679 $ 455,488
========== ==========
LIMITED PARTNERS - NET INCOME $3,312,599 $2,449,108
========== ==========
NET INCOME per unit $ 79.17 $ 58.54
========== ==========
UNITS OUTSTANDING 41,839 41,839
========== ==========
The accompanying condensed notes are an integral part of these
combined financial statements.
-8-
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP I-E
GEODYNE ENERGY INCOME PRODUCTION PARTNERSHIP I-E
COMBINED STATEMENTS OF CASH FLOWS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2005 AND 2004
(Unaudited)
2005 2004
------------ ------------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $3,931,278 $2,904,596
Adjustments to reconcile net
income to net cash provided
by operating activities:
Depreciation, depletion, and
amortization of oil and gas
properties 229,811 147,753
Settlement of asset retirement
obligation ( 272) -
Increase in accounts receivable -
oil and gas sales ( 733,201) ( 172,478)
Increase in accounts receivable -
related party (Note 2) ( 1,490) -
Decrease in deferred charge 26,442 10,481
Decrease in accounts payable ( 5,437) ( 120,014)
Decrease in accrued liability -
other (Note 1) ( 88,892) -
Increase (decrease) in gas
imbalance payable ( 4,196) 5,749
Decrease in accrued liability ( 28,846) ( 15,152)
---------- ----------
Net cash provided by operating
activities $3,325,197 $2,760,935
---------- ----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures ($ 123,387) ($ 78,661)
Proceeds from the sale of oil and
gas properties 8,993 5,799
---------- ----------
Net cash used by investing
activities ($ 114,394) ($ 72,862)
---------- ----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Cash distributions ($3,260,118) ($2,667,382)
---------- ----------
Net cash used by financing
activities ($3,260,118) ($2,667,382)
---------- ----------
NET INCREASE (DECREASE) IN CASH AND
CASH EQUIVALENTS ($ 49,315) $ 20,691
CASH AND CASH EQUIVALENTS AT
BEGINNING OF PERIOD 1,579,268 1,541,576
---------- ----------
CASH AND CASH EQUIVALENTS AT
END OF PERIOD $1,529,953 $1,562,267
========== ==========
The accompanying condensed notes are an integral part of these
combined financial statements.
-9-
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP I-F
GEODYNE ENERGY INCOME PRODUCTION PARTNERSHIP I-F
COMBINED BALANCE SHEETS
(Unaudited)
ASSETS
September 30, December 31,
2005 2004
------------ ------------
CURRENT ASSETS:
Cash and cash equivalents $ 543,555 $ 552,399
Accounts receivable:
Oil and gas sales 553,570 335,364
---------- ----------
Total current assets $1,097,125 $ 887,763
NET OIL AND GAS PROPERTIES, utilizing
the successful efforts method 975,405 840,849
DEFERRED CHARGE 304,406 326,610
---------- ----------
$2,376,936 $2,055,222
========== ==========
LIABILITIES AND PARTNERS' CAPITAL (DEFICIT)
CURRENT LIABILITIES:
Accounts payable $ 118,489 $ 102,011
Accrued liability - other (Note 1) - 62,225
Gas imbalance payable 38,136 37,860
Asset retirement obligation -
current (Note 1) 5,664 46,371
---------- ----------
Total current liabilities $ 162,289 $ 248,467
LONG-TERM LIABILITIES:
Accrued liability $ 117,885 $ 139,114
Asset retirement obligation
(Note 1) 327,132 118,400
---------- ----------
Total long-term liabilities $ 445,017 $ 257,514
PARTNERS' CAPITAL (DEFICIT):
General Partner $ 47,262 ($ 1,201)
Limited Partners, issued and
outstanding, 14,321 units 1,722,368 1,550,442
---------- ----------
Total Partners' capital $1,769,630 $1,549,241
---------- ----------
$2,376,936 $2,055,222
========== ==========
The accompanying condensed notes are an integral part of these
combined financial statements.
-10-
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP I-F
GEODYNE ENERGY INCOME PRODUCTION PARTNERSHIP I-F
COMBINED STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2005 AND 2004
(Unaudited)
2005 2004
-------- --------
REVENUES:
Oil and gas sales $761,449 $508,024
Interest income 2,894 877
-------- --------
$764,343 $508,901
COSTS AND EXPENSES:
Lease operating $132,767 $ 82,539
Production tax 43,555 28,835
Depreciation, depletion, and
amortization of oil and gas
properties 62,995 14,492
General and administrative
(Note 2) 42,517 42,476
-------- --------
$281,834 $168,342
-------- --------
NET INCOME $482,509 $340,559
======== ========
GENERAL PARTNER - NET INCOME $ 80,761 $ 52,981
======== ========
LIMITED PARTNERS - NET INCOME $401,748 $287,578
======== ========
NET INCOME per unit $ 28.05 $ 20.08
======== ========
UNITS OUTSTANDING 14,321 14,321
======== ========
The accompanying condensed notes are an integral part of these
combined financial statements.
-11-
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP I-F
GEODYNE ENERGY INCOME PRODUCTION PARTNERSHIP I-F
COMBINED STATEMENTS OF OPERATIONS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2005 AND 2004
(Unaudited)
2005 2004
---------- ----------
REVENUES:
Oil and gas sales $1,946,414 $1,468,250
Interest income 7,377 1,991
---------- ----------
$1,953,791 $1,470,241
COSTS AND EXPENSES:
Lease operating $ 301,832 $ 308,823
Production tax 117,924 85,769
Depreciation, depletion, and
amortization of oil and gas
properties 97,004 48,102
General and administrative
(Note 2) 149,502 147,755
---------- ----------
$ 666,262 $ 590,449
---------- ----------
NET INCOME $1,287,529 $ 879,792
========== ==========
GENERAL PARTNER - NET INCOME $ 205,603 $ 138,404
========== ==========
LIMITED PARTNERS - NET INCOME $1,081,926 $ 741,388
========== ==========
NET INCOME per unit $ 75.55 $ 51.77
========== ==========
UNITS OUTSTANDING 14,321 14,321
========== ==========
The accompanying condensed notes are an integral part of these
combined financial statements.
