SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarter ended March 31, 2006
Commission File Number:
III-A: 0-18302 III-B: 0-18636 III-C: 0-18634
III-D: 0-18936 III-E: 0-19010 III-F: 0-19102
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-A
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-B
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-C
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-D
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-E
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-F
---------------------------------------------------------
(Exact name of Registrant as specified in its Articles)
III-A 73-1352993
III-B 73-1358666
III-C 73-1356542
III-D 73-1357374
III-E 73-1367188
Oklahoma III-F 73-1377737
- ---------------------------- -------------------------------
(State or other jurisdiction (I.R.S. Employer Identification
of incorporation or Number)
organization)
Two West Second Street, Tulsa, Oklahoma 74103
------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code:(918) 583-1791
Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the Registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes X No
------ ------
-1-
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 No X
------ ------
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.
-2-
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-A
BALANCE SHEETS
(Unaudited)
ASSETS
March 31, December 31,
2006 2005
------------ ------------
CURRENT ASSETS:
Cash and cash equivalents $1,188,265 $1,209,317
Accounts receivable:
Oil and gas sales 595,822 831,772
---------- ----------
Total current assets $1,784,087 $2,041,089
NET OIL AND GAS PROPERTIES, utilizing
the successful efforts method 751,306 775,391
DEFERRED CHARGE 190,240 190,240
---------- ----------
$2,725,633 $3,006,720
========== ==========
LIABILITIES AND PARTNERS' CAPITAL (DEFICIT)
CURRENT LIABILITIES:
Accounts payable $ 126,927 $ 126,411
Gas imbalance payable 17,660 17,660
Asset retirement obligation -
current (Note 1) 18,263 14,606
---------- ----------
Total current liabilities $ 162,850 $ 158,677
LONG-TERM LIABILITIES:
Accrued liability $ 27,120 $ 27,120
Asset retirement obligation
(Note 1) 270,432 270,650
---------- ----------
Total long-term liabilities $ 297,552 $ 297,770
PARTNERS' CAPITAL (DEFICIT):
General Partner ($ 90,370) ($ 59,217)
Limited Partners, issued and
outstanding, 263,976 units 2,355,601 2,609,490
---------- ----------
Total Partners' capital $2,265,231 $2,550,273
---------- ----------
$2,725,633 $3,006,720
========== ==========
The accompanying condensed notes are an integral part of
these financial statements.
-3-
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-A
STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED MARCH 31, 2006 AND 2005
(Unaudited)
2006 2005
---------- ----------
REVENUES:
Oil and gas sales $1,113,320 $1,033,696
Interest income 9,146 3,881
---------- ----------
$1,122,466 $1,037,577
COSTS AND EXPENSES:
Lease operating $ 164,913 $ 263,228
Production tax 88,505 99,120
Depreciation, depletion, and
amortization of oil and gas
properties 27,490 23,989
General and administrative
(Note 2) 97,480 94,964
---------- ----------
$ 378,388 $ 481,301
---------- ----------
NET INCOME $ 744,078 $ 556,276
========== ==========
GENERAL PARTNER - NET INCOME $ 75,967 $ 57,399
========== ==========
LIMITED PARTNERS - NET INCOME $ 668,111 $ 498,877
========== ==========
NET INCOME per unit $ 2.53 $ 1.89
========== ==========
UNITS OUTSTANDING 263,976 263,976
========== ==========
The accompanying condensed notes are an integral part of
these financial statements.
-4-
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-A
STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS ENDED MARCH 31, 2006 AND 2005
(Unaudited)
2006 2005
------------ ------------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 744,078 $ 556,276
Adjustments to reconcile net income
to net cash provided by operating
activities:
Depreciation, depletion, and
amortization of oil and gas
properties 27,490 23,989
(Increase) decrease in accounts
receivable - oil and gas sales 235,950 ( 9,944)
Increase in accounts payable 8,712 129,599
---------- ----------
Net cash provided by operating
activities $1,016,230 $ 699,920
---------- ----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures ($ 8,162) ($ 10,155)
---------- ----------
Net cash used by investing activities ($ 8,162) ($ 10,155)
---------- ----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Cash distributions ($1,029,120) ($ 758,391)
---------- ----------
Net cash used by financing activities ($1,029,120) ($ 758,391)
---------- ----------
NET DECREASE IN CASH AND CASH
EQUIVALENTS ($ 21,052) ($ 68,626)
CASH AND CASH EQUIVALENTS AT
BEGINNING OF PERIOD 1,209,317 1,038,719
---------- ----------
CASH AND CASH EQUIVALENTS AT
END OF PERIOD $1,188,265 $ 970,093
========== ==========
The accompanying condensed notes are an integral part of
these financial statements.
-5-
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-B
BALANCE SHEETS
(Unaudited)
ASSETS
March 31, December 31,
2006 2005
------------ ------------
CURRENT ASSETS:
Cash and cash equivalents $ 575,739 $ 604,086
Accounts receivable:
Oil and gas sales 324,808 433,785
---------- ----------
Total current assets $ 900,547 $1,037,871
NET OIL AND GAS PROPERTIES, utilizing
the successful efforts method 400,852 414,293
DEFERRED CHARGE 125,644 125,644
---------- ----------
$1,427,043 $1,577,808
========== ==========
LIABILITIES AND PARTNERS' CAPITAL (DEFICIT)
CURRENT LIABILITIES:
Accounts payable $ 80,934 $ 76,295
Gas imbalance payable 9,707 9,707
Asset retirement obligation -
current (Note 1) 10,985 9,255
---------- ----------
Total current liabilities $ 101,626 $ 95,257
LONG-TERM LIABILITIES:
Accrued liability $ 9,664 $ 9,664
Asset retirement obligation
(Note 1) 175,810 175,358
---------- ----------
Total long-term liabilities $ 185,474 $ 185,022
PARTNERS' CAPITAL (DEFICIT):
General Partner ($ 59,238) ($ 35,041)
Limited Partners, issued and
outstanding, 138,336 units 1,199,181 1,332,570
---------- ----------
Total Partners' capital $1,139,943 $1,297,529
---------- ----------
$1,427,043 $1,577,808
========== ==========
The accompanying condensed notes are an integral part of
these financial statements.
-6-
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-B
STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED MARCH 31, 2006 AND 2005
(Unaudited)
2006 2005
-------- --------
REVENUES:
Oil and gas sales $590,471 $525,153
Interest income 4,426 1,992
-------- --------
$594,897 $527,145
COSTS AND EXPENSES:
Lease operating $105,161 $161,378
Production tax 50,283 55,862
Depreciation, depletion, and
amortization of oil and gas
properties 15,623 4,530
General and administrative
(Note 2) 62,496 60,250
-------- --------
$233,563 $282,020
-------- --------
NET INCOME $361,334 $245,125
======== ========
GENERAL PARTNER - NET INCOME $ 55,723 $ 37,104
======== ========
LIMITED PARTNERS - NET INCOME $305,611 $208,021
======== ========
NET INCOME per unit $ 2.21 $ 1.50
======== ========
UNITS OUTSTANDING 138,336 138,336
======== ========
The accompanying condensed notes are an integral part of
these financial statements.
-7-
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-B
STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS ENDED MARCH 31, 2006 AND 2005
(Unaudited)
2006 2005
---------- ----------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $361,334 $245,125
Adjustments to reconcile net income
to net cash provided by operating
activities:
Depreciation, depletion, and
amortization of oil and gas
properties 15,623 4,530
(Increase) decrease in accounts
receivable - oil and gas sales 108,977 ( 16,664)
Increase in accounts payable 10,115 83,971
-------- --------
Net cash provided by operating
activities $496,049 $316,962
-------- --------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures ($ 5,476) ($ 328)
Proceeds from sale of oil and gas
properties - 2,473
-------- --------
Net cash provided (used) by investing
activities ($ 5,476) $ 2,145
-------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Cash distributions ($518,920) ($400,848)
-------- --------
Net cash used by financing
activities ($518,920) ($400,848)
-------- --------
NET DECREASE IN CASH AND CASH
EQUIVALENTS ($ 28,347) ($ 81,741)
CASH AND CASH EQUIVALENTS AT
BEGINNING OF PERIOD 604,086 556,249
-------- --------
CASH AND CASH EQUIVALENTS AT
END OF PERIOD $575,739 $474,508
======== ========
The accompanying condensed notes are an integral part of
these financial statements.
