FORM 10-K
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2005
Commission File Number:
III-A: 0-18302; III-B: 0-18636; III-C: 0-18634; III-D: 0-18936
III-E: 0-19010; III-F: 0-19102
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-A
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-B
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-C
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-D
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-E
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-F
-----------------------------------------------
(Exact name of Registrant as specified in its Articles)
III-A: 73-1352993
III-B: 73-1358666
III-C: 73-1356542
III-D: 73-1357374
III-E: 73-1367188
Oklahoma III-F: 73-1377737
- --------------------------------- ----------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
Two West Second Street, Tulsa, Oklahoma 74103
---------------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (918)583-1791
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act:
Depositary Units of Limited Partnership interest
Indicate by check mark if the Registrant is a well-known seasoned issuer,
as defined in Rule 405 of the Securities Act.
Yes X No
---- ----
Indicate by check mark if the Registrant is not required to file reports
pursuant to Section 13 or Section 15(d) of the Act.
Yes X No
---- ----
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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 the
filing requirements for the past 90 days.
X Yes No
----- -----
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of Registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K.
X Disclosure is not contained herein.
-----
Disclosure is contained herein.
-----
Indicate by check mark whether the Registrant is a large accelerated
filer, an accelerated filer, or a non-accelerated filer. See definition of
"accelerated filer and large accelerated filer" in Rule 12b-2 of the Exchange
Act (check one):
Large accelerated filer
-----
Accelerated filer
-----
X Non-accelerated filer
-----
Indicate by check mark whether the Registrant is a shell company (as
defined in Rule 12b-2 of the Exchange Act).
Yes X No
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The Depositary Units are not publicly traded; therefore, Registrant cannot
compute the aggregate market value of the voting units held by non-affiliates of
the Registrant.
DOCUMENTS INCORPORATED BY REFERENCE: None
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FORM 10-K
TABLE OF CONTENTS
PART I.......................................................................4
ITEM 1. BUSINESS...................................................4
ITEM 1A. RISK FACTORS...............................................9
ITEM 1B. UNRESOLVED STAFF COMMENTS.................................14
ITEM 2. PROPERTIES................................................15
ITEM 3. LEGAL PROCEEDINGS.........................................35
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF LIMITED PARTNERS.......36
PART II.....................................................................36
ITEM 5. MARKET FOR UNITS AND RELATED LIMITED PARTNER MATTERS......36
ITEM 6. SELECTED FINANCIAL DATA...................................39
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS.......................46
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES
ABOUT MARKET RISK.........................................70
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA...............70
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL DISCLOSURE.......................70
ITEM 9A. CONTROLS AND PROCEDURES...................................70
ITEM 9B. OTHER INFORMATION.........................................70
PART III....................................................................70
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE GENERAL PARTNER...70
ITEM 11. EXECUTIVE COMPENSATION....................................72
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT................................................80
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS............81
ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES....................83
PART IV.....................................................................84
ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES................84
SIGNATURES............................................................95
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PART I
ITEM 1. BUSINESS
General
The Geodyne Energy Income Limited Partnership III-A (the "III-A
Partnership"), Geodyne Energy Income Limited Partnership III-B (the "III-B
Partnership"), Geodyne Energy Income Limited Partnership III-C (the "III-C
Partnership"), Geodyne Energy Income Limited Partnership III-D (the "III-D
Partnership"), Geodyne Energy Income Limited Partnership III-E (the "III-E
Partnership"), and Geodyne Energy Income Limited Partnership III-F (the "III-F
Partnership") (collectively, the "Partnerships") are limited partnerships formed
under the Oklahoma Revised Uniform Limited Partnership Act. Each Partnership is
composed of Geodyne Resources, Inc., a Delaware corporation, as general partner
("Geodyne" or the "General Partner"), Geodyne Depositary Company, a Delaware
corporation, as the sole initial limited partner, and public investors as
substitute limited partners (the "Limited Partners"). The Partnerships commenced
operations on the dates set forth below:
Date of
Partnership Activation
----------- ------------------
III-A November 22, 1989
III-B January 24, 1990
III-C February 27, 1990
III-D September 5, 1990
III-E December 26, 1990
III-F March 7, 1991
The General Partner currently serves as general partner of 26 limited
partnerships and is a wholly-owned subsidiary of Samson Investment Company.
Samson Investment Company and its various corporate subsidiaries, including the
General Partner (collectively "Samson"), are primarily engaged in the production
and development of and exploration for oil and gas reserves and the acquisition
and operation of producing properties. At December 31, 2005, Samson owned
interests in approximately 18,000 oil and gas wells located in 18 states of the
United States and the countries of Canada and Venezuela. At December 31, 2005,
Samson operated approximately 5,700 oil and gas wells located in 14 states of
the United States as well as Canada and Venezuela.
The Partnerships are currently engaged in the business of owning interests
in producing oil and gas properties located in the continental United States.
The Partnerships may also engage to a limited extent in development drilling on
producing oil and gas properties as required for the prudent management of the
Partnerships.
-4-
As limited partnerships, the Partnerships have no officers, directors, or
employees. They rely instead on the personnel of the General Partner and Samson.
As of February 15, 2006, Samson employed approximately 1,300 persons. No
employees are covered by collective bargaining agreements, and management
believes that Samson provides a sound employee relations environment. For
information regarding the executive officers of the General Partner, see "Item
10. Directors and Executive Officers of the General Partner."
The General Partner's and the Partnerships' principal place of business is
located at Samson Plaza, Two West Second Street, Tulsa, Oklahoma 74103, and
their telephone number is (918) 583-1791 or (888) 436-3963 [(888) GEODYNE].
Pursuant to the terms of the partnership agreements for the Partnerships
(the "Partnership Agreements") the Partnerships were scheduled to terminate on
the dates indicated in the "Initial Termination Date" column of the following
chart. However, the Partnership Agreements provide that the General Partner may
extend the term of each Partnership for up to five periods of two years each. As
of the date of this Annual Report on Form 10-K ("Annual Report"), the General
Partner has extended the term of the Partnerships for the fourth extension
period. Therefore, the Partnerships are currently scheduled to terminate on the
dates indicated in the "Current Termination Date" column of the following chart.
Initial Extensions Current
Partnership Termination Date Exercised Termination Date
----------- ------------------ --------- -----------------
III-A November 22, 1999 4 November 22, 2007
III-B January 24, 2000 4 December 31, 2007
III-C February 28, 2000 4 December 31, 2007
III-D September 5, 2000 4 December 31, 2007
III-E December 26, 2000 4 December 31, 2007
III-F March 7, 2001 4 December 31, 2007
The General Partner has not determined whether it will further extend the
term of any Partnership.
Funding
Although the Partnership Agreements permit the Partnerships to incur
borrowings, operations and expenses are currently funded out of each
Partnership's revenues from oil and gas sales. The General Partner may, but is
not required to, advance funds to a Partnership for the same purposes for which
Partnership borrowings are authorized.
-5-
Principal Products Produced and Services Rendered
The Partnerships' sole business is the production of, and related
incidental development of, oil and gas. The Partnerships do not refine or
otherwise process crude oil and condensate. The Partnerships do not hold any
patents, trademarks, licenses, or concessions and are not a party to any
government contracts. The Partnerships have no backlog of orders and do not
participate in research and development activities. The Partnerships are not
presently encountering shortages of oilfield tubular goods, compressors,
production material, or other equipment. However, substantial increases in the
global price of steel as well as increases in the prices for oil and gas
supplies and services will further increase the costs of any future workover,
recompletion or drilling activities conducted by the Partnerships.
Competition and Marketing
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 upon and maintain oil prices and production
quotas;
* Political instability or armed conflict in oil-producing regions or
around major shipping areas;
* The level of consumer demand and overall economic activity;
* The competitiveness of alternative fuels;
* Weather conditions and the impact of weather-related events;
* The availability of pipelines for transportation;
* Domestic and foreign government regulations and taxes; and
* Market expectations.
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
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Expenses, may not decline over time, may increase 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.
Significant Customers
The following customers accounted for ten percent or more of the
Partnerships' oil and gas sales during the year ended December 31, 2005:
Partnership Purchaser Percentage
----------- ------------------------ ----------
III-A ConocoPhillips Company
("ConocoPhillips") 29.7%
Gulfterra Central Point
Allocation ("Gulfterra") 23.2%
III-B ConocoPhillips 37.6%
Gulfterra 20.8%
III-C ONEOK Texas Energy Resources
("ONEOK") 19.1%
Duke Energy Field Services,
Inc.("Duke") 16.9%
Cinergy Marketing Company
("Cinergy") 10.4%
Enogex Services Corporation 10.3%
III-D ONEOK 28.3%
Cinergy 14.9%
Duke 13.8%
III-E Duke 18.2%
Red Desert Central Point
Allocation ("Red Desert") 17.5%
Sempra Energy Trading Corp.
("Sempra") 16.2%
Hunt Crude Oil Supply Company 13.9%
III-F Red Desert 21.9%
Sempra 20.4%
Eaglwing Trading, Inc. 17.0%
Duke 14.1%
In the event of interruption of purchases by one or more of the
Partnerships' significant customers or the cessation or material change in
availability of open access transportation by the Partnerships' pipeline
transporters, the Partnerships may
-7-
encounter difficulty in marketing their gas and in maintaining historic sales
levels. Management does not expect any of its open access transporters to seek
authorization to terminate their transportation services. Even if the services
were terminated, management believes that alternatives would be available
whereby the Partnerships would be able to continue to market their gas.
The Partnerships' principal customers for crude oil production are
refiners and other companies which have pipeline facilities near the producing
properties of the Partnerships. In the event pipeline facilities are not
conveniently available to production areas, crude oil is usually trucked by
purchasers to storage facilities.
Oil, Gas, and Environmental Control Regulations
Regulation of Production Operations -- The production of oil and gas is
subject to extensive federal and state laws and regulations governing a wide
variety of matters, including the drilling and spacing of wells, allowable rates
of production, prevention of waste and pollution, and protection of the
environment. In addition to the direct costs borne in complying with such
regulations, operations and revenues may be impacted to the extent that certain
regulations limit oil and gas production to below economic levels.
Regulation of Sales and Transportation of Oil and Gas -- Sales of crude
oil and condensate are made by the Partnerships at market prices and are not
subject to price controls. The sale of gas may be subject to both federal and
state laws and regulations. The provisions of these laws and regulations are
complex and affect all who produce, resell, transport, or purchase gas,
including the Partnerships. Although virtually all of the Partnerships' gas
production is not subject to price regulation, other regulations affect the
availability of gas transportation services and the ability of gas consumers to
continue to purchase or use gas at current levels. Accordingly, such regulations
may have a material effect on the Partnerships' operations and projections of
future oil and gas production and revenues.
Future Legislation -- Legislation affecting the oil and gas industry is
under constant review for amendment or expansion. Because such laws and
regulations are frequently amended or reinterpreted, management is unable to
predict what additional energy legislation may be proposed or enacted or the
future cost and impact of complying with existing or future regulations.
Regulation of the Environment -- The Partnerships' operations are subject
to numerous laws and regulations governing the discharge of materials into the
environment or otherwise relating to environmental protection. Compliance with
such laws and regulations, together with any penalties resulting from
noncompliance, may increase the cost of the Partnerships'
-8-
operations or may affect the Partnerships' ability to timely complete existing
or future activities. Management anticipates that various local, state, and
federal environmental control agencies will have an increasing impact on oil and
gas operations.
Insurance Coverage
The Partnerships are subject to all of the risks inherent in the
exploration for and production of oil and gas including blowouts, pollution,
fires, and other casualties. The Partnerships maintain insurance coverage as is
customary for entities of a similar size engaged in operations similar to that
of the Partnerships, but losses can occur from uninsurable risks or in amounts
in excess of existing insurance coverage. In particular, many types of pollution
and contamination can exist, undiscovered, for long periods of time and can
result in substantial environmental liabilities which are not insured. The
occurrence of an event which is not fully covered by insurance could have a
material adverse effect on the Partnerships' financial condition and results of
operations.
ITEM 1A. RISK FACTORS
The following factors, among others, could have a material adverse effect
upon the Partnerships' business, financial condition, and results of operations.
The following discussion of risk factors should be read in conjunction
with the financial statements and related notes included herein. Because of
these and other factors, past financial performance should not be considered an
indication of future performance.
Oil And Natural Gas Prices Fluctuate Due To A Number Of
-------------------------------------------------------
Uncontrollable Factors, And Any Decline Will Adversely Affect
-------------------------------------------------------------
The Partnerships' Financial Condition.
--------------------------------------
The Partnerships' results of operations depend upon the prices they
receive for their oil and natural gas. We sell most of the Partnerships' oil and
natural gas liquids at current market prices rather than through fixed-price
contracts. Historically, the markets for oil and natural gas have been volatile
and are likely to remain so. The prices we receive depend upon factors beyond
our control, including:
* political instability or armed conflict in oil-producing regions;
* weather conditions;
* the supply of domestic and foreign oil and natural gas;
-9-
* the ability of members of OPEC to agree upon and maintain prices and
production levels;
* the level of consumer demand and overall economic activity;
* worldwide economic demand;
* the price and availability of alternative fuels;
* domestic and foreign governmental regulations and taxes;
* the proximity to and capacity of transportation facilities; and
* the effect of worldwide energy conservation measures.
Government regulations, such as regulation of natural gas transportation
and price controls, can affect product prices in the long term. These external
factors and the volatile nature of the energy markets make it difficult to
reliably estimate future prices of oil and natural gas.
Any decline in oil and natural gas prices adversely affects the
Partnerships' financial condition. If the oil and gas industry experiences
significant price declines, the Partnerships may not be able to maintain their
current level of cash distributions. See "Item 1 - Business-Competition and
Marketing" and "Item 7 - Management's Discussion and Analysis of Financial
Condition and Results of Operations."
Reserve Estimates Depend On Many Assumptions That May Turn
----------------------------------------------------------
Out To Be Inaccurate. Any Material Inaccuracies In The
-------------------------------------------------------
Partnerships' Reserve Estimates Or Underlying Assumptions
---------------------------------------------------------
Could Cause The Quantities And Net Present Value Of Their
---------------------------------------------------------
Reserves To Be Overstated.
--------------------------
Estimating quantities of proved oil and natural gas reserves is a complex
process. It requires interpretations of available technical data and various
assumptions, including assumptions relating to economic factors. Any significant
inaccuracies in these interpretations or assumptions or changes of condition
could cause the quantities and net present value of the Partnerships' reserves
to be overstated.
To prepare estimates of economically recoverable oil and natural gas
reserves and future net cash flows, we analyze many variable factors, such as
historical production from the area compared with production rates from other
producing areas. We also analyze available geological, geophysical, production
and engineering data, and the extent, quality and reliability of this data can
vary. The process also involves economic assumptions relating to commodity
prices, production costs, severance and excise taxes, capital expenditures and
workover and remedial costs. Actual results most likely will vary from our
estimates.
-10-
Any significant variance could reduce the estimated quantities and present value
of reserves shown in this annual report.
You should not assume that the present value of future net cash flows from
the Partnerships' proved reserves shown in this Annual Report is the current
market value of their estimated oil and natural gas reserves. In accordance with
Securities and Exchange Commission requirements, the Partnerships base the
estimated discounted future net cash flows from their proved reserves on prices
and costs on the date of the estimate. Actual current and future prices and
costs may differ materially from those used in the earlier net present value
estimate, and as a result, net present value estimates using current prices and
costs may be significantly less than the earlier estimate which is provided in
this annual report. See "Item 2 - Properties-Proved Reserves and Net Present
Value".
Drilling Oil And Natural Gas Wells Is A High-Risk Activity
----------------------------------------------------------
And Subjects Us To A Variety Of Factors That We Cannot
------------------------------------------------------
Control.
--------
Drilling oil and natural gas wells, including development wells, involves
numerous risks, including the risk that the Partnerships may not encounter
commercially productive oil and natural gas reservoirs. While the Partnerships
do not expend a significant portion of their capital on drilling activities, to
the extent they do drill wells this can be a significant risk factor to them.
They may not recover all or any portion of their investment in new wells. The
presence of unanticipated pressures or irregularities in formations,
miscalculations or accidents may cause their drilling activities to be
unsuccessful and result in a total loss of investment. Further, drilling
operations may be curtailed, delayed or canceled as a result of a variety of
factors, including:
* unexpected drilling conditions;
* title problems;
* restricted access to land for drilling or laying pipeline;
* pressure or irregularities in formations;
* equipment failure or accidents;
* adverse weather conditions; and
* costs of, or shortages or delays in the availability of, drilling
rigs, tubular materials and equipment.
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The Marketability Of The Partnerships' Production Is
----------------------------------------------------
Dependent Upon Transportation And Processing Facilities Over
------------------------------------------------------------
Which We Have No Control.
-------------------------
The marketability of the Partnerships' production depends in part upon the
availability, proximity and capacity of pipelines, natural gas gathering systems
and processing facilities. Any significant change in market factors affecting
these infrastructure facilities could harm their business. The Partnerships
deliver oil and natural gas through gathering systems and pipelines that they do
not own. These facilities may be temporarily unavailable due to market
conditions or mechanical reasons, or may not be available to us in the future.
Reliance On Third Party Operators
---------------------------------
A substantial portion of the Partnerships' properties are operated by
third parties. The Partnerships have little, if any, control over the
operational decisions and costs associated with these properties. In addition,
the Partnerships are totally reliant on the third party operators' internal
controls associated with the operators' accounting for revenues and expenses.
No Market For Units
-------------------
The Partnerships' Units are not listed on any exchange or national market
system, and there is no established public trading market for the Units. You may
only sell your Units via (i) the General Partner's annual Repurchase Offer; (ii)
transfers facilitated by secondary trading firms and matching services; and
(iii) occasional "4.9% tender offers" which are made for the Units. Secondary
market activity for the Units has been limited and varies among the
Partnerships. See "Item 5 - Market for Units and Related Limited Partner
Matters".
Limited Life
------------
The Partnerships are currently scheduled to terminate on December 31,
2007. Even if the General Partner exercises its right to extend the
Partnerships' terms for one additional two-year period, the Partnerships will
terminate no later than December 31, 2009. Upon termination the Partnerships'
assets will be sold. There is no assurance that the market for the sale of the
Partnerships' assets will be favorable at such time.
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The Partnerships Are Subject To Complex Federal, State And
----------------------------------------------------------
Local Laws And Regulations That Could Adversely Affect Their
------------------------------------------------------------
Business.
---------
Extensive federal, state and local regulation of the oil and gas industry
significantly affects the Partnerships' operations. In particular, they are
subject to stringent environmental regulations. These regulations increase the
costs of planning, designing, drilling, installing, operating and abandoning oil
and natural gas wells and other related facilities. These regulations may become
more demanding in the future. Matters subject to regulation include:
* discharge permits for drilling operations;
* drilling bonds;
* spacing of wells;
* unitization and pooling of properties;
* environmental protection;
* reports concerning operations; and
* taxation.
Under these laws and regulations, the Partnerships could be liable for:
* personal injuries;
* property damage;
* oil spills;
* discharge of hazardous materials;
* reclamation costs;
* remediation and clean-up costs; and
* other environmental damages.
While the Partnerships maintain insurance coverage customary for companies
similar to their size and operations, losses can occur from uninsurable risks or
in amounts in excess of existing insurance coverage. See "Item 1 - Business".
Conflicts Of Interest
---------------------
Direct and indirect conflicts of interests exist among the Partnerships
and among a Partnership and the General Partner and its affiliates. The General
Partner and its affiliates engage in many aspects of the oil and gas business,
including acting as a general partner of a number of affiliated oil and gas
limited partnerships. The General Partner and its affiliates may engage in
transactions with a Partnership, and Partnerships will frequently engage in
transactions with other oil and gas limited partnerships. These conflicts could
relate to the sale of oil and gas properties, the determination of the
Partnerships' Repurchase Prices, and the determination of whether to continue
the
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Partnerships past their scheduled termination date of December 31, 2007. See
"Item 13 - Certain Relationships and Related Transactions".
Payments To The General Partner
-------------------------------
The General Partner receives reimbursements for General and Administrative
Expenses. The General Partner also receives a share of Partnership cash
distributions. See "Item 11 - Executive Compensation" and "Item 8 - Financial
Statements and Supplementary Data".
Financial Capability Of General Partner
---------------------------------------
The General Partner has limited financial resources. Contingencies may
arise which will require funding beyond its financial resources. Even if such
financial resources are available, the General Partner is not required to lend
money or to fund any financial obligations of the Partnerships.
Liability And Indemnification Of General Partner And Related
------------------------------------------------------------
Parties
-------
Although the General Partner generally will be liable for the obligations
of the Partnerships, the Partnership Agreements provide that the claims of third
parties will be initially satisfied from Partnership assets. The Partnership
Agreements also provide, subject to certain conditions, that the Partnerships
will reimburse (i.e. "indemnify") the General Partner and its affiliates for
certain costs, claims and expenses.
ITEM 1B. UNRESOLVED STAFF COMMENTS
None.
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ITEM 2. PROPERTIES
Well Statistics
The following table sets forth the number of productive wells of the
Partnerships as of December 31, 2005.
Well Statistics(1)
As of December 31, 2005
Number of Gross Wells(2) Number of Net Wells(3)
-------------------------- ---------------------------
P/ship Total Oil Gas Total Oil Gas
- -------- ----- --- --- ------ ----- -----
III-A 215 54 161 13.16 2.99 10.17
III-B 185 45 140 8.27 3.63 4.64
III-C 221 42 179 23.58 6.61 16.97
III-D 128 45 83 12.84 5.20 7.64
III-E 153 12 141 22.70 1.98 20.72
III-F 375 270 105 16.24 6.45 9.79
- ----------
(1) The designation of a well as an oil well or gas well is made by the
General Partner based on the relative amount of oil and gas reserves
for the well. Regardless of a well's oil or gas designation, it may
produce oil, gas, or both oil and gas.
(2) As used in this Annual Report, "gross well" refers to a well in
which a working interest is owned; accordingly, the number of gross
wells is the total number of wells in which a working interest is
owned.
(3) As used in this Annual Report, "net well" refers to the sum of the
fractional working interests owned in gross wells. For example, a
15% working interest in a well represents one gross well, but 0.15
net well.
Drilling Activities
During the year ended December 31, 2005, the Partnerships directly or
indirectly participated in the drilling activities described below.
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III-A Partnership
-----------------
Working Revenue
Well Name County St. Interest Interest Type Status
--------- ------- --- -------- -------- ---- ------
Alamo #22-16 San Juan NM - 0.0050 Gas Producing
Alamo #22-8 San Juan NM - 0.0050 N/A In Progress
Cain Federal #3 San Juan NM - 0.0014 Gas Producing
Clark, N. H. #18 Webb TX - 0.0075 Gas Producing
Hoyt #1B - Dakota Rio Arriba NM - 0.0002 Gas Producing
Hoyt #1B (Mesa Verde) Rio Arriba NM - 0.0005 Gas Producing
Hoyt #2B Rio Arriba NM - 0.0002 Gas Producing
Tafoya #1C San Juan NM - 0.0030 Gas Producing
Tafoya #1R San Juan NM - 0.0030 Gas Producing
Tribal #5-1 Rio Arriba NM - 0.0005 N/A Shut-In
Tribal #5-7 Rio Arriba NM - 0.0005 N/A Shut-In
Tribal #5-9 Rio Arriba NM - 0.0005 N/A Shut-In
III-B Partnership
-----------------
Working Revenue
Well Name County St. Interest Interest Type Status
--------- ------- --- -------- -------- ---- ------
<c> <c> <c> <c> <c> <c>
Alamo #22-16 San Juan NM - 0.0021 Gas Producing
Alamo #22-8 San Juan NM - 0.0021 N/A In Progress
Cain Federal #3 San Juan NM - 0.0006 Gas Producing
Clark, N. H. #18 Webb TX - 0.0035 Gas producing
Hoyt #1B - Dakota Rio Arriba NM - 0.0001 Gas Producing
Hoyt #1B (Mesa Verde) Rio Arriba NM - 0.0002 Gas Producing
Hoyt #2B Rio Arriba NM - 0.0001 Gas Producing
Tafoya #1C San Juan NM - 0.0013 Gas Producing
Tafoya #1R San Juan NM - 0.0013 Gas Producing
Tribal #5-1 Rio Arriba NM - 0.0002 N/A Shut-In
Tribal #5-7 Rio Arriba NM - 0.0002 N/A Shut-In
Tribal #5-9 Rio Arriba NM - 0.0002 N/A Shut-In
-16-
III-C Partnership
-----------------
Working Revenue
Well Name County St. Interest Interest Type Status
--------- ------- --- -------- -------- ---- ------
Alamo #22-16 San Juan NM - 0.0009 Gas Producing
Alamo #22-8 San Juan NM - 0.0009 N/A In Progress
Beaver Mountain #2 Haskell OK 0.0048 0.0048 N/A Dry Hole
Big Kick #1 Lea NM - 0.0014 Oil Producing
Cain Federal #3 San Juan NM - 0.0004 Gas Producing
Cason #1 Re-Entry Haskell OK - 0.0001 N/A Shut-In
Cheyenne 29 #2 Roger Mills OK - 0.0001 Gas Producing
Cheyenne 29 #3 Roger Mills OK - 0.0001 Gas Producing
Cheyenne 29 #4 Roger Mills OK - 0.0001 Gas Producing
Clark, N. H. #18 Webb TX - 0.0015 Gas Producing
Davis Garry #24 Kay OK - 0.0008 Gas Producing
Davis Garry 19 Kay OK - 0.0008 Oil Producing
Davis, James #1 Noble OK - 0.0001 Oil Shut-In
Defender #3-24 Stephens OK - 0.0007 Gas Producing
Delaware 28 #2 Roger Mills OK - 0.0001 Gas Producing
Delaware 28 #3 Roger Mills OK - 0.0001 Gas Producing
Delaware 28 #4 Roger Mills OK - 0.0001 Gas Producing
Delaware 28 #5 Roger Mills OK - 0.0001 Gas Producing
Freeport #2-32 Hughes OK 0.0117 0.0117 N/A Shut-In
Fresca #2-24 Roger Mills OK - 0.0049 Gas Producing
GBP #2-4H LeFlore OK 0.0015 0.0015 Gas Producing
George #6-20 Washita OK - 0.0019 Gas Producing
Guinn #2-5 Coal OK - 0.0051 N/A Dry Hole
Haggard #7-20 Washita OK - 0.0019 Gas Producing
Hefley #10-48 Wheeler TX - 0.0193 Gas Producing
Hefley #12-47 Wheeler TX - 0.0160 Gas Producing
Hefley #12-48 Wheeler TX - 0.0193 Gas Producing
Hefley #3-48 Wheeler TX - 0.0193 Gas Producing
Hefley #5-48 Wheeler TX - 0.0193 Gas Producing
Helton #2-60 Wheeler TX - 0.0048 Gas Producing
Helton #3-60 Wheeler TX - 0.0048 Gas Producing
Helton #4-60 Wheeler TX - 0.0048 Gas Producing
Higgins #2-10 Roger Mills OK - 0.0008 Gas Producing
Higgins #3-10 Roger Mills OK - 0.0010 Gas Producing
-17-
Hinkle #3-28 Washita OK - 0.0042 Gas Producing
Hinz L J #1-6 Washita OK - 0.0013 Gas Producing
Hix #1-1 Custer OK - 0.0001 Gas Producing
Hoyt #1B - Dakota Rio Arriba NM - 0.0000 Gas Producing
Hoyt #1B (Mesa Verde) Rio Arriba NM - 0.0001 Gas Producing
Hoyt #2B Rio Arriba NM - 0.0000 Gas Producing
McEntire #1-11 Atoka OK 0.0008 0.0008 N/A In Progress
Millie #2-36 Le Flore OK - 0.0014 Gas Producing
Murphy A #1 Harper OK - 0.0096 Gas Producing
Poe #1-29 Hughes OK - 0.0009 Gas Producing
Prater #2 Hemphill TX 0.0115 0.0099 Gas Producing
Prater #3-10 Hemphill TX - 0.0027 Gas Producing
Prater #4-10 Hemphill TX - 0.0027 Gas Producing
Sophia #18-50 Wheeler TX - 0.0031 Gas Producing
Tafoya #1C San Juan NM - 0.0005 Gas Producing
Tafoya #1R San Juan NM - 0.0005 Gas Producing
Tribal #5-1 Rio Arriba NM - 0.0001 N/A Shut-In
Tribal #5-7 Rio Arriba NM - 0.0001 N/A Shut-In
Tribal #5-9 Rio Arriba NM - 0.0001 N/A Shut-In
Verner W L #4-11 Pittsburg OK - 0.0037 N/A In Progress
Williams #1-18H Hughes OK - 0.0039 Gas Producing
III-D Partnership
-----------------
Working Revenue
Well Name County St. Interest Interest Type Status
--------- ------- --- -------- -------- ---- ------
Beaver Mountain #2 Haskell OK 0.0007 0.0007 N/A Dry Hole
Big Kick #1 Lea NM - 0.0002 Oil Producing
Cason #1 Re-Entry Haskell OK - 0.0000 N/A Shut-In
Cheyenne 29 #2 Roger Mills OK - 0.0000 Gas Producing
Cheyenne 29 #3 Roger Mills OK - 0.0000 Gas Producing
Cheyenne 29 #4 Roger Mills OK - 0.0000 Gas Producing
Davis Garry #24 Kay OK - 0.0001 Gas Producing
Davis Garry 19 Kay OK - 0.0001 Oil Producing
Davis, James #1 Noble OK - 0.0000 Oil Shut-In
Defender #3-24 Stephens OK - 0.0001 Gas Producing
Delaware 28 #2 Roger Mills OK - 0.0000 Gas Producing
-18-
Delaware 28 #3 Roger Mills OK - 0.0000 Gas Producing
Delaware 28 #4 Roger Mills OK - 0.0000 Gas Producing
Delaware 28 #5 Roger Mills OK - 0.0000 Gas Producing
Freeport #2-32 Hughes OK 0.0017 0.0017 N/A Shut-In
Fresca #2-24 Roger Mills OK - 0.0007 Gas Producing
GBP #2-4H Le Flore OK 0.0002 0.0002 Gas Producing
George #6-20 Washita OK - 0.0003 Gas Producing
Guinn #2-5 Coal OK - 0.0007 N/A Dry Hole
Haggard #7-20 Washita OK - 0.0003 Gas Producing
Hefley #10-48 Wheeler TX - 0.0161 Gas Producing
Hefley #12-47 Wheeler TX - 0.0134 Gas Producing
Hefley #12-48 Wheeler TX - 0.0161 Gas Producing
Hefley #3-48 Wheeler TX - 0.0161 Gas Producing
Hefley #5-48 Wheeler TX - 0.0161 Gas Producing
Helton #2-60 Wheeler TX - 0.0040 Gas Producing
Helton #3-60 Wheeler TX - 0.0040 Gas Producing
Helton #4-60 Wheeler TX - 0.0040 Gas Producing
Higgins #2-10 Roger Mills OK - 0.0001 Gas Producing
Higgins #3-10 Roger Mills OK - 0.0002 Gas Producing
Hinkle #3-28 Washita OK - 0.0006 Gas Producing
Hinz L J #1-6 Washita OK - 0.0002 Gas Producing
Hix #1-1 Custer OK - 0.0000 Gas Producing
McEntire #1-11 Atoka OK 0.0001 0.0001 N/A In Progress
Millie #2-36 Le Flore OK - 0.0002 Gas Producing
Murphy A #1 Harper OK - 0.0014 Gas Producing
Poe #1-29 Hughes OK - 0.0001 Gas Producing
Prater #2 Hemphill TX 0.0096 0.0083 Gas Producing
Prater #3-10 Hemphill TX - 0.0022 Gas Producing
Prater #4-10 Hemphill TX - 0.0022 Gas Producing
Sophia #18-50 Wheeler TX - 0.0026 Gas Producing
Turner Land & Timber
CO #13-10 Clarke AL - 0.0001 Oil Producing
Verner W L #4-11 Pittsburg OK - 0.0005 N/A In Progress
Williams #1-18H Hughes OK - 0.0006 Gas Producing
-19-
III-E Partnership
-----------------
Working Revenue
Well Name County St. Interest Interest Type Status
--------- ------- --- -------- -------- ---- ------
Bighorn #1 Sweetwater WY (1) (1) N/A Shut-In
Federal 5175-22-11WA Campbell WY - 0.0124 N/A Shut-In
Federal 5175-25-33WA Campbell WY - 0.0086 N/A Shut-In
Federal 5175-27-13CO Campbell WY - 0.0086 N/A Shut-In
Federal 5175-27-13WA Campbell WY - 0.0086 N/A Shut-In
Federal 5175-27-21WA Campbell WY - 0.0086 N/A Shut-In
Federal 5175-27-33WA Campbell WY - 0.0086 N/A Shut-In
Federal 5175-34-13WA Campbell WY - 0.0086 N/A Shut-In
Federal 5175-34-21WA Campbell WY - 0.0086 N/A In Progress
Federal 5175-34-31WA Campbell WY - 0.0086 N/A Shut-In
Federal 5175-34-43CO Campbell WY - 0.0086 N/A Shut-In
Federal 5175-34-43WA Campbell WY - 0.0086 N/A Shut-In
Federal 5175-35-21CO Campbell WY - 0.0086 N/A Shut-In
Federal 5175-35-21WA Campbell WY - 0.0086 N/A Shut-In
Federal 5175-35-41CO Campbell WY - 0.0086 N/A Shut-In
Federal 5175-35-41WA Campbell WY - 0.0086 N/A Shut-In
Floyd Fed 5175-22-31WA Campbell WY - 0.0124 N/A Shut-In
Floyd Fed 5175-23-21WA Campbell WY - 0.0124 N/A Shut-In
Floyd Fed 5175-23-23WA Campbell WY - 0.0124 N/A Shut-In
Floyd Fed 5175-23-31WA Campbell WY - 0.0124 N/A Shut-In
Floyd Fed 5175-23-41WA Campbell WY - 0.0124 N/A Shut-In
Floyd Fed 5175-23-43WA Campbell WY - 0.0124 N/A Shut-In
Floyd Fed 5175-24-13WA Campbell WY - 0.0124 N/A Shut-In
Floyd Fed 5175-24-31WA Campbell WY - 0.0124 N/A Shut-In
Hay Reservoir Unit #88 Sweetwater WY - 0.0026 Gas Producing
Hayden 5175-26-23CA Campbell WY - 0.0086 N/A Shut-In
Hayden 5175-26-23CO Campbell WY - 0.0086 N/A Shut-In
Hayden 5175-26-23WA Campbell WY - 0.0016 N/A Shut-In
Hayden 5175-26-31CO Campbell WY - 0.0087 N/A Shut-In
Hayden 5175-26-31WA Campbell WY - 0.0029 N/A Shut-In
Hayden 5175-27-11CO Campbell WY - 0.0086 N/A Shut-In
Hayden 5175-27-41CO Campbell WY - 0.0086 N/A Shut-In
-20-
Hayden Fed 5175-26-33CO Campbell WY - 0.0086 N/A Shut-In
Hayden Fed 5175-34-23WA Campbell WY - 0.0086 N/A Shut-In
Hayden Fed 5175-34-33WA Campbell WY - 0.0086 N/A Shut-In
Hayden Federal 5175-26-13WA Campbell WY - 0.0086 N/A Shut-In
Hayden Federal 5175-26-33WA Campbell WY - 0.0086 N/A Shut-In
Hayden Federal 5175-26-43WA Campbell WY - 0.0086 N/A Shut-In
Hayden Federal 5175-27-23WA Campbell WY - 0.0086 N/A In Progress
Henry 26 #2 Eddy NM - 0.0001 Gas Producing
Mooney Fed 5175-24-23WA Campbell WY - 0.0124 N/A Dry Hole
Pronghorn #1 Sweetwater WY (2) (2) N/A Shut-In
Trail Unit #20 Sweetwater WY - 0.0121 Gas Producing
Trail Unit #21 Sweetwater WY - 0.0121 Gas Producing
Turner Land & Timber
Co #13-10 Clarke AL - 0.0010 Oil Producing
Yonkee 5175-25-13CO Campbell WY - 0.0086 N/A Shut-In
Yonkee 5175-25-13WA Campbell WY - 0.0058 N/A Shut-In
Yonkee 5175-25-23CO Campbell WY - 0.0086 N/A Shut-In
Yonkee 5175-25-31CO Campbell WY - 0.0086 N/A Shut-In
Yonkee 5175-26-41CO Campbell WY - 0.0086 N/A Shut-In
Yonkee 5175-26-41WA Campbell WY - 0.0038 N/A Shut-In
Yonkee 5175-35-13CO Campbell WY - 0.0086 N/A Shut-In
Yonkee 5175-35-13WA Campbell WY - 0.0038 N/A Shut-In
Yonkee 5175-35-23CO Campbell WY - 0.0086 N/A Shut-In
Yonkee 5175-35-23WA Campbell WY - 0.0038 N/A Shut-In
Yonkee 5175-35-31CO Campbell WY - 0.0086 N/A Shut-In
Yonkee 5175-35-31WA Campbell WY - 0.0025 N/A Shut-In
Yonkee Fed 5175-26-11CO Campbell WY - 0.0086 N/A Shut-In
Yonkee Fed 5175-26-11WA Campbell WY - 0.0086 N/A Shut-In
Yonkee Fed 5175-26-21CO Campbell WY - 0.0086 N/A Shut-In
Yonkee Fed 5175-26-21WA Campbell WY - 0.0086 N/A Shut-In
Yonkee Fed 5175-34-11CO Campbell WY - 0.0086 N/A Shut-In
Yonkee Fed 5175-34-11WA Campbell WY - 0.0086 N/A Shut-In
Yonkee Fed 5175-34-41WA Campbell WY - 0.0086 N/A Shut-In
Yonkee Fed 5175-35-33WA Campbell WY - 0.0086 N/A Shut-In
Yonkee Fed 5175-35-43CO Campbell WY - 0.0086 N/A In Progress
Yonkee Fed 5175-35-43WA Campbell WY - 0.0086 N/A Shut-In
-21-
III-F Partnership
-----------------
Working Revenues
Well Name County St. Interest Interest Type Status
--------- ------- --- -------- -------- ---- ------
Bighorn #1 Sweetwater WY (1) (1) N/A Shut-In
Hay Reservoir Unit #88 Sweetwater WY - 0.0022 Gas Producing
Henry 26 #2 Eddy NM - 0.0001 Gas Producing
Pronghorn #1 Sweetwater WY (2) (2) N/A Shut-In
Trail Unit #20 Sweetwater WY - 0.0101 Gas Producing
Trail Unit #21 Sweetwater WY - 0.0101 Gas Producing
---------------------
(1) The III-E and III-F Partnerships elected to not participate in the drilling
of the Bighorn #1 well located in Sweetwater County, Wyoming. If the well
reaches payout under the terms of its operating agreement, the III-E and III-F
Partnerships will have the following interests in the well:
Working Revenue
Partnership Interest Interest
----------- -------- --------
III-E - 0.0266
III-F - 0.0223
(2) The III-E and III-F Partnerships elected to not participate in the drilling
of the Pronghorn #1 well located in Sweetwater County, Wyoming. If the well
reaches payout under the terms of its operating agreement, the III-E and III-F
Partnerships will have the following interests in the well:
Working Revenue
Partnership Interest Interest
----------- -------- --------
III-E - 0.0266
III-F - 0.0223
-22-
Oil and Gas Production, Revenue, and Price History
The following tables set forth certain historical information concerning
the oil (including condensates) and gas production, net of all royalties,
overriding royalties, and other third party interests, of the Partnerships,
revenues attributable to such production, and certain price and cost
information. As used in the following tables, direct operating expenses include
lease operating expenses and production taxes. In addition, gas production is
converted to oil equivalents at the rate of six Mcf per barrel, representing the
estimated relative energy content of gas and oil, which rate is not necessarily
indicative of the relationship of oil and gas prices. The respective prices of
oil and gas are affected by market and other factors in addition to relative
energy content.
