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, 2006
Commission File Number: P-1: 0-17800; P-3: 0-18306;
P-4: 0-18308; P-5: 0-18637; P-6: 0-18937
GEODYNE INSTITUTIONAL/PENSION ENERGY INCOME P-1 LIMITED PARTNERSHIP
GEODYNE INSTITUTIONAL/PENSION ENERGY INCOME LIMITED PARTNERSHIP P-3
GEODYNE INSTITUTIONAL/PENSION ENERGY INCOME LIMITED PARTNERSHIP P-4
GEODYNE INSTITUTIONAL/PENSION ENERGY INCOME LIMITED PARTNERSHIP P-5
GEODYNE INSTITUTIONAL/PENSION ENERGY INCOME LIMITED PARTNERSHIP P-6
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(Exact name of Registrant as specified in its Articles)
P-1: Texas P-1: 73-1330245
P-3: Oklahoma P-3: 73-1336573
P-4: Oklahoma P-4: 73-1341929
P-5: Oklahoma P-5: 73-1353774
P-6: Oklahoma P-6: 73-1357375
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
Two West Second Street, Tulsa, Oklahoma 74103
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(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 No X
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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 No X
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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
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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.
Yes X No
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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.
Disclosure is not contained herein
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X Disclosure is contained herein
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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
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Accelerated filer
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X Non-accelerated filer
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Indicate by check mark whether the Registrant is a shell company (as
defined in Rule 12b-2 of the Exchange Act).
Yes No X
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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..............................................10
ITEM 1B. UNRESOLVED STAFF COMMENTS.................................15
ITEM 2. PROPERTIES................................................15
ITEM 3. LEGAL PROCEEDINGS.........................................34
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF LIMITED PARTNERS.......34
PART II.....................................................................34
ITEM 5. MARKET FOR UNITS, RELATED LIMITED PARTNER MATTERS, AND
ISSUER PURCHASES OF UNITS.................................34
ITEM 6. SELECTED FINANCIAL DATA...................................37
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS.......................43
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT
MARKET RISK...............................................68
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA...............68
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL DISCLOSURE.......................68
ITEM 9A. CONTROLS AND PROCEDURES...................................69
ITEM 9B. OTHER INFORMATION.........................................69
PART III....................................................................69
ITEM 10. DIRECTORS, EXECUTIVE OFFICERS OF THE GENERAL PARTNER,
AND CORPORATE GOVERNANCE..................................69
ITEM 11. EXECUTIVE COMPENSATION....................................71
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
AND MANAGEMENT............................................78
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS AND
DIRECTOR INDEPENDENCE.....................................79
ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES....................81
PART IV.....................................................................82
ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES................82
SIGNATURES..................................................................94
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PART I.
ITEM 1. BUSINESS
General
The Geodyne Institutional/Pension Energy Income P-1 Limited Partnership
(the "P-1 Partnership") is a limited partnership formed under the Texas Revised
Limited Partnership Act and the Geodyne Institutional/Pension Energy Income
Limited Partnership P-3 (the "P-3 Partnership"), Geodyne Institutional/Pension
Energy Income Limited Partnership P-4 (the "P-4 Partnership"), Geodyne
Institutional/Pension Energy Income Limited Partnership P-5 (the "P-5
Partnership"), and Geodyne Institutional/Pension Energy Income Limited
Partnership P-6 (the "P-6 Partnership") are limited partnerships formed under
the Oklahoma Revised Uniform Limited Partnership Act (collectively, the
"Partnerships"). Each Partnership is composed of Geodyne Resources, Inc.
("Geodyne"), a Delaware corporation, as the general partner, Geodyne
Institutional Depository 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
----------- -----------------
P-1 October 25, 1988
P-3 May 10, 1989
P-4 November 21, 1989
P-5 February 27, 1990
P-6 September 5, 1990
Immediately following activation, each Partnership invested as a general
partner in a separate Oklahoma general partnership which actually conducts the
Partnerships' operations. Geodyne serves as managing partner of such general
partnerships. Unless the context indicates otherwise, all references to any
single Partnership or all of the Partnerships in this Annual Report on Form 10-K
("Annual Report") are references to the Partnership and its related general
partnership, collectively. In addition, unless the context indicates otherwise,
all references to the "General Partner" in this Annual Report are references to
Geodyne as the general partner of the Partnerships, and as the managing partner
of the related general partnerships.
The General Partner currently serves as general partner of 26 limited
partnerships, including the Partnerships. The General Partner 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, 2006, Samson owned interests in
approximately 12,000 oil
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and gas wells located in 19 states of the United States, Alberta Canada and the
United Kingdom North Sea. At December 31, 2006, Samson operated approximately
4,000 oil and gas wells located in 15 states of the United States, as well as
Alberta Canada.