-8-
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-C
BALANCE SHEETS
(Unaudited)
ASSETS
March 31, December 31,
2006 2005
------------ ------------
CURRENT ASSETS:
Cash and cash equivalents $1,057,842 $1,013,378
Accounts receivable:
Oil and gas sales 699,924 884,091
Related party (Note 2) 10,461 -
---------- ----------
Total current assets $1,768,227 $1,897,469
NET OIL AND GAS PROPERTIES, utilizing
the successful efforts method 1,693,846 1,544,711
DEFERRED CHARGE 62,603 62,603
---------- ----------
$3,524,676 $3,504,783
========== ==========
LIABILITIES AND PARTNERS' CAPITAL (DEFICIT)
CURRENT LIABILITIES:
Accounts payable $ 218,383 $ 263,892
Gas imbalance payable 67,556 76,928
Asset retirement obligation -
current (Note 1) 20,579 19,679
---------- ----------
Total current liabilities $ 306,518 $ 360,499
LONG-TERM LIABILITIES:
Accrued liability $ 124,681 $ 124,681
Asset retirement obligation
(Note 1) 358,936 355,551
---------- ----------
Total long-term liabilities $ 483,617 $ 480,232
PARTNERS' CAPITAL (DEFICIT):
General Partner ($ 120,353) ($ 105,515)
Limited Partners, issued and
outstanding, 244,536 units 2,854,894 2,769,567
---------- ----------
Total Partners' capital $2,734,541 $2,664,052
---------- ----------
$3,524,676 $3,504,783
========== ==========
The accompanying condensed notes are an integral part of
these financial statements.
-9-
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-C
STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED MARCH 31, 2006 AND 2005
(Unaudited)
2006 2005
---------- ----------
REVENUES:
Oil and gas sales $1,232,981 $954,505
Interest income 7,611 2,423
Other income - 1,741
---------- --------
$1,240,592 $958,669
COSTS AND EXPENSES:
Lease operating $ 185,312 $156,333
Production tax 90,563 64,819
Depreciation, depletion, and
amortization of oil and gas
properties 54,431 52,036
General and administrative
(Note 2) 91,992 89,518
---------- --------
$ 422,298 $362,706
---------- --------
NET INCOME $ 818,294 $595,963
========== ========
GENERAL PARTNER - NET INCOME $ 85,967 $ 63,881
========== ========
LIMITED PARTNERS - NET INCOME $ 732,327 $532,082
========== ========
NET INCOME per unit $ 2.99 $ 2.18
========== ========
UNITS OUTSTANDING 244,536 244,536
========== ========
The accompanying condensed notes are an integral part of
these financial statements.
-10-
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-C
STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS ENDED MARCH 31, 2006 AND 2005
(Unaudited)
2006 2005
------------ ----------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 818,294 $595,963
Adjustments to reconcile net income
to net cash provided by operating
activities:
Depreciation, depletion, and
amortization of oil and gas
properties 54,431 52,036
Settlement of asset retirement
obligation ( 109) -
(Increase) decrease in accounts
receivable - oil and gas sales 184,167 ( 45,477)
Increase in accounts receivable -
related party ( 10,461) -
Increase (decrease) in accounts
payable ( 58,628) 30,654
Decrease in gas imbalance payable ( 9,372) -
---------- --------
Net cash provided by operating
activities $ 978,322 $633,176
---------- --------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures ($ 186,053) ($ 38,757)
---------- --------
Net cash used by investing
activities ($ 186,053) ($ 38,757)
---------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Cash distributions ($ 747,805) ($408,309)
---------- --------
Net cash used by financing
activities ($ 747,805) ($408,309)
---------- --------
NET INCREASE IN CASH AND CASH
EQUIVALENTS $ 44,464 $186,110
CASH AND CASH EQUIVALENTS AT
BEGINNING OF PERIOD 1,013,378 682,792
---------- --------
CASH AND CASH EQUIVALENTS AT
END OF PERIOD $1,057,842 $868,902
========== ========
The accompanying condensed notes are an integral part of
these financial statements.
-11-
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-D
BALANCE SHEETS
(Unaudited)
ASSETS
March 31, December 31,
2006 2005
------------ ------------
CURRENT ASSETS:
Cash and cash equivalents $ 549,346 $ 547,247
Accounts receivable:
Oil and gas sales 436,252 527,187
---------- ----------
Total current assets $ 985,598 $1,074,434
NET OIL AND GAS PROPERTIES, utilizing
the successful efforts method 786,396 651,461
DEFERRED CHARGE 15,342 15,342
---------- ----------
$1,787,336 $1,741,237
========== ==========
LIABILITIES AND PARTNERS' CAPITAL (DEFICIT)
CURRENT LIABILITIES:
Accounts payable $ 139,132 $ 155,178
Accounts payable - related
party (Note 2) 4,547 -
Gas imbalance payable 41,607 42,943
Asset retirement obligation -
current (Note 1) 17,613 17,420
---------- ----------
Total current liabilities $ 202,899 $ 215,541
LONG-TERM LIABILITIES:
Accrued liability $ 153,747 $ 153,747
Asset retirement obligation
(Note 1) 186,115 186,678
---------- ----------
Total long-term liabilities $ 339,862 $ 340,425
PARTNERS' CAPITAL (DEFICIT):
General Partner ($ 37,858) ($ 29,279)
Limited Partners, issued and
outstanding, 131,008 units 1,282,433 1,214,550
---------- ----------
Total Partners' capital $1,244,575 $1,185,271
---------- ----------
$1,787,336 $1,741,237
========== ==========
The accompanying condensed notes are an integral part of
these financial statements.
-12-
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-D
STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED MARCH 31, 2006 AND 2005
(Unaudited)
2006 2005
-------- --------
REVENUES:
Oil and gas sales $714,986 $535,061
Interest income 4,061 1,397
Other income - 249
-------- --------
$719,047 $536,707
COSTS AND EXPENSES:
Lease operating $116,957 $ 88,145
Production tax 51,389 36,578
Depreciation, depletion, and
amortization of oil and gas
properties 33,147 17,037
General and administrative
(Note 2) 60,376 58,146
-------- --------
$261,869 $199,906
-------- --------
NET INCOME $457,178 $336,801
======== ========
GENERAL PARTNER - NET INCOME $ 48,295 $ 35,051
======== ========
LIMITED PARTNERS - NET INCOME $408,883 $301,750
======== ========
NET INCOME per unit $ 3.12 $ 2.30
======== ========
UNITS OUTSTANDING 131,008 131,008
======== ========
The accompanying condensed notes are an integral part of
these financial statements.
-13-
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-D
STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS ENDED MARCH 31, 2006 AND 2005
(Unaudited)
2006 2005
---------- ----------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $457,178 $336,801
Adjustments to reconcile net income
to net cash provided by operating
activities:
Depreciation, depletion, and
amortization of oil and gas
properties 33,147 17,037
Settlement of asset retirement
obligation ( 1,152) -
(Increase) decrease in accounts
receivable - oil and gas sales 90,935 ( 28,306)
Decrease in accounts payable ( 22,901) ( 48,893)
Increase in accounts payable -
related party 4,547 -
Decrease in gas imbalance
payable ( 1,336) -
-------- --------
Net cash provided by operating
activities $560,418 $276,639
-------- --------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures ($160,445) ($ 4,810)
-------- --------
Net cash used by investing
activities ($160,445) ($ 4,810)
-------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Cash distributions ($397,874) ($220,900)
-------- --------
Net cash used by financing
activities ($397,874) ($220,900)
-------- --------
NET INCREASE IN CASH AND CASH
EQUIVALENTS $ 2,099 $ 50,929
CASH AND CASH EQUIVALENTS AT
BEGINNING OF PERIOD 547,247 432,834
-------- --------
CASH AND CASH EQUIVALENTS AT
END OF PERIOD $549,346 $483,763
======== ========
The accompanying condensed notes are an integral part of
these financial statements.
-14-
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-E
BALANCE SHEETS
(Unaudited)
ASSETS
March 31, December 31,
2006 2005
------------ ------------
CURRENT ASSETS:
Cash and cash equivalents $1,492,289 $1,460,559
Accounts receivable:
Oil and gas sales 952,432 1,272,925
---------- ----------
Total current assets $2,444,721 $2,733,484
NET OIL AND GAS PROPERTIES, utilizing
the successful efforts method 1,929,648 1,981,508
DEFERRED CHARGE 40,254 40,254
---------- ----------
$4,414,623 $4,755,246
========== ==========
LIABILITIES AND PARTNERS' CAPITAL (DEFICIT)
CURRENT LIABILITIES:
Accounts payable $ 223,018 $ 324,885
Accrued liability - other (Note 1) 11,865 -
Gas imbalance payable 16,538 16,538
Asset retirement obligation -
current (Note 1) 24,256 23,971
---------- ----------
Total current liabilities $ 275,677 $ 365,394
LONG-TERM LIABILITIES:
Accrued liability $ 254,420 $ 254,420
Asset retirement obligation
(Note 1) 418,581 413,791
---------- ----------
Total long-term liabilities $ 673,001 $ 668,211
PARTNERS' CAPITAL (DEFICIT):
General Partner ($ 245,628) ($ 197,010)
Limited Partners, issued and
outstanding, 418,266 units 3,711,573 3,918,651
---------- ----------
Total Partners' capital $3,465,945 $3,721,641
---------- ----------
$4,414,623 $4,755,246
========== ==========
The accompanying condensed notes are an integral part of
these financial statements.