[Remainder of Page Intentionally Left Blank]
-23-
Net Production Data
III-A Partnership
-----------------
Year Ended December 31,
-------------------------------------
2005 2004 2003
---------- ---------- ----------
Production:
Oil (Bbls) 33,008 37,123 45,080
Gas (Mcf) 388,410 460,303 516,905
Oil and gas sales:
Oil $1,790,871 $1,481,826 $1,336,984
Gas 2,955,097 2,656,074 2,702,323
--------- --------- ---------
Total $4,745,968 $4,137,900 $4,039,307
========= ========= =========
Total direct operating
expenses $1,116,240 $ 834,758 $ 836,517
========= ========= =========
Direct operating expenses
as a percentage of oil
and gas sales 23.5% 20.2% 20.7%
Average sales price:
Per barrel of oil $54.26 $39.92 $29.66
Per Mcf of gas 7.61 5.77 5.23
Direct operating expenses
per equivalent Bbl of
oil $11.42 $ 7.33 $ 6.37
-24-
Net Production Data
III-B Partnership
-----------------
Year Ended December 31,
-----------------------------------
2005 2004 2003
---------- ---------- ----------
Production:
Oil (Bbls) 22,648 25,395 31,275
Gas (Mcf) 165,378 190,781 243,753
Oil and gas sales:
Oil $1,232,871 $1,013,900 $ 931,510
Gas 1,255,326 1,116,553 1,276,052
--------- --------- ---------
Total $2,488,197 $2,130,453 $2,207,562
========= ========= =========
Total direct operating
expenses $ 654,278 $ 486,490 $ 509,231
========= ========= =========
Direct operating expenses
as a percentage of oil
and gas sales 26.3% 22.8% 23.1%
Average sales price:
Per barrel of oil $54.44 $39.93 $29.78
Per Mcf of gas 7.59 5.85 5.24
Direct operating expenses
per equivalent Bbl of
oil $13.03 $ 8.51 $ 7.08
-25-
Net Production Data
III-C Partnership
-----------------
Year Ended December 31,
------------------------------------
2005 2004 2003
---------- ---------- ----------
Production:
Oil (Bbls) 9,614 9,551 13,872
Gas (Mcf) 514,302 548,555 668,059
Oil and gas sales:
Oil $ 517,387 $ 371,357 $ 416,104
Gas 3,717,422 2,963,161 3,185,294
--------- --------- ---------
Total $4,234,809 $3,334,518 $3,601,398
========= ========= =========
Total direct operating
expenses $ 964,443 $ 859,862 $ 868,275
========= ========= =========
Direct operating expenses
as a percentage of oil
and gas sales 22.8% 25.8% 24.1%
Average sales price:
Per barrel of oil $53.82 $38.88 $30.00
Per Mcf of gas 7.23 5.40 4.77
Direct operating expenses
per equivalent Bbl of
oil $10.12 $ 8.52 $ 6.93
-26-
Net Production Data
III-D Partnership
-----------------
Year Ended December 31,
------------------------------------
2005 2004 2003(1)
---------- ---------- ----------
Production:
Oil (Bbls) 8,611 8,411 12,909
Gas (Mcf) 288,655 293,250 376,825
Oil and gas sales:
Oil $ 455,313 $ 318,494 $ 365,101
Gas 2,013,465 1,576,403 1,749,495
--------- --------- ---------
Total $2,468,778 $1,894,897 $2,114,596
========= ========= =========
Total direct operating
expenses $ 596,204 $ 494,353 $ 528,430
========= ========= =========
Direct operating expenses
as a percentage of oil
and gas sales 24.1% 26.1% 25.0%
Average sales price:
Per barrel of oil $52.88 $37.87 $28.28
Per Mcf of gas 6.98 5.38 4.64
Direct operating expenses
per equivalent Bbl of
oil $10.51 $ 8.63 $ 6.98
- ----------
(1) These amounts have been restated to reflect the sale of the Jay Field
during 2004 as a discontinued operation. See Part II, Item 7 for more
information about this discontinued operation.
-27-
Net Production Data
III-E Partnership
-----------------
Year Ended December 31,
--------------------------------------
2005 2004 2003(1)
---------- ---------- ----------
Production:
Oil (Bbls) 23,561 22,653 32,768
Gas (Mcf) 678,857 720,487 779,623
Oil and gas sales:
Oil $1,189,780 $ 834,883 $ 882,702
Gas 4,837,523 3,798,830 3,589,841
--------- --------- ---------
Total $6,027,303 $4,633,713 $4,472,543
========= ========= =========
Total direct operating
expenses $1,518,796 $1,359,631 $1,325,795
========= ========= =========
Direct operating expenses
as a percentage of oil
and gas sales 25.2% 29.3% 29.6%
Average sales price:
Per barrel of oil $50.50 $36.86 $26.94
Per Mcf of gas 7.13 5.27 4.60
Direct operating expenses
per equivalent Bbl of
oil $11.11 $ 9.53 $ 8.15
- ----------
(1) These amounts have been restated to reflect the sale of the Jay Field
during 2004 as a discontinued operation. See Part II, Item 7 for more
information about this discontinued operation.
-28-
Net Production Data
III-F Partnership
-----------------
Year Ended December 31,
-----------------------------------
2005 2004 2003
---------- ---------- ----------
Production:
Oil (Bbls) 18,967 20,252 20,685
Gas (Mcf) 382,034 408,746 412,842
Oil and gas sales:
Oil $1,077,763 $ 794,329 $ 598,509
Gas 2,790,192 2,147,403 1,881,269
--------- --------- ---------
Total $3,867,955 $2,941,732 $2,479,778
========= ========= =========
Total direct operating
expenses $ 837,697 $ 726,687 $ 754,502
========= ========= =========
Direct operating expenses
as a percentage of oil
and gas sales 21.7% 24.7% 30.4%
Average sales price:
Per barrel of oil $56.82 $39.22 $28.93
Per Mcf of gas 7.30 5.25 4.56
Direct operating expenses
per equivalent Bbl of
oil $10.14 $ 8.22 $ 8.43
Proved Reserves and Net Present Value
The following table sets forth each Partnership's estimated proved oil and
gas reserves and net present value therefrom as of December 31, 2005. The
schedule of quantities of proved oil and gas reserves was prepared by the
General Partner in accordance with the rules prescribed by the Securities and
Exchange Commission (the "SEC"). Certain reserve information was reviewed by
Ryder Scott Company, L.P. ("Ryder Scott"), an independent petroleum engineering
firm. As used throughout this Annual Report, "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.
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
-29-
valorem taxes, and operating expenses) and estimated future development costs,
discounted at 10% per annum. Net present value attributable to the Partnerships'
proved reserves was calculated on the basis of current costs and prices at
December 31, 2005. Such prices were not escalated except in certain
circumstances where escalations were fixed and readily determinable in
accordance with applicable contract provisions. Oil and gas prices at December
31, 2005 ($61.06 per barrel and $10.08 per Mcf, respectively) were substantially
higher than the prices in effect on December 31, 2004 ($43.36 per barrel and
$6.02 per Mcf, respectively). This increase in oil and gas prices has caused the
estimates of remaining economically recoverable reserves, as well as the values
placed on said reserves, at December 31, 2005 to be higher than such estimates
and values at December 31, 2004. The prices used in calculating the net present
value attributable to the Partnerships' proved reserves do not necessarily
reflect market prices for oil and gas production subsequent to December 31,
2005. In fact, as of the date of this Annual Report, natural gas prices have
declined significantly from the December 31, 2005 price. There can be no
assurance that the prices used in calculating the net present value of the
Partnerships' proved reserves at December 31, 2005 will actually be realized for
such production.
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 near 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.
Proved Reserves and
Net Present Values
From Proved Reserves
As of December 31, 2005(1)
III-A Partnership:
-----------------
Estimated proved reserves:
Gas (Mcf) 3,483,848
Oil and liquids (Bbls) 96,735
Net present value (discounted at
10% per annum) $18,172,686
-30-
III-B Partnership:
-----------------
Estimated proved reserves:
Gas (Mcf) 1,408,960
Oil and liquids (Bbls) 60,591
Net present value (discounted at
10% per annum) $ 8,094,147
III-C Partnership:
-----------------
Estimated proved reserves:
Gas (Mcf) 4,704,441
Oil and liquids (Bbls) 89,290
Net present value (discounted at
10% per annum) $19,743,674
III-D Partnership:
-----------------
Estimated proved reserves:
Gas (Mcf) 2,407,268
Oil and liquids (Bbls) 83,877
Net present value (discounted at
10% per annum) $10,571,683
III-E Partnership:
-----------------
Estimated proved reserves:
Gas (Mcf) 5,309,709
Oil and liquids (Bbls) 150,195
Net present value (discounted at
10% per annum) $25,351,236
III-F Partnership:
-----------------
Estimated proved reserves:
Gas (Mcf) 3,504,393
Oil and liquids (Bbls) 337,230
Net present value (discounted at
10% per annum) $20,515,797
- ----------
(1) Includes certain gas balancing adjustments which cause the gas volumes and
net present values to differ from the reserve
-31-
reports which were prepared by the General Partner and reviewed by Ryder
Scott.
No estimates of the proved reserves of the Partnerships comparable to
those included herein have been included in reports to any federal agency other
than the SEC. Additional information relating to the Partnerships' proved
reserves is contained in Note 4 to the Partnerships' financial statements,
included in Item 8 of this Annual Report.
Significant Properties
The following table sets forth the number and percent of each
Partnership's total wells which are operated by affiliates of the Partnerships
as of December 31, 2005:
Operated Wells
------------------------------------------
Partnership Number Percent
----------- ------ -------
III-A 21 7%
III-B 3 1%
III-C 131 23%
III-D 127 31%
III-E 44 15%
III-F 26 6%
The following tables set forth certain well and reserve information as of
December 31, 2005 for each oil and gas basin which holds a significant portion
of the value of the Partnerships' properties. The tables contain the following
information for each such basin: (i) the number of gross wells and net wells,
(ii) the number of wells in which only a non-working interest is owned, (iii)
the Partnership's total number of wells, (iv) the number of wells operated by
the Partnership's affiliates, (v) estimated proved oil reserves, (vi) estimated
proved gas reserves, and (vii) the present value (discounted at 10% per annum)
of estimated future net cash flow.
The Anadarko Basin is located in western Oklahoma and the Texas panhandle.
The Gulf Coast Basin is located in southern Louisiana and southeast Texas, while
the Mid-Gulf Coast Basin covers Mississippi and southern Alabama. The Las Animas
Arch Basin straddles east Colorado and northwest Kansas. The Southern Oklahoma
Folded Belt Basin is located in southern Oklahoma, while the Green River Basin
is located in southern Wyoming and northwest Colorado. The Permian Basin
straddles west Texas and southeast New Mexico.
-32-
Significant Properties as of December 31, 2005
----------------------------------------------
Wells
Operated by
Affiliates Oil Gas
Gross Net Other Total ------------ Reserves Reserves Present
Basin Wells Wells Wells(1) Wells Number %(2) (Bbl) (Mcf) Value
- ------------------ ------ ------- -------- ------ ------ ---- -------- --------- ----------
III-A Partnership:
Gulf Coast 82 6.43 52 134 4 3% 75,472 1,276,196 $8,471,903
Anadarko 38 2.30 22 60 17 28% 5,190 1,548,706 6,803,700
III-B Partnership:
Gulf Coast 78 3.53 52 130 - - 49,137 616,571 $4,609,968
Anadarko 43 2.58 13 56 3 5% 5,779 470,802 2,086,503
III-C Partnership:
Anadarko 59 6.42 100 159 35 22% 11,762 2,370,054 $9,632,114
Southern Okla.
Folded Belt 45 8.58 17 62 24 39% 51,977 1,403,509 6,604,595
Permian 28 7.41 22 50 42 84% 24,290 605,304 1,930,740
III-D Partnership:
Anadarko 37 3.58 100 137 35 26% 3,166 1,774,265 $7,128,097
Permian 28 6.20 22 50 42 84% 20,185 490,068 1,530,302
Southern Okla.
Folded Belt 38 2.83 15 53 20 38% 46,768 155,223 1,486,217
- ---------------------
(1) Wells in which only a non-working (e.g. royalty) interest is owned.
(2) Percentage of wells in the applicable basin which are operated by affiliates
of the Partnerships.
-33-
Significant Properties as of December 31, 2005
----------------------------------------------
Wells
Operated by
Affiliates Oil Gas
Gross Net Other Total ------------ Reserves Reserves Present
Basin Wells Wells Wells(1) Wells Number %(2) (Bbl) (Mcf) Value
- ------------------ ------ ------- -------- ------ ------ ---- --------- --------- -----------
III-E Partnership:
Green River 56 4.29 28 84 - - 18,793 2,396,374 $10,604,510
Anadarko 21 5.05 4 25 18 72% 12,315 1,010,774 3,906,790
Gulf Coast 34 3.59 7 41 3 7% 8,768 682,582 3,750,090
Mid-Gulf Coast 11 1.52 2 13 - - 97,864 420 2,468,330
III-F Partnership:
Green River 56 3.60 28 84 - - 15,781 2,018,339 $ 8,928,339
Anadarko 26 5.65 4 30 23 77% 30,450 973,201 4,201,254
Las Animas Arch 66 1.73 - 66 - - 162,432 - 3,059,408
- --------------------
(1) Wells in which only a non-working (e.g. royalty) interest is owned.
(2) Percentage of wells in the applicable basin which are operated by affiliates
of the Partnerships.
-34-
Following is a description of those oil and gas properties whose revisions
in the estimated proved reserves (based on equivalent barrels of oil) as of
December 31, 2005, as compared to December 31, 2004, were significant to the
Partnerships.
The III-E and III-F Partnerships' estimated
proved reserves decreased approximately 96,000 and
80,000 barrels of oil equivalent, respectively, in the
Trail Unit, which is a large unitized property in
Sweetwater County, Wyoming from December 31, 2004 to
December 31, 2005. This decrease was primarily due to a
revised forecast in reserves based on actual production
experience.
Title to Oil and Gas Properties
Management believes that the Partnerships have satisfactory title to their
oil and gas properties. Record title to all of the Partnerships' properties is
held by either the Partnerships or Geodyne Nominee Corporation, an affiliate of
the General Partner.
Title to the Partnerships' properties is subject to customary royalty,
overriding royalty, carried, working, and other similar interests and
contractual arrangements customary in the oil and gas industry, to liens for
current taxes not yet due, and to other encumbrances. Management believes that
such burdens do not materially detract from the value of such properties or from
the Partnerships' interest therein or materially interfere with their use in the
operation of the Partnerships' business.
ITEM 3. LEGAL PROCEEDINGS
A lawsuit styled Robert W. Scott, Individually and as Managing Member of
R.W. Scott Investments, LLC v. Samson Resources Company, Case No. C-01-385, was
filed in the District Court of Sweetwater County, Wyoming on June 29, 2001. The
lawsuit seeks class action certification and alleges that Samson deducted from
its payments to royalty and overriding royalty owners certain charges which were
improper under the Wyoming royalty payment statutes. A number of these royalty
and overriding royalty payments burdened the interests of the Partnerships. In
February 2003, Samson made a supplemental payment to the royalty and overriding
royalty interest owners who were potential class members of amounts which were
then thought
-35-
to have been improperly deducted plus statutory interest thereon. The applicable
portions of these refunds were recouped from the Partnerships in the first
quarter of 2003 as follows:
Partnership Amount
----------- ------------
III-A $ 5,380
III-B 3,548
III-C -
III-D -
III-E 122,289
III-F 102,690
The lawsuit also alleges that Samson's check stubs did not fully comply with the
Wyoming Royalty Payment Act. Samson intends to vigorously defend this claim.
Except as set forth above, to the knowledge of the General Partner,
neither the General Partner nor the Partnerships or their properties are subject
to any litigation, the results of which would have a material effect on the
Partnerships' or the General Partner's financial condition or operations.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF LIMITED PARTNERS
There were no matters submitted to a vote of the Limited Partners of any
Partnership during 2005.
PART II
ITEM 5. MARKET FOR UNITS AND RELATED LIMITED PARTNER MATTERS
As of March 1, 2006, the number of Units outstanding and the approximate
number of Limited Partners of record in the Partnerships were as follows:
Number of Number of
Partnership Units Limited Partners
----------- --------- ----------------
III-A 263,976 1,105
III-B 138,336 661
III-C 244,536 1,033
III-D 131,008 563
III-E 418,266 1,702
III-F 221,484 868
-36-
Units were initially sold for a price of $100. Units are not traded on any
exchange and there is no public trading market for them. The General Partner is
aware of certain transfers of Units between unrelated parties, some of which are
facilitated by secondary trading firms and matching services. In addition, as
further described below, the General Partner is aware of certain "4.9% Tender
Offers" which have been made for the Units. The General Partner believes that
the transfers between unrelated parties have been limited and sporadic in number
and volume. Other than trades facilitated by certain secondary trading firms and
matching services, no organized trading market for Units exists and none is
expected to develop. Due to the nature of these transactions, the General
Partner has no verifiable information regarding prices at which Units have been
transferred. Further, a transferee may not become a substitute Limited Partner
without the consent of the General Partner.
Pursuant to the terms of the Partnership Agreements, the General Partner
is obligated to annually issue a repurchase offer which is based on the
estimated future net revenues from the Partnerships' reserves and is calculated
pursuant to the terms of the Partnership Agreements. Such repurchase offer is
recalculated monthly in order to reflect cash distributions to the Limited
Partners and extraordinary events. The following table sets forth the General
Partner's repurchase offer per Unit as of the periods indicated. For purpose of
this Annual Report, a Unit represents an initial subscription of $100 to a
Partnership.
Repurchase Offer Prices
-----------------------
2004 2005 2006
------------------------- ------------------------- ----
1st 2nd 3rd 4th 1st 2nd 3rd 4th 1st
P/ship Qtr. Qtr. Qtr. Qtr. Qtr. Qtr. Qtr. Qtr. Qtr.
- ------ ---- ---- ---- ---- ---- ---- ---- ---- ----
III-A $16 $14 $23 $20 $18 $15 $25 $23 $19
III-B 13 11 20 17 15 13 21 19 16
III-C 22 20 24 22 20 18 25 22 19
III-D 23 22 23 21 20 17 25 23 20
III-E 19 18 18 17 16 14 23 21 19
III-F 23 21 25 24 22 19 33 31 27
In addition to this repurchase offer, some of the Partnerships have been
subject to "4.9% tender offers" from several third parties. The General Partner
does not know the terms of these offers or the prices received by the Limited
Partners who accepted these offers.
-37-
Cash Distributions
Cash distributions are primarily dependent upon a Partnership's cash
receipts from the sale of oil and gas production and cash requirements of the
Partnership. Distributable cash is determined by the General Partner at the end
of each calendar quarter and distributed to the Limited Partners within 45 days
after the end of the quarter. Distributions are restricted to cash on hand less
amounts required to be retained out of such cash as determined in the sole
judgment of the General Partner to pay costs, expenses, or other Partnership
obligations whether accrued or anticipated to accrue. In certain instances, the
General Partner may not distribute the full amount of cash receipts which might
otherwise be available for distribution in an effort to equalize or stabilize
the amounts of quarterly distributions. Any available amounts not distributed
are invested and the interest or income thereon is for the accounts of the
Limited Partners.
The following is a summary of cash distributions paid to the Limited
Partners during 2004, 2005, and the first quarter of 2006:
Cash Distributions
-----------------
2004
-----------------------------------------
1st 2nd 3rd 4th
P/ship Qtr. Qtr. Qtr. Qtr.
------ ----- ----- ----- -----
III-A $1.81 $2.13 $2.20 $2.72
III-B 1.64 1.67 1.89 2.43
III-C 1.79 1.74 1.65 1.89
III-D 2.15 1.68 2.90(1) 1.77
III-E 2.06 .44 3.60(1) .62
III-F 1.35 1.55 1.50 1.40
-38-
2005 2006
---------------------------------------- -----
1st 2nd 3rd 4th 1st
P/ship Qtr. Qtr. Qtr. Qtr. Qtr.
------ ----- ----- ----- ----- -----
III-A $2.58 $2.20 $2.58 $2.59 $3.49
III-B 2.49 1.83 2.47 2.36 3.17
III-C 1.36 2.03 2.47 2.50 2.65
III-D 1.39 2.27 2.51 2.67 2.60
III-E .82 2.06 1.78 1.71 2.19
III-F 1.91 2.55 2.37 2.56 3.65
- -------------------
(1) Includes proceeds from the sale of all of the III-D and III-E
Partnerships' interests in the Jay-Little Escambia Creek Field. See Part
II, Item 7 for more information about this discontinued operation.
ITEM 6. SELECTED FINANCIAL DATA
The following tables present selected financial data for the Partnerships.
This data should be read in conjunction with the financial statements of the
Partnerships and the respective notes thereto, included elsewhere in this Annual
Report. See "Item 8. Financial Statements and Supplementary Data."
[Remainder of Page Intentionally Left Blank]
-39-
Selected Financial Data
III-A Partnership
-----------------
2005 2004 2003 2002 2001
------------ ------------ ------------ ------------ ------------
Oil and Gas Sales $4,745,968 $4,137,900 $4,039,307 $3,875,098 $5,425,163
Net Income:
Limited Partners 2,826,610 2,534,550 2,419,111 1,822,932 3,211,072
General Partner 329,261 297,437 286,852 256,987 405,019
Total 3,155,871 2,831,987 2,705,963 2,079,919 3,616,091
Limited Partners' Net
Income per Unit 10.71 9.60 9.16 6.91 12.16
Limited Partners' Cash
Distributions per
Unit 9.95 8.86 9.89 8.88 14.66
Total Assets 3,006,720 2,577,310 2,357,510 2,465,350 3,086,819
Partners' Capital
(Deficit):
Limited Partners 2,609,490 2,410,880 2,213,330 2,405,219 2,927,287
General Partner ( 59,217) ( 88,506) ( 104,097) ( 87,091) ( 114,834)
Number of Units
Outstanding 263,976 263,976 263,976 263,976 263,976
-40-
Selected Financial Data
III-B Partnership
-----------------
2005 2004 2003 2002 2001
------------ ------------ ------------ ------------ ------------
Oil and Gas Sales $2,488,197 $2,130,453 $2,207,562 $2,276,161 $3,146,463
Net Income:
Limited Partners 1,318,911 1,154,435 1,171,730 916,420 1,701,127
General Partner 246,787 219,288 227,153 216,453 348,971
Total 1,565,698 1,373,723 1,398,883 1,132,873 2,050,098
Limited Partners' Net
Income per Unit 9.53 8.35 8.47 6.62 12.30
Limited Partners' Cash
Distributions per
Unit 9.15 7.63 9.76 9.39 14.44
Total Assets 1,577,808 1,379,422 1,270,257 1,390,931 1,830,746
Partners' Capital
(Deficit):
Limited Partners 1,332,570 1,277,659 1,178,224 1,357,494 1,741,074
General Partner ( 35,041) ( 58,429) ( 68,928) ( 48,554) ( 67,276)
Number of Units
Outstanding 138,336 138,336 138,336 138,336 138,336
-41-
Selected Financial Data
III-C Partnership
-----------------
2005 2004 2003 2002 2001
------------ ------------ ------------ ------------ ------------
Oil and Gas Sales $4,234,809 $3,334,518 $3,601,398 $2,740,888 $4,371,115
Net Income:
Limited Partners 2,468,202 1,531,505 2,016,059 1,178,582 2,653,485
General Partner 295,223 213,797 243,670 158,236 163,926
Total 2,763,425 1,745,302 2,259,729 1,336,818 2,817,411
Limited Partners' Net
Income per Unit 10.09 6.26 8.24 4.82 10.85
Limited Partners' Cash
Distributions per
Unit 8.36 7.07 8.14 4.77 16.36
Total Assets 3,504,783 2,790,409 2,902,685 2,751,198 2,627,295
Partners' Capital
(Deficit):
Limited Partners 2,769,567 2,345,365 2,542,860 2,517,801 2,507,219
General Partner ( 105,515) ( 136,932) ( 153,480) ( 150,636) ( 175,495)
Number of Units
Outstanding 244,536 244,536 244,536 244,536 244,536
-42-
Selected Financial Data
III-D Partnership
-----------------
2005 2004 2003(1) 2002(1) 2001(1)
------------ ------------ ------------ ------------ ------------
Oil and Gas Sales $2,468,778 $1,894,897 $2,114,596 $1,623,494 $2,424,490
Income (Loss) from:
Continuing Operations 1,590,307 1,136,358 1,335,178 776,273 1,541,967
Discontinued
Operations - ( 86,127) 111,356 22,377 195,103
Net Income:
Limited Partners 1,421,578 936,644 1,293,974 705,530 1,630,013
General Partner 168,729 113,587 155,435 93,120 107,057
Total 1,590,307 1,050,231 1,449,409 798,650 1,737,070
Limited Partners' Net
Income per Unit 10.85 7.15 9.88 5.39 12.44
Limited Partners' Cash
Distributions per
Unit 8.84 8.50 9.55 3.75 19.36
Total Assets 1,741,237 1,370,609 1,731,542 1,458,550 1,157,930
Partners' Capital
(Deficit):
Limited Partners 1,214,550 951,972 1,129,328 1,086,354 872,824
General Partner ( 29,279) ( 55,158) ( 47,561) ( 50,949) ( 72,956)
Number of Units
Outstanding 131,008 131,008 131,008 131,008 131,008
- -------------
(1) These amounts have been restated to reflect the sale of the Jay Field during 2004 as a discontinued operation.