-12-
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP I-F
GEODYNE ENERGY INCOME PRODUCTION PARTNERSHIP I-F
COMBINED STATEMENTS OF CASH FLOWS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2005 AND 2004
(Unaudited)
2005 2004
------------ ----------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $1,287,529 $879,792
Adjustments to reconcile net
income to net cash provided
by operating activities:
Depreciation, depletion, and
amortization of oil and gas
properties 97,004 48,102
Settlement of asset retirement
obligation ( 136) -
Increase in accounts receivable -
oil and gas sales ( 218,206) ( 66,017)
Decrease in deferred charge 22,204 7,282
Increase (decrease) in accounts
payable 7,599 ( 57,018)
Decrease in accrued liability -
other (Note 1) ( 62,225) -
Increase in gas imbalance payable 276 558
Decrease in accrued liability ( 21,229) ( 4,799)
---------- --------
Net cash provided by operating
activities $1,112,816 $807,900
---------- --------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures ($ 57,613) ($ 39,766)
Proceeds from sale of oil and
gas properties 3,093 928
---------- --------
Net cash used by investing
activities ($ 54,520) ($ 38,838)
---------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Cash distributions ($1,067,140) ($758,601)
---------- --------
Net cash used by financing
activities ($1,067,140) ($758,601)
---------- --------
NET INCREASE (DECREASE) IN CASH AND
CASH EQUIVALENTS ($ 8,844) $ 10,461
CASH AND CASH EQUIVALENTS AT
BEGINNING OF PERIOD 552,399 513,327
---------- --------
CASH AND CASH EQUIVALENTS AT
END OF PERIOD $ 543,555 $523,788
========== ========
The accompanying condensed notes are an integral part of these
combined financial statements.
-13-
GEODYNE ENERGY INCOME PROGRAM I LIMITED PARTNERSHIPS
CONDENSED NOTES TO THE COMBINED FINANCIAL STATEMENTS
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 limited partnerships, without audit. Each
limited partnership is a general partner in the related Geodyne Energy
Income Production Partnership in which Geodyne Resources, Inc. serves as
the managing partner. Unless the context indicates otherwise, all
references to a "Partnership" or the "Partnerships" are references to the
limited partnership and its related production partnership, collectively,
and all references to the "General Partner" are references to the general
partner of the limited partnerships and the managing partner of the
production partnerships, collectively. In the opinion of management the
financial statements referred to above include all necessary adjustments,
consisting of normal recurring adjustments, to present fairly the combined
financial position at 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.
The Limited Partners' net income or loss per unit is based upon each
$1,000 initial capital contribution.
-14-
OIL AND GAS PROPERTIES
----------------------
The Partnerships follow the successful efforts method of accounting for
their oil and gas properties. Under the successful efforts method, the
Partnerships capitalize all property acquisition costs and development
costs incurred in connection with the further development of oil and gas
reserves. Property acquisition costs include costs incurred by the
Partnerships or the General Partner to acquire producing properties,
including related title insurance or examination costs, commissions,
engineering, legal and accounting fees, and similar costs directly related
to the acquisitions, plus an allocated portion, of the General Partner's
property screening costs. The acquisition cost to the Partnerships of
properties acquired by the General Partner is adjusted to reflect the net
cash results of operations, including interest incurred to finance the
acquisition, for the period of time the properties are held by the General
Partner.
Depletion of the costs of producing oil and gas properties, amortization
of related intangible drilling and development costs, and depreciation of
tangible lease and well equipment are computed on the unit-of-production
method. The Partnerships' depletion, depreciation, and amortization
includes estimated dismantlement and abandonment costs and estimated
salvage value of the equipment.
When complete units of depreciable property are retired or sold, the asset
cost and related accumulated depreciation are eliminated with any gain or
loss (including the elimination of the asset retirement obligation)
reflected in income. When less than complete units of depreciable property
are retired or sold, the proceeds are credited to oil and gas properties.
ACCRUED LIABILITY - OTHER
-------------------------
The Accrued Liability - Other at December 31, 2004 for the I-E and I-F
Partnerships represents a charge accrued for the payment of a judgment
related to plugging liabilities. The decrease in Accrued Liability - Other
from December 31, 2004 to September 30, 2005 was due to a ruling made by
the Texas Supreme Court on April 8, 2005 that the Partnerships did not owe
this liability.
-15-
ASSET RETIREMENT OBLIGATIONS
----------------------------
The Partnerships' wells must be properly plugged and abandoned after their
oil and gas reserves are exhausted. The Partnerships follow FAS No. 143,
"Accounting for Asset Retirement Obligations" in accounting for the future
expenditures that will be necessary to plug and abandon these wells. FAS
No. 143 requires the estimated plugging and abandonment obligations to be
recognized in the period in which they are incurred (i.e. when the well is
drilled or acquired) if a reasonable estimate of fair value can be made
and to be capitalized as part of the carrying amount of the well.
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.
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 I-D, I-E, and I-F Partnerships
recognized approximately $10,000, $109,000, and $54,000, respectively, of
an increase in depreciation, depletion, and amortization expense, which
was comprised of accretion of the asset retirement obligation and
depletion of the increase in capitalized cost of oil and gas properties.
The components of the change in asset retirement obligations for the three
and nine months ended September 30, 2005 and 2004 are as shown below.