Until liquidation (see "Partnership Termination" below), the Partnerships
are engaged in the business of owning net profits and royalty interests in oil
and gas properties located in the continental United States. Most of the net
profits interests acquired by the Partnerships have been carved out of working
interests in producing properties ("Working Interests") which were acquired by
affiliated oil and gas investment programs (the "Affiliated Programs"). Net
profits interests entitle the Partnerships to a share of net revenues from
producing properties measured by a specific percentage of the net profits
realized by such Affiliated Programs on those properties. Except where otherwise
noted, references to certain operational activities of the Partnerships are
actually the activities of the Affiliated Programs. As the holder of a net
profits interest, a Partnership is not liable to pay any amount by which oil and
gas operating costs and expenses exceed revenues for any period, although any
deficit, together with interest, is applied to reduce the amounts payable to the
Partnership in subsequent periods. As used throughout this Annual Report, the
Partnerships' net profits and royalty interests in oil and gas sales will be
referred to as "Net Profits" and the Partnerships' net profits and royalty
interests in oil and gas properties will be collectively referred to as "Net
Profits Interests."
In order to prudently manage the properties which are burdened by the
Partnerships' Net Profits Interests, it may be appropriate for drilling
operations to be conducted on such properties. Since the Partnerships' Net
Profits are calculated after considering such costs, the Partnerships also
indirectly engage in development drilling.
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, 2007, Samson employed approximately 1,200 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, and Corporate
Governance."
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].
Partnership Termination
Pursuant to the terms of the partnership agreements for the Partnerships
(the "Partnership Agreements"), the Partnerships would have terminated on
December 31, 2005. However, the Partnership Agreements provide that the General
Partner may extend the term of each
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Partnership for up to five periods of two years each. The General Partner has
extended the terms of the Partnerships for the first two-year period to December
31, 2007. On February 5, 2007, the General Partner mailed a notice to the
limited partners announcing that the Partnerships will terminate at the end of
their current term, December 31, 2007. See "Item 7. Management's Discussion and
Analysis of Financial Condition and Results of Operations" for more information
regarding the termination and liquidation of the Partnerships.
Funding
Although the partnership agreement for each Partnership (the "Partnership
Agreement") permits each Partnership to incur borrowings, operations and
expenses are currently funded out of revenues from each Partnership's Net
Profits Interests. The General Partner may, but is not required to, advance
funds to a Partnership for the same purposes for which Partnership borrowings
are authorized.
Principal Products Produced and Services Rendered
The Partnerships' sole business is the holding of certain Net Profits
Interests. 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 increase the costs of
any future workover, recompletion or drilling activities indirectly 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. During the past year, the sale of oil and
gas properties has also generated significant revenues for the Partnerships. 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.
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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 and proximity of pipelines for transportation;
* Domestic and foreign government regulations and taxes;
* Market expectations; and
* The effect of worldwide energy conservation.
It is not possible to predict the future direction of oil or natural gas
prices. 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.
As discussed in "Item 7. Management's Discussion and Analysis of Financial
Condition and Results of Operations," the Partnerships will terminate on
December 31, 2007. The volumes, pricing, and expense factors discussed above may
also impact the price the Partnerships receive for their oil and gas properties
in connection with the liquidation of the Partnerships' assets.
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Significant Customers
The following customers accounted for ten percent or more of the oil and
gas sales attributable to the Partnerships' Net Profits Interests during the
year ended December 31, 2006:
Partnership Customer Percentage
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P-1 Chevron North American
Exploration & Production
Company 10.4%
P-3 Duke Energy Field Services,
Inc. ("Duke") 11.2%
P-4 ConocoPhillips Company 32.4%
Gulfterra Central Point
Allocation 18.5%
Enogex Services Corporation
("Enogex") 10.5%
P-5 Enogex 16.3%
NGPL Allocation 11.8%
P-6 Duke 18.0%
Kinder Morgan, Inc. 15.5%
Eaglwing Trading, Inc. 10.2%
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 pipeline transporters, the Partnerships may
encounter difficulty in marketing 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 in which the Partnerships own Net Profits Interests. 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
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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 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. Although virtually all of
the natural gas production affecting the Partnerships 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' Net Profits and projections of future Net Profits.
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 -- Oil and gas operations are subject to
numerous laws and regulations governing the discharge of materials into the
environment or otherwise relating to the protection of environmental,
biological, cultural and aesthetic resources. Compliance with such laws and
regulations, together with any penalties resulting from noncompliance, may
decrease the Partnerships' Net Profits. Management anticipates that various
local, state, and federal environmental control agencies will have an increasing
impact on oil and gas operations.