See Part II, Item 7 for more information about this discontinued operation.
-43-
Selected Financial Data
III-E Partnership
-----------------
2005 2004 2003(1) 2002(1) 2001(1)
------------ ------------ ------------ ------------ ------------
Oil and Gas Sales $6,027,303 $4,633,713 $4,472,543 $2,859,082 $4,752,859
Income (Loss) from:
Continuing Operations 3,703,346 2,599,547 2,519,727 777,174 2,722,457
Discontinued
Operations - ( 598,888) 785,456 149,044 1,283,442
Net Income:
Limited Partners 3,304,874 1,782,244 2,940,848 798,510 3,744,610
General Partner 398,472 218,415 367,060 127,708 261,289
Total 3,703,346 2,000,659 3,307,908 926,218 4,005,899
Limited Partners' Net
Income per Unit 7.90 4.26 7.03 1.91 8.95
Limited Partners' Cash
Distributions per
Unit 6.37 6.72 5.10 .63 14.81
Total Assets 4,755,246 4,254,283 6,654,923 4,442,417 3,768,636
Partners' Capital
(Deficit):
Limited Partners 3,918,651 3,277,777 4,302,533 3,492,685 2,960,175
General Partner ( 197,010) ( 316,058) ( 177,234) ( 250,684) ( 286,758)
Number of Units
Outstanding 418,266 418,266 418,266 418,266 418,266
- ----------
(1) These amounts have been restated to reflect the sale of the Jay Field during 2004 as a discontinued operation.
See Part II, Item 7 for more information about this discontinued operation.
-44-
Selected Financial Data
III-F Partnership
-----------------
2005 2004 2003 2002 2001
------------ ------------ ------------ ------------ ------------
Oil and Gas Sales $3,867,955 $2,941,732 $2,479,778 $1,636,758 $2,934,300
Net Income:
Limited Partners 2,428,636 1,694,433 1,176,685 460,816 1,782,241
General Partner 135,780 95,789 70,747 35,680 103,349
Total 2,564,416 1,790,222 1,247,432 496,496 1,885,590
Limited Partners' Net
Income per Unit 10.97 7.65 5.31 2.08 8.05
Limited Partners' Cash
Distributions per
Unit 9.39 5.80 4.72 2.60 13.62
Total Assets 3,557,937 2,994,343 2,592,302 2,427,147 2,369,806
Partners' Capital
(Deficit):
Limited Partners 3,131,791 2,783,155 2,374,722 2,245,037 2,359,221
General Partner ( 126,897) ( 142,055) ( 156,356) ( 159,621) ( 161,655)
Number of Units
Outstanding 221,484 221,484 221,484 221,484 221,484
-45-
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
Use of Forward-Looking Statements and Estimates
This Annual 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 Annual 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 accuracy of third party payments and billings, 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, or otherwise indicated.
Discontinued Operations
The III-D and III-E Partnerships owned working interests in the Jay-Little
Escambia Creek Field in Santa Rosa County, Florida (the "Jay Field"). In May
2004, the III-D and III-E Partnerships sold all of their interests in the Jay
Field. For accounting purposes, the sale was treated as a discontinued
operation. The sales proceeds, consisting of approximately $89,000 and $632,000,
respectively, were included in the III-D and III-E Partnerships' August 15, 2004
cash distributions.
The sale of the Jay Field interests impacted the operations of the III-D
and III-E Partnerships. Routine audits of joint interest billings by an
unaffiliated non-operator after the close date of the sale resulted in
additional expenses of approximately $76,000 and $544,000, respectively, billed
to the III-D and III-E Partnerships. The expenses represent costs incurred
before the effective date of the sale. The reader should refer to Note 6 -
Discontinued Operations to the financial statements included in
-46-
Part II, Item 8 of this Annual Report on Form 10-K for additional information
regarding this matter.
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 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 OPEC to agree upon and maintain
oil prices and production quotas;
* Political instability or armed conflict in oil-producing regions or
around major shipping areas;
* The level of consumer demand and overall economic activity;
* The competitiveness of alternative fuels;
* Weather conditions and the impact of weather-related events;
* The availability of pipelines for transportation;
* Domestic and foreign government regulations and taxes; and
* Market expectations.
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, may
increase, 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, remain relatively constant, or
-47-
decrease at an even greater rate over a given period. These factors include, but
are not limited to:
* Geophysical conditions which cause an acceleration of the decline in
production;
* 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;
* Prior period volume adjustments (either positive or negative) made
by operators of the properties;
* Adjustments in ownership or rights to production in accordance with
agreements governing the operation or ownership of the well (such as
adjustments that occur at payout or due to gas balancing); and
* 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 decline in production experienced on all
remaining wells.
Results of Operations
An analysis of the change in net oil and gas operations (oil and gas
sales, less lease operating expenses and production taxes), is presented in the
tables following "Results of Operations" under the heading "Average Sales
Prices, Production Volumes, and Average Production Costs." Following is a
discussion of each Partnerships' results of operations for the year ended
December 31, 2005 as compared to the year ended December 31, 2004, and for the
year ended December 31, 2004 as compared to the year ended December 31, 2003.
III-A Partnership
-----------------
Year Ended December 31, 2005 Compared
to Year Ended December 31, 2004
-------------------------------------
Total oil and gas sales increased $608,000 (14.7%) in 2005 as compared to
2004. Of this increase $473,000 and $714,000, respectively, were related to
increases in the average prices of oil and gas sold. These increases were
partially offset by decreases of $164,000 and $415,000, respectively, related to
decreases in volumes of oil and gas sold. Volumes of oil and gas
-48-
sold decreased 4,115 barrels and 71,893 Mcf, respectively, in 2005 as compared
to 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
late 2004 and early 2005 in order to perform a workover. As of the date of this
Annual 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) the shutting-in of two significant wells
during early 2005 in order to perform workovers, and (iii) a positive prior
period volume adjustment included in the receipt of first revenues on one
significant well during 2004. As of the date of this Annual Report, the operator
has not yet determined when or if the shut-in wells will return to production
and, if returned to production, at what rate.
Average oil and gas prices increased to $54.26 per barrel and $7.61 per
Mcf, respectively, in 2005 from $39.92 per barrel and $5.77 per Mcf,
respectively, in 2004.
Oil and gas production expenses (including lease operating expenses and
production taxes) increased $281,000 (33.7%) in 2005 as compared to 2004. This
increase was primarily due to (i) workover expenses incurred on several wells
during 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 in 2005 by the operator on one significant well. These increases
were partially offset by a negative prior period production tax adjustment also
made in 2005 by the operator on another significant well. As a percentage of oil
and gas sales, these expenses increased to 23.5% in 2005 from 20.2% in 2004,
primarily due to the dollar increase in oil and gas production expenses.
Depreciation, depletion, and amortization ("DD&A") of oil and gas
properties increased $8,000 (4.9%) in 2005 as compared to 2004. Of this increase
(i) $67,000 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 $44,000 was related to previously fully
depleted wells, and (ii) $8,000 was due to accretion of these additional asset
retirement obligations. These increases were partially offset by (i) the
abandonment of one significant well during 2004 following an unsuccessful
recompletion attempt and (ii) the decreases in volumes of oil and gas sold. As a
percentage of oil and gas sales, this expense decreased to 3.7% in 2005 from
4.0% in 2004.
General and administrative expenses increased $6,000 (2.0%) in 2005 as
compared to 2004. As a percentage of oil and gas sales, these expenses decreased
to 6.7% in 2005 from 7.6% in 2004, primarily due to the increase in oil and gas
sales.
-49-
The Limited Partners have received cash distributions through December 31,
2005 totaling $41,524,701 or 157.30% of Limited Partners' capital contributions.
Year Ended December 31, 2004 Compared
to Year Ended December 31, 2003
-------------------------------------
Total oil and gas sales increased $99,000 (2.4%) in 2004 as compared to
2003. Of this increase $381,000 and $250,000, respectively, were related to
increases in the average prices of oil and gas sold. These increases were
partially offset by decreases of $236,000 and $296,000, respectively, related to
decreases in volumes of oil and gas sold. Volumes of oil and gas sold decreased
7,957 barrels and 56,602 Mcf, respectively, in 2004 as compared to 2003.
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
late 2004 due to mechanical problems. (See Results of Operations discussion for
2004 - 2005 for an update on this well.) The decrease in volumes of gas sold was
primarily due to normal declines in production, which was partially offset by
the receipt of first revenues on one significant well during 2004.
Average oil and gas prices increased to $39.92 per barrel and $5.77 per
Mcf, respectively, in 2004 from $29.66 per barrel and $5.23 per Mcf,
respectively, in 2003.
Oil and gas production expenses (including lease operating expenses and
production taxes) remained relatively constant in 2004 and 2003. Lease operating
expenses decreased due to the decreases in volumes of oil and gas sold, but this
decrease was substantially offset by (i) an increase in production taxes
associated with the increase in oil and gas sales, (ii) an increase in
production taxes associated with the receipt of first revenues on one
significant well during 2004, and (iii) workover expenses incurred on two
significant wells during 2004. As a percentage of oil and gas sales, these
expenses decreased to 20.2% in 2004 from 20.7% in 2003.
DD&A of oil and gas properties decreased $21,000 (11.2%) in 2004 as
compared to 2003. This decrease was primarily due to (i) the decreases in
volumes of oil and gas sold and (ii) upward revisions in the estimates of
remaining oil and gas reserves during 2004. These decreases were partially
offset by the abandonment of one significant well during 2004 following an
unsuccessful recompletion attempt. As a percentage of oil and gas sales, this
expense decreased to 4.0% in 2004 from 4.6% in 2003, primarily due to the dollar
decrease in DD&A of oil and gas properties.
-50-
General and administrative expenses remained relatively constant in 2004
and 2003. As a percentage of oil and gas sales, these expenses decreased to 7.6%
in 2004 from 7.8% in 2003.
III-B Partnership
-----------------
Year Ended December 31, 2005 Compared
to Year Ended December 31, 2004
-------------------------------------
Total oil and gas sales increased $358,000 (16.8%) in 2005 as compared to
2004. Of this increase $329,000 and $288,000, respectively, were related to
increases in the average prices of oil and gas sold. These increases were
partially offset by decreases of $110,000 and $149,000, respectively, related to
decreases in volumes of oil and gas sold. Volumes of oil and gas sold decreased
2,747 barrels and 25,403 Mcf, respectively, in 2005 as compared to 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
late 2004 and early 2005 in order to perform a workover. As of the date of this
Annual 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 and (ii) the shutting-in of two significant
wells during early 2005 in order to perform workovers. As of the date of this
Annual Report, the operator has not yet determined when or if the shut-in wells
will return to production and, if returned to production, at what rate.
Average oil and gas prices increased to $54.44 per barrel and $7.59 per
Mcf, respectively, in 2005 from $39.93 per barrel and $5.85 per Mcf,
respectively, in 2004.
Oil and gas production expenses (including lease operating expenses and
production taxes) increased $168,000 (34.5%) in 2005 as compared to 2004. This
increase was primarily due to (i) workover expenses incurred on several wells
during 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 in 2005 by the operator on one significant well. These increases
were partially offset by a negative prior period production tax adjustment also
made in 2005 by the operator on another significant well. As a percentage of oil
and gas sales, these expenses increased to 26.3% in 2005 from 22.8% in 2004,
primarily due to the dollar increase in oil and gas production expenses.
Depreciation, depletion, and amortization ("DD&A") of oil and gas
properties decreased $2,000 (2.4%) in 2005 as compared to
-51-
2004. This decrease was primarily due to (i) the abandonment of one significant
well during 2004 following an unsuccessful recompletion attempt and (ii) the
decreases in volumes of oil and gas sold. These decreases were partially offset
by increases of (i) $44,000 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 $27,000 was related to previously
fully depleted wells, and (ii) $5,000 due to accretion of these additional asset
retirement obligations. As a percentage of oil and gas sales, this expense
decreased to 3.8% in 2005 from 4.6% in 2004, primarily due to the increases in
the average prices of oil and gas sold.
General and administrative expenses increased $7,000 (3.9%) in 2005 as
compared to 2004. As a percentage of oil and gas sales, these expenses decreased
to 7.3% in 2005 from 8.2% in 2004, primarily due to the increase in oil and gas
sales.
The Limited Partners have received cash distributions through December 31,
2005 totaling $23,096,353 or 166.96% of Limited Partners' capital contributions.
Year Ended December 31, 2004 Compared
to Year Ended December 31, 2003
-------------------------------------
Total oil and gas sales decreased $77,000 (3.5%) in 2004 as compared to
2003. Of this decrease $175,000 and $277,000, respectively, were related to
decreases in volumes of oil and gas sold. These decreases were partially offset
by increases of $257,000 and $118,000, respectively, related to increases in the
average prices of oil and gas sold. Volumes of oil and gas sold decreased 5,880
barrels and 52,972 Mcf, respectively, in 2004 as compared to 2003.
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
late 2004 due to mechanical problems. (See Results of Operations discussion for
2004 - 2005 for an update on this well.) The decrease in volumes of gas sold was
primarily due to normal declines in production.
Average oil and gas prices increased to $39.93 per barrel and $5.85 per
Mcf, respectively, in 2004 from $29.78 per barrel and $5.24 per Mcf,
respectively, in 2003.
Oil and gas production expenses (including lease operating expenses and
production taxes) decreased $23,000 (4.5%) in 2004 as compared to 2003. As a
percentage of oil and gas sales, these expenses decreased to 22.8% in 2004 from
23.1% in 2003.
-52-
DD&A of oil and gas properties decreased $28,000 (22.5%) in 2004 as
compared to 2003. This decrease was primarily due to (i) the decreases in
volumes of oil and gas sold and (ii) upward revisions in the estimates of
remaining oil and gas reserves during 2004. These decreases were partially
offset by the abandonment of one significant well during 2004 following an
unsuccessful recompletion attempt. As a percentage of oil and gas sales, this
expense decreased to 4.6% in 2004 from 5.7% in 2003, primarily due to the dollar
decrease in DD&A of oil and gas properties.
General and administrative expenses remained relatively constant in 2004
and 2003. As a percentage of oil and gas sales, these expenses increased to 8.2%
in 2004 from 8.0% in 2003.
III-C Partnership
-----------------
Year Ended December 31, 2005 Compared
to Year Ended December 31, 2004
-------------------------------------
Total oil and gas sales increased $900,000 (27.0%) in 2005 as compared to
2004. Of this increase (i) $144,000 and $939,000, respectively, were related to
increases in the average prices of oil and gas sold and (ii) $2,000 was related
to an increase in volumes of oil sold. These increases were partially offset by
a decrease of $185,000 related to a decrease in volumes of gas sold. Volumes of
oil sold increased 63 barrels, while volumes of gas sold decreased 34,253 Mcf in
2005 as compared to 2004.
The increase in volumes of oil sold was primarily due to (i) the
successful completion of several new wells during early to mid 2005 and (ii) an
increase in production on one significant well following the successful workover
of that well during late 2004. These increases were partially offset by normal
declines in production.
The decrease in volumes of gas sold was primarily due to (i) normal
declines in production, (ii) substantial declines in production during 2005 on
two significant wells following unsuccessful 2004 workovers of those wells, and
(iii) a negative prior period volume adjustment on one significant well during
2005. The wells with substantial declines in production are not expected to
return to their previously high levels of production. These decreases were
partially offset by (i) the successful completion of several new wells during
late 2004 and early to mid 2005 and (ii) increases in production on several
other wells following the successful workovers of those wells during mid to late
2004 and early 2005.
-53-
Average oil and gas prices increased to $53.82 per barrel and $7.23 per
Mcf, respectively, in 2005 from $38.88 per barrel and $5.40 per Mcf in 2004.
Oil and gas production expenses (including lease operating expenses and
production taxes) increased $105,000 (12.2%) in 2005 as compared to 2004. This
increase was primarily due to (i) workover expenses incurred on several wells
during 2005 and (ii) an increase in production taxes associated with the
increase in oil and gas sales. These increases were partially offset by lower
workover expenses incurred on several other wells during 2004. As a percentage
of oil and gas sales, these expenses decreased to 22.8% in 2005 from 25.8% in
2004, primarily due to the increase in oil and gas sales.
Depreciation, depletion, and amortization ("DD&A") of oil and gas
properties decreased $213,000 (48.2%) in 2005 as compared to 2004. This decrease
was primarily due to (i) one significant well being fully depleted during 2004
due to the lack of remaining reserves and (ii) the decrease in volumes of gas
sold. These decreases were partially offset by (i) $53,000 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
$34,000 was related to previously fully depleted wells, (ii) $8,000 due to
accretion of these additional asset retirement obligations, and (iii) an
increase in depletable oil and gas properties during 2005 primarily due to the
drilling of two developmental wells. As a percentage of oil and gas sales, this
expense decreased to 5.4% in 2005 from 13.3% in 2004, primarily due to the
dollar decrease in DD&A of oil and gas properties.
General and administrative expenses increased $6,000 (2.1%) in 2005 as
compared to 2004. As a percentage of oil and gas sales, these expenses decreased
to 7.0% in 2005 from 8.7% in 2004, primarily due to the increase in oil and gas
sales.
The Limited Partners have received cash distributions through December 31,
2005 totaling $31,437,795 or 128.56% of Limited Partners' capital contributions.
Year Ended December 31, 2004 Compared
to Year Ended December 31, 2003
-------------------------------------
Total oil and gas sales decreased $267,000 (7.4%) in 2004 as compared to
2003. Of this decrease $130,000 and $570,000, respectively, were related to
decreases in volumes of oil and gas sold. These decreases were partially offset
by increases of $85,000 and $348,000, respectively, related to increases in the
average prices of oil and gas sold. Volumes of oil and gas sold
-54-
decreased 4,321 barrels and 119,504 Mcf, respectively, in 2004 as compared to
2003.
The decrease in volumes of oil sold was primarily due to (i) normal
declines in production and (ii) the shutting-in of a production zone on one
significant well during late 2003. The shut-in well continues to produce at a
lower rate. The decrease in volumes of gas sold was primarily due to (i) normal
declines in production and (ii) downward revisions in the estimates of remaining
gas reserves on one significant well resulting in the III-C Partnership becoming
over produced in excess of estimated ultimate reserves, thereby increasing its
gas imbalance payable. These decreases were partially offset by the successful
completion of a new well during early 2004.
Average oil and gas prices increased to $38.88 per barrel and $5.40 per
Mcf, respectively, in 2004 from $30.00 per barrel and $4.77 per Mcf,
respectively, in 2003.
Oil and gas production expenses (including lease operating expenses and
production taxes) decreased $8,000 (1.0%) in 2004 as compared to 2003. This
decrease was primarily due to the decreases in volumes of oil and gas sold,
which decrease was partially offset by workover expenses incurred on several
wells during 2004. As a percentage of oil and gas sales, these expenses
increased to 25.8% in 2004 from 24.1% in 2003.
DD&A of oil and gas properties increased $238,000 (116.6%) in 2004 as
compared to 2003, primarily due to one significant well being fully depleted in
2004 due to the lack of remaining reserves. This increase was partially offset
by the decreases in volumes of oil and gas sold. As a percentage of oil and gas
sales, this expense increased to 13.3% in 2004 from 5.7% in 2003, primarily due
to the dollar increase in DD&A of oil and gas properties.
General and administrative expenses remained relatively constant in 2004
and 2003. As a percentage of oil and gas sales, these expenses increased to 8.7%
in 2004 from 8.1% in 2003.
III-D Partnership
-----------------
Year Ended December 31, 2005 Compared
to Year Ended December 31, 2004
-------------------------------------
Total oil and gas sales increased $574,000 (30.3%) in 2005 as compared to
2004. Of this increase (i) $129,000 and $462,000, respectively, were related to
increases in the average prices of oil and gas sold and (ii) $8,000 was related
to an increase in volumes of oil sold. These increases were partially offset by
a
-55-
decrease of $25,000 related to a decrease in volumes of gas sold. Volumes of oil
sold increased 200 barrels, while volumes of gas sold decreased 4,595 Mcf in
2005 as compared to 2004.
The increase in volumes of oil sold was primarily due to (i) the
successful completion of several new wells during early to mid 2005 and (ii) an
increase in production on one significant well following the successful workover
of that well during late 2004. These increases were partially offset by normal
declines in production.
The decrease in volumes of gas sold was primarily due to (i) normal
declines in production and (ii) a substantial decline in production during 2005
on one significant well following its unsuccessful 2004 workover. This well is
not expected to return to its previously high levels of production. These
decreases were partially offset by (i) the successful completion of several new
wells during late 2004 and early to mid 2005 and (ii) increases in production on
two significant wells following the successful workovers of those wells during
mid to late 2004.
Average oil and gas prices increased to $52.88 per barrel and $6.98 per
Mcf, respectively, in 2005 from $37.87 per barrel and $5.38 per Mcf in 2004.
Oil and gas production expenses (including lease operating expenses and
production taxes) increased $102,000 (20.6%) in 2005 as compared to 2004. This
increase was primarily due to (i) workover expenses incurred on several wells
during 2005, (ii) an increase in production taxes associated with the increase
in oil and gas sales, and (iii) repair and maintence expenses incurred on
several other wells during 2005. These increases were partially offset by lower
workover expenses incurred on two significant wells during 2004. As a percentage
of oil and gas sales, these expenses decreased to 24.1% in 2005 from 26.1% in
2004.
Depreciation, depletion, and amortization ("DD&A") of oil and gas
properties increased $22,000 (23.4%) in 2005 as compared to 2004. Of this
increase (i) $34,000 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 $25,000 was related to previously fully
depleted wells, and (ii) $5,000 was due to accretion of these additional asset
retirement obligations. This increase was also due to downward revisions in the
estimates of remaining oil and gas reserves following an unsuccessful
recompletion attempt on one significant well during 2005. These increases were
partially offset by (i) one significant well being fully depleted during 2004
due to the lack of remaining reserves and (ii) upward revisions in the estimates
of remaining oil and gas reserves since December 31, 2004. As a percentage of
oil and gas sales, this expense decreased to 4.8% in 2005 from 5.1% in 2004.
-56-
General and administrative expenses increased $2,000 (1.4%) in 2005 as
compared to 2004. As a percentage of oil and gas sales, these expenses decreased
to 7.0% in 2005 from 9.0% in 2004, primarily due to the increase in oil and gas
sales.
The Limited Partners have received cash distributions through December 31,
2005 totaling $17,584,669, or 134.23% of Limited Partners' capital
contributions.
Year Ended December 31, 2004 Compared
to Year Ended December 31, 2003
-------------------------------------
The following discussion contains amounts for the year 2003 which have
been restated to reflect the 2004 sale of the Jay Field as a discontinued
operation. See Part II, Item 7 for more information about this discontinued
operation.
Total oil and gas sales decreased $220,000 (10.4%) in 2004 as compared to
2003. Of this decrease $127,000 and $388,000, respectively, were related to
decreases in volumes of oil and gas sold. These decreases were partially offset
by increases of $80,000 and $215,000, respectively, related to increases in the
average prices of oil and gas sold. Volumes of oil and gas sold decreased 4,498
barrels and 83,575 Mcf, respectively, in 2004 as compared to 2003.
The decrease in volumes of oil sold was primarily due to (i) the
shutting-in of a production zone on one significant well during late 2003 and
(ii) normal declines in production. The shut-in well continues to produce at a
lower rate. The decrease in volumes of gas sold was primarily due to (i) normal
declines in production and (ii) downward revisions in the estimates of remaining
gas reserves on one significant well resulting in the III-D Partnership becoming
over produced in excess of estimated ultimate reserves thereby increasing gas
imbalance payable.
Average oil and gas prices increased to $37.87 per barrel and $5.38 per
Mcf, respectively, in 2004 from $28.28 per barrel and $4.64 per Mcf,
respectively, in 2003.
Oil and gas production expenses (including lease operating expenses and
production taxes) decreased $34,000 (6.4%) in 2004 as compared to 2003. This
decrease was primarily due to (i) the decreases in volumes of oil and gas sold,
(ii) 2003 workover expenses incurred on one significant well, and (iii) a
decrease in production taxes associated with the decrease in oil and gas sales.
These decreases were partially offset by workover expenses incurred on two other
significant wells during 2004. As a percentage of oil and gas sales, these
expenses increased to 26.1% in 2004 from 25.0% in 2003.
-57-
DD&A of oil and gas properties decreased $1,000 (1.0%) in 2004 as compared
to 2003. This decrease was primarily due to the decreases in volumes of oil and
gas sold, which decrease was partially offset by one significant well being
fully depleted in 2004 due to the lack of remaining reserves. As a percentage of
oil and gas sales, these expenses increased to 5.1% in 2004 from 4.6% in 2003.
General and administrative expenses increased $4,000 (2.4%) in 2004 as
compared to 2003. As a percentage of oil and gas sales, these expenses increased
to 9.0% in 2004 from 7.9% in 2003, primarily due to the decrease in oil and gas
sales.
III-E Partnership
-----------------
Year Ended December 31, 2005 Compared
to Year Ended December 31, 2004
-------------------------------------
Total oil and gas sales increased $1,394,000 (30.1%) in 2005 as compared
to 2004. Of this increase (i) $322,000 and $1,258,000, respectively, were
related to increases in the average prices of oil and gas sold and (ii) $33,000
was related to an increase in volumes of oil sold. These increases were
partially offset by a decrease of $219,000 related to a decrease in volumes of
gas sold. Volumes of oil sold increased 908 barrels, while volumes of gas sold
decreased 41,630 Mcf in 2005 as compared to 2004.
The increase in volumes of oil sold was primarily due to a negative prior
period volume adjustment on one significant well during 2004. This increase was
substantially offset by normal declines in production. The decrease in volumes
of gas sold was primarily due to normal declines in production.
Average oil and gas prices increased to $50.50 per barrel and $7.13 per
Mcf, respectively, in 2005 from $36.86 per barrel and $5.27 per Mcf,
respectively, in 2004.
Oil and gas production expenses (including lease operating expenses and
production taxes) increased $159,000 (11.7%) in 2005 as compared to 2004. This
increase was primarily due to (i) an increase in production taxes associated
with the increase in oil and gas sales and (ii) workover expenses incurred on
several wells during 2005. These increases were partially offset by a positive
prior period production tax adjustment on one significant unit during 2004. As a
percentage of oil and gas sales, these expenses decreased to 25.2% in 2005 from
29.3% in 2004, primarily due to the increase in oil and gas sales.
-58-
Depreciation, depletion, and amortization ("DD&A") of oil and gas
properties increased $143,000 (72.8%) in 2005 as compared to 2004. Of this
increase (i) $85,000 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 $61,000 was related to previously fully
depleted wells, and (ii) $11,000 was due to accretion of these additional asset
retirement obligations. This increase was also due to (i) downward revisions in
the estimates of remaining gas reserves since December 31, 2004 and (ii) an
increase in depletable oil and gas properties during 2005 primarily due to the
recompletion of one significant well. These increases were partially offset by
(i) one significant well being fully depleted during 2004 due to the lack of
remaining reserves and (ii) the decrease in volumes of gas sold. As a percentage
of oil and gas sales, this expense increased to 5.6% in 2005 from 4.2% in 2004,
primarily due to the dollar increase in DD&A of oil and gas properties.
General and administrative expenses remained relatively constant in 2005
and 2004. As a percentage of oil and gas sales, these expenses decreased to 8.1%
in 2005 from 10.5% in 2004, primarily due to the increase in oil and gas sales.
The Limited Partners have received cash distributions through December 31,
2005 totaling $51,959,016 or 124.22% of Limited Partners' capital contributions.
Year Ended December 31, 2004 Compared
to Year Ended December 31, 2003
-------------------------------------
The following discussion contains amounts for the year 2003 which have
been restated to reflect the 2004 sale of the Jay Field as a discontinued
operation. See Part II, Item 7 for more information about this discontinued
operation.
Total oil and gas sales increased $161,000 (3.6%) in 2004 as compared to
2003. Of this increase $225,000 and $481,000, respectively, were related to
increases in the average prices of oil and gas sold. These increases were
partially offset by decreases of $273,000 and $272,000, respectively, related to
decreases in volumes of oil and gas sold. Volumes of oil and gas sold decreased
10,115 barrels and 59,136 Mcf, respectively, in 2004 as compared to 2003.
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 2004 and (ii) normal declines in production.
-59-
Average oil and gas prices increased to $36.86 per barrel and $5.27 per
Mcf, respectively, in 2004 from $26.94 per barrel and $4.60 per Mcf,
respectively, in 2003.
Oil and gas production expenses (including lease operating expenses and
production taxes) increased $34,000 (2.6%) in 2004 as compared to 2003. This
increase was primarily due to (i) a prior period production tax adjustment on
one significant unit during 2004, (ii) workover expenses incurred on two
significant wells during 2004, and (iii) an increase in production taxes
associated with the increase in oil and gas sales. These increases were
partially offset by the decreases in volumes of oil and gas sold. As a
percentage of oil and gas sales, these expenses decreased to 29.3% in 2004 from
29.6% in 2003.
DD&A of oil and gas properties decreased $25,000 (11.2%) in 2004 as
compared to 2003. This decrease was primarily due to (i) the decreases in
volumes of oil and gas sold and (ii) one significant well being fully depleted
in 2003 due to the lack of remaining reserves. These decreases were partially
offset by (i) an increase in depletable oil and gas properties primarily due to
2004 recompletion activities on two significant wells and (ii) one other
significant well being fully depleted in 2004 due to the lack of remaining
reserves. As a percentage of oil and gas sales, this expense decreased to 4.2%
in 2004 from 4.9% in 2003, primarily due to the dollar decrease in DD&A of oil
and gas properties.
General and administrative expenses remained relatively constant in 2004
and 2003. As a percentage of oil and gas sales, these expenses decreased to
10.5% in 2004 from 10.9% in 2003.
III-F Partnership
-----------------
Year Ended December 31, 2005 Compared
to Year Ended December 31, 2004
-------------------------------------
Total oil and gas sales increased $926,000 (31.5%) in 2005 as compared to
2004. Of this increase $334,000 and $783,000, respectively, were related to
increases in the average prices of oil and gas sold. These increases were
partially offset by a decrease of $140,000 related to a decrease in volumes of
gas sold. Volumes of oil and gas sold decreased 1,285 barrels and 26,712 Mcf,
respectively, in 2005 as compared to 2004. The decrease in volumes of gas sold
was primarily due to normal declines in production. Average oil and gas prices
increased to $56.82 per barrel and $7.30 per Mcf, respectively, in 2005 from
$39.22 per barrel and $5.25 per Mcf, respectively, in 2004.
-60-
Oil and gas production expenses (including lease operating expenses and
production taxes) increased $111,000 (15.3%) in 2005 as compared to 2004. This
increase was primarily due to (i) an increase in production taxes associated
with the increase in oil and gas sales and (ii) workover expenses incurred on
several wells during 2005. As a percentage of oil and gas sales, these expenses
decreased to 21.7% in 2005 from 24.7% in 2004, primarily due to the increase in
oil and gas sales.
Depreciation, depletion, and amortization ("DD&A") of oil and gas
properties increased $46,000 (28.5%) in 2005 as compared to 2004. Of this
increase (i) $24,000 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 $13,000 was related to previously fully
depleted wells, and (ii) $6,000 was due to accretion of these additional asset
retirement obligations. This increase was also due to downward revisions in the
estimates of remaining oil and gas reserves on one significant well since
December 31, 2004. These increases were partially offset by the decreases in
volumes of oil and gas sold. As a percentage of oil and gas sales, this expense
decreased to 5.4% in 2005 from 5.5% in 2004.