I-D Partnership
---------------
Three Months Three Months
Ended Ended
9/30/2005 9/30/2004
------------- -------------
Total Asset Retirement
Obligation, July 1 $ 31,481 $ 30,430
Additions and revisions 29,540 -
Accretion expense 1,543 271
-------- --------
Total Asset Retirement
Obligation, End of Quarter $ 62,564 $ 30,701
======== ========
-16-
Nine Months Nine Months
Ended Ended
9/30/2005 9/30/2004
----------- -----------
Total Asset Retirement
Obligation, January 1 $ 31,101 $ 29,848
Additions and revisions 29,685 -
Settlements and disposals ( 448) -
Accretion expense 2,226 853
-------- --------
Total Asset Retirement
Obligation, End of Period $ 62,564 $ 30,701
======== ========
Asset Retirement Obligation -
Current $ 2,337 $ 1,193
Asset Retirement Obligation -
Long-Term 60,227 29,508
I-E Partnership
---------------
Three Months Three Months
Ended Ended
9/30/2005 9/30/2004
------------ ------------
Total Asset Retirement
Obligation, July 1 $349,377 $284,732
Additions and revisions 365,183 257
Accretion expense 17,830 1,720
-------- --------
Total Asset Retirement
Obligation, End of Quarter $732,390 $286,709
======== ========
Nine Months Nine Months
Ended Ended
9/30/2005 9/30/2004
----------- -----------
Total Asset Retirement
Obligation, January 1 $345,509 $281,230
Additions and revisions 365,977 257
Settlements and disposals ( 2,922) -
Accretion expense 23,826 5,222
-------- --------
Total Asset Retirement
Obligation, End of Period $732,390 $286,709
======== ========
Asset Retirement Obligation -
Current $ 13,433 $ 10,851
Asset Retirement Obligation -
Long-Term 718,957 275,858
-17-
I-F Partnership
---------------
Three Months Three Months
Ended Ended
9/30/2005 9/30/2004
------------ ------------
Total Asset Retirement
Obligation, July 1 $166,508 $123,985
Additions and revisions 158,373 180
Accretion expense 7,915 788
-------- --------
Total Asset Retirement
Obligation, End of Quarter $332,796 $124,953
======== ========
Nine Months Nine Months
Ended Ended
9/30/2005 9/30/2004
----------- -----------
Total Asset Retirement
Obligation, January 1 $164,771 $122,335
Additions and revisions 158,751 180
Settlements and disposals ( 1,533) -
Accretion expense 10,807 2,438
-------- --------
Total Asset Retirement
Obligation, End of Period $332,796 $124,953
======== ========
Asset Retirement Obligation -
Current $ 5,664 $ 5,921
Asset Retirement Obligation -
Long-Term 327,132 119,032
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:
Direct General Administrative
Partnership and Administrative Overhead
----------- ------------------- ---------------
I-D $2,037 $ 19,986
I-E 5,431 116,220
I-F 2,737 39,780
During the nine months ended September 30, 2005, the following payments
were made to the General Partner or its affiliates by the Partnerships:
-18-
Direct General Administrative
Partnership and Administrative Overhead
----------- ------------------- ---------------
I-D $27,804 $ 59,958
I-E 39,238 348,660
I-F 30,162 119,340
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.
ACCOUNTS RECEIVABLE - RELATED PARTY
-----------------------------------
The Accounts Receivable - Related Party at September 30, 2005 for the I-E
Partnership represents oil and gas revenues initially paid directly to an
affiliate that have not been disbursed to the I-E Partnership as of
September 30, 2005. Such amount is expected to be received during the
fourth quarter of 2005.
ACCOUNTS PAYABLE - RELATED PARTY
--------------------------------
The Accounts Payable - Related Party at September 30, 2005 for the I-D
Partnership represents oil and gas revenues due to affiliates that have
not been disbursed by the I-D Partnership as of September 30, 2005. Such
amounts will be repaid during the fourth quarter of 2005.
-19-
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
USE OF FORWARD-LOOKING STATEMENTS AND ESTIMATES
- -----------------------------------------------
This Quarterly Report contains certain forward-looking statements. The
words "anticipate", "believe", "expect", "plan", "intend", "estimate",
"project", "could", "may" and similar expressions are intended to identify
forward-looking statements. Such statements reflect management's current
views with respect to future events and financial performance. This
Quarterly Report also includes certain information, which is, or is based
upon, estimates and assumptions. Such estimates and assumptions are
management's efforts to accurately reflect the condition and operation of
the Partnerships.
Use of forward-looking statements and estimates and assumptions involve
risks and uncertainties which include, but are not limited to, the
volatility of oil and gas prices, the uncertainty of reserve information,
the operating risk associated with oil and gas properties (including the
risk of personal injury, death, property damage, damage to the well or
producing reservoir, environmental contamination, and other operating
risks), the prospect of changing tax and regulatory laws, the availability
and capacity of processing and transportation facilities, the general
economic climate, the supply and price of foreign imports of oil and gas,
the level of consumer product demand, and the price and availability of
alternative fuels. Should one or more of these risks or uncertainties
occur or should estimates or underlying assumptions prove incorrect,
actual conditions or results may vary materially and adversely from those
stated, anticipated, believed, estimated, and otherwise indicated.
GENERAL
- -------
The Partnerships are engaged in the business of acquiring and operating
producing oil and gas properties located in the continental United States.
In general, a Partnership acquired producing properties and did not engage
in development drilling or enhanced recovery projects, except as an
incidental part of the management of the producing properties acquired.
Therefore, the economic life of each Partnership, and its related
Production Partnership, is limited to the period of time required to fully
produce its acquired oil and gas reserves. The net proceeds from the oil
and gas operations are distributed to the Limited Partners and the General
Partner in accordance with the terms of the Partnerships' partnership
agreements.
-20-
LIQUIDITY AND CAPITAL RESOURCES
- -------------------------------
The Partnerships began operations and investors were assigned their rights
as Limited Partners, having made capital contributions in the amounts and
on the dates set forth below:
Limited
Date of Partner Capital
Partnership Activation Contributions
----------- ------------------ ---------------
I-D March 4, 1986 $ 7,194,700
I-E September 10, 1986 41,839,400
I-F December 16, 1986 14,320,900
In general, the amount of funds available for acquisition of producing
properties was equal to the capital contributions of the Limited Partners,
less 15% for sales commissions and organization and management fees. All
of the Partnerships have fully invested their capital contributions.
Net proceeds from the operations less necessary operating capital are
distributed to the Limited Partners on a quarterly basis. Revenues and net
proceeds of a Partnership are largely dependent upon the volumes of oil
and gas sold and the prices received for such oil and gas. While the
General Partner cannot predict future pricing trends, it believes the
working capital available as of September 30, 2005 and the net revenue
generated from future operations will provide sufficient working capital
to meet current and future obligations.
Occasional expenditures for new wells or well recompletions or workovers,
however, may reduce or eliminate cash available for a particular quarterly
cash distribution.
Pursuant to the terms of the Partnerships' partnership agreements (the
"Partnership Agreements"), the Partnerships would have terminated on
December 31, 1999. However, the Partnership Agreements provide that the
General Partner may extend the term of each Partnership for up to five
periods of two years each. As of the date of this Quarterly Report, the
General Partner has extended the terms of the Partnerships for their
fourth two year extension period to December 31, 2007.