-15-
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-E
STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED MARCH 31, 2006 AND 2005
(Unaudited)
2006 2005
---------- ----------
REVENUES:
Oil and gas sales $1,299,778 $1,216,684
Interest income 11,108 4,549
Other income 10,740 -
---------- ----------
$1,321,626 $1,221,233
COSTS AND EXPENSES:
Lease operating $ 230,151 $ 274,873
Production tax 83,495 84,095
Depreciation, depletion, and
amortization of oil and gas
properties 71,757 43,786
General and administrative
(Note 2) 140,368 137,518
---------- ----------
$ 525,771 $ 540,272
---------- ----------
NET INCOME $ 795,855 $ 680,961
========== ==========
GENERAL PARTNER - NET INCOME $ 84,933 $ 71,582
========== ==========
LIMITED PARTNERS - NET INCOME $ 710,922 $ 609,379
========== ==========
NET INCOME per unit $ 1.70 $ 1.46
========== ==========
UNITS OUTSTANDING 418,266 418,266
========== ==========
The accompanying condensed notes are an integral part of
these financial statements.
-16-
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-E
STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS ENDED MARCH 31, 2006 AND 2005
(Unaudited)
2006 2005
------------ ------------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 795,855 $ 680,961
Adjustments to reconcile net income
to net cash provided by operating
activities:
Depreciation, depletion, and
amortization of oil and gas
properties 71,757 43,786
Decrease in accounts receivable -
oil and gas sales 320,493 88,269
Decrease in accounts payable ( 40,944) ( 500,577)
Increase in accrued liability -
other 11,865 -
---------- ----------
Net cash provided by operating
activities $1,159,026 $ 312,439
---------- ----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures ($ 75,745) ($ 10,469)
---------- ----------
Net cash used by investing
activities ($ 75,745) ($ 10,469)
---------- ----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Cash distributions ($1,051,551) ($ 370,331)
---------- ----------
Net cash used by financing
activities ($1,051,551) ($ 370,331)
---------- ----------
NET INCREASE (DECREASE) IN CASH AND
CASH EQUIVALENTS $ 31,730 ($ 68,361)
CASH AND CASH EQUIVALENTS AT
BEGINNING OF PERIOD 1,460,559 1,413,497
---------- ----------
CASH AND CASH EQUIVALENTS AT
END OF PERIOD $1,492,289 $1,345,136
========== ==========
The accompanying condensed notes are an integral part of
these financial statements.
-17-
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-F
BALANCE SHEETS
(Unaudited)
ASSETS
March 31, December 31,
2006 2005
------------ ------------
CURRENT ASSETS:
Cash and cash equivalents $ 963,052 $1,062,866
Accounts receivable:
Oil and gas sales 599,445 797,469
---------- ----------
Total current assets $1,562,497 $1,860,335
NET OIL AND GAS PROPERTIES, utilizing
the successful efforts method 1,644,546 1,680,470
DEFERRED CHARGE 17,132 17,132
---------- ----------
$3,224,175 $3,557,937
========== ==========
LIABILITIES AND PARTNERS' CAPITAL (DEFICIT)
CURRENT LIABILITIES:
Accounts payable $ 161,624 $ 176,398
Gas imbalance payable 13,857 13,857
Asset retirement obligation -
current (Note 1) 1,969 1,948
---------- ----------
Total current liabilities $ 177,450 $ 192,203
LONG-TERM LIABILITIES:
Accrued liability $ 84,584 $ 84,584
Asset retirement obligation
(Note 1) 279,705 276,256
---------- ----------
Total long-term liabilities $ 364,289 $ 360,840
PARTNERS' CAPITAL (DEFICIT):
General Partner ($ 114,555) ($ 126,897)
Limited Partners, issued and
outstanding, 221,484 units 2,796,991 3,131,791
---------- ----------
Total Partners' capital $2,682,436 $3,004,894
---------- ----------
$3,224,175 $3,557,937
========== ==========
The accompanying condensed notes are an integral part of
these financial statements.
-18-
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-F
STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED MARCH 31, 2006 AND 2005
(Unaudited)
2006 2005
-------- --------
REVENUES:
Oil and gas sales $861,866 $819,952
Interest income 8,023 2,585
Other income 9,018 -
-------- --------
$878,907 $822,537
COSTS AND EXPENSES:
Lease operating $171,071 $163,857
Production tax 48,119 43,993
Depreciation, depletion, and
amortization of oil and gas
properties 43,775 37,151
General and administrative
(Note 2) 85,567 83,143
-------- --------
$348,532 $328,144
-------- --------
NET INCOME $530,375 $494,393
======== ========
GENERAL PARTNER - NET INCOME $ 56,175 $ 26,076
======== ========
LIMITED PARTNERS - NET INCOME $474,200 $468,317
======== ========
NET INCOME per unit $ 2.14 $ 2.11
======== ========
UNITS OUTSTANDING 221,484 221,484
======== ========
The accompanying condensed notes are an integral part of
these financial statements.
-19-
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-F
STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS ENDED MARCH 31, 2006 AND 2005
(Unaudited)
2006 2005
------------ ----------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 530,375 $494,393
Adjustments to reconcile net income
to net cash provided by operating
activities:
Depreciation, depletion, and
amortization of oil and gas
properties 43,775 37,151
(Increase) decrease in accounts
receivable - oil and gas sales 198,024 ( 14,322)
Increase (decrease) in accounts
payable ( 8,558) 28,213
---------- --------
Net cash provided by operating
activities $ 763,616 $545,435
---------- --------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures ($ 10,597) ($ 7,912)
---------- --------
Net cash used by investing
activities ($ 10,597) ($ 7,912)
---------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Cash distributions ($ 852,833) ($451,091)
---------- --------
Net cash used by financing
activities ($ 852,833) ($451,091)
---------- --------
NET INCREASE (DECREASE) IN CASH AND
CASH EQUIVALENTS ($ 99,814) $ 86,432
CASH AND CASH EQUIVALENTS AT
BEGINNING OF PERIOD 1,062,866 696,460
---------- --------
CASH AND CASH EQUIVALENTS AT
END OF PERIOD $ 963,052 $782,892
========== ========
The accompanying condensed notes are an integral part of
these financial statements.
-20-
GEODYNE ENERGY INCOME PROGRAM III LIMITED PARTNERSHIPS
CONDENSED NOTES TO THE FINANCIAL STATEMENTS
MARCH 31, 2006
(Unaudited)
1. ACCOUNTING POLICIES
-------------------
The balance sheets as of March 31, 2006, statements of operations for the
three months ended March 31, 2006 and 2005, and statements of cash flows
for the three months ended March 31, 2006 and 2005 have been prepared by
Geodyne Resources, Inc., the General Partner of the Partnerships (the
"General Partner"), without audit. In the opinion of management the
financial statements referred to above include all necessary adjustments,
consisting of normal recurring adjustments, to present fairly the
financial position at March 31, 2006, the results of operations for the
three months ended March 31, 2006 and 2005, and the cash flows for the
three months ended March 31, 2006 and 2005.
Information and footnote disclosures normally included in financial
statements prepared in accordance with generally accepted accounting
principles have been condensed or omitted. The accompanying interim
financial statements should be read in conjunction with the Partnerships'
Annual Report on Form 10-K filed for the year ended December 31, 2005. The
results of operations for the period ended March 31, 2006 are not
necessarily indicative of the results to be expected for the full year.
The Limited Partners' net income or loss per unit is based upon each $100
initial capital contribution.
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.
-21-
Depletion of the costs of producing oil and gas properties, amortization
of related intangible drilling and development costs, and depreciation of
tangible lease and well equipment are computed on the unit-of-production
method. The Partnerships' depletion, depreciation, and amortization
includes estimated dismantlement and abandonment costs and estimated
salvage value of the equipment.
When complete units of depreciable property are retired or sold, the asset
cost and related accumulated depreciation are eliminated with any gain or
loss (including the elimination of the asset retirement obligation)
reflected in income. When less than complete units of depreciable property
are retired or sold, the proceeds are credited to oil and gas properties.
ASSET RETIREMENT OBLIGATIONS
----------------------------
The Partnerships' wells must be properly plugged and abandoned after their
oil and gas reserves are exhausted. The Partnerships follow FAS No. 143,
"Accounting for Asset Retirement Obligations" in accounting for the future
expenditures that will be necessary to plug and abandon these wells. FAS
No. 143 requires the estimated plugging and abandonment obligations to be
recognized in the period in which they are incurred (i.e. when the well is
drilled or acquired) if a reasonable estimate of fair value can be made
and to be capitalized as part of the carrying amount of the well.
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. 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 will be adjusted upwards each quarter in
order to recognize accretion of the time-related discount factor. For the
three months ended March 31, 2006, the III-A, III-B, III-C, III-D, III-E,
and III-F Partnerships recognized approximately $9,000, $6,000, $9,000,
$5,000, $12,000, and $7,000, respectively, of an increase in depreciation,
depletion, and amortization expense, which was comprised of accretion of
the asset retirement obligation and depletion of the increase in
capitalized cost of oil and gas properties.
The components of the change in asset retirement obligations for the three
months ended March 31, 2006 and 2005 are as shown below.