General and administrative expenses increased $6,000 (2.3%) in 2005 as
compard to 2004. As a percentage of oil and gas sales, these expenses decreased
to 7.1% in 2005 from 9.1% in 2004, primarily due to the increase in oil and gas
sales.
The Limited Partners have received cash distributions through December 31,
2005 totaling $21,752,904 or 98.21% of Limited Partners' capital contributions.
Year Ended December 31, 2004 Compared
to Year Ended December 31, 2003
-------------------------------------
Total oil and gas sales increased $462,000 (18.6%) in 2004 as compared to
2003. Of this increase $208,000 and $285,000, respectively, were related to
increases in the average prices of oil and gas sold. Volumes of oil and gas sold
decreased 433 barrels and 4,096 Mcf, respectively, in 2004 as compared to 2003.
Average oil and gas prices increased to $39.22 per barrel and $5.25 per Mcf,
respectively, in 2004 from $28.93 per barrel and $4.56 per Mcf, respectively, in
2003.
Oil and gas production expenses (including lease operating expenses and
production taxes) decreased $28,000 (3.7%) in 2004 as compared to 2003. This
decrease was primarily due to (i) workover expenses incurred on one significant
well during 2003 and (ii) the abandonment of another significant well in early
2003 due to severe mechanical problems. These decreases were
-61-
partially offset by an increase in production taxes associated with the increase
in oil and gas sales. As a percentage of oil and gas sales, these expenses
decreased to 24.7% in 2004 from 30.4% in 2003, primarily due to the increase in
oil and gas sales.
DD&A of oil and gas properties decreased $54,000 (25.1%) in 2004 as
compared to 2003. This decrease was primarily due to (i) the abandonment of one
significant well in 2003 due to severe mechanical problems and (ii) another
significant well being fully depleted in 2003 due to the lack of remaining
reserves. As a percentage of oil and gas sales, this expense decreased to 5.5%
in 2004 from 8.7% in 2003. This percentage decrease was primarily due to (i) the
dollar decrease in DD&A of oil and gas properties and (ii) increases in the
average prices of oil and gas sold.
General and administrative expenses remained relatively constant in 2004
and 2003. As a percentage of oil and gas sales, these expenses decreased to 9.1%
in 2004 from 10.8% in 2003, primarily due to the increase in oil and gas sales.
Average Sale Prices, Production Volumes, and Average Production Costs
The following tables are comparisons of annual average oil and gas sales
prices, production volumes, and average production costs (lease operating
expenses and production taxes) per barrel of oil equivalent (one barrel or 6 Mcf
of gas) for 2005, 2004, and 2003.
-62-
2005 Compared to 2004
---------------------
Average Sales Prices
- ---------------------------------------------------------------------------
P/ship 2005 2004 % Change
- ------ ------------------- ----------------- ------------
Oil Gas Oil Gas
($/Bbl) ($/Mcf) ($/Bbl) ($/Mcf) Oil Gas
------- ------- ------- ------- --- ---
III-A $54.26 $7.61 $39.92 $5.77 36% 32%
III-B 54.44 7.59 39.93 5.85 36% 30%
III-C 53.82 7.23 38.88 5.40 38% 34%
III-D 52.88 6.98 37.87 5.38 40% 30%
III-E 50.50 7.13 36.86 5.27 37% 35%
III-F 56.82 7.30 39.22 5.25 45% 39%
Production Volumes
- -----------------------------------------------------------------------------
P/ship 2005 2004 % Change
- ------ ------------------- ------------------ --------------
Oil Gas Oil Gas Oil Gas
(Bbls) (Mcf) (Bbls) (Mcf) (Bbls) (Mcf)
------ ------- ------ ------- ------ -----
III-A 33,008 388,410 37,123 460,303 (11%) (16%)
III-B 22,648 165,378 25,395 190,781 (11%) (13%)
III-C 9,614 514,302 9,551 548,555 1% (6%)
III-D 8,611 288,655 8,411 293,250 2% (2%)
III-E 23,561 678,857 22,653 720,487 4% (6%)
III-F 18,967 382,034 20,252 408,746 (6%) (7%)
Average Production Costs
per Barrel of Oil Equivalent
----------------------------------------
P/ship 2005 2004 % Change
------ ------ ----- --------
III-A $11.42 $7.33 56%
III-B 13.03 8.51 53%
III-C 10.12 8.52 19%
III-D 10.51 8.63 22%
III-E 11.11 9.53 17%
III-F 10.14 8.22 23%
-63-
2004 Compared to 2003
---------------------
Average Sales Prices
- ---------------------------------------------------------------------------
P/ship 2004 2003(1) % Change
- ------ ------------------- ----------------- ------------
Oil Gas Oil Gas
($/Bbl) ($/Mcf) ($/Bbl) ($/Mcf) Oil Gas
------- ------- ------- ------- --- ---
III-A $39.92 $5.77 $29.66 $5.23 35% 10%
III-B 39.93 5.85 29.78 5.24 34% 12%
III-C 38.88 5.40 30.00 4.77 30% 13%
III-D 37.87 5.38 28.28 4.64 34% 16%
III-E 36.86 5.27 26.94 4.60 37% 15%
III-F 39.22 5.25 28.93 4.56 36% 15%
Production Volumes
- -----------------------------------------------------------------------------
P/ship 2004 2003(1) % Change
- ------ ------------------- ------------------ --------------
Oil Gas Oil Gas Oil Gas
(Bbls) (Mcf) (Bbls) (Mcf) (Bbls) (Mcf)
------ ------- ------ ------- ------ -----
III-A 37,123 460,303 45,080 516,905 (18%) (11%)
III-B 25,395 190,781 31,275 243,753 (19%) (22%)
III-C 9,551 548,555 13,872 668,059 (31%) (18%)
III-D 8,411 293,250 12,909 376,825 (35%) (22%)
III-E 22,653 720,487 32,768 779,623 (31%) ( 8%)
III-F 20,252 408,746 20,685 412,842 ( 2%) ( 1%)
Average Production Costs
per Barrel of Oil Equivalent
----------------------------------------
P/ship 2004 2003(1) % Change
------ ----- ------- --------
III-A $7.33 $6.37 15%
III-B 8.51 7.08 20%
III-C 8.52 6.93 23%
III-D 8.63 6.98 24%
III-E 9.53 8.15 13%
III-F 8.22 8.43 ( 2%)
- -----------
(1) The amounts for the III-D and III-E Partnerships have been restated to
reflect the sale of the Jay Field during 2004 as a discontinued operation.
See Part II, Item 7 for more information about this discontinued
operation.
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Liquidity and Capital Resources
Net proceeds from operations less necessary operating capital are
distributed to the Limited Partners on a quarterly basis. See "Item 5. Market
for Units and Related Limited Partner Matters." The net proceeds from production
are not generally reinvested in productive assets, except to the extent that
producing wells are improved, where methods are employed to permit more
efficient recovery of reserves, or where identified developmental drilling or
recompletion opportunities are pursued, thereby resulting in a positive economic
impact. Assuming 2005 production levels for future years, the Partnerships'
proved reserve quantities at December 31, 2005 would have the following
remaining lives:
Partnership Gas-Years Oil-Years
----------- --------- ---------
III-A 9.0 2.9
III-B 8.5 2.7
III-C 9.1 9.3
III-D 8.3 9.7
III-E 7.8 6.4
III-F 9.2 17.8
These life of reserves estimates are based on the current estimates of remaining
oil and gas reserves. See "Item 2. Properties" for a discussion of these reserve
estimates. As discussed below, the Partnerships must terminate no later than
December 31, 2009 (November 22, 2009 for the III-A Partnership), which is four
years from December 31, 2005.
The Partnerships' available capital from the Limited Partners'
subscriptions has been spent on oil and gas properties and there should be no
further material capital resource commitments in the future. The Partnerships
have no debt commitments. Cash for operational purposes will be provided by
current oil and gas production. During 2005, 2004, and 2003, the Partnerships
expended no capital on oil and gas acquisition or exploration activities.
However, during those years the Partnerships expended the following amounts on
oil and gas developmental activities, primarily well recompletions and
developmental drilling:
Partnership 2005 2004 2003
----------- -------- -------- -------
III-A $ 16,822 $ 78,142 $53,311
III-B 2,903 52,376 32,726
III-C 127,299 217,479 21,609
III-D 85,828 27,306 6,141
III-E 158,067 245,429 21,436
III-F 32,310 188,433 16,762
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While these expenditures may reduce or eliminate cash available for a
particular quarterly cash distribution, the General Partner believes that these
activities are necessary for the prudent operation of the properties and
maximization of their value to the Partnerships.
The Partnerships sold certain oil and gas properties during 2004 and 2003.
No such sales occurred during 2005. The sales of the Partnerships' properties
was made by the General Partner after giving due consideration to both the offer
price and the General Partner's estimate of the property's remaining proved
reserves and future operating costs. Net proceeds from the sales of such
properties were included in the calculation of the Partnerships' cash
distributions for the quarter immediately following the Partnerships' receipt of
the proceeds. The amount of such proceeds from the sales of oil and gas
properties during 2005, 2004, and 2003, were as follows:
Partnership 2005 2004 2003
----------- -------- -------- --------
III-A $ - $ 375 $ 1,902
III-B - - 984
III-C - - 34,411
III-D - 88,277 23,232
III-E - 629,332 101,704
III-F - 1,654 17,010
Over the years, as part of the normal course of business, some of the
Partnerships' interests in wells have been sold, generally at oil and gas
auctions. Given the generally favorable current environment for oil and gas
dispositions, it is possible that the Partnerships will increase the number of
properties to be sold. In the event of sales, any net proceeds are distributed
as soon as possible after the disposition. Future production, costs and cash
flow will be reduced as properties are sold.
There can be no assurance as to the amount of the Partnerships' future
cash distributions. The Partnerships' ability to make cash distributions depends
primarily upon the level of available cash flow generated by the Partnerships'
operating activities, which will be affected (either positively or negatively)
by many factors beyond the control of the Partnerships, including the price of
and demand for oil and gas and other market and economic conditions. Even if
prices and costs remain stable, the amount of cash available for distributions
will decline over time (as the volume of production from producing properties
declines) since the Partnerships are not replacing production through
acquisitions of producing properties and extensive drilling. The Partnerships'
quantity of proved reserves has been reduced by the sale of oil and gas
properties as described above; therefore, it is possible that the Partnerships'
future cash distributions will decline as a result of a reduction of the
Partnerships' reserve base.
-66-
The General Partner expects general and administrative expenses to
increase substantially during 2006 and 2007 due to costs required to comply with
Section 404 of the Sarbanes-Oxley Act of 2002. Such anticipated increase will
reduce cash available for distribution. The General Partner expects at least a
portion of this anticipated increase in general and administrative expenses to
continue in years beyond 2007.
Pursuant to the terms of the partnership agreements for the Partnerships
(the "Partnership Agreements") the Partnerships were scheduled to terminate on
the dates indicated in the "Initial Termination Date" column of the following
chart. However, the Partnership Agreements provide that the General Partner may
extend the term of each Partnership for up to five periods of two years each. As
of the date of this Annual Report, the General Partner has extended the term of
the Partnerships for the fourth extension period. Therefore, the Partnerships
are currently scheduled to terminate on the dates indicated in the "Current
Termination Date" column of the following chart.
Initial Extensions Current
Partnership Termination Date Exercised Termination Date
----------- ------------------ --------- -----------------
III-A November 22, 1999 4 November 22, 2007
III-B January 24, 2000 4 December 31, 2007
III-C February 28, 2000 4 December 31, 2007
III-D September 5, 2000 4 December 31, 2007
III-E December 26, 2000 4 December 31, 2007
III-F March 7, 2001 4 December 31, 2007
The General Partner has not determined whether it will further extend the term
of any Partnership.
Off-Balance Sheet Arrangements
The Partnerships do not have any off-balance sheet arrangements.
Contractual Obligations
The Partnerships do not have any contractual obligations of the type which
are required by the SEC to be disclosed in this Annual Report under this
heading.
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
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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
Partnership 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 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 units-of-production method. The
Partnerships' calculation of depreciation, depletion, and amortization includes
estimated dismantlement and abandonment costs, net of estimated salvage values.
When complete units of depreciable property are retired or sold, the asset cost
and related accumulated depreciation are eliminated with any gain or loss
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 all oil and gas
properties within a field exceed 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 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 included in Item 8 of this
Annual Report 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 rates used in calculating the Deferred Charge and
Accrued Liability are the annual average production cost per Mcf.
The Partnerships' oil and condensate production is sold, title passed, and
revenue recognized at or near the Partnerships' wells under short-term purchase
contracts at prevailing prices in accordance with arrangements which are
customary in the oil and gas industry. Sales of gas applicable to the
Partnerships' interest in producing oil and gas leases are recorded as revenue
when the gas is metered and title transferred pursuant to the gas
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sales contracts covering the Partnerships' interest in gas reserves. During such
times as a Partnership's sales of gas exceed its pro rata ownership in a well,
such sales are recorded as revenues unless total sales from the well have
exceeded the Partnership's share of estimated total gas reserves underlying the
property, at which time such excess is recorded as a liability. The rates per
Mcf used to calculate this liability are based on the average gas prices
received for the volumes at the time the overproduction occurred. These rates
also approximate the prices for which the Partnerships are currently settling
similar liabilities. 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 a negotiated or contractual
payment to the underproduced party.
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.
Inflation and Changing Prices
Prices obtained for oil and gas production depend upon numerous factors,
including the extent of domestic and foreign production, foreign imports of oil,
market demand, domestic and foreign economic conditions in general, and
governmental regulations and tax laws. Inflationary pressure on drilling and
operating costs have impacted the operating costs incurred by the Partnerships.
This pressure is expected to continue if commodity prices remain at their
current levels. Oil and gas prices have fluctuated during recent years and
generally have not followed the same pattern as inflation. See "Item 2.
Properties - Oil and Gas Production, Revenue, and Price History."
-69-
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
The Partnerships do not hold any market risk sensitive instruments.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The financial statements and supplementary data are indexed in Item 15
hereof.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
None.
ITEM 9A. 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.
ITEM 9B. OTHER INFORMATION
The General Partner is not aware of any information required to be
reported on Form 8-K during the fourth quarter of 2005 but which was not so
reported.
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE GENERAL PARTNER
The Partnerships have no directors or executive officers. The following
individuals are directors and executive officers of the General Partner. The
business address of such director and executive officers is Two West Second
Street, Tulsa, Oklahoma 74103.
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Name Age Position with Geodyne
---------------- --- --------------------------------
Dennis R. Neill 54 President and Director
Judy K. Fox 55 Secretary
The director will hold office until the next annual meeting of shareholders of
Geodyne or until his successor has been duly elected and qualified. All
executive officers serve at the discretion of the Board of Directors.
Dennis R. Neill joined Samson in 1981, was named Senior Vice President and
Director of Geodyne on March 3, 1993, and was named President of Geodyne and its
subsidiaries on June 30, 1996. Prior to joining Samson, he was associated with a
Tulsa law firm, Conner and Winters, where his principal practice was in the
securities area. He received a Bachelor of Arts degree in political science from
Oklahoma State University and a Juris Doctorate degree from the University of
Texas. Mr. Neill also serves as Senior Vice President of Samson Investment
Company and as President and Director of Samson Properties Incorporated, Samson
Hydrocarbons Company, Dyco Petroleum Corporation, Berry Gas Company, Circle L
Drilling Company, Snyder Exploration Company, and Compression, Inc.
Judy K. Fox joined Samson in 1990 and was named Secretary of Geodyne and
its subsidiaries on June 30, 1996. Prior to joining Samson, she served as Gas
Contract Manager for Ely Energy Company. Ms. Fox is also Secretary of Berry Gas
Company, Circle L Drilling Company, Compression, Inc., Dyco Petroleum
Corporation, Samson Hydrocarbons Company, Snyder Exploration Company, and Samson
Properties Incorporated.
Section 16(a) Beneficial Ownership Reporting Compliance
To the best knowledge of the Partnerships and the General Partner, there
were no officers, directors, or ten percent owners who were delinquent filers
during 2005 of reports required under Section 16 of the Securities Exchange Act
of 1934.
Audit Committee Financial Expert
The Partnerships are not required by SEC regulations or otherwise to
maintain an audit committee. The board of directors of the General Partner
consists of one person and therefore serves as its audit committee. There is not
an audit committee financial expert, as defined in the SEC regulations, serving
on the General Partner's board of directors.
-71-
Code of Ethics
The General Partner has adopted a Code of Ethics which applies to all of
its executive officers, including those persons who perform the functions of
principal executive officer, principal financial officer, and principal
accounting officer. The Partnerships will provide, free of charge, a copy of
this Code of Ethics to any person upon receipt of a written request mailed to
Geodyne Resources, Inc., Investor Services, Samson Plaza, Two West Second
Street, Tulsa, OK 74103. Such requests must include the address to which the
Code of Ethics should be mailed.
ITEM 11. EXECUTIVE COMPENSATION
The General Partner and its affiliates are reimbursed for actual general
and administrative costs and operating costs incurred and attributable to the
conduct of the business affairs and operations of the Partnerships, computed on
a cost basis, determined in accordance with generally accepted accounting
principles. Such reimbursed costs and expenses allocated to the Partnerships
include office rent, secretarial, employee compensation and benefits, travel and
communication costs, fees for professional services, and other items generally
classified as general or administrative expense. When actual costs incurred
benefit other Partnerships and affiliates, the allocation of costs is based on
the relationship of the Partnerships' reserves to the total reserves owned by
all Partnerships and affiliates. The amount of general and administrative
expense allocated to the General Partner and its affiliates which was charged to
each Partnership during 2005, 2004, and 2003, is set forth in the table below.
Although the actual costs incurred by the General Partner and its affiliates
have fluctuated during the three years presented, the amounts charged to the
Partnerships have not fluctuated due to expense limitations imposed by the
Partnership Agreements.
Partnership 2005 2004 2003
----------- -------- -------- --------
III-A $277,872 $277,872 $277,872
III-B 145,620 145,620 145,620
III-C 257,412 257,412 257,412
III-D 137,904 137,904 137,904
III-E 440,280 440,280 440,280
III-F 233,136 233,136 233,136
None of the officers or directors of the General Partner receive
compensation directly from the Partnerships. The Partnerships reimburse the
General Partner or its affiliates for that portion of such officers' and
directors' salaries and expenses attributable to time devoted by such
individuals to the
-72-
Partnerships' activities based on the allocation method described above. The
following tables indicate the approximate amount of general and administrative
expense reimbursement attributable to the salaries of the directors, officers,
and employees of the General Partner and its affiliates during 2005, 2004, and
2003:
[Remainder of Page Intentionally Left Blank]
-73-
Salary Reimbursements
III-A Partnership
-----------------
Three Years Ended December 31, 2005
Long Term Compensation
----------------------------------
Annual Compensation Awards Payouts
------------------------------- ----------------------- -------
Securi-
Other ties All
Name Annual Restricted Under- Other
and Compen- Stock lying LTIP Compen-
Principal Salary Bonus sation Award(s) Options/ Payouts sation
Position Year ($) ($) ($) ($) SARs(#) ($) ($)
- --------------- ---- -------- ------- ------- ---------- -------- ------- -------
Dennis R. Neill,
President(1) 2003 - - - - - - -
2004 - - - - - - -
2005 - - - - - - -
All Executive
Officers,
Directors,
and Employees
as a group(2) 2003 $150,821 - - - - - -
2004 $161,596 - - - - - -
2005 $165,823 - - - - - -
- ----------
(1) The general and administrative expenses paid by the III-A Partnership and
attributable to salary reimbursements do not include any salary or other
compensation attributable to Mr. Neill.
(2) No officer or director of Geodyne or its affiliates provides full-time
services to the III-A Partnership and no individual's salary or other
compensation reimbursement from the III-A Partnership equals or exceeds
$100,000 per annum.
-74-
Salary Reimbursements
III-B Partnership
-----------------
Three Years Ended December 31, 2005
Long Term Compensation
----------------------------------
Annual Compensation Awards Payouts
------------------------------- ----------------------- -------
Securi-
Other ties All
Name Annual Restricted Under- Other
and Compen- Stock lying LTIP Compen-
Principal Salary Bonus sation Award(s) Options/ Payouts sation
Position Year ($) ($) ($) ($) SARs(#) ($) ($)
- --------------- ---- ------- ------- ------- ---------- -------- ------- -------
Dennis R. Neill,
President(1) 2003 - - - - - - -
2004 - - - - - - -
2005 - - - - - - -
All Executive
Officers,
Directors,
and Employees
as a group(2) 2003 $79,038 - - - - - -
2004 $84,685 - - - - - -
2005 $86,900 - - - - - -
- ----------
(1) The general and administrative expenses paid by the III-B Partnership and
attributable to salary reimbursements do not include any salary or other
compensation attributable to Mr. Neill.
(2) No officer or director of Geodyne or its affiliates provides full-time
services to the III-B Partnership and no individual's salary or other
compensation reimbursement from the III-B Partnership equals or exceeds
$100,000 per annum.
-75-
Salary Reimbursements
III-C Partnership
-----------------
Three Years Ended December 31, 2005
Long Term Compensation
------------------------------------
Annual Compensation Awards Payouts
------------------------------- ----------------------- -------
Securi-
Other ties All
Name Annual Restricted Under- Other
and Compen- Stock lying LTIP Compen-
Principal Salary Bonus sation Award(s) Options/ Payouts sation
Position Year ($) ($) ($) ($) SARs(#) ($) ($)
- --------------- ---- -------- ------- ------- ---------- -------- ------- -------
Dennis R. Neill,
President(1) 2003 - - - - - - -
2004 - - - - - - -
2005 - - - - - - -
All Executive
Officers,
Directors,
and Employees
as a group(2) 2003 $139,716 - - - - - -
2004 $149,698 - - - - - -
2005 $153,613 - - - - - -
- ----------
(1) The general and administrative expenses paid by the III-C Partnership and
attributable to salary reimbursements do not include any salary or other
compensation attributable to Mr. Neill.
(2) No officer or director of Geodyne or its affiliates provides full-time
services to the III-C Partnership and no individual's salary or other
compensation reimbursement from the III-C Partnership equals or exceeds
$100,000 per annum.
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Salary Reimbursements
III-D Partnership
-----------------
Three Years Ended December 31, 2005
Long Term Compensation
----------------------------------
Annual Compensation Awards Payouts
------------------------------- ----------------------- -------
Securi-
Other ties All
Name Annual Restricted Under- Other
and Compen- Stock lying LTIP Compen-
Principal Salary Bonus sation Award(s) Options/ Payouts sation
Position Year ($) ($) ($) ($) SARs(#) ($) ($)
- --------------- ---- ------- ------- ------- ---------- -------- ------- -------
Dennis R. Neill,
President(1) 2003 - - - - - - -
2004 - - - - - - -
2005 - - - - - - -
All Executive
Officers,
Directors,
and Employees
as a group(2) 2003 $74,850 - - - - - -
2004 $80,198 - - - - - -
2005 $82,296 - - - - - -
- ----------
(1) The general and administrative expenses paid by the III-D Partnership and
attributable to salary reimbursements do not include any salary or other
compensation attributable to Mr. Neill.
(2) No officer or director of Geodyne or its affiliates provides full-time
services to the III-D Partnership and no individual's salary or other
compensation reimbursement from the III-D Partnership equals or exceeds
$100,000 per annum.
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Salary Reimbursements
III-E Partnership
-----------------
Three Years Ended December 31, 2005
Long Term Compensation
-------------------------------------
Annual Compensation Awards Payouts
------------------------------- ----------------------- -------
Securi-
Other ties All
Name Annual Restricted Under- Other
and Compen- Stock lying LTIP Compen-
Principal Salary Bonus sation Award(s) Options/ Payouts sation
Position Year ($) ($) ($) ($) SARs(#) ($) ($)
- --------------- ---- -------- ------- ------- ---------- -------- ------- -------
Dennis R. Neill,
President(1) 2003 - - - - - - -
2004 - - - - - - -
2005 - - - - - - -
All Executive
Officers,
Directors,
and Employees
as a group(2) 2003 $238,971 - - - - - -
2004 $256,045 - - - - - -
2005 $262,741 - - - - - -
- ----------
(1) The general and administrative expenses paid by the III-E Partnership and
attributable to salary reimbursements do not include any salary or other
compensation attributable to Mr. Neill.
(2) No officer or director of Geodyne or its affiliates provides full-time
services to the III-E Partnership and no individual's salary or other
compensation reimbursement from the III-E Partnership equals or exceeds
$100,000 per annum.
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Salary Reimbursements
III-F Partnership
-----------------
Three Years Ended December 31, 2005
Long Term Compensation
----------------------------------
Annual Compensation Awards Payouts
------------------------------- ---------------------- -------
Securi-
Other ties All
Name Annual Restricted Under- Other
and Compen- Stock lying LTIP Compen-
Principal Salary Bonus sation Award(s) Options/ Payouts sation
Position Year ($) ($) ($) ($) SARs(#) ($) ($)
- --------------- ---- -------- ------- ------- ---------- -------- ------- -------
Dennis R. Neill,
President(1) 2003 - - - - - - -
2004 - - - - - - -
2005 - - - - - - -
All Executive
Officers,
Directors,
and Employees
as a group(2) 2003 $126,539 - - - - - -
2004 $135,580 - - - - - -
2005 $139,126 - - - - - -
- ----------
(1) The general and administrative expenses paid by the III-F Partnership and
attributable to salary reimbursements do not include any salary or other
compensation attributable to Mr. Neill.
(2) No officer or director of Geodyne or its affiliates provides full-time
services to the III-F Partnership and no individual's salary or other
compensation reimbursement from the III-F Partnership equals or exceeds
$100,000 per annum.
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Affiliates of the Partnerships serve as operator of some of the
Partnerships' wells. The General Partner contracts with such affiliates for
services as operator of the wells. As operator, such affiliates are compensated
at rates provided in the operating agreements in effect and charged to all
parties to such agreement. Such compensation may occur both prior and subsequent
to the commencement of commercial marketing of production of oil or gas. The
dollar amount of such compensation paid by the Partnerships to the affiliates is
impossible to quantify as of the date of this Annual Report.
Samson maintains necessary inventories of new and used field equipment.
Samson may have provided some of this equipment for wells in which the
Partnerships have an interest. This equipment was provided at prices or rates
equal to or less than those normally charged in the same or comparable
geographic area by unaffiliated persons or companies dealing at arm's length.
The operators of these wells billed the Partnerships for a portion of such costs
based upon the Partnerships' interest in the well.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table provides information as to the beneficial ownership of
the Units as of the date of filing this Annual Report by (i) each beneficial
owner of more than five percent of the issued and outstanding Units, (ii) the
directors and officers of the General Partner, and (iii) the General Partner and
its affiliates. The address of each of such persons is Samson Plaza, Two West
Second Street, Tulsa, Oklahoma 74103.
Number of Units
Beneficially
Owned (Percent
Beneficial Owner of Outstanding)
- ------------------------------------ ------------------
III-A Partnership:
- -----------------
Samson Resources Company 66,383 (25.2%)
All affiliates, directors,
and officers of the General
Partner as a group and
the General Partner (4 persons) 66,383 (25.2%)
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III-B Partnership:
- -----------------
Samson Resources Company 33,507 (24.2%)
All affiliates, directors,
and officers of the General
Partner as a group and
the General Partner (4 persons) 33,507 (24.2%)
III-C Partnership:
- -----------------
Samson Resources Company 68,804 (28.1%)
All affiliates, directors,
and officers of the General
Partner as a group and
the General Partner (4 persons) 68,804 (28.1%)
III-D Partnership:
- -----------------
Samson Resources Company 37,728 (28.8%)
All affiliates, directors,
and officers of the General
Partner as a group and
the General Partner (4 persons) 37,728 (28.8%)
III-E Partnership:
- -----------------
Samson Resources Company 124,864 (29.9%)
All affiliates, directors,
and officers of the General
Partner as a group and
the General Partner (4 persons) 124,864 (29.9%)
III-F Partnership:
- -----------------
Samson Resources Company 69,103 (31.2%)
All affiliates, directors,
and officers of the General
Partner as a group and
the General Partner (4 persons) 69,103 (31.2%)
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The General Partner and certain of its affiliates engage in oil and gas
activities independently of the Partnerships which result in conflicts of
interest that cannot be totally eliminated. The allocation of acquisition and
drilling opportunities and the nature of the compensation arrangements between
the Partnerships and the General Partner also create
-81-
potential conflicts of interest. An affiliate of the Partnerships owns some of
the Partnerships' Units and therefore has an identity of interest with other
Limited Partners with respect to the operations of the Partnerships.
In order to attempt to assure limited liability for Limited Partners as
well as an orderly conduct of business, management of the Partnerships is
exercised solely by the General Partner. The Partnership Agreements grant the
General Partner broad discretionary authority with respect to the Partnerships'
participation in drilling prospects and expenditure and control of funds,
including borrowings. These provisions are similar to those contained in
prospectuses and partnership agreements for other public oil and gas
partnerships. Broad discretion as to general management of the Partnerships
involves circumstances where the General Partner has conflicts of interest and
where it must allocate costs and expenses, or opportunities, among the
Partnerships and other competing interests.
The General Partner does not devote all of its time, efforts, and
personnel exclusively to the Partnerships. Furthermore, the Partnerships do not
have any employees, but instead rely on the personnel of Samson. The
Partnerships thus compete with Samson (including other oil and gas partnerships)
for the time and resources of such personnel. Samson devotes such time and
personnel to the management of the Partnerships as are indicated by the
circumstances and as are consistent with the General Partner's fiduciary duties.
Affiliates of the Partnerships are solely responsible for the negotiation,
administration, and enforcement of oil and gas sales agreements covering the
Partnerships' leasehold interests. Because affiliates of the Partnerships who
provide services to the Partnerships have fiduciary or other duties to other
members of Samson, contract amendments and negotiating positions taken by them
in their effort to enforce contracts with purchasers may not necessarily
represent the positions that the Partnerships would take if they were to
administer their own contracts without involvement with other members of Samson.
On the other hand, management believes that the Partnerships' negotiating
strength and contractual positions have been enhanced by virtue of their
affiliation with Samson.
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ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES
Audit Fees
During 2005 and 2004, each Partnership paid the following audit fees:
2005 2004
------- -------
Year-end audit per engagement letter $23,716 $21,560
1st quarter 10-Q review 925 825
2nd quarter 10-Q review 917 825
3rd quarter 10-Q review 917 825
Audit-Related Fees
During 2005 and 2004 the Partnerships did not pay any audit-related fees
of the type required by the SEC to be disclosed in this Annual Report under this
heading.
Tax Fees
During 2005 and 2004 the Partnerships did not pay any tax compliance, tax
advice, or tax planning fees of the type required by the SEC to be disclosed in
this Annual Report under this heading.
All Other Fees
During 2005 and 2004 the Partnerships did not pay any other fees of the
type required by the SEC to be disclosed in this Annual Report under this
heading.
Audit Approval
The Partnerships do not have audit committee pre-approval policies and
procedures as described in paragraph (c)(7)(i) of Rule 2-01 of Regulation S-X.
The Partnerships did not receive any services of the type described in Items
9(e)(2) through 9(e)(4) of Schedule 14A.
Audit and Related Fees Paid by Affiliates
The Partnerships' accountants received compensation from other related
partnerships managed by the General Partner and from other entities affiliated
with the General Partner. This compensation is for audit services, tax related
services, and other accounting-related services. The General Partner does not
believe this arrangement creates a conflict of interest or impairs the auditors'
independence.
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PART IV
ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
(a) Financial Statements, Financial Statement Schedules, and Exhibits.
(1) Financial Statements: The following financial statements for the
Geodyne Energy Income Limited Partnership III-A
Geodyne Energy Income Limited Partnership III-B
Geodyne Energy Income Limited Partnership III-C
Geodyne Energy Income Limited Partnership III-D
Geodyne Energy Income Limited Partnership III-E
Geodyne Energy Income Limited Partnership III-F
as of December 31, 2005 and 2004 and for each of the three years in
the period ended December 31, 2005 are filed as part of this report:
Report of Independent Registered Public Accounting Firm
Balance Sheets
Statements of Operations
Statements of Changes in Partners' Capital (Deficit)
Statements of Cash Flows
Notes to Financial Statements
(2) Financial Statement Schedules:
None.
(3) Exhibits:
Exh.