-21-
CRITICAL ACCOUNTING POLICIES
- ----------------------------
The Partnerships follow the successful efforts method of accounting for
their oil and gas properties. Under the successful efforts method, the
Partnerships capitalize all property acquisition costs and development
costs incurred in connection with the further development of oil and gas
reserves. Property acquisition costs include costs incurred by the
Partnerships or the General Partner to acquire producing properties,
including related title insurance or examination costs, commissions,
engineering, legal and accounting fees, and similar costs directly related
to the acquisitions plus an allocated portion of the General Partner's
property screening costs. The acquisition cost to the Partnerships of the
properties acquired by the General Partner is adjusted to reflect the net
cash results of operations, including interest incurred to finance the
acquisition, for the period of time the properties are held by the General
Partner.
Depletion of the cost of producing oil and gas properties, amortization of
related intangible drilling and development costs, and depreciation of
tangible lease and well equipment are computed on the unit-of-production
method. The Partnerships' calculation of depreciation, depletion, and
amortization includes estimated dismantlement and abandonment costs and
estimated salvage value of the equipment. When complete units of
depreciable property are retired or sold, the asset cost and related
accumulated depreciation are eliminated with any gain or loss (including
the elimination of the asset retirement obligation) reflected in income.
When less than complete units of depreciable property are retired or sold,
the proceeds are credited to oil and gas properties.
The Partnerships evaluate the recoverability of the carrying costs of
their proved oil and gas properties for each oil and gas field (rather
than separately for each well). If the unamortized costs of oil and gas
properties within a field exceeds the expected undiscounted future cash
flows from such properties, the cost of the properties is written down to
fair value, which is determined by using the estimated discounted future
cash flows from the properties. The risk that the Partnerships will be
required to record impairment provisions in the future increases as oil
and gas prices decrease.
The Deferred Charge on the Balance Sheets represents costs deferred for
lease operating expenses incurred in connection with the Partnerships'
underproduced gas imbalance positions. Conversely, the Accrued Liability
represents charges accrued for lease operating expenses incurred in
connection with the Partnerships' overproduced gas imbalance positions.
The rate used in calculating the Deferred Charge and Accrued Liability is
the annual average production costs per Mcf.
-22-
The Partnerships' oil and condensate production is sold, title passed, and
revenue recognized at or near the Partnerships' wells under short-term
purchase contracts at prevailing prices in accordance with arrangements
which are customary in the oil and gas industry. Sales of gas applicable
to the Partnerships' interest in producing oil and gas leases are recorded
as revenue when the gas is metered and title transferred pursuant to the
gas sales contracts covering the Partnerships' interest in gas reserves.
During such times as a Partnership's sales of gas exceed its pro rata
ownership in a well, such sales are recorded as revenues unless total
sales from the well have exceeded the Partnership's share of estimated
total gas reserves underlying the property, at which time such excess is
recorded as a liability. The rates per Mcf used to calculate this
liability are based on the average gas price for which the Partnerships
are currently settling this liability. These amounts were recorded as gas
imbalance payables in accordance with the sales method. These gas
imbalance payables will be settled by either gas production by the
underproduced party in excess of current estimates of total gas reserves
for the well or by negotiated or contractual payment to the underproduced
party.
ASSET RETIREMENT OBLIGATIONS
- ----------------------------
The Partnerships' wells must be properly plugged and abandoned after their
oil and gas reserves are exhausted. The Partnerships follow FAS No. 143,
"Accounting for Asset Retirement Obligations" in accounting for the future
expenditures that will be necessary to plug and abandon these wells. FAS
No. 143 requires the estimated plugging and abandonment obligations to be
recognized in the period in which they are incurred (i.e. when the well is
drilled or acquired) if a reasonable estimate of fair value can be made
and to be capitalized as part of the carrying amount of the well.
NEW ACCOUNTING PRONOUNCEMENTS
- -----------------------------
The Partnerships are not aware of any recently issued accounting
pronouncements that would have an impact on the Partnerships' future
results of operations and financial position.
-23-
PROVED RESERVES AND NET PRESENT VALUE
- -------------------------------------
The process of estimating oil and gas reserves is complex, requiring
significant subjective decisions in the evaluation of available
geological, engineering, and economic data for each reservoir. The data
for a given reservoir may change substantially over time as a result of,
among other things, additional development activity, production history,
and viability of production under varying economic conditions;
consequently, it is reasonably possible that material revisions to
existing reserve estimates may occur in the future. Although every
reasonable effort has been made to ensure that these reserve estimates
represent the most accurate assessment possible, the significance of the
subjective decisions required and variances in available data for various
reservoirs make these estimates generally less precise than other
estimates presented in connection with financial statement disclosures.
The following tables summarize changes in net quantities of the
Partnerships' proved reserves, all of which are located in the United
States, for the periods indicated. The proved reserves were estimated by
petroleum engineers employed by affiliates of the Partnerships, and are
annually reviewed by an independent engineering firm. "Proved reserves"
refers to those estimated quantities of crude oil, gas, and gas liquids
which geological and engineering data demonstrate with reasonable
certainty to be recoverable in future years from known oil and gas
reservoirs under existing economic and operating conditions. The following
information includes certain gas balancing adjustments which cause the gas
volume to differ from the reserve reports prepared by the General Partner.