Insurance Coverage
Exploration for and production of oil and gas are subject to many inherent
risks, including blowouts, pollution, fires, and other casualties. The
Partnerships maintain insurance coverage as is customary for entities of a
similar size engaged in similar operations, but losses can occur from
uninsurable risks or in amounts in excess of existing insurance coverage. For
example, 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 in that it could negatively impact the cash
flow received from the Net Profits Interests.
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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 combined 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.
Termination of Partnerships in 2007
-----------------------------------
The Partnerships will terminate on December 31, 2007. Upon termination, we
will sell the Partnerships' properties. There is no assurance that the market
for the Partnerships' properties will be favorable at that time. The market for
oil and gas properties is highly dependent on current and anticipated future
prices for oil and gas. These prices fluctuate due to a number of uncontrollable
factors as described in the following paragraph. A decrease in oil and gas
prices and/or anticipated future oil and gas prices would probably depress the
market for oil and gas properties and result in lowered sales proceeds to the
Partnerships.
Oil And Natural Gas Prices Fluctuate Due To A Number Of
--------------------------------------------------------
Uncontrollable Factors, And Any Decline Will Adversely Affect The
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Partnerships' Financial Condition.
----------------------------------
The Partnerships' results of operations depend upon the prices they
receive for their oil and natural gas as well as the sales of oil and gas
properties pursuant to the liquidation plan described in "Item 7. Management's
Discussion and Analysis of Financial Condition and Results of Operations." 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:
* Worldwide and domestic supplies of oil and natural gas;
* The ability of the members of 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 and proximity of pipelines for transportation;
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* Domestic and foreign government regulations and taxes;
* Market expectations; and
* The effect of worldwide energy conservation.
Government regulations, such as regulation of natural gas transportation
and price controls, can affect product prices. 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." Furthermore, significant price declines
will negatively affect the ultimate cash received upon the sale of oil and gas
properties in liquidation of the Partnerships.
Reserve Estimates Depend On Many Assumptions That May Turn Out To
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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. 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
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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".
We have included in Note 7 to the financial statements included in this
Annual Report unaudited combined balance sheets for the Partnerships which are
prepared on a liquidation basis, rather than a going concern basis, due to
Partnership termination on December 31, 2007. However, while these balance
sheets are prepared with the intent of showing fair value, they are also based
on estimates regarding future net cash flows until the properties are sold as
well as the prices which may be received for the properties through the
liquidation process. Actual current and future prices and costs as well as the
prices buyers are willing to pay at the time the properties are sold may differ
materially from the estimates used in the preparation of the unaudited
liquidation basis combined balance sheets.
Drilling Oil And Natural Gas Wells Is A High-Risk Activity And
--------------------------------------------------------------
Subjects Us To A Variety Of Factors That We Cannot Control.
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Drilling oil and natural gas wells, including development wells, involves
numerous risks, including the risk that the Affiliated Programs may not
encounter commercially productive oil and natural gas reservoirs. While the
Affiliated Programs do not expend a significant portion of their capital on
drilling activities, to the extent they do drill wells this can be a significant
indirect risk factor to the Partnerships. The Affiliated Programs 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 the Partnerships' 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
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Upon Transportation And Processing Facilities Over Which We Have
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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 them. Secondary
market activity for the Units has been limited and varies among the
Partnerships. The General Partner's annual repurchase offer was terminated on
March 9, 2007 in anticipation of the Partnerships' termination at December 31,
2007. Therefore, you may only sell your Units via (i) occasional "4.9% tender
offers" which are made for the Units and (ii) transfers facilitated by secondary
trading firms and matching services. To ensure that the proper parties receive
their share of the Partnerships' liquidation proceeds, the General Partner will
not accept, process, or recognize any transfers of Units (with the exception of
certain transactions between related persons) for which completed transfer
documentation is not mailed to the General Partner with a postmark on or before
June 30, 2007. Accordingly, there will be no market for the Partnerships' Units
after June 30, 2007. See "Item 5. Market for Units, Related Limited Partner
Matters, and Issuer Purchases of Units."
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The Partnerships Are Subject To Complex Federal, State And Local
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Laws And Regulations That Could Adversely Affect Their Business.
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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 in the normal course of business as
well as in the liquidation process. See "Item 13. Certain Relationships and
Related Transactions and Director Independence."
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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.
ITEM 2. PROPERTIES
Well Statistics
The following table sets forth the number of productive wells as of
December 31, 2006 in which the Partnerships had a Net Profits Interest which was
carved from a working interest.