No. Exhibit
- ---- -------
4.1 Agreement of Limited Partnership dated November 17, 1989 for Geodyne
Energy Income Limited Partnership III-A filed as Exhibit 4.1 to
Registrant's Annual Report on Form 10-K for the year ended December
31, 1999, filed with the SEC on February 25, 2000, and is hereby
incorporated by reference.
4.2 Certificate of Limited Partnership dated January 24, 1990 for
Geodyne Energy Income Limited Partnership III-A filed as Exhibit 4.2
to Registrant's Annual Report on Form 10-K for the year ended
December 31, 2001, filed with the SEC on February 28, 2002 and is
hereby incorporated by reference.
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4.3 First Amendment to Certificate of Limited Partnership and First
Amendment to Agreement of Limited Partnership dated February 24,
1993 for Geodyne Energy Income Limited Partnership III-A filed as
Exhibit 4.5 to Registrant's Annual Report on Form 10-K for the year
ended December 31, 1999, filed with the SEC on February 25, 2000,
and is hereby incorporated by reference.
4.4 Second Amendment to Agreement of Limited Partnership dated August 4,
1993 for Geodyne Energy Income Limited Partnership III-A filed as
Exhibit 4.8 to Registrant's Annual Report on Form 10-K for the year
ended December 31, 1999, filed with the SEC on February 25, 2000,
and is hereby incorporated by reference.
4.5 Second Amendment to Certificate of Limited Partnership dated July 1,
1996 for Geodyne Energy Income Limited Partnership III-A filed as
Exhibit 4.5 to Registrant's Annual Report on Form 10-K for the year
ended December 31, 2001, filed with the SEC on February 28, 2002 and
is hereby incorporated by reference.
4.6 Third Amendment to Agreement of Limited Partnership dated August 31,
1995 for Geodyne Energy Income Limited Partnership III-A filed as
Exhibit 4.15 to Registrant's Annual Report on Form 10-K for the year
ended December 31, 1999, filed with the SEC on February 25, 2000,
and is hereby incorporated by reference.
4.7 Fourth Amendment to Agreement of Limited Partnership dated July 1,
1996 for Geodyne Energy Income Limited Partnership III-A filed as
Exhibit 4.22 to Registrant's Annual Report on Form 10-K for the year
ended December 31, 1999, filed with the SEC on February 25, 2000,
and is hereby incorporated by reference.
4.8 Fifth Amendment to Agreement of Limited Partnership dated November
15, 1999 for Geodyne Energy Income Limited Partnership III-A filed
as Exhibit 4.25 to Registrant's Annual Report on Form 10-K for the
year ended December 31, 1999, filed with the SEC on February 25,
2000, and is hereby incorporated by reference.
4.9 Sixth Amendment to Agreement of Limited Partnership dated November
14, 2001, for the Geodyne Energy Income Limited Partnership III-A
filed as Exhibit 4.9 to Registrant's Annual Report on Form 10-K for
the year ended December 31, 2001, filed with the SEC on February 28,
2002 and is hereby incorporated by reference.
4.10 Seventh Amendment to Agreement of Limited Partnership dated November
17, 2003, for the Geodyne Energy Income Limited Partnership III-A
filed as Exhibit 4.10 to Registrant's Annual Report on Form 10-K for
the year
-85-
ended December 31, 2003, filed with the SEC on March 30, 2004 and is
hereby incorporated by reference.
*4.11 Eighth Amendment to Agreement of Limited Partnership for the Geodyne
Energy Income Limited Partnership III-A dated October 27, 2005.
4.12 Agreement of Limited Partnership dated January 24, 1990 for Geodyne
Energy Income Limited Partnership III-B filed as Exhibit 4.2 to
Registrant's Annual Report on Form 10-K for the year ended December
31, 1999, filed with the SEC on February 25, 2000, and is hereby
incorporated by reference.
4.13 Certificate of Limited Partnership dated January 24, 1990 for
Geodyne Energy Income Limited Partnership III-B filed as Exhibit
4.11 to Registrant's Annual Report on Form 10-K for the year ended
December 31, 2001, filed with the SEC on February 28, 2002 and is
hereby incorporated by reference.
4.14 First Amendment to Certificate of Limited Partnership and First
Amendment to Agreement of Limited Partnership dated February 24,
1993 for Geodyne Energy Income Limited Partnership III-B filed as
Exhibit 4.6 to Registrant's Annual Report on Form 10-K for the year
ended December 31, 1999, filed with the SEC on February 25, 2000,
and is hereby incorporated by reference.
4.15 Second Amendment to Agreement of Limited Partnership dated August 4,
1993 for Geodyne Energy Income Limited Partnership III-B filed as
Exhibit 4.9 to Registrant's Annual Report on Form 10-K for the year
ended December 31, 1999, filed with the SEC on February 25, 2000,
and is hereby incorporated by reference.
4.16 Third Amendment to Agreement of Limited Partnership dated August 31,
1995 for Geodyne Energy Income Limited Partnership III-B filed as
Exhibit 4.16 to Registrant's Annual Report on Form 10-K for the year
ended December 31, 1999, filed with the SEC on February 25, 2000,
and is hereby incorporated by reference.
4.17 Second Amendment to Certificate of Limited Partnership dated July 1,
1996 for Geodyne Energy Income Limited Partnership III-B filed as
Exhibit 4.15 to Registrant's Annual Report on Form 10-K for the year
ended December 31, 2001, filed with the SEC on February 28, 2002 and
is hereby incorporated by reference.
4.18 Fourth Amendment to Agreement of Limited Partnership dated July 1,
1996 for Geodyne Energy Income Limited Partnership III-B filed as
Exhibit 4.23 to Registrant's Annual Report on Form 10-K for the year
ended December
-86-
31, 1999, filed with the SEC on February 25, 2000, and is hereby
incorporated by reference.
4.19 Fifth Amendment to Agreement of Limited Partnership dated December
30, 1999 for Geodyne Energy Income Limited Partnership III-B filed
as Exhibit 4.26 to Registrant's Annual Report on Form 10-K for the
year ended December 31, 1999, filed with the SEC on February 25,
2000, and is hereby incorporated by reference.
4.20 Sixth Amendment to Agreement of Limited Partnership dated November
14, 2001, for the Geodyne Energy Income Limited Partnership III-B
filed as Exhibit 4.18 to Registrant's Annual Report on Form 10-K for
the year ended December 31, 2001, filed with the SEC on February 28,
2002 and is hereby incorporated by reference.
4.21 Seventh Amendment to Agreement of Limited Partnership dated January
22, 2004, for the Geodyne Energy Income Limited Partnership III-B
filed as Exhibit 4.20 to Registrant's Annual Report on Form 10-K for
the year ended December 31, 2003, filed with the SEC on March 30,
2004 and is hereby incorporated by reference.
*4.22 Eighth Amendment to Agreement of Limited Partnership for the Geodyne
Energy Income Limited Partnership III-B dated October 27, 2005.
4.23 Agreement of Limited Partnership dated February 26, 1990 for Geodyne
Energy Income Limited Partnership III-C filed as Exhibit 4.3 to
Registrant's Annual Report on Form 10-K for the year ended December
31, 1999, filed with the SEC on February 25, 2000, and is hereby
incorporated by reference.
4.24 Certificate of Limited Partnership dated February 26, 1990 for
Geodyne Energy Income Limited Partnership III-C filed as Exhibit
4.20 to Registrant's Annual Report on Form 10-K for the year ended
December 31, 2001, filed with the SEC on February 28, 2002 and is
hereby incorporated by reference.
4.25 First Amendment to Certificate of Limited Partnership and First
Amendment to Agreement of Limited Partnership dated February 24,
1993 for Geodyne Energy Income Limited Partnership III-C filed as
Exhibit 4.7 to Registrant's Annual Report on Form 10-K for the year
ended December 31, 1999, filed with the SEC on February 25, 2000,
and is hereby incorporated by reference.
4.26 Second Amendment to Agreement of Limited Partnership dated August 4,
1993 for Geodyne Energy Income Limited Partnership III-C filed as
Exhibit 4.19 to Registrant's Annual Report on Form 10-K for the year
ended December
-87-
31, 1999, filed with the SEC on February 25, 2000, and is hereby
incorporated by reference.
4.27 Third Amendment to Agreement of Limited Partnership dated August 31,
1995 for Geodyne Energy Income Limited Partnership III-C filed as
Exhibit 4.17 to Registrant's Annual Report on Form 10-K for the year
ended December 31, 1999, filed with the SEC on February 25, 2000,
and is hereby incorporated by reference.
4.28 Second Amendment to Certificate of Limited Partnership dated July 1,
1996 for Geodyne Energy Income Limited Partnership III-C filed as
Exhibit 4.24 to Registrant's Annual Report on Form 10-K for the year
ended December 31, 2001, filed with the SEC on February 28, 2002 and
is hereby incorporated by reference.
4.29 Fourth Amendment to Agreement of Limited Partnership dated July 1,
1996 for Geodyne Energy Income Limited Partnership III-C filed as
Exhibit 4.24 to Registrant's Annual Report on Form 10-K for the year
ended December 31, 1999, filed with the SEC on February 25, 2000,
and is hereby incorporated by reference.
4.30 Fifth Amendment to Agreement of Limited Partnership dated December
30, 1999 for Geodyne Energy Income Limited Partnership III-C filed
as Exhibit 4.27 to Registrant's Annual Report on Form 10-K for the
year ended December 31, 1999, filed with the SEC on February 25,
2000, and is hereby incorporated by reference.
4.31 Sixth Amendment to Agreement of Limited Partnership dated November
14, 2001, for the Geodyne Energy Income Limited Partnership III-C
filed as Exhibit 4.27 to Registrant's Annual Report on Form 10-K for
the year ended December 31, 2001, filed with the SEC on February 28,
2002 and is hereby incorporated by reference.
4.32 Seventh Amendment to Agreement of Limited Partnership dated January
22, 2004, for the Geodyne Energy Income Limited Partnership III-C
filed as Exhibit 4.30 to Registrant's Annual Report on Form 10-K for
the year ended December 31, 2003, filed with the SEC on March 30,
2004 and is hereby incorporated by reference.
*4.33 Eighth Amendment to Agreement of Limited Partnership for the Geodyne
Energy Income Limited Partnership III-C dated October 27, 2005.
4.34 Agreement of Limited Partnership dated September 5, 1990 for Geodyne
Energy Income Limited Partnership III-D filed as Exhibit 4.4 to
Registrant's Annual Report on Form 10-K for the year ended December
31, 2000, filed with the SEC on March 5, 2001, and is hereby
-88-
incorporated by reference.
4.35 Certificate of Limited Partnership dated September 5, 1990 for
Geodyne Energy Income Limited Partnership III-D filed as Exhibit
4.29 to Registrant's Annual Report on Form 10-K for the year ended
December 31, 2001, filed with the SEC on February 28, 2002 and is
hereby incorporated by reference.
4.36 First Amendment to Certificate of Limited Partnership and First
Amendment to Agreement of Limited Partnership dated February 24,
1993 for Geodyne Energy Income Limited Partnership III-D filed as
Exhibit 4.11 to Registrant's Annual Report on Form 10-K for the year
ended December 31, 2000, filed with the SEC on March 5, 2001, and is
hereby incorporated by reference.
4.37 Second Amendment to Agreement of Limited Partnership dated August 4,
1993 for Geodyne Energy Income Limited Partnership III-D filed as
Exhibit 4.18 to Registrant's Annual Report on Form 10-K for the year
ended December 31, 2000, filed with the SEC on March 5, 2001, and is
hereby incorporated by reference.
4.38 Third Amendment to Agreement of Limited Partnership dated August 31,
1995 for Geodyne Energy Income Limited Partnership III-D filed as
Exhibit 4.25 to Registrant's Annual Report on Form 10-K for the year
ended December 31, 2000, filed with the SEC on March 5, 2001, and is
hereby incorporated by reference.
4.39 Second Amendment to Certificate of Limited Partnership dated July 1,
1996 for Geodyne Energy Income Limited Partnership III-D filed as
Exhibit 4.33 to Registrant's Annual Report on Form 10-K for the year
ended December 31, 2001, filed with the SEC on February 28, 2002 and
is hereby incorporated by reference.
4.40 Fourth Amendment to Agreement of Limited Partnership dated July 1,
1996 for the Geodyne Energy Income Limited Partnership III-D filed
as Exhibit 4.32 to Registrant's Annual Report on Form 10-K for the
year ended December 31, 2000, filed with the SEC on March 5, 2001,
and is hereby incorporated by reference.
4.41 Fifth Amendment to Agreement of Limited Partnership dated August 23,
2000 for the Geodyne Energy Income Limited Partnership III-D filed
as Exhibit 4.39 to Registrant's Annual Report on Form 10-K for the
year ended December 31, 2000, filed with the SEC on March 5, 2001,
and is hereby incorporated by reference.
4.42 Sixth Amendment to Agreement of Limited Partnership dated August 20,
2002 for the Geodyne Energy Income
-89-
Limited Partnership III-D filed as Exhibit 4.36 to Registrant's
Annual Report on Form 10-K for the year ended December 31, 2002,
filed with the SEC on March 28, 2003, and is hereby incorporated by
reference.
4.43 Seventh Amendment to Agreement of Limited Partnership dated August
18, 2004 for the Geodyne Energy Income Limited Partnership III-D
filed as Exhibit 4.40 to Registrant's Annual Report on Form 10-K for
the year ended December 31, 2004, filed with the SEC on March 30,
2004, and is hereby incorporated by reference.
*4.44 Eighth Amendment to Agreement of Limited Partnership for the Geodyne
Energy Income Limited Partnership III-D dated October 27, 2005.
4.45 Agreement of Limited Partnership dated December 26, 1990 for Geodyne
Energy Income Limited Partnership III-E filed as Exhibit 4.5 to
Registrant's Annual Report on Form 10-K for the year ended December
31, 2000, filed with the SEC on March 5, 2001, and is hereby
incorporated by reference.
4.46 Certificate of Limited Partnership dated December 26, 2990 for
Geodyne Energy Income Limited Partnership III-E filed as Exhibit
4.37 to Registrant's Annual Report on Form 10-K for the year ended
December 31, 2001, filed with the SEC on February 28, 2002 and is
hereby incorporated by reference.
4.47 First Amendment to Certificate of Limited Partnership and First
Amendment to Agreement of Limited Partnership dated February 24,
1993 for Geodyne Energy Income Limited Partnership III-E filed as
Exhibit 4.12 to Registrant's Annual Report on Form 10-K for the year
ended December 31, 2000, filed with the SEC on March 5, 2001, and is
hereby incorporated by reference.
4.48 Second Amendment to Agreement of Limited Partnership dated August 4,
1993 for Geodyne Energy Income Limited Partnership III-E filed as
Exhibit 4.19 to Registrant's Annual Report on Form 10-K for the year
ended December 31, 2000, filed with the SEC on March 5, 2001, and is
hereby incorporated by reference.
4.49 Third Amendment to Agreement of Limited Partnership dated August 31,
1995 for Geodyne Energy Income Limited Partnership III-E filed as
Exhibit 4.26 to Registrant's Annual Report on Form 10-K for the year
ended December 31, 2000, filed with the SEC on March 5, 2001, and is
hereby incorporated by reference.
4.50 Second Amendment to Certificate of Limited Partnership dated July 1,
1996 for Geodyne Energy Income Limited
-90-
Partnership III-E filed as Exhibit 4.41 to Registrant's Annual
Report on Form 10-K for the year ended December 31, 2001, filed with
the SEC on February 28, 2002 and is hereby incorporated by
reference.
4.51 Fourth Amendment to Agreement of Limited Partnership dated July 1,
1996 for the Geodyne Energy Income Limited Partnership III-E filed
as Exhibit 4.33 to Registrant's Annual Report on Form 10-K for the
year ended December 31, 2000, filed with the SEC on March 5, 2001,
and is hereby incorporated by reference.
4.52 Fifth Amendment to Agreement of Limited Partnership dated November
15, 2000 for the Geodyne Energy Income Limited Partnership III-E
filed as Exhibit 4.40 to Registrant's Annual Report on Form 10-K for
the year ended December 31, 2000, filed with the SEC on March 5,
2001, and is hereby incorporated by reference.
4.53 Sixth Amendment to Agreement of Limited Partnership for Geodyne
Energy Income Limited Partnership III-E dated November 6, 2002,
filed as Exhibit 4.1 to Registrant's Quarterly Report on Form 10-Q
with the SEC on November 14, 2002, and is hereby incorporated by
reference.
4.54 Seventh Amendment to Agreement of Limited Partnership for the
Geodyne Energy Income Limited Partnership III-E dated August 18,
2004, filed as Exhibit 4.53 to Registrant's Annual Report on Form
10-K for the year ended December 31, 2004, filed with the SEC on
March 30, 2005, and is hereby incorporated by reference.
*4.55 Eighth Amendment to Agreement of Limited Partnership for the Geodyne
Energy Income Limited Partnership III-E dated October 27, 2005.
4.56 Agreement of Limited Partnership dated March 7, 1991 for Geodyne
Energy Income Limited Partnership III-F filed as Exhibit 4.6 to
Registrant's Annual Report on Form 10-K for the year ended December
31, 2000, filed with the SEC on March 5, 2001, and is hereby
incorporated by reference.
4.57 Certificate of Limited Partnership dated March 7, 1991 for Geodyne
Energy Income Limited Partnership III-F filed as Exhibit 4.45 to
Registrant's Annual Report on Form 10-K for the year ended December
31, 2001, filed with the SEC on February 28, 2002 and is hereby
incorporated by reference.
4.58 First Amendment to Certificate of Limited Partnership and First
Amendment to Agreement of Limited Partnership dated February 24,
1993 for Geodyne Energy Income Limited Partnership III-F filed as
Exhibit 4.13 to
-91-
Registrant's Annual Report on Form 10-K for the year ended December
31, 2000, filed with the SEC on March 5, 2001, and is hereby
incorporated by reference.
4.59 Second Amendment to Agreement of Limited Partnership dated August 4,
1993 for Geodyne Energy Income Limited Partnership III-F filed as
Exhibit 4.20 to Registrant's Annual Report on Form 10-K for the year
ended December 31, 2000, filed with the SEC on March 5, 2001, and is
hereby incorporated by reference.
4.60 Second Amendment to Certificate of Limited Partnership dated July 1,
1996 for Geodyne Energy Income Limited Partnership III-F filed as
Exhibit 4.48 to Registrant's Annual Report on Form 10-K for the year
ended December 31, 2001, filed with the SEC on February 28, 2002 and
is hereby incorporated by reference.
4.61 Third Amendment to Agreement of Limited Partnership dated August 31,
1995 for Geodyne Energy Income Limited Partnership III-F filed as
Exhibit 4.27 to Registrant's Annual Report on Form 10-K for the year
ended December 31, 2000, filed with the SEC on March 5, 2001, and is
hereby incorporated by reference.
4.62 Fourth Amendment to Agreement of Limited Partnership dated July 1,
1996 for the Geodyne Energy Income Limited Partnership III-F filed
as Exhibit 4.34 to Registrant's Annual Report on Form 10-K for the
year ended December 31, 2000, filed with the SEC on March 5, 2001,
and is hereby incorporated by reference.
4.63 Fifth Amendment to Agreement of Limited Partnership dated February
5, 2001 for the Geodyne Energy Income Limited Partnership III-F
filed as Exhibit 4.41 to Registrant's Annual Report on Form 10-K for
the year ended December 31, 2000, filed with the SEC on March 5,
2001, and is hereby incorporated by reference.
4.64 Sixth Amendment to Agreement of Limited Partnership for the Geodyne
Energy Income Limited Partnership III-F dated February 10, 2003,
filed as Exhibit 4.53(a) to Registrant's Annual Report on Form 10-K
for the year ended December 31, 2002, filed with the SEC on March
28, 2003, and is hereby incorporated by reference.
4.65 Seventh Amendment to Agreement of Limited Partnership for the
Geodyne Energy Income Limited Partnership III-F dated February 7,
2005, filed as Exhibit 4.60 to Registrant's Annual Report on Form
10-K for the year ended December 31, 2004, filed with the SEC on
March 30, 2004, and is hereby incorporated by reference.
*4.66 Eighth Amendment to Agreement of Limited Partnership
-92-
for the Geodyne Energy Income Limited Partnership III-F dated
October 27, 2005.
*23.1 Consent of Ryder Scott Company, L.P. for Geodyne Energy Income
Limited Partnership III-A.
*23.2 Consent of Ryder Scott Company, L.P. for Geodyne Energy Income
Limited Partnership III-B.
*23.3 Consent of Ryder Scott Company, L.P. for Geodyne Energy Income
Limited Partnership III-C.
*23.4 Consent of Ryder Scott Company, L.P. for Geodyne Energy Income
Limited Partnership III-D.
*23.5 Consent of Ryder Scott Company, L.P. for Geodyne Energy Income
Limited Partnership III-E.
*23.6 Consent of Ryder Scott Company, L.P. for Geodyne Energy Income
Limited Partnership III-F.
*31.1 Certification by Dennis R. Neill required by Rule
13a-14(a)/15d-14(a) for the Geodyne Energy Income Limited
Partnership III-A.
*31.2 Certification by Craig D. Loseke required by Rule
13a-14(a)/15d-14(a) for the Geodyne Energy Income Limited
Partnership III-A.
*31.3 Certification by Dennis R. Neill required by Rule
13a-14(a)/15d-14(a) for the Geodyne Energy Income Limited
Partnership III-B.
*31.4 Certification by Craig D. Loseke required by Rule
13a-14(a)/15d-14(a) for the Geodyne Energy Income Limited
Partnership III-B.
*31.5 Certification by Dennis R. Neill required by Rule
13a-14(a)/15d-14(a) for the Geodyne Energy Income Limited
Partnership III-C.
*31.6 Certification by Craig D. Loseke required by Rule
13a-14(a)/15d-14(a) for the Geodyne Energy Income Limited
Partnership III-C.
*31.7 Certification by Dennis R. Neill required by Rule
13a-14(a)/15d-14(a) for the Geodyne Energy Income Limited
Partnership III-D.
*31.8 Certification by Craig D. Loseke required by Rule
13a-14(a)/15d-14(a) for the Geodyne Energy Income Limited
Partnership III-D.
-93-
*31.9 Certification by Dennis R. Neill required by Rule
13a-14(a)/15d-14(a) for the Geodyne Energy Income Limited
Partnership III-E.
*31.10 Certification by Craig D. Loseke required by Rule
13a-14(a)/15d-14(a) for the Geodyne Energy Income Limited
Partnership III-E.
*31.11 Certification by Dennis R. Neill required by Rule
13a-14(a)/15d-14(a) for the Geodyne Energy Income Limited
Partnership III-F.
*31.12 Certification by Craig D. Loseke required by Rule
13a-14(a)/15d-14(a) for the Geodyne Energy Income Limited
Partnership III-F.
*32.1 Certification pursuant to 18 U.S.C. Section 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 for the
Geodyne Energy Income Limited Partnership III-A.
*32.2 Certification pursuant to 18 U.S.C. Section 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 for the
Geodyne Energy Income Limited Partnership III-B.
*32.3 Certification pursuant to 18 U.S.C. Section 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 for the
Geodyne Energy Income Limited Partnership III-C.
*32.4 Certification pursuant to 18 U.S.C. Section 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 for the
Geodyne Energy Income Limited Partnership III-D.
*32.5 Certification pursuant to 18 U.S.C. Section 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 for the
Geodyne Energy Income Limited Partnership III-E.
*32.6 Certification pursuant to 18 U.S.C. Section 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 for the
Geodyne Energy Income Limited Partnership III-F.
All other Exhibits are omitted as inapplicable.
----------
*Filed herewith.
-94-
SIGNATURES
Pursuant to the requirements of Sections 13 or 15(d) 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 organized.
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-A
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-B
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-C
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-D
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-E
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-F
By: GEODYNE RESOURCES, INC.
General Partner
March 29, 2006
By: //s//Dennis R. Neill
------------------------------
Dennis R. Neill
President
Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following persons on behalf of the registrant and
in the capacities on the dates indicated.
By: //s//Dennis R. Neill President and March 29, 2006
-------------------- Director (Principal
Dennis R. Neill Executive Officer)
//s//Craig D. Loseke Chief Accounting March 29, 2006
-------------------- Officer (Principal
Craig D. Loseke Accounting and
Financial Officer)
//s//Judy K. Fox Secretary March 29, 2006
--------------------
Judy K. Fox
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Item 8: Financial Statements and Supplementary Data
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
TO THE PARTNERS
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-A
In our opinion, the accompanying balance sheets and the related statements
of operations, changes in partners' capital (deficit) and cash flows present
fairly, in all material respects, the financial position of the Geodyne Energy
Income Limited Partnership III-A, an Oklahoma limited partnership, at December
31, 2005 and 2004, and the results of its operations and its cash flows for each
of the three years in the period ended December 31, 2005, in conformity with
accounting principles generally accepted in the United States of America. These
financial statements are the responsibility of the Partnership's management. Our
responsibility is to express an opinion on these financial statements based on
our audits. We conducted our audits of these financial statements in accordance
with the standards of the Public Company Accounting Oversight Board (United
States). Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements, assessing the
accounting principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.
As discussed in Note 1 of Notes to the Financial Statements under the
heading "Asset Retirement Obligation," effective January 1, 2003 the
Partnerships changed the manner in which they account for asset retirement
obligations.
PricewaterhouseCoopers LLP
Tulsa, Oklahoma
March 29, 2006
F-1
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-A
Balance Sheets
December 31, 2005 and 2004
ASSETS
------
2005 2004
------------ ------------
CURRENT ASSETS:
Cash and cash equivalents $1,209,317 $1,038,719
Accounts receivable:
Oil and gas sales 831,772 588,829
--------- ---------
Total current assets $2,041,089 $1,627,548
NET OIL AND GAS PROPERTIES,
utilizing the successful
efforts method 775,391 761,804
DEFERRED CHARGE 190,240 187,958
--------- ---------
$3,006,720 $2,577,310
========= =========
LIABILITIES AND PARTNERS' CAPITAL (DEFICIT)
-------------------------------------------
CURRENT LIABILITIES:
Accounts payable $ 126,411 $ 84,554
Gas imbalance payable 17,660 26,709
Asset retirement obligation -
current (Note 1) 14,606 18,336
--------- ---------
Total current liabilities $ 158,677 $ 129,599
LONG-TERM LIABILITIES:
Accrued liability $ 27,120 $ 28,718
Asset retirement obligation
(Note 1) 270,650 96,619
--------- ---------
Total long-term liabilities $ 297,770 $ 125,337
PARTNERS' CAPITAL (DEFICIT):
General Partner ($ 59,217) ($ 88,506)
Limited Partners, issued and
outstanding, 263,976 Units 2,609,490 2,410,880
--------- ---------
Total Partners' capital $2,550,273 $2,322,374
--------- ---------
$3,006,720 $2,577,310
========= =========
The accompanying notes are an integral part of these
financial statements.
F-2
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-A
Statements of Operations
For the Years Ended December 31, 2005, 2004, and 2003
2005 2004 2003
---------- ---------- ------------
REVENUES:
Oil and gas sales $4,745,968 $4,137,900 $4,039,307
Interest income 19,441 6,549 5,800
Gain on sale of oil
and gas properties - 1,399 -
--------- --------- ---------
$4,765,409 $4,145,848 $4,045,107
COSTS AND EXPENSES:
Lease operating $ 699,570 $ 504,320 $ 527,306
Production tax 416,670 330,438 309,211
Depreciation, depletion,
and amortization of oil
and gas properties 173,536 165,482 186,388
General and administrative 319,762 313,621 315,566
--------- --------- ---------
$1,609,538 $1,313,861 $1,338,471
--------- --------- ---------
INCOME BEFORE CUMULATIVE
EFFECT OF ACCOUNTING
CHANGE $3,155,871 $2,831,987 $2,706,636
Cumulative effect of change
in accounting for asset
retirement obligations
(Note 1) - - ( 673)
--------- --------- ---------
NET INCOME $3,155,871 $2,831,987 $2,705,963
========= ========= =========
GENERAL PARTNER - NET
INCOME $ 329,261 $ 297,437 $ 286,852
========= ========= =========
LIMITED PARTNERS - NET
INCOME $2,826,610 $2,534,550 $2,419,111
========= ========= =========
NET INCOME per Unit $ 10.71 $ 9.60 $ 9.16
========= ========= =========
UNITS OUTSTANDING 263,976 263,976 263,976
========= ========= =========
The accompanying notes are an integral part of these
financial statements.
F-3
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-A
Statements of Partners' Capital (Deficit)
For the Years Ended December 31, 2005, 2004, and 2003
Limited General
Partners Partner Total
------------ ---------- ------------
Balance, Dec. 31, 2002 $2,405,219 ($ 87,091) $2,318,128
Net income 2,419,111 286,852 2,705,963
Cash distributions ( 2,611,000) ( 303,858) ( 2,914,858)
--------- ------- ---------
Balance, Dec. 31, 2003 $2,213,330 ($104,097) $2,109,233
Net income 2,534,550 297,437 2,831,987
Cash distributions ( 2,337,000) ( 281,846) ( 2,618,846)
--------- ------- ---------
Balance, Dec. 31, 2004 $2,410,880 ($ 88,506) $2,322,374
Net income 2,826,610 329,261 3,155,871
Cash distributions ( 2,628,000) ( 299,972) ( 2,927,972)
--------- ------- ---------
Balance, Dec. 31, 2005 $2,609,490 ($ 59,217) $2,550,273
========= ======= =========
The accompanying notes are an integral part of these
financial statements.
F-4
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-A
Statements of Cash Flows
For the Years Ended December 31, 2005, 2004, and 2003
2005 2004 2003
------------ ------------ ------------
CASH FLOWS FROM OPERATING
ACTIVITIES:
Net income $3,155,871 $2,831,987 $2,705,963
Adjustments to reconcile
net income to net cash
provided by operating
activities:
Cumulative effect of change
in accounting for asset
retirement obligations
(Note 1) - - 673
Depreciation, depletion,
and amortization of oil
and gas properties 173,536 165,482 186,388
Settlement of asset
retirement obligation - ( 165) -
Gain on sale of oil and
gas properties - ( 1,399) -
Decrease in accounts
receivable - related
party - - 10
(Increase) decrease in
accounts receivable -
oil and gas sales ( 242,943) ( 79,554) 107,912
(Increase) decrease in
deferred charge ( 2,282) 7,691 65,187
Increase (decrease) in
accounts payable 43,321 ( 2,055) ( 9,631)
Increase (decrease) in
gas imbalance payable ( 9,049) 4,420 ( 5,182)
Increase (decrease) in
accrued liability ( 1,598) ( 5,328) 875
--------- --------- ---------
Net cash provided by
operating activities $3,116,856 $2,921,079 $3,052,195
--------- --------- ---------
CASH FLOWS FROM INVESTING
ACTIVITIES:
Capital expenditures ($ 18,286) ($ 68,482) ($ 53,311)
Proceeds from sale of oil
and gas properties - 375 1,902
--------- --------- ---------
Net cash used by
investing activities ($ 18,286) ($ 68,107) ($ 51,409)
--------- --------- ---------
F-5
CASH FLOWS FROM FINANCING
ACTIVITIES:
Cash distributions ($2,927,972) ($2,618,846) ($2,914,858)
--------- --------- ---------
Net cash used by
financing activities ($2,927,972) ($2,618,846) ($2,914,858)
--------- --------- ---------
NET INCREASE IN CASH AND
CASH EQUIVALENTS $ 170,598 $ 234,126 $ 85,928
CASH AND CASH EQUIVALENTS
AT BEGINNING OF PERIOD $1,038,719 804,593 718,665
--------- --------- ---------
CASH AND CASH EQUIVALENTS
AT END OF PERIOD $1,209,317 $1,038,719 $ 804,593
========= ========= =========
The accompanying notes are an integral part of these
financial statements.
F-6
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
TO THE PARTNERS
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-B
In our opinion, the accompanying balance sheets and the related statements
of operations, changes in partners' capital (deficit) and cash flows present
fairly, in all material respects, the financial position of the Geodyne Energy
Income Limited Partnership III-B, an Oklahoma limited partnership, at December
31, 2005 and 2004, and the results of its operations and its cash flows for each
of the three years in the period ended December 31, 2005, in conformity with
accounting principles generally accepted in the United States of America. These
financial statements are the responsibility of the Partnership's management. Our
responsibility is to express an opinion on these financial statements based on
our audits. We conducted our audits of these financial statements in accordance
with the standards of the Public Company Accounting Oversight Board (United
States). Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements, assessing the
accounting principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.