-24-
I-D Partnership
---------------
Crude Natural
Oil Gas
(Barrels) (Mcf)
--------- -----------
Proved reserves, Dec. 31, 2004 71,201 1,516,243
Production ( 952) ( 41,416)
Extensions and discoveries 84 147
Revisions of previous
estimates 204 23,496
------ ---------
Proved reserves, March 31, 2005 70,537 1,498,470
Production ( 858) ( 34,823)
Extensions and discoveries 305 2,711
Revisions of previous
estimates 518 58,832
------ ---------
Proved reserves, June 30, 2005 70,502 1,525,190
Production ( 921) ( 34,746)
Extensions and discoveries 41 3,355
Revisions of previous
estimates 195 36,001
------ ---------
Proved reserves, Sept. 30, 2005 69,817 1,529,800
====== =========
-25-
I-E Partnership
---------------
Crude Natural
Oil Gas
(Barrels) (Mcf)
--------- -----------
Proved reserves, Dec. 31, 2004 500,364 8,079,380
Production ( 10,723) ( 229,046)
Extensions and discoveries 363 635
Revisions of previous
estimates 20,871 141,088
------- ---------
Proved reserves, March 31, 2005 510,875 7,992,057
Production ( 8,653) ( 195,235)
Extensions and discoveries 1,078 13,574
Revisions of previous
estimates 3,176 314,743
------- ---------
Proved reserves, June 30, 2005 506,476 8,125,139
Production ( 10,508) ( 189,167)
Extensions and discoveries 185 16,674
Revisions of previous
estimates 14,074 200,607
------- ---------
Proved reserves, Sept. 30, 2005 510,227 8,153,253
======= =========
-26-
I-F Partnership
---------------
Crude Natural
Oil Gas
(Barrels) (Mcf)
--------- -----------
Proved reserves, Dec. 31, 2004 238,894 2,401,195
Production ( 5,079) ( 61,912)
Extensions and discoveries 168 296
Revisions of previous
estimates 9,588 53,721
------- ---------
Proved reserves, March 31, 2005 243,571 2,393,300
Production ( 3,982) ( 58,488)
Extensions and discoveries 407 5,850
Revisions of previous
estimates 1,283 139,067
------- ---------
Proved reserves, June 30, 2005 241,279 2,479,729
Production ( 4,785) ( 61,844)
Extensions and discoveries 89 7,176
Revisions of previous
estimates 5,378 93,024
------- ---------
Proved reserves, Sept. 30, 2005 241,961 2,518,085
======= =========
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 oil and gas prices in effect on the dates
corresponding to the reserve valuations. Changes in the oil and gas prices
cause the estimates of remaining economically recoverable reserves, as
well as the values placed on said reserves to fluctuate. The prices used
in calculating the net present value attributable to the Partnerships'
proved reserves do not necessarily reflect market prices for oil
-27-
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
----------- ------- ------- ------- --------
I-D $11,036 $ 5,498 $ 5,498 $ 4,527
I-E 62,377 31,684 31,845 25,701
I-F 20,090 10,758 10,736 8,503
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;
-28-
* 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 nd 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.
-29-
I-D PARTNERSHIP
THREE MONTHS ENDED SEPTEMBER 30, 2005 COMPARED TO THE THREE MONTHS ENDED
SEPTEMBER 30, 2004.
Three Months Ended September 30,
--------------------------------
2005 2004
-------- --------
Oil and gas sales $324,886 $229,257
Oil and gas production expenses $ 55,785 $ 30,838
Barrels produced 921 871
Mcf produced 34,746 37,834
Average price/Bbl $ 60.79 $ 41.91
Average price/Mcf $ 7.74 $ 5.09
As shown in the table above, total oil and gas sales increased $95,629
(41.7%) for the three months ended September 30, 2005 as compared to the
three months ended September 30, 2004. Of this increase, approximately
$17,000 and $92,000, respectively, were related to increases in the
average prices of oil and gas sold. These increases were partially offset
by a decrease of approximately $16,000 related to a decrease in volumes of
gas sold. Volumes of oil sold increased 50 barrels, while volumes of gas
sold decreased 3,088 Mcf for the three months ended September 30, 2005 as
compared to the three months ended September 30, 2004. The decrease in
volumes of gas sold was primarily due to normal declines in production,
which decrease was partially offset by positive prior period volume
adjustments made by the operator on several wells during the three months
ended September 30, 2005.
Oil and gas production expenses (including lease operating expenses and
production taxes) increased $24,947 (80.9%) for the three months ended
September 30, 2005 as compared to the three months ended September 30,
2004. This increase was primarily due to (i) positive prior period lease
operating expense adjustments made on several 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) workover
expenses incurred on several other wells during the three months ended
September 30, 2005. As a percentage of oil and gas sales, these expenses
increased to 17.2% for the three months ended September 30, 2005 from
13.5% for the three months ended September 30, 2004. This percentage
increase was primarily due to the dollar increase in oil and gas
production expenses.
Depreciation, depletion, and amortization of oil and gas properties
increased $9,738 (146.9%) for the three months ended September 30, 2005 as
compared to the three months ended September 30, 2004. Of this increase
(i) approximately $7,000 was due to the depletion of additional
capitalized costs of oil and gas properties as a result of the upward
revision in the estimate of the asset retirement obligations, of which
approximately $5,000 was related to
-30-
previously fully depleted wells, and (ii) approximately $1,000 was due to
accretion of these additional asset retirement obligations. This increase
was also due to one significant well being fully depleted during the three
months ended September 30, 2005 due to the lack of remaining reserves. As
a percentage of oil and gas sales, this expense increased to 5.0% for the
three months ended September 30, 2005 from 2.9% for the three months ended
September 30, 2004. This percentage increase was primarily due to the
dollar increase in depreciation, depletion, and amortization of oil and
gas properties.
General and administrative expenses remained relatively constant for the
three months ended September 30, 2005 and 2004. As a percentage of oil and
gas sales, these expenses decreased to 6.8% for the three months ended
September 30, 2005 from 9.6% for the three months ended September 30,
2004. This percentage decrease was primarily due to the increase in oil
and gas sales.
NINE MONTHS ENDED SEPTEMBER 30, 2005 COMPARED TO THE NINE MONTHS ENDED
SEPTEMBER 30, 2004.
Nine Months Ended September 30,
-------------------------------
2005 2004
-------- --------
Oil and gas sales $882,543 $692,596
Oil and gas production expenses $158,363 $119,681
Barrels produced 2,731 2,558
Mcf produced 110,985 115,934
Average price/Bbl $ 53.57 $ 37.67
Average price/Mcf $ 6.63 $ 5.14
As shown in the table above, total oil and gas sales increased $189,947
(27.4%) for the nine months ended September 30, 2005 as compared to the
nine months ended September 30, 2004. Of this increase, approximately
$43,000 and $165,000, respectively, were related to increases in the
average prices of oil and gas sold. These increases were partially offset
by a decrease of approximately $25,000 related to a decrease in volumes of
gas sold. Volumes of oil sold increased 173 barrels, while volumes of gas
sold decreased 4,949 Mcf for the nine months ended September 30, 2005 as
compared to the nine months ended September 30, 2004. The decrease in
volumes of gas sold was primarily due to normal declines in production.