-22-
III-A Partnership
-----------------
Three Months Three Months
Ended Ended
3/31/2006 3/31/2005
------------ ------------
Total Asset Retirement
Obligation, January 1 $285,256 $114,955
Accretion expense 3,439 1,150
-------- --------
Total Asset Retirement
Obligation, End of Period $288,695 $116,105
======== ========
Asset Retirement Obligation -
Current $ 18,263 $ 6,589
Asset Retirement Obligation -
Long-Term 270,432 109,516
III-B Partnership
-----------------
Three Months Three Months
Ended Ended
3/31/2006 3/31/2005
------------ ------------
Total Asset Retirement
Obligation, January 1 $184,613 $ 79,865
Accretion expense 2,182 774
-------- --------
Total Asset Retirement
Obligation, End of Period $186,795 $ 80,639
======== ========
Asset Retirement Obligation -
Current $ 10,985 $ 26,223
Asset Retirement Obligation -
Long-Term 175,810 54,416
-23-
III-C Partnership
-----------------
Three Months Three Months
Ended Ended
3/31/2006 3/31/2005
------------ ------------
Total Asset Retirement
Obligation, January 1 $375,230 $204,672
Additions and revisions - 1,069
Settlements and disposals ( 109) -
Accretion expense 4,394 2,095
-------- --------
Total Asset Retirement
Obligation, End of Period $379,515 $207,836
======== ========
Asset Retirement Obligation -
Current $ 20,579 $ 27,005
Asset Retirement Obligation -
Long-Term 358,936 180,831
III-D Partnership
-----------------
Three Months Three Months
Ended Ended
3/31/2006 3/31/2005
------------ ------------
Total Asset Retirement
Obligation, January 1 $204,098 $109,182
Additions and revisions - 155
Settlements and disposals ( 2,732) -
Accretion expense 2,362 1,094
-------- --------
Total Asset Retirement
Obligation, End of Period $203,728 $110,431
======== ========
Asset Retirement Obligation -
Current $ 17,613 $ 3,814
Asset Retirement Obligation -
Long-Term 186,115 106,617
-24-
III-E Partnership
-----------------
Three Months Three Months
Ended Ended
3/31/2006 3/31/2005
------------ ------------
Total Asset Retirement
Obligation, January 1 $437,762 $217,175
Accretion expense 5,075 2,068
-------- --------
Total Asset Retirement
Obligation, End of Period $442,837 $219,243
======== ========
Asset Retirement Obligation -
Current $ 24,256 $ 15,403
Asset Retirement Obligation -
Long-Term 418,581 203,840
III-F Partnership
-----------------
Three Months Three Months
Ended Ended
3/31/2006 3/31/2005
------------ ------------
Total Asset Retirement
Obligation, January 1 $278,204 $150,199
Accretion expense 3,470 1,698
-------- --------
Total Asset Retirement
Obligation, End of Period $281,674 $151,897
======== ========
Asset Retirement Obligation -
Current $ 1,969 $ 6,024
Asset Retirement Obligation -
Long-Term 279,705 145,873
-25-
2. TRANSACTIONS WITH RELATED PARTIES
---------------------------------
The Partnerships' partnership agreements provide for reimbursement to the
General Partner for all direct general and administrative expenses and for
the general and administrative overhead applicable to the Partnerships
based on an allocation of actual costs incurred. During the three months
ended March 31, 2006, the following payments were made to the General
Partner or its affiliates by the Partnerships:
Direct General Administrative
Partnership and Administrative Overhead
----------- ------------------- ---------------
III-A $28,012 $ 69,468
III-B 26,091 36,405
III-C 27,639 64,353
III-D 25,900 34,476
III-E 30,298 110,070
III-F 27,283 58,284
Affiliates of the Partnerships operate certain of the Partnerships'
properties and their policy is to bill the Partnerships for all customary
charges and cost reimbursements associated with their activities.
ACCOUNTS RECEIVABLE - RELATED PARTY
----------------------------------
The Accounts Receivable - Related Party at March 31, 2006 for the III-C
Partnership represents affiliated partnerships' share of oil and gas
production expenses initially paid by the III-C Partnership that have not
yet been reimbursed by the affiliated partnerships as of March 31, 2006.
Such amounts will be received during the second quarter of 2006.
ACCOUNTS PAYABLE - RELATED PARTY
--------------------------------
The Accounts Payable - Related Party at March 31, 2006 for the III-D
Partnership represents the III-D Partnership's share of oil and gas
production expenses initially paid by the III-C Partnership that have not
been reimbursed by the III-D Partnership to the III-C Partnership as of
March 31, 2006. Such amounts will be repaid during the second quarter of
2006.
ACCRUED LIABILITY - OTHER
-------------------------
The Accrued Liability - Other at March 31, 2006 for the III-E Partnership
represents a charge accrued for the settlement of a lawsuit brought by a
royalty owner in the Karon Unit located in Live Oak County, Texas.
-26-
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
USE OF FORWARD-LOOKING STATEMENTS AND ESTIMATES
- -----------------------------------------------
This Quarterly Report contains certain forward-looking statements. The
words "anticipate", "believe", "expect", "plan", "intend", "estimate",
"project", "could", "may" and similar expressions are intended to identify
forward-looking statements. Such statements reflect management's current
views with respect to future events and financial performance. This
Quarterly Report also includes certain information, which is, or is based
upon, estimates and assumptions. Such estimates and assumptions are
management's efforts to accurately reflect the condition and operation of
the Partnerships.
Use of forward-looking statements and estimates and assumptions involve
risks and uncertainties which include, but are not limited to, the
volatility of oil and gas prices, the uncertainty of reserve information,
the operating risk associated with oil and gas properties (including the
risk of personal injury, death, property damage, damage to the well or
producing reservoir, environmental contamination, and other operating
risks), the prospect of changing tax and regulatory laws, the availability
and capacity of processing and transportation facilities, the general
economic climate, the supply and price of foreign imports of oil and gas,
the level of consumer product demand, and the price and availability of
alternative fuels. Should one or more of these risks or uncertainties
occur or should estimates or underlying assumptions prove incorrect,
actual conditions or results may vary materially and adversely from those
stated, anticipated, believed, estimated, and otherwise indicated.
GENERAL
- -------
The Partnerships are engaged in the business of acquiring and operating
producing oil and gas properties located in the continental United States.
In general, a Partnership acquired producing properties and did not engage
in development drilling or enhanced recovery projects, except as an
incidental part of the management of the producing properties acquired.
Therefore, the economic life of each Partnership is limited to the period
of time required to fully produce its acquired oil and gas reserves. The
net proceeds from the oil and gas operations are distributed to the
Limited Partners and the General Partner in accordance with the terms of
the Partnerships' partnership agreements.
-27-
LIQUIDITY AND CAPITAL RESOURCES
- -------------------------------
The Partnerships began operations and investors were assigned their rights
as Limited Partners, having made capital contributions in the amounts and
on the dates set forth below:
Limited
Date of Partner Capital
Partnership Activation Contributions
----------- ------------------ ---------------
III-A November 22, 1989 $26,397,600
III-B January 24, 1990 13,833,600
III-C February 27, 1990 24,453,600
III-D September 5, 1990 13,100,800
III-E December 26, 1990 41,826,600
III-F March 7, 1991 22,148,400
In general, the amount of funds available for acquisition of producing
properties was equal to the capital contributions of the Limited Partners,
less 15% for sales commissions and organization and management fees. All
of the Partnerships have fully invested their capital contributions.
Net proceeds from the operations less necessary operating capital are
distributed to the Limited Partners on a quarterly basis. Revenues and net
proceeds of a Partnership are largely dependent upon the volumes of oil
and gas sold and the prices received for such oil and gas. While the
General Partner cannot predict future pricing trends, it believes the
working capital available as of March 31, 2006 and the net revenue
generated from future operations will provide sufficient working capital
to meet current and future obligations.
Occasional expenditures for new wells, well recompletions, or workovers
may, however, reduce or eliminate cash available for a particular
quarterly distribution. During the three months ended March 31, 2006,
capital expenditures for the III-C and III-D Partnerships totaled $199,000
and $167,000, respectively. These expenditures were primarily due to the
recompletion of the Sugg AA 3067 #1 well located in Irion County, Texas.
The III-C and III-D Partnerships own working interests of approximately
34.2% and 28.6%, respectively, in this well.
Pursuant to the terms of the Partnership Agreements for the Partnerships
(the "Partnership Agreements") the Partnerships were initially scheduled
to terminate on the dates indicated in the "Initial Termination Date"
column of the following chart. However, the Partnership Agreements provide
that the General Partner may extend the term of each Partnership for up to
five periods of two years each. As of the date of this Quarterly Report,
the General Partner has extended the
-28-
terms of the Partnerships for their 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
As of the date of this Quarterly Report, the General Partner has not yet
determined whether to further extend the term of any Partnership.
CRITICAL ACCOUNTING POLICIES
- ----------------------------
The Partnerships follow the successful efforts method of accounting for
their oil and gas properties. Under the successful efforts method, the
Partnerships capitalize all property acquisition costs and development
costs incurred in connection with the further development of oil and gas
reserves. Property acquisition costs include costs incurred by the
Partnerships or the General Partner to acquire producing properties,
including related title insurance or examination costs, commissions,
engineering, legal and accounting fees, and similar costs directly related
to the acquisitions plus an allocated portion of the General Partner's
property screening costs. The acquisition cost to the Partnerships of the
properties acquired by the General Partner is adjusted to reflect the net
cash results of operations, including interest incurred to finance the
acquisition, for the period of time the properties are held by the General
Partner.