As discussed in Note 1 of Notes to the Financial Statements under the
heading "Asset Retirement Obligation," effective January 1, 2003 the
Partnerships changed the manner in which they account for asset retirement
obligations.
PricewaterhouseCoopers LLP
Tulsa, Oklahoma
March 29, 2006
F-7
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-B
Balance Sheets
December 31, 2005 and 2004
ASSETS
------
2005 2004
------------ ------------
CURRENT ASSETS:
Cash and cash equivalents $ 604,086 $ 556,249
Accounts receivable:
Oil and gas sales 433,785 300,554
--------- ---------
Total current assets $1,037,871 $ 856,803
NET OIL AND GAS PROPERTIES,
utilizing the successful
efforts method 414,293 402,168
DEFERRED CHARGE 125,644 120,451
--------- ---------
$1,577,808 $1,379,422
========= =========
LIABILITIES AND PARTNERS' CAPITAL (DEFICIT)
-------------------------------------------
CURRENT LIABILITIES:
Accounts payable $ 76,295 $ 55,739
Gas imbalance payable 9,707 14,760
Asset retirement obligation -
current (Note 1) 9,255 31,869
--------- ---------
Total current liabilities $ 95,257 $ 102,368
LONG-TERM LIABILITIES:
Accrued liability $ 9,664 $ 9,828
Asset retirement obligation
(Note 1) 175,358 47,996
--------- ---------
Total long-term liabilities $ 185,022 $ 57,824
PARTNERS' CAPITAL (DEFICIT):
General Partner ($ 35,041) ($ 58,429)
Limited Partners, issued and
outstanding, 138,336 Units 1,332,570 1,277,659
--------- ---------
Total Partners' capital $1,297,529 $1,219,230
--------- ---------
$1,577,808 $1,379,422
========= =========
The accompanying notes are an integral part of these
financial statements.
F-8
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-B
Statements of Operations
For the Years Ended December 31, 2005, 2004, and 2003
2005 2004 2003
---------- ---------- ------------
REVENUES:
Oil and gas sales $2,488,197 $2,130,453 $2,207,562
Interest income 9,610 3,114 2,971
--------- --------- ---------
$2,497,807 $2,133,567 $2,210,533
COSTS AND EXPENSES:
Lease operating $ 421,904 $ 309,872 $ 334,283
Production tax 232,374 176,618 174,948
Depreciation, depletion,
and amortization of oil
and gas properties 95,525 97,836 126,318
General and administrative 182,306 175,518 175,515
--------- --------- ---------
$ 932,109 $ 759,844 $ 811,064
--------- --------- ---------
INCOME BEFORE CUMULATIVE EFFECT
OF ACCOUNTING CHANGE $1,565,698 $1,373,723 $1,399,469
Cumulative effect of change
in accounting for asset
retirement obligations
(Note 1) - - ( 586)
--------- --------- ---------
NET INCOME $1,565,698 $1,373,723 $1,398,883
========= ========= =========
GENERAL PARTNER - NET
INCOME $ 246,787 $ 219,288 $ 227,153
========= ========= =========
LIMITED PARTNERS - NET
INCOME $1,318,911 $1,154,435 $1,171,730
========= ========= =========
NET INCOME per Unit $ 9.53 $ 8.35 $ 8.47
========= ========= =========
UNITS OUTSTANDING 138,336 138,336 138,336
========= ========= =========
The accompanying notes are an integral part of these
financial statements.
F-9
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-B
Statements of Partners' Capital (Deficit)
For the Years Ended December 31, 2005, 2004, and 2003
Limited General
Partners Partner Total
------------ ---------- ------------
Balance, Dec. 31, 2002 $1,357,494 ($ 48,554) $1,308,940
Net income 1,171,730 227,153 1,398,883
Cash distributions ( 1,351,000) ( 247,527) ( 1,598,527)
--------- ------- ---------
Balance, Dec. 31, 2003 $1,178,224 ($ 68,928) $1,109,296
Net income 1,154,435 219,288 1,373,723
Cash distributions ( 1,055,000) ( 208,789) ( 1,263,789)
--------- ------- ---------
Balance, Dec. 31, 2004 $1,277,659 ($ 58,429) $1,219,230
Net income 1,318,911 246,787 1,565,698
Cash distributions ( 1,264,000) ( 223,399) ( 1,487,399)
--------- ------- ---------
Balance, Dec. 31, 2005 $1,332,570 ($ 35,041) $1,297,529
========= ======= =========
The accompanying notes are an integral part of these
financial statements.
F-10
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-B
Statements of Cash Flows
For the Years Ended December 31, 2005, 2004, and 2003
2005 2004 2003
------------ ------------ ------------
CASH FLOWS FROM OPERATING
ACTIVITIES:
Net income $1,565,698 $1,373,723 $1,398,883
Adjustments to reconcile
net income to net cash
provided by operating
activities:
Cumulative effect of change
in accounting for asset
retirement obligations
(Note 1) - - 586
Depreciation, depletion,
and amortization of oil
and gas properties 95,525 97,836 126,318
Settlement of asset
retirement obligation - ( 701) -
Decrease in accounts
receivable - related
party - - 7
(Increase) decrease in
accounts receivable -
oil and gas sales ( 133,231) ( 26,258) 72,368
(Increase) decrease in
deferred charge ( 5,193) 7,966 55,865
Increase (decrease) in
accounts payable 20,909 ( 2,383) ( 4,784)
Increase (decrease) in
gas imbalance payable ( 5,053) 3,049 ( 685)
Increase (decrease) in
accrued liability ( 164) ( 3,918) 1,228
--------- --------- ---------
Net cash provided by
operating activities $1,538,491 $1,449,314 $1,649,786
--------- --------- ---------
CASH FLOWS FROM INVESTING
ACTIVITIES:
Capital expenditures ($ 3,255) ($ 46,547) ($ 32,726)
Proceeds from sale of oil
and gas properties - - 984
--------- --------- ---------
Net cash used by
investing activities ($ 3,255) ($ 46,547) ($ 31,742)
--------- --------- ---------
F-11
CASH FLOWS FROM FINANCING
ACTIVITIES:
Cash distributions ($1,487,399) ($1,263,789) ($1,598,527)
--------- --------- ---------
Net cash used by
financing activities ($1,487,399) ($1,263,789) ($1,598,527)
--------- --------- ---------
NET INCREASE IN CASH AND
CASH EQUIVALENTS $ 47,837 $ 138,978 $ 19,517
CASH AND CASH EQUIVALENTS
AT BEGINNING OF PERIOD 556,249 417,271 397,754
--------- --------- ---------
CASH AND CASH EQUIVALENTS
AT END OF PERIOD $ 604,086 $ 556,249 $ 417,271
========= ========= =========
The accompanying notes are an integral part of these
financial statements.
F-12
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
TO THE PARTNERS
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-C
In our opinion, the accompanying balance sheets and the related statements
of operations, changes in partners' capital (deficit) and cash flows present
fairly, in all material respects, the financial position of the Geodyne Energy
Income Limited Partnership III-C, an Oklahoma limited partnership, at December
31, 2005 and 2004, and the results of its operations and its cash flows for each
of the three years in the period ended December 31, 2005, in conformity with
accounting principles generally accepted in the United States of America. These
financial statements are the responsibility of the Partnership's management. Our
responsibility is to express an opinion on these financial statements based on
our audits. We conducted our audits of these financial statements in accordance
with the standards of the Public Company Accounting Oversight Board (United
States). Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements, assessing the
accounting principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.
As discussed in Note 1 of Notes to the Financial Statements under the
heading "Asset Retirement Obligation," effective January 1, 2003 the
Partnerships changed the manner in which they account for asset retirement
obligations.
PricewaterhouseCoopers LLP
Tulsa, Oklahoma
March 29, 2006
F-13
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-C
Balance Sheets
December 31, 2005 and 2004
ASSETS
------
2005 2004
------------ ------------
CURRENT ASSETS:
Cash and cash equivalents $1,013,378 $ 682,792
Accounts receivable:
Oil and gas sales 884,091 583,009
--------- ---------
Total current assets $1,897,469 $1,265,801
NET OIL AND GAS PROPERTIES,
utilizing the successful
efforts method 1,544,711 1,475,924
DEFERRED CHARGE 62,603 48,684
--------- ---------
$3,504,783 $2,790,409
========= =========
LIABILITIES AND PARTNERS' CAPITAL (DEFICIT)
-------------------------------------------
CURRENT LIABILITIES:
Accounts payable $ 263,892 $ 123,591
Gas imbalance payable 76,928 83,181
Asset retirement obligation -
current (Note 1) 19,679 38,950
--------- ---------
Total current liabilities $ 360,499 $ 245,722
LONG-TERM LIABILITIES:
Accrued liability $ 124,681 $ 170,532
Asset retirement obligation
(Note 1) 355,551 165,722
--------- ---------
Total long-term liabilities $ 480,232 $ 336,254
PARTNERS' CAPITAL (DEFICIT):
General Partner ($ 105,515) ($ 136,932)
Limited Partners, issued and
outstanding, 244,536 Units 2,769,567 2,345,365
--------- ---------
Total Partners' capital $2,664,052 $2,208,433
--------- ---------
$3,504,783 $2,790,409
========= =========
The accompanying notes are an integral part of these
financial statements.
F-14
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-C
Statements of Operations
For the Years Ended December 31, 2005, 2004, and 2003
2005 2004 2003
---------- ------------ ----------
REVENUES:
Oil and gas sales $4,234,809 $3,334,518 $3,601,398
Interest income 17,355 5,295 4,707
Gain (loss) on sale of oil
and gas properties - ( 891) 16,854
Other income 2,541 - -
--------- --------- ---------
$4,254,705 $3,338,922 $3,622,959
COSTS AND EXPENSES:
Lease operating $ 679,289 $ 625,598 $ 617,922
Production tax 285,154 234,264 250,353
Depreciation, depletion,
and amortization of oil
and gas properties 229,070 442,183 204,186
General and administrative 297,767 291,575 293,086
--------- --------- ---------
$1,491,280 $1,593,620 $1,365,547
--------- --------- ---------
INCOME BEFORE CUMULATIVE EFFECT
OF ACCOUNTING CHANGE $2,763,425 $1,745,302 $2,257,412
Cumulative effect of change
in accounting for asset
retirement obligations
(Note 1) - - 2,317
--------- --------- ---------
NET INCOME $2,763,425 $1,745,302 $2,259,729
========= ========= =========
GENERAL PARTNER -
NET INCOME $ 295,223 $ 213,797 $ 243,670
========= ========= =========
LIMITED PARTNERS -
NET INCOME $2,468,202 $1,531,505 $2,016,059
========= ========= =========
NET INCOME per Unit $ 10.09 $ 6.26 $ 8.24
========= ========= =========
UNITS OUTSTANDING 244,536 244,536 244,536
========= ========= =========
The accompanying notes are an integral part of these
financial statements.
F-15
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-C
Statements of Partners' Capital (Deficit)
For the Years Ended December 31, 2005, 2004, and 2003
Limited General
Partners Partner Total
------------ ---------- ------------
Balance, Dec. 31, 2002 $2,517,801 ($150,636) $2,367,165
Net income 2,016,059 243,670 2,259,729
Cash distributions ( 1,991,000) ( 246,514) ( 2,237,514)
--------- ------- ---------
Balance, Dec. 31, 2003 $2,542,860 ($153,480) $2,389,380
Net income 1,531,505 213,797 1,745,302
Cash distributions ( 1,729,000) ( 197,249) ( 1,926,249)
--------- ------- ---------
Balance, Dec. 31, 2004 $2,345,365 ($136,932) $2,208,433
Net income 2,468,202 295,223 2,763,425
Cash distributions ( 2,044,000) ( 263,806) ( 2,307,806)
--------- ------- ---------
Balance, Dec. 31, 2005 $2,769,567 ($105,515) $2,664,052
========= ======= =========
The accompanying notes are an integral part of these
financial statements.
F-16
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-C
Statements of Cash Flows
For the Years Ended December 31, 2005, 2004, and 2003
2005 2004 2003
------------ ------------ ------------
CASH FLOWS FROM OPERATING
ACTIVITIES:
Net income $2,763,425 $1,745,302 $2,259,729
Adjustments to reconcile
net income to net cash
provided by operating
activities:
Cumulative effect of change
in accounting for asset
retirement obligations
(Note 1) - - ( 2,317)
Depreciation, depletion,
and amortization of oil
and gas properties 229,070 442,183 204,186
(Gain) loss on sale of oil
and gas properties - 891 ( 16,854)
Settlement of asset
retirement obligation - ( 131) -
(Increase) decrease in
accounts receivable -
oil and gas sales ( 301,082) ( 136,151) 71,516
(Increase) decrease in
deferred charge ( 13,919) 4,533 4,650
Increase (decrease) in
accounts payable 118,382 15,711 ( 66,036)
Increase (decrease) in
gas imbalance payable ( 6,253) 44,994 ( 5,736)
Increase (decrease) in
accrued liability ( 45,851) ( 32,226) 6,591
--------- --------- ---------
Net cash provided by
operating activities $2,743,772 $2,085,106 $2,455,729
--------- --------- ---------
CASH FLOWS FROM INVESTING
ACTIVITIES:
Capital expenditures ($ 105,380) ($ 187,506) ($ 21,609)
Proceeds from sale of oil
and gas properties - - 34,411
--------- --------- ---------
Net cash provided (used)
by investing activities ($ 105,380) ($ 187,506) $ 12,802
--------- --------- ---------
F-17
CASH FLOWS FROM FINANCING
ACTIVITIES:
Cash distributions ($2,307,806) ($1,926,249) ($2,237,514)
--------- --------- ---------
Net cash used by
financing activities ($2,307,806) ($1,926,249) ($2,237,514)
--------- --------- ---------
NET INCREASE (DECREASE) IN
CASH AND CASH EQUIVALENTS $ 330,586 ($ 28,649) $ 231,017
CASH AND CASH EQUIVALENTS
AT BEGINNING OF PERIOD 682,792 711,441 480,424
--------- --------- ---------
CASH AND CASH EQUIVALENTS
AT END OF PERIOD $1,013,378 $ 682,792 $ 711,441
========= ========= =========
The accompanying notes are an integral part of these
financial statements.
F-18
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
TO THE PARTNERS
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-D
In our opinion, the accompanying balance sheets and the related statements
of operations, changes in partners' capital (deficit) and cash flows present
fairly, in all material respects, the financial position of the Geodyne Energy
Income Limited Partnership III-D, an Oklahoma limited partnership, at December
31, 2005 and 2004, and the results of its operations and its cash flows for each
of the three years in the period ended December 31, 2005, in conformity with
accounting principles generally accepted in the United States of America. These
financial statements are the responsibility of the Partnership's management. Our
responsibility is to express an opinion on these financial statements based on
our audits. We conducted our audits of these financial statements in accordance
with the standards of the Public Company Accounting Oversight Board (United
States). Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements, assessing the
accounting principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.
As discussed in Note 1 of Notes to the Financial Statements under the
heading "Asset Retirement Obligation," effective January 1, 2003 the
Partnerships changed the manner in which they account for asset retirement
obligations.
PricewaterhouseCoopers LLP
Tulsa, Oklahoma
March 29, 2006
F-19
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-D
Balance Sheets
December 31, 2005 and 2004
ASSETS
------
2005 2004
------------ ------------
CURRENT ASSETS:
Cash and cash equivalents $ 547,247 $ 432,834
Accounts receivable:
Oil and gas sales 527,187 340,185
--------- ---------
Total current assets $1,074,434 $ 773,019
NET OIL AND GAS PROPERTIES,
utilizing the successful
efforts method 651,461 589,161
DEFERRED CHARGE 15,342 8,429
--------- ---------
$1,741,237 $1,370,609
========= =========
LIABILITIES AND PARTNERS' CAPITAL (DEFICIT)
-------------------------------------------
CURRENT LIABILITIES:
Accounts payable $ 155,178 $ 131,321
Gas imbalance payable 42,943 41,607
Asset retirement obligation -
current (Note 1) 17,420 11,975
--------- ---------
Total current liabilities $ 215,541 $ 184,903
LONG-TERM LIABILITIES:
Accrued liability $ 153,747 $ 191,685
Asset retirement obligation
(Note 1) 186,678 97,207
--------- ---------
Total long-term liabilities $ 340,425 $ 288,892
PARTNERS' CAPITAL (DEFICIT):
General Partner ($ 29,279) ($ 55,158)
Limited Partners, issued and
outstanding, 131,008 Units 1,214,550 951,972
--------- ---------
Total Partners' capital $1,185,271 $ 896,814
--------- ---------
$1,741,237 $1,370,609
========= =========
The accompanying notes are an integral part of these
financial statements.
F-20
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-D
Statements of Operations
For the Years Ended December 31, 2005, 2004, and 2003
2005 2004 2003
---------- ------------ ----------
REVENUES:
Oil and gas sales $2,468,778 $1,894,897 $2,114,596
Interest income 9,619 3,313 2,723
Gain (loss) on sale of
oil and gas properties - ( 128) 10,701
Other income 364 - -
--------- --------- ---------
$2,478,761 $1,898,082 $2,128,020
COSTS AND EXPENSES:
Lease operating $ 430,119 $ 361,742 $ 381,051
Production tax 166,085 132,611 147,379
Depreciation, depletion,
and amortization of oil
and gas properties 118,445 96,020 97,024
General and administrative 173,805 171,351 167,388
--------- --------- ---------
$ 888,454 $ 761,724 $ 792,842
--------- --------- ---------
INCOME FROM CONTINUING OPERATIONS $1,590,307 $1,136,358 $1,335,178
--------- --------- ---------
Income (loss) from discontinued
operations (Note 6) - ( 96,495) 111,356
Gain on disposal of discontinued
operations (Note 6) - 10,368 -
--------- --------- ---------
INCOME BEFORE CUMULATIVE EFFECT
OF ACCOUNTING CHANGE $1,590,307 $1,050,231 $1,446,534
Cumulative effect of change
in accounting for asset
retirement obligations
(Note 1) - - 2,875
--------- --------- ---------
NET INCOME $1,590,307 $1,050,231 $1,449,409
========= ========= =========
F-21
GENERAL PARTNER - NET
INCOME $ 168,729 $ 113,587 $ 155,435
========= ========= =========
LIMITED PARTNERS - NET
INCOME $1,421,578 $ 936,644 $1,293,974
========= ========= =========
NET INCOME per Unit $ 10.85 $ 7.15 $ 9.88
========= ========= =========
UNITS OUTSTANDING 131,008 131,008 131,008
========= ========= =========
The accompanying notes are an integral part of these
financial statements.
F-22
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-D
Statements of Partners' Capital (Deficit)
For the Years Ended December 31, 2005, 2004, and 2003
Limited General
Partners Partner Total
------------ ---------- ------------
Balance, Dec. 31, 2002 $1,086,354 ($ 50,949) $1,035,405
Net income 1,293,974 155,435 1,449,409
Cash distributions ( 1,251,000) ( 152,047) ( 1,403,047)
--------- ------- ---------
Balance, Dec. 31, 2003 $1,129,328 ($ 47,561) $1,081,767
Net income 936,644 113,587 1,050,231
Cash distributions ( 1,114,000) ( 121,184) ( 1,235,184)
--------- ------- ---------
Balance, Dec. 31, 2004 $ 951,972 ($ 55,158) $ 896,814
Net income 1,421,578 168,729 1,590,307
Cash distributions ( 1,159,000) ( 142,850) ( 1,301,850)
--------- ------- ---------
Balance, Dec. 31, 2005 $1,214,550 ($ 29,279) $1,185,271
========= ======= =========
The accompanying notes are an integral part of these
financial statements.
F-23
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-D
Statements of Cash Flows
For the Years Ended December 31, 2005, 2004, and 2003
2005 2004 2003
------------ ------------ ------------
CASH FLOWS FROM OPERATING
ACTIVITIES:
Net income $1,590,307 $1,050,231 $1,449,409
Adjustments to reconcile
net income to net
cash provided by
operating activities:
Cumulative effect of change
in accounting for asset
retirement obligations
(Note 1) - - ( 2,875)
Depreciation, depletion,
and amortization of oil
and gas properties 118,445 98,838 122,507
(Gain) loss on sale of
oil and gas properties - 128 ( 10,701)
Gain on disposal of
discontinued operations
(Note 6) - ( 10,368) -
Settlement of asset
retirement obligation - ( 17) -
(Increase) decrease in
accounts receivable -
oil and gas sales ( 187,002) ( 719) 46,558
(Increase) decrease in
deferred charge ( 6,913) 1,523 997
Increase (decrease) in
accounts payable ( 16,403) 45,198 ( 88,096)
Increase in gas
imbalance payable 1,336 36,418 5,189
Decrease in accrued
liability ( 37,938) ( 55,619) ( 4,494)
--------- --------- ---------
Net cash provided by
operating activities $1,461,832 $1,165,613 $1,518,494
--------- --------- ---------
CASH FLOWS FROM INVESTING
ACTIVITIES:
Capital expenditures ($ 45,569) ($ 24,743) ($ 6,141)
Proceeds from sale of oil
and gas properties - - 23,232
Proceeds from disposal of
discontinued operations
(Note 6) - 88,586 -
--------- --------- ---------
F-24
Net cash provided (used)
by investing activities ($ 45,569) $ 63,843 $ 17,091
--------- --------- ---------
CASH FLOWS FROM FINANCING
ACTIVITIES:
Cash distributions ($1,301,850) ($1,235,184) ($1,403,047)
--------- --------- ---------
Net cash used by
financing activities ($1,301,850) ($1,235,184) ($1,403,047)
--------- --------- ---------
NET INCREASE (DECREASE) IN
CASH AND CASH EQUIVALENTS $ 114,413 ($ 5,728) $ 132,538
CASH AND CASH EQUIVALENTS
AT BEGINNING OF PERIOD 432,834 438,562 306,024
--------- --------- ---------
CASH AND CASH EQUIVALENTS
AT END OF PERIOD $ 547,247 $ 432,834 $ 438,562
========= ========= =========
The accompanying notes are an integral part of these
financial statements.
F-25
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
TO THE PARTNERS
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-E
In our opinion, the accompanying balance sheets and the related statements
of operations, changes in partners' capital (deficit) and cash flows present
fairly, in all material respects, the financial position of the Geodyne Energy
Income Limited Partnership III-E, an Oklahoma limited partnership, at December
31, 2005 and 2004, and the results of its operations and its cash flows for each
of the three years in the period ended December 31, 2005, in conformity with
accounting principles generally accepted in the United States of America. These
financial statements are the responsibility of the Partnership's management. Our
responsibility is to express an opinion on these financial statements based on
our audits. We conducted our audits of these financial statements in accordance
with the standards of the Public Company Accounting Oversight Board (United
States). Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements, assessing the
accounting principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.
As discussed in Note 1 of Notes to the Financial Statements under the
heading "Asset Retirement Obligation," effective January 1, 2003 the
Partnerships changed the manner in which they account for asset retirement
obligations.
PricewaterhouseCoopers LLP
Tulsa, Oklahoma
March 29, 2006
F-26
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-E
Balance Sheets
December 31, 2005 and 2004
ASSETS
------
2005 2004
------------ ------------
CURRENT ASSETS:
Cash and cash equivalents $1,460,559 $1,413,497
Accounts receivable:
Oil and gas sales 1,272,925 849,754
--------- ---------
Total current assets $2,733,484 $2,263,251
NET OIL AND GAS PROPERTIES,
utilizing the successful
efforts method 1,981,508 1,942,054
DEFERRED CHARGE 40,254 48,978
--------- ---------
$4,755,246 $4,254,283
========= =========
LIABILITIES AND PARTNERS' CAPITAL (DEFICIT)
-------------------------------------------
CURRENT LIABILITIES:
Accounts payable $ 324,885 $ 768,152
Gas imbalance payable 16,538 5,643
Asset retirement obligation -
current (Note 1) 23,971 28,411
--------- ---------
Total current liabilities $ 365,394 $ 802,206
LONG-TERM LIABILITIES:
Accrued liability $ 254,420 $ 301,594
Asset retirement obligation
(Note 1) 413,791 188,764
--------- ---------
Total long-term liabilities $ 668,211 $ 490,358
PARTNERS' CAPITAL (DEFICIT):
General Partner ($ 197,010) ($ 316,058)
Limited Partners, issued and
outstanding, 418,266 Units 3,918,651 3,277,777
--------- ---------
Total Partners' capital $3,721,641 $2,961,719
--------- ---------
$4,755,246 $4,254,283
========= =========
The accompanying notes are an integral part of these
financial statements.
F-27
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-E
Statements of Operations
For the Years Ended December 31, 2005, 2004, and 2003
2005 2004 2003
---------- ------------ ----------
REVENUES:
Oil and gas sales $6,027,303 $4,633,713 $4,472,543
Interest income 24,217 10,677 5,786
Gain on sale of
oil and gas properties - - 76,301
--------- --------- ---------
$6,051,520 $4,644,390 $4,554,630
COSTS AND EXPENSES:
Lease operating $1,108,841 $ 994,188 $1,047,478
Production tax 409,955 365,443 278,317
Depreciation, depletion,
and amortization of oil
and gas properties 339,544 196,510 221,181
General and administrative 489,834 488,702 487,927
--------- --------- ---------
$2,348,174 $2,044,843 $2,034,903
--------- --------- ---------
INCOME FROM CONTINUING
OPERATIONS $3,703,346 $2,599,547 $2,519,727
--------- --------- ---------
Income (loss) from
discontinued operations
(Note 6) - ( 687,645) 785,456
Gain on disposal of
discontinued operations
(Note 6) - 88,757 -
--------- --------- ---------
INCOME BEFORE CUMULATIVE EFFECT
OF ACCOUNTING CHANGE $3,703,346 $2,000,659 $3,305,183
Cumulative effect of change
in accounting for asset
retirement obligations
(Note 1) - - 2,725
--------- --------- ---------
NET INCOME $3,703,346 $2,000,659 $3,307,908
========= ========= =========
F-28
GENERAL PARTNER - NET
INCOME $ 398,472 $ 218,415 $ 367,060
========= ========= =========
LIMITED PARTNERS - NET
INCOME $3,304,874 $1,782,244 $2,940,848
========= ========= =========
NET INCOME per Unit $ 7.90 $ 4.26 $ 7.03
========= ========= =========
UNITS OUTSTANDING 418,266 418,266 418,266
========= ========= =========
The accompanying notes are an integral part of these
financial statements.
F-29
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-E
Statements of Partners' Capital (Deficit)
For the Years Ended December 31, 2005, 2004, and 2003
Limited General
Partners Partner Total
------------ ---------- ------------
Balance, Dec. 31, 2002 $3,492,685 ($250,684) $3,242,001
Net income 2,940,848 367,060 3,307,908
Cash distributions ( 2,131,000) ( 293,610) ( 2,424,610)
--------- ------- ---------
Balance, Dec. 31, 2003 $4,302,533 ($177,234) $4,125,299
Net income 1,782,244 218,415 2,000,659
Cash distributions ( 2,807,000) ( 357,239) ( 3,164,239)
--------- ------- ---------
Balance, Dec. 31, 2004 $3,277,777 ($316,058) $2,961,719
Net income 3,304,874 398,472 3,703,346
Cash distributions ( 2,664,000) ( 279,424) ( 2,943,424)
--------- ------- ---------
Balance, Dec. 31, 2005 $3,918,651 ($197,010) $3,721,641
========= ======= =========
The accompanying notes are an integral part of these
financial statements.
F-30
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-E
Statements of Cash Flows
For the Years Ended December 31, 2005, 2004, and 2003
2005 2004 2003
------------ ------------ ------------
CASH FLOWS FROM OPERATING
ACTIVITIES:
Net income $3,703,346 $2,000,659 $3,307,908
Adjustments to reconcile
net income to net cash
provided by operating
activities:
Cumulative effect of change
in accounting for asset
retirement obligations
(Note 1) - - ( 2,725)
Depreciation, depletion,
and amortization of oil
and gas properties 339,544 215,745 412,149
Gain on sale of oil and
gas properties - - ( 76,301)
Gain on disposal of
discontinued operations
(Note 6) - ( 88,757) -
Settlement of asset
retirement obligation ( 345) ( 319) ( 1,848)
(Increase) decrease in
accounts receivable -
oil and gas sales ( 423,171) 237,935 ( 162,862)
Decrease in deferred charge 8,724 718 19,480
Increase (decrease) in
accounts payable ( 500,913) 342,489 ( 331,565)
Decrease in accrued
liability - other - - ( 122,289)
Increase in gas imbalance
payable 10,895 2,907 -
Increase (decrease) in
accrued liability ( 47,174) ( 41,237) 14,199
--------- --------- ---------
Net cash provided by
operating activities $3,090,906 $2,670,140 $3,056,146
--------- --------- ---------
CASH FLOWS FROM INVESTING
ACTIVITIES:
Capital expenditures ($ 100,420) ($ 237,849) ($ 21,436)
Proceeds from sale of oil
and gas properties - - 101,704
Proceeds from disposal of
discontinued operations
(Note 6) - 632,221 -
--------- --------- ---------
F-31
Net cash provided (used)
by investing activities ($ 100,420) $ 394,372 $ 80,268
--------- --------- ---------
CASH FLOWS FROM FINANCING
ACTIVITIES:
Cash distributions ($2,943,424) ($3,164,239) ($2,424,610)
--------- --------- ---------
Net cash used by
financing activities ($2,943,424) ($3,164,239) ($2,424,610)
--------- --------- ---------
NET INCREASE (DECREASE) IN
CASH AND CASH EQUIVALENTS $ 47,062 ($ 99,727) $ 711,804
CASH AND CASH EQUIVALENTS
AT BEGINNING OF PERIOD 1,413,497 1,513,224 801,420
--------- --------- ---------
CASH AND CASH EQUIVALENTS
AT END OF PERIOD $1,460,559 $1,413,497 $1,513,224
========= ========= =========
The accompanying notes are an integral part of these
financial statements.
F-32
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
TO THE PARTNERS
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-F
In our opinion, the accompanying balance sheets and the related statements
of operations, changes in partners' capital (deficit) and cash flows present
fairly, in all material respects, the financial position of the Geodyne Energy
Income Limited Partnership III-F, an Oklahoma limited partnership, at December
31, 2005 and 2004, and the results of its operations and its cash flows for each
of the three years in the period ended December 31, 2005, in conformity with
accounting principles generally accepted in the United States of America. These
financial statements are the responsibility of the Partnership's management. Our
responsibility is to express an opinion on these financial statements based on
our audits. We conducted our audits of these financial statements in accordance
with the standards of the Public Company Accounting Oversight Board (United
States). Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements, assessing the
accounting principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.
As discussed in Note 1 of Notes to the Financial Statements under the
heading "Asset Retirement Obligation," effective January 1, 2003 the
Partnerships changed the manner in which they account for asset retirement
obligations.
PricewaterhouseCoopers LLP
Tulsa, Oklahoma
March 29, 2006
F-33
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-F
Balance Sheets
December 31, 2005 and 2004
ASSETS
------
2005 2004
------------ ------------
CURRENT ASSETS:
Cash and cash equivalents $1,062,866 $ 696,460
Accounts receivable:
Oil and gas sales 797,469 548,005
--------- ---------
Total current assets $1,860,335 $1,244,465
NET OIL AND GAS PROPERTIES,
utilizing the successful
efforts method 1,680,470 1,727,931
DEFERRED CHARGE 17,132 21,947
--------- ---------
$3,557,937 $2,994,343
========= =========
LIABILITIES AND PARTNERS' CAPITAL (DEFICIT)
-------------------------------------------
CURRENT LIABILITIES:
Accounts payable $ 176,398 $ 92,446
Gas imbalance payable 13,857 4,721
Asset retirement obligation -
current (Note 1) 1,948 8,552
--------- ---------
Total current liabilities $ 192,203 $ 105,719
LONG-TERM LIABILITIES:
Accrued liability $ 84,584 $ 105,877
Asset retirement obligation
(Note 1) 276,256 141,647
--------- ---------
Total long-term liabilities $ 360,840 $ 247,524
PARTNERS' CAPITAL (DEFICIT):
General Partner ($ 126,897) ($ 142,055)
Limited Partners, issued and
outstanding, 221,484 Units 3,131,791 2,783,155
--------- ---------
Total Partners' capital $3,004,894 $2,641,100
--------- ---------
$3,557,937 $2,994,343
========= =========
The accompanying notes are an integral part of these
financial statements.