This decrease was partially offset by (i) positive prior period volume
adjustments made by the operator on several wells during the nine months
ended September 30, 2005, (ii) the first receipt of revenues on one
significant well during early 2005, and (iii) the successful completion of
several new wells during late 2004 and early 2005.
-31-
Oil and gas production expenses (including lease operating expenses and
production taxes) increased $38,682 (32.3%) for the nine months ended
September 30, 2005 as compared to the nine months ended September 30,
2004. This increase was primarily due to (i) an increase in production
taxes associated with the increase in oil and gas sales, (ii) positive
prior period lease operating expense adjustments made on several wells
during the nine months ended September 30, 2005, and (iii) workover
expenses incurred on several other wells during the nine months ended
September 30, 2005. As a percentage of oil and gas sales, these expenses
increased to 17.9% for the nine months ended September 30, 2005 from 17.3%
for the nine months ended September 30, 2004.
Depreciation, depletion, and amortization of oil and gas properties
increased $8,338 (32.4%) for the nine months ended September 30, 2005 as
compared to the nine months ended September 30, 2004. Of this increase (i)
approximately $7,000 was due to the depletion of additional capitalized
costs of oil and gas properties 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 $1,000 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. These increases were partially
offset by (i) several wells being fully depleted during the nine months
ended September 30, 2004 due to the lack of remaining reserves and (ii)
upward revisions in the estimates of remaining oil and gas reserves since
September 30, 2004. As a percentage of oil and gas sales, this expense
increased to 3.9% for the nine months ended September 30, 2005 from 3.7%
for the nine months ended September 30, 2004.
General and administrative expenses increased $2,460 (2.9%) for the nine
months ended September 30, 2005 as compared to the nine months ended
September 30, 2004. As a percentage of oil and gas sales, these expenses
decreased to 9.9% for the nine months ended September 30, 2005 from 12.3%
for the nine months ended September 30, 2004. This percentage decrease was
primarily due to the increase in oil and gas sales.
The Limited Partners have received cash distributions through September
30, 2005 totaling $17,697,175 or 245.98% of Limited Partners' capital
contributions.
-32-
I-E PARTNERSHIP
THREE MONTHS ENDED SEPTEMBER 30, 2005 COMPARED TO THE THREE MONTHS ENDED
SEPTEMBER 30, 2004.
Three Months Ended September 30,
--------------------------------
2005 2004
---------- ----------
Oil and gas sales $2,092,219 $1,492,508
Oil and gas production expenses $ 411,396 $ 267,718
Barrels produced 10,508 11,151
Mcf produced 189,167 206,459
Average price/Bbl $ 58.62 $ 40.60
Average price/Mcf $ 7.80 $ 5.04
As shown in the table above, total oil and gas sales increased $599,711
(40.2%) for the three months ended September 30, 2005 as compared to the
three months ended September 30, 2004. Of this increase, approximately
$189,000 and $524,000, respectively, were related to increases in the
average prices of oil and gas sold. These increases were partially offset
by a decrease of approximately $87,000 related to a decrease in volumes of
gas sold. Volumes of oil and gas sold decreased 643 barrels and 17,292
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 gas sold was primarily due to normal declines in production.
This decrease was partially offset by (i) positive prior period volume
adjustments made by the operator on several wells during the three months
ended September 30, 2005 and (ii) the successful completion of several new
wells during late 2004 and early 2005.
Oil and gas production expenses (including lease operating expenses and
production taxes) increased $143,678 (53.7%) for the three months ended
September 30, 2005 as compared to the three months ended September 30,
2004. This increase was primarily due to (i) positive prior period lease
operating expense adjustments made on several 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) workover
expenses incurred on several other wells during the three months ended
September 30, 2005. As a percentage of oil and gas sales, these expenses
increased to 19.7% for the three months ended September 30, 2005 from
17.9% for the three months ended September 30, 2004. This percentage
increase was primarily due to the dollar increase in oil and gas
production expenses.
Depreciation, depletion, and amortization of oil and gas properties
increased $97,894 (243.9%) for the three months ended September 30, 2005
as compared to the three months ended September 30, 2004. Of this increase
(i) approximately $70,000 was due to the depletion of additional
capitalized costs of oil and gas properties as a result of
-33-
the upward revision in the estimate of the asset retirement obligations,
of which approximately $42,000 was related to previously fully depleted
wells, and (ii) approximately $15,000 was due to accretion of these
additional asset retirement obligations. This increase was also due to one
significant well being fully depleted during the three months ended
September 30, 2005 due to the lack of remaining reserves. These increases
were partially offset by (i) the decreases in volumes of oil and gas sold
and (ii) upward revisions in the estimates of remaining oil and gas
reserves since September 30, 2004. As a percentage of oil and gas sales,
this expense increased to 6.6% for the three months ended September 30,
2005 from 2.7% for the three months ended September 30, 2004. This
percentage increase was primarily due to the dollar increase in
depreciation, depletion, and amortization of oil and gas properties.
General and administrative expenses remained relatively constant for the
three months ended September 30, 2005 and 2004. As a percentage of oil and
gas sales, these expenses decreased to 5.8% for the three months ended
September 30, 2005 from 8.1% for the three months ended September 30,
2004. This percentage decrease was primarily due to the increase in oil
and gas sales.
NINE MONTHS ENDED SEPTEMBER 30, 2005 COMPARED TO THE NINE MONTHS ENDED
SEPTEMBER 30, 2004.
Nine Months Ended September 30,
-------------------------------
2005 2004
---------- ----------
Oil and gas sales $5,628,777 $4,418,764
Oil and gas production expenses $1,101,034 $ 983,429
Barrels produced 29,884 34,394
Mcf produced 613,448 632,401
Average price/Bbl $ 52.63 $ 35.22
Average price/Mcf $ 6.61 $ 5.07
As shown in the table above, total oil and gas sales increased $1,210,013
(27.4%) for the nine months ended September 30, 2005 as compared to the
nine months ended September 30, 2004. Of this increase, approximately
$520,000 and $945,000, respectively, were related to increases in the
average prices of oil and gas sold. These increases were partially offset
by decreases of approximately $159,000 and $96,000, respectively, related
to decreases in volumes of oil and gas sold. Volumes of oil and gas sold
decreased 4,510 barrels and 18,953 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)
normal declines in production and (ii) a negative prior period volume
adjustment made by the operator on one significant well during the nine
months ended September 30, 2005. The decrease in volumes of gas sold was
primarily due to normal declines in production. This decrease was
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partially offset by (i) an increase in production on two significant wells
following the successful workover of those wells during mid 2004, (ii)
positive prior period volume adjustments made by the operator on several
wells during the nine months ended September 30, 2005, and (iii) the
successful completion of several new wells during late 2004 and early
2005.