Depletion of the cost of producing oil and gas properties, amortization of
related intangible drilling and development costs, and depreciation of
tangible lease and well equipment are computed on the unit-of-production
method. The Partnerships' calculation of depreciation, depletion, and
amortization includes estimated dismantlement and abandonment costs and
estimated salvage value of the equipment. When complete units of
depreciable property are retired or sold, the asset cost and related
accumulated depreciation are eliminated with any gain or loss (including
the elimination of the asset retirement obligation) reflected in income.
When less that complete units of depreciable property are retired or sold,
the proceeds are credited to oil and gas properties.
-29-
The Partnerships evaluate the recoverability of the carrying costs of
their proved oil and gas properties for each oil and gas field (rather
than separately for each well). If the unamortized costs of oil and gas
properties within a field exceeds the expected undiscounted future cash
flows from such properties, the cost of the properties is written down to
fair value, which is determined by using the estimated discounted future
cash flows from the properties. The risk that the Partnerships will be
required to record impairment provisions in the future increases as oil
and gas prices decrease.
The Deferred Charge on the Balance Sheets represents costs deferred for
lease operating expenses incurred in connection with the Partnerships'
underproduced gas imbalance positions. Conversely, the Accrued Liability
represents charges accrued for lease operating expenses incurred in
connection with the Partnerships' overproduced gas imbalance positions.
The rate used in calculating the Deferred Charge and Accrued Liability is
the annual average production costs per Mcf.
The Partnerships' oil and condensate production is sold, title passed, and
revenue recognized at or near the Partnerships' wells under short-term
purchase contracts at prevailing prices in accordance with arrangements
which are customary in the oil and gas industry. Sales of gas applicable
to the Partnerships' interest in producing oil and gas leases are recorded
as revenue when the gas is metered and title transferred pursuant to the
gas sales contracts covering the Partnerships' interest in gas reserves.
During such times as a Partnership's sales of gas exceed its pro rata
ownership in a well, such sales are recorded as revenues unless total
sales from the well have exceeded the Partnership's share of estimated
total gas reserves underlying the property, at which time such excess is
recorded as a liability. The rates per Mcf used to calculate this
liability are based on the average gas prices for which the Partnerships
are currently settling this liability. These amounts were recorded as gas
imbalance payables in accordance with the sales method. These gas
imbalance payables will be settled by either gas production by the
underproduced party in excess of current estimates of total gas reserves
for the well or by negotiated or contractual payment to the underproduced
party.
ASSET RETIREMENT OBLIGATIONS
- ----------------------------
The Partnerships' wells must be properly plugged and abandoned after
their oil and gas reserves are exhausted. The Partnerships follow FAS
No. 143, "Accounting for Asset Retirement Obligations" in accounting
for the future expenditures that will be necessary to plug and abandon
these wells. FAS No. 143 requires the estimated plugging
-30-
and abandonment obligations to be recognized in the period in which they
are incurred (i.e. when the well is drilled or acquired) if a reasonable
estimate of fair value can be made and to be capitalized as part of the
carrying amount of the well.
NEW ACCOUNTING PRONOUNCEMENTS
- -----------------------------
The Partnerships are not aware of any recently issued accounting
pronouncements that would have an impact on the Partnerships' future
results of operations and financial position.
PROVED RESERVES AND NET PRESENT VALUE
- -------------------------------------
The process of estimating oil and gas reserves is complex, requiring
significant subjective decisions in the evaluation of available
geological, engineering, and economic data for each reservoir. The data
for a given reservoir may change substantially over time as a result of,
among other things, additional development activity, production history,
and viability of production under varying economic conditions;
consequently, it is reasonably possible that material revisions to
existing reserve estimates may occur in the future. Although every
reasonable effort has been made to ensure that these reserve estimates
represent the most accurate assessment possible, the significance of the
subjective decisions required and variances in available data for various
reservoirs make these estimates generally less precise than other
estimates presented in connection with financial statement disclosures.
The following tables summarize changes in net quantities of the
Partnerships' proved reserves, all of which are located in the United
States, for the periods indicated. The proved reserves were estimated by
petroleum engineers employed by affiliates of the Partnerships, and are
annually reviewed by an independent engineering firm. "Proved reserves"
refers to those estimated quantities of crude oil, gas, and gas liquids
which geological and engineering data demonstrate with reasonable
certainty to be recoverable in future years from known oil and gas
reservoirs under existing economic and operating conditions. The following
information includes certain gas balancing adjustments which cause the gas
volume to differ from the reserve reports prepared by the General Partner.
-31-
III-A Partnership
-----------------
Crude Natural
Oil Gas
(Barrels) (Mcf)
--------- -----------
Proved reserves, Dec. 31, 2005 96,735 3,483,848
Production ( 6,820) ( 97,516)
Extensions and discoveries 2 3,176
Revisions of previous
estimates ( 215) ( 53,212)
------ ---------
Proved reserves, March 31, 2006 89,702 3,336,296
====== =========
III-B Partnership
-----------------
Crude Natural
Oil Gas
(Barrels) (Mcf)
--------- -----------
Proved reserves, Dec. 31, 2005 60,591 1,408,960
Production ( 4,850) ( 42,417)
Extensions and discoveries 1 1,341
Revisions of previous
estimates 1,364 ( 18,779)
------ ---------
Proved reserves, March 31, 2006 57,106 1,349,105
====== =========
III-C Partnership
-----------------
Crude Natural
Oil Gas
(Barrels) (Mcf)
--------- -----------
Proved reserves, Dec. 31, 2005 89,290 4,704,441
Production ( 2,712) ( 158,163)
Extensions and discoveries 1,473 119,936
Revisions of previous
estimates 2,456 ( 109,182)
------ ---------
Proved reserves, March 31, 2006 90,507 4,557,032
====== =========
-32-
III-D Partnership
-----------------
Crude Natural
Oil Gas
(Barrels) (Mcf)
--------- -----------
Proved reserves, Dec. 31, 2005 83,877 2,407,268
Production ( 2,291) ( 84,478)
Extensions and discoveries 1,215 96,460
Revisions of previous
estimates 658 ( 70,812)
------- ---------
Proved reserves, March 31, 2006 83,459 2,348,438
======= =========
III-E Partnership
-----------------
Crude Natural
Oil Gas
(Barrels) (Mcf)
--------- ------------
Proved reserves, Dec. 31, 2005 150,195 5,309,709
Production ( 4,192) ( 154,777)
Extensions and discoveries 11 143,125
Revisions of previous
estimates ( 3,993) ( 83,964)
------- ---------
Proved reserves, March 31, 2006 142,021 5,214,093
======= =========
III-F Partnership
-----------------
Crude Natural
Oil Gas
(Barrels) (Mcf)
--------- -----------
Proved reserves, Dec. 31, 2005 337,230 3,504,393
Production ( 5,130) ( 79,364)
Extensions and discoveries 7 20
Revisions of previous
estimates 13,117 ( 102,547)
------- ---------
Proved reserves, March 31, 2006 345,224 3,322,502
======= =========
-33-
The net present value of the Partnerships' reserves may change
dramatically as oil and gas prices change or as volumes change for the
reasons described above. Net present value represents estimated future
gross cash flow from the production and sale of proved reserves, net of
estimated oil and gas production costs (including production taxes, ad
valorem taxes, and operating expenses) and estimated future development
costs, discounted at 10% per annum.
The following table indicates the estimated net present value of the
Partnerships' proved reserves as of March 31, 2006 and December 31, 2005.
Net present value attributable to the Partnerships' proved reserves was
calculated on the basis of current costs and prices as of the date of
estimation. Such prices were not escalated except in certain circumstances
where escalations were fixed and readily determinable in accordance with
applicable contract provisions. The table also indicates the gas prices in
effect on the dates corresponding to the reserve valuations. Changes in
the oil and gas prices cause the estimates of remaining economically
recoverable reserves, as well as the values placed on said reserves to
fluctuate. The prices used in calculating the net present value
attributable to the Partnerships' proved reserves do not necessarily
reflect market prices for oil and gas production subsequent to March 31,
2006. There can be no assurance that the prices used in calculating the
net present value of the Partnerships' proved reserves at March 31, 2006
will actually be realized for such production.
Net Present Value of Reserves
-------------------------------------------
Partnership 3/31/06 12/31/05
----------- ----------- -----------
III-A $13,164,434 $18,172,686
III-B 6,084,467 8,094,147
III-C 13,478,529 19,743,674
III-D 7,505,439 10,571,683
III-E 18,021,403 25,351,236
III-F 15,791,540 20,515,797
Oil and Gas Prices
------------------------------------------
Pricing 3/31/06 12/31/05
----------- ----------- -----------
Oil (Bbl) $ 66.25 $ 61.06
Gas (Mcf) 7.18 10.08
RESULTS OF OPERATIONS
- ---------------------
GENERAL DISCUSSION
The following general discussion should be read in conjunction with the
analysis of results of operations provided below.