F-34
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-F
Statements of Operations
For the Years Ended December 31, 2005, 2004, and 2003
2005 2004 2003
---------- ---------- ----------
REVENUES:
Oil and gas sales $3,867,955 $2,941,732 $2,479,778
Interest income 15,044 3,841 2,295
--------- --------- ---------
$3,882,999 $2,945,573 $2,482,073
COSTS AND EXPENSES:
Lease operating $ 629,921 $ 569,410 $ 615,422
Production tax 207,776 157,277 139,080
Depreciation, depletion,
and amortization of oil
and gas properties 207,776 161,752 215,975
General and administrative 273,110 266,912 267,876
--------- --------- ---------
$1,318,583 $1,155,351 $1,238,353
--------- --------- ---------
INCOME BEFORE CUMULATIVE EFFECT
OF ACCOUNTING CHANGE $2,564,416 $1,790,222 $1,243,720
Cumulative effect of change
in accounting for asset
retirement obligations
(Note 1) - - 3,712
--------- --------- ---------
NET INCOME $2,564,416 $1,790,222 $1,247,432
========= ========= =========
GENERAL PARTNER - NET
INCOME $ 135,780 $ 95,789 $ 70,747
========= ========= =========
LIMITED PARTNERS - NET
INCOME $2,428,636 $1,694,433 $1,176,685
========= ========= =========
NET INCOME per Unit $ 10.97 $ 7.65 $ 5.31
========= ========= =========
UNITS OUTSTANDING 221,484 221,484 221,484
========= ========= =========
The accompanying notes are an integral part of these
financial statements.
F-35
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-F
Statements of Partners' Capital (Deficit)
For the Years Ended December 31, 2005, 2004, and 2003
Limited General
Partners Partner Total
------------ ---------- ------------
Balance, Dec. 31, 2002 $2,245,037 ($159,621) $2,085,416
Net income 1,176,685 70,747 1,247,432
Cash distributions ( 1,047,000) ( 67,482) ( 1,114,482)
--------- ------- ---------
Balance, Dec. 31, 2003 $2,374,722 ($156,356) $2,218,366
Net income 1,694,433 95,789 1,790,222
Cash distributions ( 1,286,000) ( 81,488) ( 1,367,488)
--------- ------- ---------
Balance, Dec. 31, 2004 $2,783,155 ($142,055) $2,641,100
Net income 2,428,636 135,780 2,564,416
Cash distributions ( 2,080,000) ( 120,622) ( 2,200,622)
--------- ------- ---------
Balance, Dec. 31, 2005 $3,131,791 ($126,897) $3,004,894
========= ======= =========
The accompanying notes are an integral part of these
financial statements.
F-36
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-F
Statements of Cash Flows
For the Years Ended December 31, 2005, 2004, and 2003
2005 2004 2003
------------ ------------ ------------
CASH FLOWS FROM OPERATING
ACTIVITIES:
Net income $2,564,416 $1,790,222 $1,247,432
Adjustments to reconcile
net income to net cash
provided by operating
activities:
Cumulative effect of change
in accounting for asset
retirement obligations
(Note 1) - - ( 3,712)
Depreciation, depletion,
and amortization of oil
and gas properties 207,776 161,752 215,975
Settlement of asset
retirement obligation - - ( 903)
Increase in accounts
receivable - oil and
gas sales ( 249,464) ( 195,540) ( 4,165)
Decrease in deferred charge 4,815 290 7,709
Increase (decrease) in
accounts payable 84,991 ( 12,362) ( 21,845)
Decrease in accrued
liability - other - - ( 102,690)
Increase in gas
imbalance payable 9,136 2,426 -
Increase (decrease) in
accrued liability ( 21,293) ( 25,891) 13,763
--------- --------- ---------
Net cash provided by
operating activities $2,600,377 $1,720,897 $1,351,564
--------- --------- ---------
CASH FLOWS FROM INVESTING
ACTIVITIES:
Capital expenditures ($ 33,349) ($ 180,521) ($ 16,762)
Proceeds from sale of oil
and gas properties - 1,654 17,010
--------- --------- ---------
Net cash provided (used)
by investing activities ($ 33,349) ($ 178,867) $ 248
--------- --------- ---------
F-37
CASH FLOWS FROM FINANCING
ACTIVITIES:
Cash distributions ($2,200,622) ($1,367,488) ($1,114,482)
--------- --------- ---------
Net cash used by
financing activities ($2,200,622) ($1,367,488) ($1,114,482)
--------- --------- ---------
NET INCREASE IN CASH
AND CASH EQUIVALENTS $ 366,406 $ 174,542 $ 237,330
CASH AND CASH EQUIVALENTS
AT BEGINNING OF PERIOD 696,460 521,918 284,588
--------- --------- ---------
CASH AND CASH EQUIVALENTS
AT END OF PERIOD $1,062,866 $ 696,460 $ 521,918
========= ========= =========
The accompanying notes are an integral part of these
financial statements.
F-38
GEODYNE ENERGY INCOME PROGRAM III LIMITED PARTNERSHIPS
Notes to Financial Statements
For the Years Ended December 31, 2005, 2004, and 2003
1. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Organization and Nature of Operations
The Geodyne Energy Income Limited Partnerships (the "Partnerships") were
formed pursuant to a public offering of depositary units ("Units"). Upon
formation, investors became limited partners (the "Limited Partners") and held
Units issued by each Partnership. Geodyne Resources, Inc. (the "General
Partner") is the general partner of each Partnership. Limited Partner capital
contributions were invested in producing oil and gas properties. The
Partnerships were activated on the following dates with the following Limited
Partner capital contributions.
Limited Partner
Date of Capital
Partnership Activation Contributions
----------- ------------------ ---------------
III-A November 22, 1989 $26,397,600
III-B January 24, 1990 13,833,600
III-C February 27, 1990 24,453,600
III-D September 5, 1990 13,100,800
III-E December 26, 1990 41,826,600
III-F March 7, 1991 22,148,400
Pursuant to the terms of the partnership agreements for the Partnerships
(the "Partnership Agreements") the Partnerships were scheduled to terminate on
the dates indicated in the "Initial Termination Date" column of the following
chart. However, the Partnership Agreements provide that the General Partner may
extend the term of each Partnership for up to five periods of two years each. As
of the date of this Annual Report on Form 10-K ("Annual Report"), the General
Partner has extended the term of the Partnerships for the fourth extension
period. Therefore, the Partnerships are currently scheduled to terminate on the
dates indicated in the "Current Termination Date" column of the following chart.
Initial Extensions Current
Partnership Termination Date Exercised Termination Date
- ----------- ------------------ --------- ------------------
III-A November 22, 1999 4 November 22, 2007
III-B January 24, 2000 4 December 31, 2007
III-C February 28, 2000 4 December 31, 2007
III-D September 5, 2000 4 December 31, 2007
III-E December 26, 2000 4 December 31, 2007
III-F March 7, 2001 4 December 31, 2007
F-39
The General Partner has not determined whether it will further extend the
term of any Partnership.
An affiliate of the General Partner owned the following Units at December
31, 2005:
Number of Percent of
Partnership Units Owned Outstanding
----------- ----------- -----------
III-A 66,383 25.2%
III-B 33,507 24.2%
III-C 68,554 28.0%
III-D 37,728 28.8%
III-E 124,534 29.8%
III-F 68,853 31.1%
The Partnerships' sole business is the development and production of oil
and gas. Substantially all of the Partnerships' gas production is being sold
regionally on the "spot market." Due to the highly competitive nature of the
spot market, prices on the spot market are subject to wide seasonal and regional
pricing fluctuations. In addition, such spot market sales are generally short
term in nature and are dependent upon obtaining transportation services provided
by pipelines. The Partnerships' oil is sold at or near the Partnerships' wells
under short-term purchase contracts at prevailing arrangements which are
customary in the oil industry. The prices received for the Partnerships' oil and
gas are subject to influences such as global consumption and supply trends.
Allocation of Costs and Revenues
The terms of each Partnership's Limited Partnership Agreement (the
"Partnership Agreement") allocate costs and income between the Limited Partners
and the General Partner as follows:
F-40
Before Payout (1) After Payout(1)
-------------------- --------------------
General Limited General Limited
Partner Partners Partner Partners
-------- -------- -------- --------
Costs(2)
- ------------------------
Sales commissions, payment
for organization and
offering costs and
management fee 1% 99% - -
Property acquisition
costs 1% 99% 1% 99%
Identified development
drilling 1% 99% 1% 99%
Development drilling(2) 5% 95% 15% 85%
General and administra-
tive costs, direct
administrative costs
and operating costs(2) 5% 95% 15% 85%
Income(2)
- ------------------------
Temporary investments of
Limited Partners'
subscriptions 1% 99% 1% 99%
Income from oil and gas
production(2) 5% 95% 15% 85%
Gain on sale of
producing properties(2) 5% 95% 15% 85%
All other income(2) 5% 95% 15% 85%
- ----------
(1) Payout occurs when total distributions to Limited Partners equal total
original Limited Partner subscriptions.
(2) If at payout the Limited Partners have received distributions at an annual
rate less than 12% of their subscriptions, the percentage of income and
costs allocated to the General Partner will increase to only 10% and the
Limited Partners will be allocated 90%. Thereafter, if the distribution to
Limited Partners reaches an average annual rate of 12% the allocation will
change to 15% to the General Partner and 85% to the Limited Partners.
The Partnerships' payout dates and current general partner/limited partner
sharing ratio of costs and income are shown on the following chart:
F-41
Current
Payout Costs and Income
Partnership Occurred Sharing
----------- ------------- ----------------
III-A 2nd Qtr. 2000 10%/90%
III-B 1st Qtr. 1998 15%/85%
III-C 4th Qtr. 2001 10%/90%
III-D 3rd Qtr. 2001 10%/90%
III-E 3rd Qtr. 2001 10%/90%
III-F Not Paid Out(1) 5%/95%
- -----------------
(1) The III-F Partnership achieved payout during the first quarter of 2006.
After payout, operations and revenues for the III-F Partnership will be
allocated using after payout percentages. After payout percentages
allocate operating income and expenses 10% to the General Partner and 90%
to the Limited Partners.
Cash and Cash Equivalents
The Partnerships consider all highly liquid investments with a maturity of
three months or less when purchased to be cash equivalents. Cash equivalents are
not insured, which cause the Partnerships to be subject to risk.
Credit Risks
Accrued oil and gas sales which are due from a variety of oil and gas
purchasers subject the Partnerships to a concentration of credit risk. Some of
these purchasers are discussed in Note 3 - Major Customers.
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.
F-42
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 units-of-production
method. The Partnerships' calculation of depreciation, depletion, and
amortization includes estimated dismantlement and abandonment costs, net of
estimated salvage values. The depreciation, depletion, and amortization rates,
which include accretion of the asset retirement obligation, per equivalent
barrel of oil produced during the years ended December 31, 2005, 2004, and 2003
were as follows:
Partnership 2005 2004 2003(1)
----------- ----- ----- -------
III-A $1.78 $1.45 $1.42
III-B 1.90 1.71 1.76
III-C 2.40 4.38 1.63
III-D 2.09 1.68 1.28
III-E 2.48 1.37 1.36
III-F 2.51 1.83 2.41
- ----------------
(1) The amounts for the III-D and III-E Partnerships have been restated to
reflect the sale of the Jay Field during 2004 as a discontinued operation.
See Note 6 for more information about this discontinued operation.
When complete units of depreciable property are retired or sold, the asset
cost, related accumulated depreciation, and remaining asset retirement
obligation, are eliminated with any gain or loss 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 at the field level. If the unamortized costs
of oil and gas properties within a field exceed 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 discounted future cash flows from
the properties. No impairment provisions were recorded by the Partnerships
during the three years ended December 31, 2005. The risk that the Partnerships
will be required to record impairment provisions in the future increases as oil
and gas prices decrease.
Deferred Charge
Deferred Charge represents costs deferred for lease operating expenses
incurred in connection with the Partnerships'
F-43
underproduced gas imbalance positions. The rate used in calculating the deferred
charge is the average of the annual production costs per Mcf. At December 31,
2005 and 2004, cumulative total gas sales volumes for underproduced wells were
less than the Partnerships' pro-rata share of total gas production from these
wells by the following amounts:
2005 2004
-------------------- --------------------
Partnership Mcf Amount Mcf Amount
----------- ------- -------- ------- --------
III-A 217,477 $190,240 216,217 $187,958
III-B 110,907 125,644 108,897 120,451
III-C 92,496 62,603 82,810 48,684
III-D 12,461 15,342 8,260 8,429
III-E 20,422 40,254 24,848 48,978
III-F 15,507 17,132 19,865 21,947
Accrued Liability
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 accrued liability is the average of
the annual production costs per Mcf. At December 31, 2005 and 2004, cumulative
total gas sales volumes for overproduced wells exceeded the Partnerships'
pro-rata share of total gas production from these wells by the following
amounts:
2005 2004
-------------------- --------------------
Partnership Mcf Amount Mcf Amount
----------- ------- -------- ------- --------
III-A 31,198 $ 27,120 33,036 $ 28,718
III-B 8,738 9,664 8,886 9,828
III-C 204,788 124,681 280,099 170,532
III-D 150,673 153,747 187,853 191,685
III-E 129,075 254,420 153,008 301,594
III-F 76,561 84,584 95,834 105,877
Oil and Gas Sales and Gas Imbalance Payable
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
F-44
reserves. During such times as a Partnership's sales of gas
exceed its pro rata ownership in a well, such sales are recorded as revenue
unless total sales from the well have exceeded the Partnership's share of
estimated total gas reserves underlying the property, at which time such excess
is recorded as a liability. The rates per Mcf used to calculate this liability
are based on the average gas prices for which the Partnerships are currently
settling this liability. At December 31, 2005 and 2004 total sales exceeded the
Partnerships' share of estimated total gas reserves as follows:
2005 2004
------------------- -------------------
Partnership Mcf Amount Mcf Amount
----------- ------ ------- ------ -------
III-A 11,773 $17,660 17,806 $26,709
III-B 6,471 9,707 9,840 14,760
III-C 52,079 76,928 55,454 83,181
III-D 28,742 42,943 27,738 41,607
III-E 11,025 16,538 3,762 5,643
III-F 9,238 13,857 3,147 4,721
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 the current estimates of
total gas reserves for the well or by a negotiated or contractual payment to the
underproduced party.
The Partnerships have not entered into any hedging or derivative contracts
in connection with their production and sale of oil and gas.
General and Administrative Overhead
The General Partner and its affiliates are reimbursed for actual general
and administrative costs incurred and attributable to the conduct of the
business affairs and operations of the Partnerships.
Use of Estimates in Financial Statements
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates. Further, the
deferred charge, the gas imbalance payable, the
F-45
asset retirement obligations, and the accrued liability all involve estimates
which could materially differ from the actual amounts ultimately realized or
incurred in the near term. Oil and gas reserves (see Note 4) also involve
significant estimates which could materially differ from the actual amounts
ultimately realized.
Income Taxes
Income or loss for income tax purposes is includable in the income tax
returns of the partners. Accordingly, no recognition has been given to income
taxes in these financial statements.
Asset Retirement Obligation
The Partnerships' wells must be properly plugged and abandoned after their
oil and gas reserves are exhausted. 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. On January 1, 2003, the Partnerships adopted FAS No. 143
"Accounting for Asset Retirement Obligations" and recorded an increase in
capitalized cost of oil and gas properties, an increase (decrease) in net income
for the cumulative effect of the change in accounting principle, and an asset
retirement obligation. During the year ended December 31, 2005, the Partnerships
asset retirement obligations were revised upward 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 is adjusted upwards each quarter in order
to recognize accretion of the time-related discount factor. For the year ended
December 31, 2005, the III-A, III-B, III-C, III-D, III-E, and III-F Partnerships
recognized approximately $81,000, $52,000, $71,000, $44,000, $96,000, and
$38,000, 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 years
ended December 31, 2005 and 2004 are as shown below.
F-46
III-A Partnership
-----------------
2005 2004
---------- ------------
Total Asset Retirement
Obligation, January 1 $114,955 $ 114,993
Revisions 157,334 466
Settlements and disposals - ( 4,865)
Accretion expense 12,967 4,361
------- ---------
Total Asset Retirement
Obligation, December 31 $285,256 $ 114,955
======= =========
Asset Retirement Obligation -
Current $ 14,606 $ 18,336
Asset Retirement Obligation -
Long-Term 270,650 96,619
III-B Partnership
-----------------
2005 2004
---------- ------------
Total Asset Retirement
Obligation, January 1 $ 79,865 $ 83,211
Revisions 96,512 ( 2,532)
Settlements and disposals - ( 3,801)
Accretion expense 8,236 2,987
------- ---------
Total Asset Retirement
Obligation, December 31 $184,613 $ 79,865
======= =========
Asset Retirement Obligation -
Current $ 9,255 $ 31,869
Asset Retirement Obligation -
Long-Term 175,358 47,996
F-47
III-C Partnership
-----------------
2005 2004
---------- ------------
Total Asset Retirement
Obligation, January 1 $204,672 $ 194,453
Additions 1,809 2,307
Revisions 152,220 171
Settlements and disposals - ( 131)
Accretion expense 16,529 7,872
------- ---------
Total Asset Retirement
Obligation, December 31 $375,230 $ 204,672
======= =========
Asset Retirement Obligation -
Current $ 19,679 $ 38,950
Asset Retirement Obligation -
Long-Term 355,551 165,722
III-D Partnership
-----------------
2005 2004
---------- ------------
Total Asset Retirement
Obligation, January 1 $109,182 $ 314,031
Additions 592 1,054
Revisions 85,391 -
Settlements and disposals - ( 17)
Accretion expense 8,933 6,941
Discontinued operations - ( 212,827)
------- ---------
Total Asset Retirement
Obligation, December 31 $204,098 $ 109,182
======= =========
Asset Retirement Obligation -
Current $ 17,420 $ 11,975
Asset Retirement Obligation -
Long-Term 186,678 97,207
F-48
III-E Partnership
-----------------
2005 2004
---------- ------------
Total Asset Retirement
Obligation, January 1 $217,175 $1,768,863
Additions 750 922
Revisions 205,703 -
Settlements and disposals ( 5,091) ( 6,252)
Accretion expense 19,225 27,245
Discontinued operations - ( 1,573,603)
------- ---------
Total Asset Retirement
Obligation, December 31 $437,762 $ 217,175
======= =========
Asset Retirement Obligation -
Current $ 23,971 $ 28,411
Asset Retirement Obligation -
Long-Term 413,791 188,764
III-F Partnership
-----------------
2005 2004
---------- ------------
Total Asset Retirement
Obligation, January 1 $150,199 $ 142,977
Additions - 774
Revisions 114,910 -
Accretion expense 13,095 6,448
------- ---------
Total Asset Retirement
Obligation, December 31 $278,204 $ 150,199
======= =========
Asset Retirement Obligation -
Current $ 1,948 $ 8,552
Asset Retirement Obligation -
Long-Term 276,256 141,647
2. TRANSACTIONS WITH RELATED PARTIES
The Partnerships reimburse the General Partner for the general and
administrative overhead applicable to the Partnerships, based on an allocation
of actual costs incurred by the General Partner. When actual costs incurred
benefit other Partnerships and affiliates, the allocation of costs is based on
F-49
the relationship of the Partnerships' reserves to the total reserves owned by
all Partnerships and affiliates. The General Partner believes this allocation
method is reasonable. Although the actual costs incurred by the General Partner
and its affiliates have fluctuated during the three years presented, the amounts
charged to the Partnerships have not fluctuated due to the expense limitations
imposed by the Partnership Agreement. The following is a summary of payments
made to the General Partner or its affiliates by the Partnerships for general
and administrative overhead costs for the years ended December 31, 2005, 2004,
and 2003:
Partnership 2005 2004 2003
----------- -------- -------- --------
III-A $277,872 $277,872 $277,872
III-B 145,620 145,620 145,620
III-C 257,412 257,412 257,412
III-D 137,904 137,904 137,904
III-E 440,280 440,280 440,280
III-F 233,136 233,136 233,136
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 these activities, together with
any compressor rentals, consulting, or other services provided.
3. MAJOR CUSTOMERS
The following table sets forth purchasers who individually accounted for
ten percent or more of each Partnership's combined oil and gas sales during
2005, 2004, and 2003:
Partnership Purchaser Percentage
----------- ------------------------ --------------------------
2005 2004 2003
----- ----- -----
III-A ConocoPhillips Company
("ConocoPhillips") 29.7% - -
Gulfterra Central Point
Allocation
("Gulfterra") 23.2% 12.2% -
Eaglwing Trading, Inc.
("Eaglwing") - 26.9% 27.0%
Valero Industrial Gas
L.P. ("Valero") - - 23.9%
F-50
III-B ConocoPhillips 37.6% - -
Gulfterra 20.8% 11.0% -
Eaglwing - 33.8% 32.0%
Valero - - 20.3%
III-C ONEOK Texas Energy
Resources ("ONEOK") 19.1% 13.4% -
Duke Energy Field
Services, Inc. ("Duke") 16.9% 18.3% 19.6%
Cinergy Marketing Company
("Cinergy") 10.4% 14.5% 23.2%
Enogex Services
Corporation 10.3% 11.5% -
ONEOK Field Services
Company ("ONEOK FSC") - 13.3% 17.7%
III-D ONEOK 28.3% 18.0% -
Cinergy 14.9% 19.1% 28.1%
Duke 13.8% 14.1% 14.5%
Eaglwing - 16.2% 23.9%
ONEOK FSC - 10.8% 15.2%
III-E Duke 18.2% 15.1% 13.7%
Red Desert Central
Point Allocation
("Red Desert") 17.5% - -
Sempra Energy Trading
Corp. ("Sempra") 16.2% 11.6% -
Hunt Crude Oil Supply
Company 13.9% 10.4% -
Eaglwing - 24.4% 36.1%
Mountain Gas Resources,
Inc. ("Mountain") - 13.5% -
III-F Red Desert 21.9% - -
Sempra 20.4% 19.8% -
Eaglwing 17.0% 18.4% 15.4%
Duke 14.1% 14.7% 17.3%
Mountain - 23.1% 19.7%
In the event of interruption of purchases by one or more of these
significant customers or the cessation or material change in availability of
open access transportation by the Partnerships' pipeline transporters, the
Partnerships may encounter difficulty in marketing their gas and in maintaining
historic sales levels. Alternative purchasers or transporters may not be readily
available.
F-51
4. SUPPLEMENTAL OIL AND GAS INFORMATION
The following supplemental information regarding the oil and gas
activities of the Partnerships is presented pursuant to the disclosure
requirements promulgated by the SEC.
Capitalized Costs
Capitalized costs and accumulated depreciation, depletion, amortization,
and valuation allowance at December 31, 2005 and 2004 were as follows:
III-A Partnership
-----------------
2005 2004
------------- -------------
Proved properties $15,679,530 $15,505,374
Less accumulated
depreciation, depletion,
amortization, and valuation
allowance ( 14,904,139) ( 14,743,570)
---------- ----------
Net oil and gas
properties $ 775,391 $ 761,804
========== ==========
III-B Partnership
-----------------
2005 2004
------------- -------------
Proved properties $ 9,378,899 $ 9,271,100
Less accumulated
depreciation, depletion,
amortization, and valuation
allowance ( 8,964,606) ( 8,868,932)
---------- ----------
Net oil and gas
properties $ 414,293 $ 402,168
========== ==========
F-52
III-C Partnership
-----------------
2005 2004
------------- -------------
Proved properties $17,887,094 $18,190,059
Less accumulated
depreciation, depletion,
amortization, and valuation
allowance ( 16,342,383) ( 16,714,135)
---------- ----------
Net oil and gas
properties $ 1,544,711 $ 1,475,924
========== ==========
III-D Partnership
-----------------
2005 2004
------------- -------------
Proved properties $ 9,388,350 $ 9,297,180
Less accumulated
depreciation, depletion,
amortization, and valuation
allowance ( 8,736,889) ( 8,708,019)
---------- ----------
Net oil and gas
properties $ 651,461 $ 589,161
========== ==========
III-E Partnership
-----------------
2005 2004
------------- -------------
Proved properties $21,182,856 $20,848,695
Less accumulated
depreciation, depletion,
amortization, and valuation
allowance ( 19,201,348) ( 18,906,641)
---------- ----------
Net oil and gas
properties $ 1,981,508 $ 1,942,054
========== ==========
F-53
III-F Partnership
-----------------
2005 2004
------------- -------------
Proved properties $14,020,664 $13,873,444
Less accumulated
depreciation, depletion,
amortization, and valuation
allowance ( 12,340,194) ( 12,145,513)
---------- ----------
Net oil and gas
properties $ 1,680,470 $ 1,727,931
========== ==========
Costs Incurred
The Partnerships incurred no costs in connection with oil and gas
acquisition or exploration activities during the years ended December 31, 2005,
2004, and 2003. Costs incurred by the Partnerships in connection with oil and
gas property development activities for the years ended December 31, 2005, 2004,
and 2003 were as follows:
Partnership 2005(1) 2004 2003(2)
----------- -------- -------- ----------
III-A $ 16,822 $ 78,142 $ 53,311
III-B 2,903 52,376 32,726
III-C 127,299 217,479 21,609
III-D 85,828 27,306 209,710
III-E 158,067 245,429 1,529,844
III-F 32,310 188,433 16,762
----------------
(1) Excludes the estimated asset retirement costs for the III-A,
III-B, III-C, III-D, III-E, and III-F Partnerships of
approximately $157,000, $97,000, $152,000, $85,000, $206,000,
and $115,000, respectively, recorded as a revision in FAS No.
143 during 2005 due to an increase in both the labor and rig
costs associated with plugging wells.
(2) Excludes the estimated asset retirement costs for the III-A,
III-B, III-C, III-D, III-E, and III-F Partnerships of
approximately $75,000, $51,000, $121,000, $74,000, $200,000,
and $95,000, respectively, recorded as part of the FAS No. 143
implementation.
F-54
Quantities of Proved Oil and Gas Reserves - Unaudited
The following tables summarize changes in net quantities of the
Partnerships' proved reserves, all of which are located in the United States of
America, for the periods indicated. The proved reserves at December 31, 2005,
2004, and 2003 were estimated by petroleum engineers employed by affiliates of
the Partnerships. Certain reserve information was reviewed by Ryder Scott
Company, L.P., an independent petroleum engineering firm. The following
information includes certain gas balancing adjustments which cause the gas
volumes to differ from the reserve reports prepared by the General Partner and
reviewed by Ryder Scott.
III-A Partnership
-----------------
Crude Natural
Oil Gas
(Barrels) (Mcf)
--------- -----------
Proved reserves, Dec. 31, 2002 60,496 3,866,700
Production ( 45,080) ( 516,905)
Extensions and discoveries 40 7,988
Revision of previous
estimates 123,755 681,695
------- ---------
Proved reserves, Dec. 31, 2003 139,211 4,039,478
Production ( 37,123) ( 460,303)
Sale of minerals in place ( 78) -
Extensions and discoveries 1,037 3,108
Revision of previous
estimates 20,356 190,454
------- ---------
Proved reserves, Dec. 31, 2004 123,403 3,772,737
Production ( 33,008) ( 388,410)
Extensions and discoveries 366 12,296
Revision of previous estimates 5,974 87,225
------- ---------
Proved reserves, Dec. 31, 2005 96,735 3,483,848
======= =========
PROVED DEVELOPED RESERVES:
December 31, 2003 134,026 3,989,058
======= =========
December 31, 2004 118,462 3,722,768
======= =========
December 31, 2005 96,735 3,483,848
======= =========
F-55
III-B Partnership
-----------------
Crude Natural
Oil Gas
(Barrels) (Mcf)
--------- -----------
Proved reserves, Dec. 31, 2002 46,684 1,676,027
Production ( 31,275) ( 243,753)
Extensions and discoveries 18 3,366
Revision of previous
estimates 72,212 242,200
------- ---------
Proved reserves, Dec. 31, 2003 87,639 1,677,840
Production ( 25,395) ( 190,781)
Extensions and discoveries 684 2,050
Revision of previous
estimates 11,766 67,962
------- ---------
Proved reserves, Dec. 31, 2004 74,694 1,557,071
Production ( 22,648) ( 165,378)
Extensions and discoveries 235 5,798
Revision of previous
estimates 8,310 11,469
------- ---------
Proved reserves, Dec. 31, 2005 60,591 1,408,960
======= =========
PROVED DEVELOPED RESERVES:
December 31, 2003 84,217 1,644,581
======= =========
December 31, 2004 71,435 1,524,111
======= =========
December 31, 2005 60,591 1,408,960
======= =========
F-56
III-C Partnership
-----------------
Crude Natural
Oil Gas
(Barrels) (Mcf)
--------- -----------
Proved reserves, Dec. 31, 2002 110,916 4,928,613
Production ( 13,872) ( 668,059)
Sale of minerals in place ( 19) ( 1,572)
Extensions and discoveries 5 1,400
Revision of previous
estimates 2,689 1,088,723
------- ---------
Proved reserves, Dec. 31, 2003 99,719 5,349,105
Production ( 9,551) ( 548,555)
Sale of minerals in place ( 6) -
Extensions and discoveries 4 37,754
Revision of previous
estimates ( 8,492) ( 205,801)
------- ---------
Proved reserves, Dec. 31, 2004 81,674 4,632,503
Production ( 9,614) ( 514,302)
Extensions and discoveries 998 190,272
Revision of previous
estimates 16,232 395,968
------- ---------
Proved reserves, Dec. 31, 2005 89,290 4,704,441
======= =========
PROVED DEVELOPED RESERVES:
December 31, 2003 99,719 5,349,105
======= =========
December 31, 2004 81,674 4,632,503
======= =========
December 31, 2005 89,290 4,704,441
======= =========
F-57
III-D Partnership
-----------------
Crude Natural
Oil Gas
(Barrels) (Mcf)
--------- -----------
Proved reserves, Dec. 31, 2002 236,192 2,667,538
Production ( 26,438) ( 387,346)
Sale of minerals in place ( 54) ( 4,885)
Revision of previous
estimates ( 52,656) 377,307
------- ---------
Proved reserves, Dec. 31, 2003 157,044 2,652,614
Production ( 8,411) ( 293,250)
Sale of minerals in place ( 72,676) ( 14,536)
Extensions and discoveries - 5,525
Revision of previous
estimates 5,116 59,608
------- ---------
Proved reserves, Dec. 31, 2004 81,073 2,409,961
Production ( 8,611) ( 288,655)
Extensions and discoveries 780 106,658
Revision of previous
estimates 10,635 179,304
------- ---------
Proved reserves, Dec. 31, 2005 83,877 2,407,268
======= =========
PROVED DEVELOPED RESERVES:
December 31, 2003 157,044 2,652,614
======= =========
December 31, 2004 81,073 2,409,961
======= =========
December 31, 2005 83,877 2,407,268
======= =========
F-58
III-E Partnership
-----------------
Crude Natural
Oil Gas
(Barrels) (Mcf)
----------- ------------
Proved reserves, Dec. 31, 2002 1,259,858 7,254,259
Production ( 129,314) ( 854,720)
Sale of minerals in place ( 395) ( 34,850)
Extensions and discoveries 38 2,639
Revision of previous
estimates ( 455,263) 198,619
--------- ---------
Proved reserves, Dec. 31, 2003 674,924 6,565,947
Production ( 22,653) ( 720,487)
Sale of minerals in place ( 518,676) ( 103,734)
Extensions and discoveries 1,189 11,923
Revision of previous
estimates 23,724 686,430
--------- ---------
Proved reserves, Dec. 31, 2004 158,508 6,440,079
Production ( 23,561) ( 678,857)
Extensions and discoveries 4,692 114,219
Revision of previous
estimates 10,556 ( 565,732)
--------- ---------
Proved reserves, Dec. 31, 2005 150,195 5,309,709
========= =========
PROVED DEVELOPED RESERVES:
December 31, 2003 674,924 6,565,947
========= =========
December 31, 2004 158,508 6,440,079
========= =========
December 31, 2005 150,195 5,309,709
========= =========
F-59
III-F Partnership
-----------------
Crude Natural
Oil Gas
(Barrels) (Mcf)
--------- -----------
Proved reserves, Dec. 31, 2002 224,872 4,664,302
Production ( 20,685) ( 412,842)
Extensions and discoveries 32 2,261
Revision of previous
estimates 156,069 228,662
------- ---------
Proved reserves, Dec. 31, 2003 360,288 4,482,383
Production ( 20,252) ( 408,746)
Extensions and discoveries 1,000 10,015
Revision of previous
estimates ( 26,170) 57,073
------- ---------
Proved reserves, Dec. 31, 2004 314,866 4,140,725
Production ( 18,967) ( 382,034)
Extensions and discoveries 3,395 94,386
Revision of previous
estimates 37,936 ( 348,684)
------- ---------
Proved reserves, Dec. 31, 2005 337,230 3,504,393
======= =========
PROVED DEVELOPED RESERVES:
December 31, 2003 360,288 4,482,383
======= =========
December 31, 2004 314,866 4,140,725
======= =========
December 31, 2005 337,230 3,504,393
======= =========
F-60
5. QUARTERLY FINANCIAL DATA (Unaudited)
Summarized unaudited quarterly financial data for 2005 and 2004 are as
follows:
III-A Partnership
-----------------
2005
----------------------------------------------
First Second Third Fourth
Quarter Quarter Quarter Quarter
---------- ---------- ---------- ----------
Total Revenues $1,037,577 $1,140,511 $1,213,351 $1,373,970
Gross Profit (1) 675,229 926,537 915,106 1,132,297
Net Income 556,276 830,295 781,003 988,297
Limited Partners'
Net Income
Per Unit 1.89 2.82 2.65 3.35
2004
----------------------------------------------
First Second Third Fourth
Quarter Quarter Quarter Quarter
---------- ---------- ---------- ----------
Total Revenues $1,006,298 $1,087,980 $1,026,563 $1,025,007
Gross Profit (1) 773,904 873,995 837,270 825,921
Net Income 622,304 732,552 737,004 740,127
Limited Partners'
Net Income
Per Unit 2.10 2.48 2.50 2.52
- ------------------
(1) Total revenues less oil and gas production expenses.