Oil and gas production expenses (including lease operating expenses and
production taxes) increased $117,605 (12.0%) for the nine months ended
September 30, 2005 as compared to the nine months ended September 30,
2004. This increase 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) positive prior period lease operating expense adjustments
made on several other wells during the nine months ended September 30,
2005. These increases were partially offset by (i) a reversal during the
nine months ended September 30, 2005 of approximately $89,000 of a charge
previously accrued for a judgment and (ii) workover expenses incurred on
several wells during the nine months ended September 30, 2004. As a
percentage of oil and gas sales, these expenses decreased to 19.6% for the
nine months ended September 30, 2005 from 22.3% for the nine months ended
September 30, 2004. This percentage decrease was primarily due to the
increase in oil and gas sales.
Depreciation, depletion, and amortization of oil and gas properties
increased $82,058 (55.5%) for the nine months ended September 30, 2005 as
compared to the nine months ended September 30, 2004. Of this increase (i)
approximately $70,000 was due to the depletion of additional capitalized
costs of oil and gas properties as a result of the upward revision in the
estimate of the asset retirement obligations, of which approximately
$42,000 was related to previously fully depleted wells, and (ii)
approximately $15,000 was due to accretion of these additional asset
retirement obligations. This increase was also due to (i) two significant
wells being fully depleted during the nine months ended September 30, 2005
due to the lack of remaining reserves and (ii) downward revisions in the
estimates of remaining oil and gas reserves on two other significant wells
since September 30, 2004. These increases were partially offset by (i)
upward revisions in the estimates of remaining oil and gas reserves since
September 30, 2004, (ii) several wells being fully depleted during the
nine months ended September 30, 2004 due to the lack of remaining
reserves, and (iii) the decreases in volumes of oil and gas sold. As a
percentage of oil and gas sales, this expense increased to 4.1% for the
nine months ended September 30, 2005 from 3.3% for the nine months ended
September 30, 2004. This percentage increase was primarily due to the
dollar increase in depreciation, depletion, and amortization of oil and
gas properties.
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General and administrative expenses remained relatively constant for the
nine months ended September 30, 2005 and 2004. As a percentage of oil and
gas sales, these expenses decreased to 6.9% for the nine months ended
September 30, 2005 from 8.8% for the nine months ended September 30, 2004.
This percentage decrease was primarily due to the increase in oil and gas
sales.
The Limited Partners have received cash distributions through September
30, 2005 totaling $74,025,552 or 176.93% of Limited Partners' capital
contributions.
I-F PARTNERSHIP
THREE MONTHS ENDED SEPTEMBER 30, 2005 COMPARED TO THE THREE MONTHS ENDED
SEPTEMBER 30, 2004.
Three Months Ended September 30,
--------------------------------
2005 2004
-------- --------
Oil and gas sales $761,449 $508,024
Oil and gas production expenses $176,322 $111,374
Barrels produced 4,785 5,061
Mcf produced 61,844 58,268
Average price/Bbl $ 58.77 $ 40.65
Average price/Mcf $ 7.76 $ 5.19
As shown in the table above, total oil and gas sales increased $253,425
(49.9%) for the three months ended September 30, 2005 as compared to the
three months ended September 30, 2004. Of this increase, approximately (i)
$87,000 and $159,000, respectively, were related to increases in the
average prices of oil and gas sold and (ii) $19,000 was related to an
increase in volumes of gas sold. Volumes of oil sold decreased 276
barrels, while volumes of gas sold increased 3,576 Mcf for the three
months ended September 30, 2005 as compared to the three months ended
September 30, 2004. The increase in volumes of gas sold was primarily due
to (i) positive prior period volume adjustments made by the operator on
several wells during the three months ended September 30, 2005, (ii) an
increase in production on two significant wells following the workover of
those wells during mid 2004 and early 2005, and (iii) the successful
completion of several new wells during late 2004 and early 2005. These
increases were partially offset by normal declines in production.
Oil and gas production expenses (including lease operating expenses and
production taxes) increased $64,948 (58.3%) for the three months ended
September 30, 2005 as compared to the three months ended September 30,
2004. This increase was primarily due to (i) positive prior period lease
operating expense adjustments made on several 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) workover
expenses incurred on several other
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wells during the three months ended September 30, 2005. As a percentage of
oil and gas sales, these expenses increased to 23.2% for the three months
ended September 30, 2005 from 21.9% for the three months ended September
30, 2004.
Depreciation, depletion, and amortization of oil and gas properties
increased $48,503 (334.7%) for the three months ended September 30, 2005
as compared to the three months ended September 30, 2004. Of this increase
(i) approximately $33,000 was due to the depletion of additional
capitalized costs of oil and gas properties as a result of the upward
revision in the estimate of the asset retirement obligations, of which
approximately $22,000 was related to previously fully depleted wells, and
(ii) approximately $6,000 was due to accretion of these additional asset
retirement obligations. As a percentage of oil and gas sales, this expense
increased to 8.3% for the three months ended September 30, 2005 from 2.9%
for the three months ended September 30, 2004. This percentage increase
was primarily due to the dollar increase in depreciation, depletion, and
amortization of oil and gas properties.
General and administrative expenses remained relatively constant for the
three months ended September 30, 2005 and 2004. As a percentage of oil and
gas sales, these expenses decreased to 5.6% 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 oil
and gas sales.
NINE MONTHS ENDED SEPTEMBER 30, 2005 COMPARED TO THE NINE MONTHS ENDED
SEPTEMBER 30, 2004.