-34-
The primary source of liquidity and Partnership cash distributions comes
from the net revenues generated from the sale of oil and gas produced from
the Partnerships' oil and gas properties. The level of net revenues is
highly dependent upon the total volumes of oil and natural gas sold. Oil
and gas reserves are depleting assets and will experience production
declines over time, thereby likely resulting in reduced net revenues. The
level of net revenues is also highly dependent upon the prices received
for oil and gas sales, which prices have historically been very volatile
and may continue to be so.
Additionally, lower oil and natural gas prices may reduce the amount of
oil and gas that is economic to produce and reduce the Partnerships'
revenues and cash flow. Various factors beyond the Partnerships' control
will affect prices for oil and natural gas, such as:
* Worldwide and domestic supplies of oil and natural gas;
* The ability of the members of the Organization of Petroleum
Exporting Countries ("OPEC") to agree to and maintain oil
prices and production quotas;
* Political instability or armed conflict in oil-producing
regions or around major shipping areas;
* The level of consumer demand and overall economic activity;
* The competitiveness of alternative fuels;
* Weather conditions 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 decrease at
an even greater rate
-35-
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 the 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 declines in production
experienced on all remaining wells.
III-A PARTNERSHIP
THREE MONTHS ENDED MARCH 31, 2006 COMPARED TO THE THREE MONTHS ENDED MARCH
31, 2005.
Three Months Ended March 31,
-----------------------------
2006 2005
---------- ----------
Oil and gas sales $1,113,320 $1,033,696
Oil and gas production expenses $ 253,418 $ 362,348
Barrels produced 6,820 8,034
Mcf produced 97,516 108,487
Average price/Bbl $ 62.60 $ 45.38
Average price/Mcf $ 7.04 $ 6.17
As shown in the table above, total oil and gas sales increased $80,000
(7.7%) for the three months ended March 31, 2006 as compared to the three
months ended March 31, 2005. Of this increase, $118,000 and $85,000,
respectively, were related to increases in the average prices of oil and
gas sold. These increases were partially offset by decreases of $55,000
and $68,000, respectively, related to decreases in volumes of oil and gas
sold. Volumes of oil and gas sold decreased 1,214 barrels and 10,971 Mcf,
respectively, for the three months ended March 31, 2006 as compared to the
three months ended March 31, 2005. The
-36-
decrease in volumes of oil sold was primarily due to (i) the shutting-in
of one significant well during late 2005 in order to perform a workover
and (ii) normal declines in production. As of the date of this Quarterly
Report, the operator has not yet determined when or if the shut-in well
will return to production, and if returned to production, at what rate.
The decrease in volumes of gas sold was primarily due to (i) normal
declines in production, (ii) positive prior period volume adjustments made
by the operators on two significant wells during the three months ended
March 31, 2005, and (iii) the shutting-in of two other significant wells
during early 2005 in order to perform workovers. As of the date of this
Quarterly Report, the operator has not yet determined when or if the
shut-in wells will return to production, and if returned to production, at
what rate. These decreases were partially offset by a positive prior
period volume adjustment made by the operator on another significant well
during the three months ended March 31, 2006.
Oil and gas production expenses (including lease operating expenses and
production taxes) decreased $109,000 (30.1%) for the three months ended
March 31, 2006 as compared to the three months ended March 31, 2005. This
decrease was primarily due to (i) workover expenses incurred on several
wells during the three months ended March 31, 2005, (ii) a positive prior
period production tax adjustment made by the operator on one significant
well during the three months ended March 31, 2005, and (iii) a decrease in
saltwater disposal expenses incurred on several wells during the three
months ended March 31, 2006 as compared to the three months ended March
31, 2005. As of the date of this Quarterly Report, management anticipates
that the saltwater disposal expenses on these wells will remain at 2006
levels. These decreases were partially offset by (i) workover expenses
incurred on one significant well during the three months ended March 31,
2006 and (ii) an increase in production taxes associated with the increase
in oil and gas sales. As a percentage of oil and gas sales, these expenses
decreased to 22.8% for the three months ended March 31, 2006 from 35.1%
for the three months ended March 31, 2005. This percentage decrease was
primarily due to the dollar decrease in oil and gas production expenses.
Depreciation, depletion, and amortization of oil and gas properties
increased $4,000 (14.6%) for the three months ended March 31, 2006 as
compared to the three months ended March 31, 2005. Of this increase (i)
$6,000 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 during late 2005 and (ii) $2,000 was due to
accretion of these additional asset retirement obligations. This increase
was also due to one significant well being fully depleted during the three
months ended March 31, 2006 due to the lack of remaining reserves. These
increases were partially offset by the decreases in volumes of oil and gas
sold. As a
-37-
percentage of oil and gas sales, this expense increased to 2.5% for the
three months ended March 31, 2006 from 2.3% for the three months ended
March 31, 2005.
General and administrative expenses increased $3,000 (2.6%) for the three
months ended March 31, 2006 as compared to the three months ended March
31, 2005. As a percentage of oil and gas sales, these expenses decreased
to 8.8% for the three months ended March 31, 2006 from 9.2% for the three
months ended March 31, 2005.
The Limited Partners have received cash distributions through March 31,
2006 totaling $42,446,701 or 160.80% of Limited Partners' capital
contributions.
III-B PARTNERSHIP
THREE MONTHS ENDED MARCH 31, 2006 COMPARED TO THE THREE MONTHS ENDED MARCH
31, 2005.
Three Months Ended March 31,
----------------------------
2006 2005
-------- --------
Oil and gas sales $590,471 $525,153
Oil and gas production expenses $155,444 $217,240
Barrels produced 4,850 5,398
Mcf produced 42,417 44,794
Average price/Bbl $ 61.96 $ 45.58
Average price/Mcf $ 6.84 $ 6.23
As shown in the table above, total oil and gas sales increased $65,000
(12.4%) for the three months ended March 31, 2006 as compared to the three
months ended March 31, 2005. Of this increase, $79,000 and $26,000,
respectively, were related to increases in the average prices of oil and
gas sold. These increases were partially offset by decreases of $25,000
and $15,000, respectively, related to decreases in volumes of oil and gas
sold. Volumes of oil and gas sold decreased 548 barrels and 2,377 Mcf,
respectively, for the three months ended March 31, 2006 as compared to the
three months ended March 31, 2005. The decrease in volumes of oil sold was
primarily due to (i) the shutting-in of one significant well during late
2005 in order to perform a workover and (ii) normal declines in
production. As of the date of this Quarterly Report, the operator has not
yet determined when or if the shut-in well will return to production, and
if returned to production, at what rate. 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 Quarterly 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. These decreases were partially
offset by a positive prior period volume
-38-
adjustment made by the operator on another significant well during the
three months ended March 31, 2006.
Oil and gas production expenses (including lease operating expenses and
production taxes) decreased $62,000 (28.4%) for the three months ended
March 31, 2006 as compared to the three months ended March 31, 2005. This
decrease was primarily due to (i) workover expenses incurred on several
wells during the three months ended March 31, 2005, (ii) a positive prior
period production tax adjustment made by the operator on one significant
well during the three months ended March 31, 2005, and (iii) a decrease in
saltwater disposal expenses incurred on several wells during the three
months ended March 31, 2006 as compared to the three months ended March
31, 2005. As of the date of this Quarterly Report, management anticipates
that the saltwater disposal expenses on these wells will remain at 2006
levels. These decreases were partially offset by (i) workover expenses
incurred on one significant well during the three months ended March 31,
2006 and (ii) an increase in production taxes associated with the increase
in oil and gas sales. As a percentage of oil and gas sales, these expenses
decreased to 26.3% for the three months ended March 31, 2006 from 41.4%
for the three months ended March 31, 2005. This percentage decrease was
primarily due to the dollar decrease in oil and gas production expenses.
Depreciation, depletion, and amortization of oil and gas properties
increased $11,000 (244.9%) for the three months ended March 31, 2006 as
compared to the three months ended March 31, 2005. Of this increase (i)
$4,000 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 during late 2005 and (ii) $1,000 was due to
accretion of these additional asset retirement obligations. This increase
was also due to one significant well being fully depleted during the three
months ended March 31, 2006 due to the lack of remaining reserves. As a
percentage of oil and gas sales, this expense increased to 2.6% for the
three months ended March 31, 2006 from 0.9% for the three months ended
March 31, 2005. This percentage increase was primarily due to the dollar
increase in depreciation, depletion, and amortization of oil and gas
properties.
General and administrative expenses increased $2,000 (3.7%) for the three
months ended March 31, 2006 as compared to the three months ended March
31, 2005. As a percentage of oil and gas sales, these expenses decreased
to 10.6% for the three months ended March 31, 2006 from 11.5% for the
three months ended March 31, 2005.
The Limited Partners have received cash distributions through March 31,
2006 totaling $23,535,353 or 170.13% of Limited Partners' capital
contributions.
-39-
III-C PARTNERSHIP
THREE MONTHS ENDED MARCH 31, 2006 COMPARED TO THE THREE MONTHS ENDED MARCH
31, 2005.