F-61
III-B Partnership
-----------------
2005
--------------------------------------------
First Second Third Fourth
Quarter Quarter Quarter Quarter
-------- -------- --------- --------
Total Revenues $527,145 $607,235 $640,609 $722,818
Gross Profit (1) 309,905 489,221 455,615 588,788
Net Income 245,125 437,673 366,126 516,774
Limited Partners'
Net Income
Per Unit 1.50 2.68 2.20 3.15
2004
--------------------------------------------
First Second Third Fourth
Quarter Quarter Quarter Quarter
-------- -------- -------- --------
Total Revenues $489,830 $552,921 $546,524 $544,292
Gross Profit (1) 357,945 423,402 434,255 431,475
Net Income 269,151 338,410 380,123 386,039
Limited Partners'
Net Income
Per Unit 1.61 2.05 2.32 2.37
- --------------------
(1) Total revenues less oil and gas production expenses.
F-62
III-C Partnership
-----------------
2005
----------------------------------------------
First Second Third Fourth
Quarter Quarter Quarter Quarter
-------- -------- ---------- ----------
Total Revenues $958,669 $987,037 $1,128,339 $1,180,660
Gross Profit (1) 737,517 834,492 889,661 828,592
Net Income 595,963 724,628 714,044 728,790
Limited Partners'
Net Income
Per Unit 2.18 2.65 2.59 2.67
2004
----------------------------------------------
First Second Third Fourth
Quarter Quarter Quarter Quarter
-------- -------- ---------- ----------
Total Revenues $849,402 $880,487 $ 693,167 $ 915,866
Gross Profit (1) 659,593 682,348 483,784 653,335
Net Income 528,360 545,890 218,968 452,084
Limited Partners'
Net Income
Per Unit 1.92 1.99 .74 1.61
- --------------------
(1) Total revenues less oil and gas production expenses.
F-63
III-D Partnership
-----------------
2005
---------------------------------------------
First Second Third Fourth
Quarter Quarter Quarter Quarter
-------- --------- ---------- ---------
Total Revenues $536,707 $559,349 $650,556 $732,149
Gross Profit (1) 411,984 470,125 508,952 491,496
Net Income 336,801 409,922 433,982 409,602
Limited Partners'
Net Income
Per Unit 2.30 2.81 2.95 2.79
2004
----------------------------------------------
First Second Third Fourth
Quarter Quarter Quarter Quarter
-------- ---------- ---------- ----------
Total Revenues $504,384 $490,233 $398,216 $505,249
Gross Profit (1) 389,210 416,192 254,565 343,762
Income from Continuing
Operations 323,806 326,554 201,445 284,553
Income(Loss) from Dis-
continued Operations 2,288 ( 12,922) ( 67,866) ( 7,627)
Net Income 326,094 313,632 133,579 276,926
Limited Partners'
Net Income
Per Unit 2.22 2.13 .91 1.89
- ----------------------
(1) Total revenues less oil and gas production expenses.
F-64
III-E Partnership
-----------------
2005
--------------------------------------------------
First Second Third Fourth
Quarter Quarter Quarter Quarter
---------- ----------- ------------ ------------
Total Revenues $1,221,233 $1,359,895 $1,543,048 $1,927,344
Gross Profit (1) 862,265 1,051,947 1,170,903 1,447,609
Net Income 680,961 893,012 902,553 1,226,820
Limited Partners'
Net Income
Per Unit 1.46 1.91 1.91 2.62
2004
--------------------------------------------------
First Second Third Fourth
Quarter Quarter Quarter Quarter
---------- ----------- ------------- ------------
Total Revenues $1,137,562 $1,133,811 $1,107,254 $1,265,763
Gross Profit (1) 826,371 836,552 790,858 830,978
Income from Continuing
Operations 668,551 668,873 603,665 658,458
Income (Loss) from Dis-
continued Operations 17,093 ( 77,220) ( 484,339)( 54,422)
Net Income 685,644 591,653 119,326 604,036
Limited Partners'
Net Income
Per Unit 1.46 1.27 .24 1.29
- ----------------------------
(1) Total revenues less oil and gas production expenses.
F-65
III-F Partnership
-----------------
2005
----------------------------------------------
First Second Third Fourth
Quarter Quarter Quarter Quarter
-------- -------- ---------- ----------
Total Revenues $822,537 $814,563 $1,024,555 $1,221,344
Gross Profit (1) 614,687 651,492 815,930 963,193
Net Income 494,393 549,114 699,066 821,843
Limited Partners'
Net Income
Per Unit 2.11 2.35 2.99 3.52
2004
----------------------------------------------
First Second Third Fourth
Quarter Quarter Quarter Quarter
-------- -------- ---------- ----------
Total Revenues $646,107 $709,781 $ 753,476 $ 836,209
Gross Profit (1) 467,124 539,008 569,315 643,439
Net Income 372,506 430,873 452,317 534,526
Limited Partners'
Net Income
Per Unit 1.59 1.85 1.93 2.28
- -----------------------
(1) Total revenues less oil and gas production expenses.
F-66
6. DISCONTINUED OPERATIONS
On May 12, 2004 the III-D and III-E Partnerships sold all of their
interests in the Jay-Little Escambia Creek Field located in Santa Rosa County,
Florida (the "Jay Field") at a large public oil and gas auction for
approximately $721,000, subject to standard transaction requirements and
adjustments. These proceeds were allocated approximately $89,000 and $632,000,
respectively, to the III-D and III-E Partnerships. This represents the sale of
all oil and gas assets held by the III-D and III-E Partnerships in the Jay Field
and is therefore a disposal of a business segment under Statement of Financial
Accounting Standards No. 144, "Accounting for the Impairment or Disposal of
Long-Lived Assets" (FAS 144). The sale resulted in a gain on disposal of
discontinued operations of approximately $10,000 and $89,000, respectively, for
the III-D and III-E Partnerships. Accordingly, 2004 results of the Jay Field
segment were classified as discontinued, and the prior period has been restated.
Results from discontinued operations are as follows:
III-D Partnership
-----------------
2005 2004 2003
------------ ------------ ------------
Oil and gas sales $ - $ 149,996 $ 399,182
Lease operating - ( 233,768) ( 231,165)
Production tax - ( 9,905) ( 31,178)
Depreciation, depletion,
and amortization of
oil and gas properties - ( 2,818) ( 25,483)
------- --------- ---------
Income (loss) from
discontinued operations $ - ($ 96,495) $ 111,356
======= ========= =========
III-E Partnership
-----------------
2005 2004 2003
------------ ------------ ------------
Oil and gas sales $ - $1,070,623 $2,848,673
Lease operating - ( 1,668,335) ( 1,649,756)
Production tax - ( 70,698) ( 222,493)
Depreciation, depletion,
and amortization of
oil and gas properties - ( 19,235) ( 190,968)
------- --------- ---------
Income (loss) from
discontinued operations $ - ($ 687,645) $ 785,456
======= ========= =========
F-67
INDEX TO EXHIBITS
-----------------
Exh.
No. Exhibit
- ---- -------
4.1 Agreement of Limited Partnership dated November 17, 1989 for Geodyne
Energy Income Limited Partnership III-A filed as Exhibit 4.1 to
Registrant's Annual Report on Form 10-K for the year ended December
31, 1999, filed with the SEC on February 25, 2000, and is hereby
incorporated by reference.
4.2 Certificate of Limited Partnership dated January 24, 1990 for
Geodyne Energy Income Limited Partnership III-A filed as Exhibit 4.2
to Registrant's Annual Report on Form 10-K for the year ended
December 31, 2001, filed with the SEC on February 28, 2002 and is
hereby incorporated by reference.
4.3 First Amendment to Certificate of Limited Partnership and First
Amendment to Agreement of Limited Partnership dated February 24,
1993 for Geodyne Energy Income Limited Partnership III-A filed as
Exhibit 4.5 to Registrant's Annual Report on Form 10-K for the year
ended December 31, 1999, filed with the SEC on February 25, 2000,
and is hereby incorporated by reference.
4.4 Second Amendment to Agreement of Limited Partnership dated August 4,
1993 for Geodyne Energy Income Limited Partnership III-A filed as
Exhibit 4.8 to Registrant's Annual Report on Form 10-K for the year
ended December 31, 1999, filed with the SEC on February 25, 2000,
and is hereby incorporated by reference.
4.5 Second Amendment to Certificate of Limited Partnership dated July 1,
1996 for Geodyne Energy Income Limited Partnership III-A filed as
Exhibit 4.5 to Registrant's Annual Report on Form 10-K for the year
ended December 31, 2001, filed with the SEC on February 28, 2002 and
is hereby incorporated by reference.
4.6 Third Amendment to Agreement of Limited Partnership dated August 31,
1995 for Geodyne Energy Income Limited Partnership III-A filed as
Exhibit 4.15 to Registrant's Annual Report on Form 10-K for the year
ended December 31, 1999, filed with the SEC on February 25, 2000,
and is hereby incorporated by reference.
4.7 Fourth Amendment to Agreement of Limited Partnership dated July 1,
1996 for Geodyne Energy Income Limited Partnership III-A filed as
Exhibit 4.22 to Registrant's Annual Report on Form 10-K for the year
ended December
F-68
31, 1999, filed with the SEC on February 25, 2000, and is hereby
incorporated by reference.
4.8 Fifth Amendment to Agreement of Limited Partnership dated November
15, 1999 for Geodyne Energy Income Limited Partnership III-A filed
as Exhibit 4.25 to Registrant's Annual Report on Form 10-K for the
year ended December 31, 1999, filed with the SEC on February 25,
2000, and is hereby incorporated by reference.
4.9 Sixth Amendment to Agreement of Limited Partnership dated November
14, 2001, for the Geodyne Energy Income Limited Partnership III-A
filed as Exhibit 4.9 to Registrant's Annual Report on Form 10-K for
the year ended December 31, 2001, filed with the SEC on February 28,
2002 and is hereby incorporated by reference.
4.10 Seventh Amendment to Agreement of Limited Partnership dated November
17, 2003, for the Geodyne Energy Income Limited Partnership III-A
filed as Exhibit 4.10 to Registrant's Annual Report on Form 10-K for
the year ended December 31, 2003, filed with the SEC on March 30,
2004 and is hereby incorporated by reference.
*4.11 Eighth Amendment to Agreement of Limited Partnership for the Geodyne
Energy Income Limited Partnership III-A dated October 27, 2005.
4.12 Agreement of Limited Partnership dated January 24, 1990 for Geodyne
Energy Income Limited Partnership III-B filed as Exhibit 4.2 to
Registrant's Annual Report on Form 10-K for the year ended December
31, 1999, filed with the SEC on February 25, 2000, and is hereby
incorporated by reference.
4.13 Certificate of Limited Partnership dated January 24, 1990 for
Geodyne Energy Income Limited Partnership III-B filed as Exhibit
4.11 to Registrant's Annual Report on Form 10-K for the year ended
December 31, 2001, filed with the SEC on February 28, 2002 and is
hereby incorporated by reference.
4.14 First Amendment to Certificate of Limited Partnership and First
Amendment to Agreement of Limited Partnership dated February 24,
1993 for Geodyne Energy Income Limited Partnership III-B filed as
Exhibit 4.6 to Registrant's Annual Report on Form 10-K for the year
ended December 31, 1999, filed with the SEC on February 25, 2000,
and is hereby incorporated by reference.
4.15 Second Amendment to Agreement of Limited Partnership dated August 4,
1993 for Geodyne Energy Income Limited Partnership III-B filed as
Exhibit 4.9 to Registrant's Annual Report on Form 10-K for the year
ended December
F-69
31, 1999, filed with the SEC on February 25, 2000, and is hereby
incorporated by reference.
4.16 Third Amendment to Agreement of Limited Partnership dated August 31,
1995 for Geodyne Energy Income Limited Partnership III-B filed as
Exhibit 4.16 to Registrant's Annual Report on Form 10-K for the year
ended December 31, 1999, filed with the SEC on February 25, 2000,
and is hereby incorporated by reference.
4.17 Second Amendment to Certificate of Limited Partnership dated July 1,
1996 for Geodyne Energy Income Limited Partnership III-B filed as
Exhibit 4.15 to Registrant's Annual Report on Form 10-K for the year
ended December 31, 2001, filed with the SEC on February 28, 2002 and
is hereby incorporated by reference.
4.18 Fourth Amendment to Agreement of Limited Partnership dated July 1,
1996 for Geodyne Energy Income Limited Partnership III-B filed as
Exhibit 4.23 to Registrant's Annual Report on Form 10-K for the year
ended December 31, 1999, filed with the SEC on February 25, 2000,
and is hereby incorporated by reference.
4.19 Fifth Amendment to Agreement of Limited Partnership dated December
30, 1999 for Geodyne Energy Income Limited Partnership III-B filed
as Exhibit 4.26 to Registrant's Annual Report on Form 10-K for the
year ended December 31, 1999, filed with the SEC on February 25,
2000, and is hereby incorporated by reference.
4.20 Sixth Amendment to Agreement of Limited Partnership dated November
14, 2001, for the Geodyne Energy Income Limited Partnership III-B
filed as Exhibit 4.18 to Registrant's Annual Report on Form 10-K for
the year ended December 31, 2001, filed with the SEC on February 28,
2002 and is hereby incorporated by reference.
4.21 Seventh Amendment to Agreement of Limited Partnership dated January
22, 2004, for the Geodyne Energy Income Limited Partnership III-B
filed as Exhibit 4.20 to Registrant's Annual Report on Form 10-K for
the year ended December 31, 2003, filed with the SEC on March 30,
2004 and is hereby incorporated by reference.
*4.22 Eighth Amendment to Agreement of Limited Partnership for the Geodyne
Energy Income Limited Partnership III-B dated October 27, 2005.
4.23 Agreement of Limited Partnership dated February 26, 1990 for Geodyne
Energy Income Limited Partnership III-C filed as Exhibit 4.3 to
Registrant's Annual Report on Form 10-K for the year ended December
31, 1999, filed
F-70
with the SEC on February 25, 2000, and is hereby incorporated by
reference.
4.24 Certificate of Limited Partnership dated February 26, 1990 for
Geodyne Energy Income Limited Partnership III-C filed as Exhibit
4.20 to Registrant's Annual Report on Form 10-K for the year ended
December 31, 2001, filed with the SEC on February 28, 2002 and is
hereby incorporated by reference.
4.25 First Amendment to Certificate of Limited Partnership and First
Amendment to Agreement of Limited Partnership dated February 24,
1993 for Geodyne Energy Income Limited Partnership III-C filed as
Exhibit 4.7 to Registrant's Annual Report on Form 10-K for the year
ended December 31, 1999, filed with the SEC on February 25, 2000,
and is hereby incorporated by reference.
4.26 Second Amendment to Agreement of Limited Partnership dated August 4,
1993 for Geodyne Energy Income Limited Partnership III-C filed as
Exhibit 4.19 to Registrant's Annual Report on Form 10-K for the year
ended December 31, 1999, filed with the SEC on February 25, 2000,
and is hereby incorporated by reference.
4.27 Third Amendment to Agreement of Limited Partnership dated August 31,
1995 for Geodyne Energy Income Limited Partnership III-C filed as
Exhibit 4.17 to Registrant's Annual Report on Form 10-K for the year
ended December 31, 1999, filed with the SEC on February 25, 2000,
and is hereby incorporated by reference.
4.28 Second Amendment to Certificate of Limited Partnership dated July 1,
1996 for Geodyne Energy Income Limited Partnership III-C filed as
Exhibit 4.24 to Registrant's Annual Report on Form 10-K for the year
ended December 31, 2001, filed with the SEC on February 28, 2002 and
is hereby incorporated by reference.
4.29 Fourth Amendment to Agreement of Limited Partnership dated July 1,
1996 for Geodyne Energy Income Limited Partnership III-C filed as
Exhibit 4.24 to Registrant's Annual Report on Form 10-K for the year
ended December 31, 1999, filed with the SEC on February 25, 2000,
and is hereby incorporated by reference.
4.30 Fifth Amendment to Agreement of Limited Partnership dated December
30, 1999 for Geodyne Energy Income Limited Partnership III-C filed
as Exhibit 4.27 to Registrant's Annual Report on Form 10-K for the
year ended December 31, 1999, filed with the SEC on February 25,
2000, and is hereby incorporated by reference.
F-71
4.31 Sixth Amendment to Agreement of Limited Partnership dated November
14, 2001, for the Geodyne Energy Income Limited Partnership III-C
filed as Exhibit 4.27 to Registrant's Annual Report on Form 10-K for
the year ended December 31, 2001, filed with the SEC on February 28,
2002 and is hereby incorporated by reference.
4.32 Seventh Amendment to Agreement of Limited Partnership dated January
22, 2004, for the Geodyne Energy Income Limited Partnership III-C
filed as Exhibit 4.30 to Registrant's Annual Report on Form 10-K for
the year ended December 31, 2003, filed with the SEC on March 30,
2004 and is hereby incorporated by reference.
*4.33 Eighth Amendment to Agreement of Limited Partnership for the Geodyne
Energy Income Limited Partnership III-C dated October 27, 2005.
4.34 Agreement of Limited Partnership dated September 5, 1990 for Geodyne
Energy Income Limited Partnership III-D filed as Exhibit 4.4 to
Registrant's Annual Report on Form 10-K for the year ended December
31, 2000, filed with the SEC on March 5, 2001, and is hereby
incorporated by reference.
4.35 Certificate of Limited Partnership dated September 5, 1990 for
Geodyne Energy Income Limited Partnership III-D filed as Exhibit
4.29 to Registrant's Annual Report on Form 10-K for the year ended
December 31, 2001, filed with the SEC on February 28, 2002 and is
hereby incorporated by reference.
4.36 First Amendment to Certificate of Limited Partnership and First
Amendment to Agreement of Limited Partnership dated February 24,
1993 for Geodyne Energy Income Limited Partnership III-D filed as
Exhibit 4.11 to Registrant's Annual Report on Form 10-K for the year
ended December 31, 2000, filed with the SEC on March 5, 2001, and is
hereby incorporated by reference.
4.37 Second Amendment to Agreement of Limited Partnership dated August 4,
1993 for Geodyne Energy Income Limited Partnership III-D filed as
Exhibit 4.18 to Registrant's Annual Report on Form 10-K for the year
ended December 31, 2000, filed with the SEC on March 5, 2001, and is
hereby incorporated by reference.
4.38 Third Amendment to Agreement of Limited Partnership dated August 31,
1995 for Geodyne Energy Income Limited Partnership III-D filed as
Exhibit 4.25 to Registrant's Annual Report on Form 10-K for the year
ended December 31, 2000, filed with the SEC on March 5, 2001, and is
hereby incorporated by reference.
F-72
4.39 Second Amendment to Certificate of Limited Partnership dated July 1,
1996 for Geodyne Energy Income Limited Partnership III-D filed as
Exhibit 4.33 to Registrant's Annual Report on Form 10-K for the year
ended December 31, 2001, filed with the SEC on February 28, 2002 and
is hereby incorporated by reference.
4.40 Fourth Amendment to Agreement of Limited Partnership dated July 1,
1996 for the Geodyne Energy Income Limited Partnership III-D filed
as Exhibit 4.32 to Registrant's Annual Report on Form 10-K for the
year ended December 31, 2000, filed with the SEC on March 5, 2001,
and is hereby incorporated by reference.
4.41 Fifth Amendment to Agreement of Limited Partnership dated August 23,
2000 for the Geodyne Energy Income Limited Partnership III-D filed
as Exhibit 4.39 to Registrant's Annual Report on Form 10-K for the
year ended December 31, 2000, filed with the SEC on March 5, 2001,
and is hereby incorporated by reference.
4.42 Sixth Amendment to Agreement of Limited Partnership dated August 20,
2002 for the Geodyne Energy Income Limited Partnership III-D filed
as Exhibit 4.36 to Registrant's Annual Report on Form 10-K for the
year ended December 31, 2002, filed with the SEC on March 28, 2003,
and is hereby incorporated by reference.
4.43 Seventh Amendment to Agreement of Limited Partnership dated August
18, 2004 for the Geodyne Energy Income Limited Partnership III-D
filed as Exhibit 4.40 to Registrant's Annual Report on Form 10-K for
the year ended December 31, 2004, filed with the SEC on March 30,
2004, and is hereby incorporated by reference.
*4.44 Eighth Amendment to Agreement of Limited Partnership for the Geodyne
Energy Income Limited Partnership III-D dated October 27, 2005.
4.45 Agreement of Limited Partnership dated December 26, 1990 for Geodyne
Energy Income Limited Partnership III-E filed as Exhibit 4.5 to
Registrant's Annual Report on Form 10-K for the year ended December
31, 2000, filed with the SEC on March 5, 2001, and is hereby
incorporated by reference.
4.46 Certificate of Limited Partnership dated December 26, 2990 for
Geodyne Energy Income Limited Partnership III-E filed as Exhibit
4.37 to Registrant's Annual Report on Form 10-K for the year ended
December 31, 2001, filed with the SEC on February 28, 2002 and is
hereby incorporated by reference.
F-73
4.47 First Amendment to Certificate of Limited Partnership and First
Amendment to Agreement of Limited Partnership dated February 24,
1993 for Geodyne Energy Income Limited Partnership III-E filed as
Exhibit 4.12 to Registrant's Annual Report on Form 10-K for the year
ended December 31, 2000, filed with the SEC on March 5, 2001, and is
hereby incorporated by reference.
4.48 Second Amendment to Agreement of Limited Partnership dated August 4,
1993 for Geodyne Energy Income Limited Partnership III-E filed as
Exhibit 4.19 to Registrant's Annual Report on Form 10-K for the year
ended December 31, 2000, filed with the SEC on March 5, 2001, and is
hereby incorporated by reference.
4.49 Third Amendment to Agreement of Limited Partnership dated August 31,
1995 for Geodyne Energy Income Limited Partnership III-E filed as
Exhibit 4.26 to Registrant's Annual Report on Form 10-K for the year
ended December 31, 2000, filed with the SEC on March 5, 2001, and is
hereby incorporated by reference.
4.50 Second Amendment to Certificate of Limited Partnership dated July 1,
1996 for Geodyne Energy Income Limited Partnership III-E filed as
Exhibit 4.41 to Registrant's Annual Report on Form 10-K for the year
ended December 31, 2001, filed with the SEC on February 28, 2002 and
is hereby incorporated by reference.
4.51 Fourth Amendment to Agreement of Limited Partnership dated July 1,
1996 for the Geodyne Energy Income Limited Partnership III-E filed
as Exhibit 4.33 to Registrant's Annual Report on Form 10-K for the
year ended December 31, 2000, filed with the SEC on March 5, 2001,
and is hereby incorporated by reference.
4.52 Fifth Amendment to Agreement of Limited Partnership dated November
15, 2000 for the Geodyne Energy Income Limited Partnership III-E
filed as Exhibit 4.40 to Registrant's Annual Report on Form 10-K for
the year ended December 31, 2000, filed with the SEC on March 5,
2001, and is hereby incorporated by reference.
4.53 Sixth Amendment to Agreement of Limited Partnership for Geodyne
Energy Income Limited Partnership III-E dated November 6, 2002,
filed as Exhibit 4.1 to Registrant's Quarterly Report on Form 10-Q
with the SEC on November 14, 2002, and is hereby incorporated by
reference.
4.54 Seventh Amendment to Agreement of Limited Partnership for the
Geodyne Energy Income Limited Partnership III-E dated August 18,
2004, filed as Exhibit 4.53 to Registrant's Annual Report on Form
10-K for the year
F-74
ended December 31, 2004, filed with the SEC on March 30, 2005, and
is hereby incorporated by reference.
*4.55 Eighth Amendment to Agreement of Limited Partnership for the Geodyne
Energy Income Limited Partnership III-E dated October 27, 2005.
4.56 Agreement of Limited Partnership dated March 7, 1991 for Geodyne
Energy Income Limited Partnership III-F filed as Exhibit 4.6 to
Registrant's Annual Report on Form 10-K for the year ended December
31, 2000, filed with the SEC on March 5, 2001, and is hereby
incorporated by reference.
4.57 Certificate of Limited Partnership dated March 7, 1991 for Geodyne
Energy Income Limited Partnership III-F filed as Exhibit 4.45 to
Registrant's Annual Report on Form 10-K for the year ended December
31, 2001, filed with the SEC on February 28, 2002 and is hereby
incorporated by reference.
4.58 First Amendment to Certificate of Limited Partnership and First
Amendment to Agreement of Limited Partnership dated February 24,
1993 for Geodyne Energy Income Limited Partnership III-F filed as
Exhibit 4.13 to Registrant's Annual Report on Form 10-K for the year
ended December 31, 2000, filed with the SEC on March 5, 2001, and is
hereby incorporated by reference.
4.59 Second Amendment to Agreement of Limited Partnership dated August 4,
1993 for Geodyne Energy Income Limited Partnership III-F filed as
Exhibit 4.20 to Registrant's Annual Report on Form 10-K for the year
ended December 31, 2000, filed with the SEC on March 5, 2001, and is
hereby incorporated by reference.
4.60 Second Amendment to Certificate of Limited Partnership dated July 1,
1996 for Geodyne Energy Income Limited Partnership III-F filed as
Exhibit 4.48 to Registrant's Annual Report on Form 10-K for the year
ended December 31, 2001, filed with the SEC on February 28, 2002 and
is hereby incorporated by reference.
4.61 Third Amendment to Agreement of Limited Partnership dated August 31,
1995 for Geodyne Energy Income Limited Partnership III-F filed as
Exhibit 4.27 to Registrant's Annual Report on Form 10-K for the year
ended December 31, 2000, filed with the SEC on March 5, 2001, and is
hereby incorporated by reference.
4.62 Fourth Amendment to Agreement of Limited Partnership dated July 1,
1996 for the Geodyne Energy Income Limited Partnership III-F filed
as Exhibit 4.34 to Registrant's Annual Report on Form 10-K for the
year
F-75
ended December 31, 2000, filed with the SEC on March 5, 2001, and is
hereby incorporated by reference.
4.63 Fifth Amendment to Agreement of Limited Partnership dated February
5, 2001 for the Geodyne Energy Income Limited Partnership III-F
filed as Exhibit 4.41 to Registrant's Annual Report on Form 10-K for
the year ended December 31, 2000, filed with the SEC on March 5,
2001, and is hereby incorporated by reference.
4.64 Sixth Amendment to Agreement of Limited Partnership for the Geodyne
Energy Income Limited Partnership III-F dated February 10, 2003,
filed as Exhibit 4.53(a) to Registrant's Annual Report on Form 10-K
for the year ended December 31, 2002, filed with the SEC on March
28, 2003, and is hereby incorporated by reference.
4.65 Seventh Amendment to Agreement of Limited Partnership for the
Geodyne Energy Income Limited Partnership III-F dated February 7,
2005, filed as Exhibit 4.60 to Registrant's Annual Report on Form
10-K for the year ended December 31, 2004, filed with the SEC on
March 30, 2004, and is hereby incorporated by reference.
*4.66 Eighth Amendment to Agreement of Limited Partnership for the Geodyne
Energy Income Limited Partnership III-F dated October 27, 2005.
*23.1 Consent of Ryder Scott Company, L.P. for Geodyne Energy Income
Limited Partnership III-A.
*23.2 Consent of Ryder Scott Company, L.P. for Geodyne Energy Income
Limited Partnership III-B.
*23.3 Consent of Ryder Scott Company, L.P. for Geodyne Energy Income
Limited Partnership III-C.
*23.4 Consent of Ryder Scott Company, L.P. for Geodyne Energy Income
Limited Partnership III-D.
*23.5 Consent of Ryder Scott Company, L.P. for Geodyne Energy Income
Limited Partnership III-E.
*23.6 Consent of Ryder Scott Company, L.P. for Geodyne Energy Income
Limited Partnership III-F.
*31.1 Certification by Dennis R. Neill required by Rule
13a-14(a)/15d-14(a) for the Geodyne Energy Income Limited
Partnership III-A.
*31.2 Certification by Craig D. Loseke required by Rule
13a-14(a)/15d-14(a) for the Geodyne Energy Income Limited
Partnership III-A.
F-76
*31.3 Certification by Dennis R. Neill required by Rule
13a-14(a)/15d-14(a) for the Geodyne Energy Income Limited
Partnership III-B.
*31.4 Certification by Craig D. Loseke required by Rule
13a-14(a)/15d-14(a) for the Geodyne Energy Income Limited
Partnership III-B.
*31.5 Certification by Dennis R. Neill required by Rule
13a-14(a)/15d-14(a) for the Geodyne Energy Income Limited
Partnership III-C.
*31.6 Certification by Craig D. Loseke required by Rule
13a-14(a)/15d-14(a) for the Geodyne Energy Income Limited
Partnership III-C.
*31.7 Certification by Dennis R. Neill required by Rule
13a-14(a)/15d-14(a) for the Geodyne Energy Income Limited
Partnership III-D.
*31.8 Certification by Craig D. Loseke required by Rule
13a-14(a)/15d-14(a) for the Geodyne Energy Income Limited
Partnership III-D.
*31.9 Certification by Dennis R. Neill required by Rule
13a-14(a)/15d-14(a) for the Geodyne Energy Income Limited
Partnership III-E.
*31.10 Certification by Craig D. Loseke required by Rule
13a-14(a)/15d-14(a) for the Geodyne Energy Income Limited
Partnership III-E.
*31.11 Certification by Dennis R. Neill required by Rule
13a-14(a)/15d-14(a) for the Geodyne Energy Income Limited
Partnership III-F.
*31.12 Certification by Craig D. Loseke required by Rule
13a-14(a)/15d-14(a) for the Geodyne Energy Income Limited
Partnership III-F.
*32.1 Certification pursuant to 18 U.S.C. Section 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 for the
Geodyne Energy Income Limited Partnership III-A.
*32.2 Certification pursuant to 18 U.S.C. Section 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 for the
Geodyne Energy Income Limited Partnership III-B.
*32.3 Certification pursuant to 18 U.S.C. Section 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 for the
Geodyne Energy Income Limited Partnership III-C.
F-77
*32.4 Certification pursuant to 18 U.S.C. Section 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 for the
Geodyne Energy Income Limited Partnership III-D.
*32.5 Certification pursuant to 18 U.S.C. Section 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 for the
Geodyne Energy Income Limited Partnership III-E.
*32.6 Certification pursuant to 18 U.S.C. Section 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 for the
Geodyne Energy Income Limited Partnership III-F.
All other Exhibits are omitted as inapplicable.
----------
*Filed herewith.
F-78