Nine Months Ended September 30,
-------------------------------
2005 2004
---------- ----------
Oil and gas sales $1,946,414 $1,468,250
Oil and gas production expenses $ 419,756 $ 394,592
Barrels produced 13,846 15,382
Mcf produced 182,244 178,611
Average price/Bbl $ 52.29 $ 35.50
Average price/Mcf $ 6.71 $ 5.16
As shown in the table above, total oil and gas sales increased $478,164
(32.6%) for the nine months ended September 30, 2005 as compared to the
nine months ended September 30, 2004. Of this increase, approximately (i)
$233,000 and $281,000, respectively, were related to increases in the
average prices of oil and gas sold and (ii) $19,000 was related to an
increase in volumes of gas sold. These increases were partially offset by
a decrease of approximately $55,000 related to a decrease in volumes of
oil sold. Volumes of oil sold decreased 1,536 barrels, while volumes of
gas sold increased 3,633 Mcf for the nine months ended September 30, 2005
as compared to the nine months ended September 30, 2004. The decrease in
volumes of
-37-
oil sold was primarily due to (i) normal declines in production and (ii) a
negative prior period volume adjustment made by the operator on one
significant well during the nine months ended September 30, 2005. The
increase in volumes of gas sold was primarily due to (i) an increase in
production on two significant wells following their successful workover
during mid 2004 and early 2005, (ii) positive prior period volume
adjustments made by the operator on several wells during the nine months
ended September 30, 2005, and (iii) the successful completion of several
new wells during late 2004 and early 2005. These increases were partially
offset by normal declines in production.
Oil and gas production expenses (including lease operating expenses and
production taxes) increased $25,164 (6.4%) for the nine months ended
September 30, 2005 as compared to the nine months ended September 30,
2004. This increase 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) positive prior period lease operating expense adjustments
made on several other wells during the nine months ended September 30,
2005. These increases were partially offset by (i) a reversal during the
nine months ended September 30, 2005 of approximately $62,000 of a charge
previously accrued for a judgment and (ii) workover expenses incurred on
several wells during the nine months ended September 30, 2004. As a
percentage of oil and gas sales, these expenses decreased to 21.6% for the
nine months ended September 30, 2005 from 26.9% for the nine months ended
September 30, 2004. This percentage decrease was primarily due to the
increase in oil and gas sales.
Depreciation, depletion, and amortization of oil and gas properties
increased $48,902 (101.7%) for the nine months ended September 30, 2005 as
compared to the nine months ended September 30, 2004. Of this increase (i)
approximately $33,000 was due to the depletion of additional capitalized
costs of oil and gas properties as a result of the upward revision in the
estimate of the asset retirement obligations, of which approximately
$22,000 was related to previously fully depleted wells, and (ii)
approximately $6,000 was due to accretion of these additional asset
retirement obligations. This increase was partially offset by upward
revisions in the estimates of remaining oil and gas reserves since
September 30, 2004. As a percentage of oil and gas sales, this expense
increased to 5.0% for the nine months ended September 30, 2005 from 3.3%
for the nine months ended September 30, 2004. This percentage increase was
primarily due to the dollar increase in depreciation, depletion, and
amortization of oil and gas properties.
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General and administrative expenses increased $1,747 (1.2%) for the nine
months ended September 30, 2005 as compared to the nine months ended
September 30, 2004. As a percentage of oil and gas sales, these expenses
decreased to 7.7% for the nine months ended September 30, 2005 from 10.1%
for the nine months ended September 30, 2004. This percentage decrease was
primarily due to the increase in oil and gas sales.
The Limited Partners have received cash distributions through September
30, 2005 totaling $23,303,664 or 162.72% of Limited Partners' capital
contributions.
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ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET
RISK
The Partnerships do not hold any market risk sensitive instruments.
ITEM 4. CONTROLS AND PROCEDURES
As of the end of this 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 I-D Partnership.
31.2 Certification by Craig D. Loseke required by Rule
13a-14(a)/15d-14(a) for the I-D Partnership.
31.3 Certification by Dennis R. Neill required by Rule
13a-14(a)/15d-14(a) for the I-E Partnership.
31.4 Certification by Craig D. Loseke required by Rule
13a-14(a)/15d-14(a) for the I-E Partnership.
31.5 Certification by Dennis R. Neill required by Rule
13a-14(a)/15d-14(a) for the I-F Partnership.
31.6 Certification by Craig D. Loseke required by Rule
13a-14(a)/15d-14(a) for the I-F Partnership.
32.1 Certification pursuant to 18 U.S.C. Section 1350, as
adopted pursuant to Section 906 of the Sarbanes-Oxley
Act of 2002 for the I-D Partnership.
32.2 Certification pursuant to 18 U.S.C. Section 1350, as
adopted pursuant to Section 906 of the Sarbanes-Oxley
Act of 2002 for the I-E Partnership.
32.3 Certification pursuant to 18 U.S.C. Section 1350, as
adopted pursuant to Section 906 of the Sarbanes-Oxley
Act of 2002 for the I-F Partnership.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP I-D
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP I-E
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP I-F
(Registrant)
BY: GEODYNE RESOURCES, INC.
General Partner
Date: 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 Energy Income Limited
Partnership I-D.
31.2 Certification by Craig D. Loseke required by Rule
13a-14(a)/15d-14(a) for the Geodyne Energy Income Limited
Partnership I-D.
31.3 Certification by Dennis R. Neill required by Rule
13a-14(a)/15d-14(a) for the Geodyne Energy Income Limited
Partnership I-E.
31.4 Certification by Craig D. Loseke required by Rule
13a-14(a)/15d-14(a) for the Geodyne Energy Income Limited
Partnership I-E.
31.5 Certification by Dennis R. Neill required by Rule
13a-14(a)/15d-14(a) for the Geodyne Energy Income Limited
Partnership I-F.
31.6 Certification by Craig D. Loseke required by Rule
13a-14(a)/15d-14(a) for the Geodyne Energy Income Limited
Partnership I-F.
32.1 Certification pursuant to 18 U.S.C. Section 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 for
the Geodyne Energy Income Limited Partnership I-D.
32.2 Certification pursuant to 18 U.S.C. Section 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 for
the Geodyne Energy Income Limited Partnership I-E.
32.3 Certification pursuant to 18 U.S.C. Section 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 for
the Geodyne Energy Income Limited Partnership I-F.
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