Three Months Ended March 31,
----------------------------
2006 2005
---------- --------
Oil and gas sales $1,232,981 $954,505
Oil and gas production expenses $ 275,875 $221,152
Barrels produced 2,712 2,469
Mcf produced 158,163 134,206
Average price/Bbl $ 61.83 $ 46.83
Average price/Mcf $ 6.74 $ 6.25
As shown in the table above, total oil and gas sales increased $278,000
(29.2%) for the three months ended March 31, 2006 as compared to the three
months ended March 31, 2005. Of this increase (i) $11,000 and $150,000,
respectively, were related to increases in the average prices of oil and
gas sold and (ii) $40,000 and $77,000, respectively, were related to
increases in volumes of oil and gas sold. Volumes of oil and gas sold
increased 243 barrels and 23,957 Mcf, respectively, for the three months
ended March 31, 2006 as compared to the three months ended March 31, 2005.
The increase in volumes of oil sold was primarily due to (i) an increase
in production on one significant well following the successful
recompletion of that well during early 2006 and (ii) the successful
completion of several new wells during 2005 and early 2006. These
increases were partially offset by normal declines in production. The
increase in volumes of gas sold was primarily due to (i) the successful
completion of several new wells during 2005 and early 2006 and (ii) an
increase in production on two significant wells following the successful
recompletion of those wells during 2005 and early 2006. These increases
were partially offset by normal declines in production.
Oil and gas production expenses (including lease operating expenses and
production taxes) increased $55,000 (24.7%) for the three months ended
March 31, 2006 as compared to the three months ended March 31, 2005. This
increase was primarily due to (i) workover expenses incurred on several
wells during the three months ended March 31, 2006, (ii) an increase in
production taxes associated with the increase in oil and gas sales, and
(iii) repair and maintenance expenses incurred on several other wells
during the three months ended March 31, 2006. These increases were
partially offset by workover expenses incurred on several wells during the
three months ended March 31, 2005. As a percentage of oil and gas sales,
these expenses decreased to 22.4% for the three months ended March 31,
2006 from 23.2% for the three months ended March 31, 2005.
-40-
Depreciation, depletion, and amortization of oil and gas properties
increased $2,000 (4.6%) for the three months ended March 31, 2006 as
compared to the three months ended March 31, 2005. This increase was
primarily due to (i) an increase in depletable oil and gas properties
during the three months ended March 31, 2006 primarily due to the
recompletion of one significant well and (ii) the increases in volumes of
oil and gas sold. These increases were partially offset by (i) an increase
in depletable oil and gas properties during 2005 primarily due to the
drilling of two developmental wells and (ii) the receipt of an equipment
credit on one fully depleted well during the three months ended March 31,
2006. As a percentage of oil and gas sales, this expense decreased to 4.4%
for the three months ended March 31, 2006 from 5.5% for the three months
ended March 31, 2005. This percentage decrease was primarily due to the
increases in the average prices of oil and gas sold.
General and administrative expenses increased $2,000 (2.8%) for the three
months ended March 31, 2006 as compared to the three months ended March
31, 2005. As a percentage of oil and gas sales, these expenses decreased
to 7.5% for the three months ended March 31, 2006 from 9.4% for the three
months ended March 31, 2005. This percentage decrease was primarily due to
the increase in oil and gas sales.
The Limited Partners have received cash distributions through March 31,
2006 totaling $32,084,795 or 131.21% of Limited Partners' capital
contributions.
III-D PARTNERSHIP
THREE MONTHS ENDED MARCH 31, 2006 COMPARED TO THE THREE MONTHS ENDED MARCH
31, 2005.
Three Months Ended March 31,
----------------------------
2006 2005
-------- --------
Oil and gas sales $714,986 $535,061
Oil and gas production expenses $168,346 $124,723
Barrels produced 2,291 2,399
Mcf produced 84,478 76,715
Average price/Bbl $ 60.30 $ 45.62
Average price/Mcf $ 6.83 $ 5.55
As shown in the table above, total oil and gas sales increased $180,000
(33.6%) for the three months ended March 31, 2006 as compared to the three
months ended March 31, 2005. Of this increase (i) $34,000 and $108,000,
respectively, were related to increases in the average prices of oil and
gas sold and (ii) $43,000 was related to an increase in volumes of gas
sold. These increases were partially offset by a decrease of $5,000
related to a decrease in volumes of oil sold. Volumes of oil sold
decreased 108 barrels, while volumes of gas sold increased 7,763 Mcf for
the three months ended March 31, 2006 as
-41-
compared to the three months ended March 31, 2005. The decrease in volumes
of oil sold was primarily due to normal declines in production. This
decrease was partially offset by (i) an increase in production on one
significant well following the successful recompletion of that well during
early 2006 and (ii) the successful completion of several new wells during
2005 and early 2006. The increase in volumes of gas sold was primarily due
to (i) the successful completion of several new wells during 2005 and
early 2006 and (ii) an increase in production on two significant wells
following the successful recompletion of those wells during 2005 and early
2006. These increases were partially offset by normal declines in
production.
Oil and gas production expenses (including lease operating expenses and
production taxes) increased $44,000 (35.0%) for the three months ended
March 31, 2006 as compared to the three months ended March 31, 2005. This
increase was primarily due to (i) repair and maintenance expenses incurred
on several wells during the three months ended March 31, 2006, (ii) an
increase in production taxes associated with the increase in oil and gas
sales, and (iii) workover expenses incurred on another significant well
during the three months ended March 31, 2006. As a percentage of oil and
gas sales, these expenses remained relatively constant at 23.5% for the
three months ended March 31, 2006 and 23.3% for the three months ended
March 31, 2005.
Depreciation, depletion, and amortization of oil and gas properties
increased $16,000 (94.6%) for the three months ended March 31, 2006 as
compared to the three months ended March 31, 2005. This increase was
primarily due to (i) an increase in depletable oil and gas properties
during the three months ended March 31, 2006 primarily due to the
recompletion of one significant well, (ii) an increase of $3,000 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 during late 2005, and (iii) an increase of $1,000 due to the
accretion of these additional asset retirement obligations. These
increases were partially offset by an increase in depletable oil and gas
properties during 2005 primarily due to the drilling of one developmental
well. As a percentage of oil and gas sales, this expense increased to 4.6%
for the three months ended March 31, 2006 from 3.2% for the three months
ended March 31, 2005. This percentage increase was primarily due to the
dollar increase in depreciation, depletion, and amortization of oil and
gas properties.
General and administrative expenses increased $2,000 (3.8%) for the three
months ended March 31, 2006 as compared to the three months ended March
31, 2005. As a percentage of oil and gas sales, these expenses decreased
to 8.4% for the three months ended March 31, 2006 from 10.9% for the three
months ended March 31, 2005. This percentage decrease was primarily due to
the increase in oil and gas sales.
-42-
The Limited Partners have received cash distributions through March 31,
2006 totaling $17,925,669 or 136.83% of Limited Partners' capital
contributions.
III-E PARTNERSHIP
THREE MONTHS ENDED MARCH 31, 2006 COMPARED TO THE THREE MONTHS ENDED MARCH
31, 2005.
Three Months Ended March 31,
----------------------------
2006 2005
---------- ----------
Oil and gas sales $1,299,778 $1,216,684
Oil and gas production expenses $ 313,646 $ 358,968
Barrels produced 4,192 6,185
Mcf produced 154,777 172,223
Average price/Bbl $ 59.27 $ 43.51
Average price/Mcf $ 6.79 $ 5.50
As shown in the table above, total oil and gas sales increased $83,000
(6.8%) for the three months ended March 31, 2006 as compared to the three
months ended March 31, 2005. Of this increase $66,000 and $200,000,
respectively, were related to increases in the average prices of oil and
gas sold. These increases were partially offset by decreases of $87,000
and $96,000, respectively, related to decreases in volumes of oil and gas
sold. Volumes of oil and gas sold decreased 1,993 barrels and 17,446 Mcf,
respectively, for the three months ended March 31, 2006 as compared to the
three months ended March 31, 2005. 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 2005 and early 2006 in
order to perform a workover. As of the date of this Quarterly Report, the
shut-in well has returned to production at a rate lower than previously
experienced. The decrease in volumes of gas sold was primarily due to
normal declines in production.
Oil and gas production expenses (including lease operating expenses and
production taxes) decreased $45,000 for the three months ended March 31,
2006 as compared to the three months ended March 31, 2005. As a percentage
of oil and gas sales, these expenses decreased to 24.1% for the three
months ended March 31, 2006 from 29.5% for the three months ended March
31, 2005. This percentage decrease was primarily due to (i) the dollar
decrease in oil and gas production expenses and (ii) the increase in oil
and gas sales.
Depreciation, depletion, and amortization of oil and gas properties
increased $28,000 (63.9%) for the three months ended March 31, 2006 as
compared to the three months ended March 31, 2005. This increase was
primarily due to (i) one significant well being fully depleted during the
three months ended March 31, 2006 due to the lack of remaining
-43-
reserves, (ii) an increase of $7,000 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 during late
2005, and (iii) an increase of $3,000 due to the accretion of these
additional asset retirement obligations. As a percentage of oil and gas
sales, this expense increased to 5.5% for the three months ended March 31,
2006 from 3.6% for the three months ended March 31, 2005. This percentage
increase was primarily due to the dollar increase in depreciation,
depletion, and amortization of oil and gas properties.
General and administrative expenses increased $3,000 (2.1%) for the three
months ended March 31, 2006 as compared to the three months ended March
31, 2005. As a percentage of oil and gas sales, these expenses decreased
to 10.8% for the three months ended March 31, 2006 from 11.3% for the
three months ended March 31, 2005.
The Limited Partners have received cash distributions through March 31,
2006 totaling $52,877,016 or 126.42% of Limited Partners' capital
contributions.
III-F PARTNERSHIP
THREE MONTHS ENDED MARCH 31, 2006 COMPARED TO THE THREE MONTHS ENDED MARCH
31, 2005.
Three Months Ended March 31,
----------------------------
2006 2005
-------- --------
Oil and gas sales $861,866 $819,952
Oil and gas production expenses $219,190 $207,850
Barrels produced 5,130 5,389
Mcf produced 79,364 100,250
Average price/Bbl $ 58.76 $ 46.66
Average price/Mcf $ 7.06 $ 5.67
As shown in the table above, total oil and gas sales increased $42,000
(5.1%) for the three months ended March 31, 2006 as compared to the three
months ended March 31, 2005. Of this increase $62,000 and $110,000,
respectively, were related to increases in the average prices of oil and
gas sold. These increases were partially offset by decreases of $12,000
and $118,000, respectively, related to decreases in volumes of oil and gas
sold. Volumes of oil and gas sold decreased 259 barrels and 20,886 Mcf,
respectively, for the three months ended March 31, 2006 as compared to the
three months ended March 31, 2005. The decrease in volumes of oil sold was
primarily due to normal declines in production, which decrease was
partially offset by an increase in production on one significant well
following the successful recompletion of that well during 2005. The
decrease in volumes of gas sold was primarily due to (i) normal declines
in production and (ii) the shutting-in of one significant well during the
three months ended
-44-
March 31, 2006 in order to perform repairs and maintenance. As of the date
of this Quarterly Report, the shut-in well is expected to return to
production in mid 2006.
Oil and gas production expenses (including lease operating expenses and
production taxes) increased $11,000 (5.5%) for the three months ended
March 31, 2006 as compared to the three months ended March 31, 2005. As a
percentage of oil and gas sales, these expenses remained relatively
constant at 25.4% for the three months ended March 31, 2006 and 25.3% for
the three months ended March 31, 2005.
Depreciation, depletion, and amortization of oil and gas properties
increased $7,000 (17.8%) for the three months ended March 31, 2006 as
compared to the three months ended March 31, 2005. This increase was
primarily due to (i) downward revisions in the estimates of remaining gas
reserves since March 31, 2005, (ii) an increase of $3,000 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 during late 2005, and (iii) an increase of $2,000 due to the
accretion of these additional asset retirement obligations. These
increases were partially offset by the decreases in volumes of oil and gas
sold. As a percentage of oil and gas sales, this expense increased to 5.1%
for the three months ended March 31, 2006 from 4.5% for the three months
ended March 31, 2005. This percentage increase was primarily due to the
dollar increase in depreciation, depletion, and amortization of oil and
gas properties.
General and administrative expenses increased $2,000 (2.9%) for the three
months ended March 31, 2006 as compared to the three months ended March
31, 2005. As a percentage of oil and gas sales, this expense decreased to
9.9% for the three months ended March 31, 2006 from 10.1% for the three
months ended March 31, 2005.
The III-F Partnership achieved payout during the first quarter of 2006.
After payout, operations and revenues for the III-F Partnership have been
and 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. Before payout, operating income
and expenses were allocated 5% to the General Partner and 95% to the
Limited Partners.
The Limited Partners have received cash distributions through March 31,
2006 totaling $22,561,904 or 101.87% of Limited Partners' capital
contributions.
-45-
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
The Partnerships do not hold any market risk sensitive instruments.
ITEM 4. CONTROLS AND PROCEDURES
As of the end of the period covered by this report, the principal
executive officer and principal financial officer conducted an
evaluation of the Partnerships' disclosure controls and procedures
(as defined in Rules 13a-15(e) and 15d-15(e) under the Securities
and Exchange Act of 1934). Based on this evaluation, such officers
concluded that the Partnerships' disclosure controls and procedures
are effective to ensure that information required to be disclosed by
the Partnerships in reports filed under the Exchange Act is
recorded, processed, summarized, and reported accurately and within
the time periods specified in the Securities and Exchange Commission
rules and forms.
-46-
PART II. OTHER INFORMATION
ITEM 6. EXHIBITS
31.1 Certification by Dennis R. Neill required by Rule
13a-14(a)/15d-14(a) for the III-A Partnership.
31.2 Certification by Craig D. Loseke required by Rule
13a-14(a)/15d-14(a) for the III-A Partnership.
31.3 Certification by Dennis R. Neill required by Rule
13a-14(a)/15d-14(a) for the III-B Partnership.
31.4 Certification by Craig D. Loseke required by Rule
13a-14(a)/15d-14(a) for the III-B Partnership.
31.5 Certification by Dennis R. Neill required by Rule
13a-14(a)/15d-14(a) for the III-C Partnership.
31.6 Certification by Craig D. Loseke required by Rule
13a-14(a)/15d-14(a) for the III-C Partnership.
31.7 Certification by Dennis R. Neill required by Rule
13a-14(a)/15d-14(a) for the III-D Partnership.
31.8 Certification by Craig D. Loseke required by Rule
13a-14(a)/15d-14(a) for the III-D Partnership.
31.9 Certification by Dennis R. Neill required by Rule
13a-14(a)/15d-14(a) for the III-E Partnership.
31.10 Certification by Craig D. Loseke required by Rule
13a-14(a)/15d-14(a) for the III-E Partnership.
31.11 Certification by Dennis R. Neill required by Rule
13a-14(a)/15d-14(a) for the III-F Partnership.
31.12 Certification by Craig D. Loseke required by Rule
13a-14(a)/15d-14(a) for the III-F Partnership.
32.1 Certification pursuant to 18 U.S.C. Section 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 for the
III-A Partnership.
32.2 Certification pursuant to 18 U.S.C. Section 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 for the
III-B Partnership.
32.3 Certification pursuant to 18 U.S.C. Section 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 for the
III-C Partnership.
32.4 Certification pursuant to 18 U.S.C. Section 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 for the
III-D Partnership.
-47-
32.5 Certification pursuant to 18 U.S.C. Section 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 for the
III-E Partnership.
32.6 Certification pursuant to 18 U.S.C. Section 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 for the
III-F Partnership.
-48-
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-A
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-B
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-C
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-D
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-E
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-F
(Registrant)
BY: GEODYNE RESOURCES, INC.
General Partner
Date: May 12, 2006 By: /s/Dennis R. Neill
--------------------------------
(Signature)
Dennis R. Neill
President
Date: May 12, 2006 By: /s/Craig D. Loseke
--------------------------------
(Signature)
Craig D. Loseke
Chief Accounting Officer
-49-
INDEX TO EXHIBITS
-----------------
Exh.
No. Exhibit
- ---- -------
31.1 Certification by Dennis R. Neill required by Rule
13a-14(a)/15d-14(a) for the Geodyne Energy Income Limited
Partnership III-A.
31.2 Certification by Craig D. Loseke required by Rule
13a-14(a)/15d-14(a) for the Geodyne Energy Income Limited
Partnership III-A.
31.3 Certification Dennis R. Neill required by Rule
13a-14(a)/15d-14(a) for the Geodyne Energy Income Limited
Partnership III-B.
31.4 Certification Craig D. Loseke required by Rule
13a-14(a)/15d-14(a) for the Geodyne Energy Income Limited
Partnership III-B.
31.5 Certification by Dennis R. Neill required by Rule
13a-14(a)/15d-14(a) for the Geodyne Energy Income Limited
Partnership III-C.
31.6 Certification by Craig D. Loseke required by Rule
13a-14(a)/15d-14(a) for the Geodyne Energy Income Limited
Partnership III-C.
31.7 Certification by Dennis R. Neill required by Rule
13a-14(a)/15d-14(a) for the Geodyne Energy Income Limited
Partnership III-D.
31.8 Certification by Craig D. Loseke required by Rule
13a-14(a)/15d-14(a) for the Geodyne Energy Income Limited
Partnership III-D.
31.9 Certification by Dennis R. Neill required by Rule
13a-14(a)/15d-14(a) for the Geodyne Energy Income Limited
Partnership III-E.
31.10 Certification by Craig D. Loseke required by Rule
13a-14(a)/15d-14(a) for the Geodyne Energy Income Limited
Partnership III-E.
31.11 Certification by Dennis R. Neill required by Rule
13a-14(a)/15d-14(a) for the Geodyne Energy Income Limited
Partnership III-F.
31.12 Certification by Craig D. Loseke required by Rule
13a-14(a)/15d-14(a) for the Geodyne Energy Income Limited
Partnership III-F.
-50-
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.
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