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P/ship Number of Wells(1)
------ ---------------------------
Total Oil Gas
----- --- ---
P-1 793 576 217
P-3 833 578 255
P-4 206 50 156
P-5 123 23 100
P-6 177 40 137
- ---------------
(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.
Drilling Activities
During the year ended December 31, 2006, the Partnerships indirectly
participated (through their Net Profits Interests) in the developmental drilling
activities described below.
[Remainder of Page Intentionally Left Blank]
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P-1 PARTNERSHIP
- ---------------
WORKING REVENUE
WELL NAME COUNTY ST. INTEREST INTEREST TYPE STATUS
- --------- ------ --- -------- -------- ---- ------
Bennett A #1 Yoakum TX - 0.00047 Oil Producing
Cochran #1 Pecos TX - 0.00094 Gas Producing
Daberry #8-1 Wheeler TX - 0.00199 Gas Producing
Hester 12-4 Lea NM - 0.00070 Oil Shut-in
Hester #12-5 Lea NM - 0.00070 Gas In Progress
Hester 12 6 Lea NM - 0.00070 Oil Shut-in
Marshall #1 Howard TX - 0.00751 Gas Shut-in
Miers W A #19 Sutton TX - 0.00024 Gas Producing
Pettitfils J.D. A #12 Mitchell TX - 0.00313 Oil In progress
Simpson Canyon #2027 Crockett TX - 0.00333 Oil Producing
Simpson Canyon #3044 Crockett TX - 0.00751 Oil Producing
Smith 18 #1 Lynn TX - 0.00188 Gas Dryhole
Southland Royalty D #4 Andrews TX 0.00751 0.00751 Oil Producing
Wilson A #3 Roger Mills OK 0.00015 0.00015 Gas Producing
[Remainder of Page Intentionally Left Blank]
-17-
P-3 PARTNERSHIP
- ---------------
WORKING REVENUE
WELL NAME COUNTY ST. INTEREST INTEREST TYPE STATUS
- --------- ------ --- -------- -------- ---- ------
Bennett A #1 Yoakum TX - 0.00059 Oil Producing
Cochran #1 Pecos TX - 0.00118 Gas Producing
Daberry #8-1 Wheeler TX - 0.00250 Gas Producing
Hester 12-4 Lea NM - 0.00088 Oil Producing
Hester #12-5 Lea NM - 0.00088 Gas In progress
Hester 12 6 Lea NM - 0.00088 Oil Shut-in
Hoyt #1C (DK) Rio Arriba NM - 0.00004 Gas In Progress
Hoyt #1C (MV) Rio Arriba NM - 0.00013 Gas Shut-in
Jenny #1C Rio Arriba NM - 0.00040 Gas Producing
Jicarilla B #1B Rio Arriba NM - 0.00005 Gas Producing
Marshall #1 Howard TX - 0.00946 Gas Shut-in
Miers W A #19 Sutton TX - 0.00030 Gas Producing
Oliver #1 McClain OK - 0.00198 Oil Producing
Pettitfils J.D. A #12 Mitchell TX - 0.00394 Oil In Progress
Simpson Canyon #2027 Crockett TX - 0.00420 Oil Producing
Simpson Canyon #3044 Crockett TX - 0.00946 Oil Producing
Smith 18 #1 Lynn TX - 0.00236 Gas Dryhole
Southland Royalty D #4 Andrews TX 0.00946 0.00946 Oil Producing
Tafoya #35-5 San Juan NM - 0.00076 Gas Producing
Wilson A #3 Roger Mills OK 0.00019 0.00019 Gas Producing
P-4 PARTNERSHIP
- ---------------
WORKING REVENUE
WELL NAME COUNTY ST. INTEREST INTEREST TYPE STATUS
- --------- ------ --- -------- -------- ---- ------
Clayton #11-9 Washita OK - 0.00155 Gas Producing
Hachar #41 Webb TX - 0.00351 Gas Producing
Hoyt #1C (DK) Rio Arriba NM - 0.00007 Gas In Progress
Hoyt #1C (MV) Rio Arriba NM - 0.00023 Gas Shut-in
Jenny #1C Rio Arriba NM - 0.00073 Gas Producing
Jicarilla B #1B Rio Arriba NM - 0.00010 Gas Producing
Phillips #1-22 Caddo OK - 0.00101 Gas Producing
Ringo #10-9 Washita OK - 0.00166 Gas Producing
Tafoya #35-5 San Juan NM - 0.00139 Gas Producing
-18-
P-5 PARTNERSHIP
- ---------------
WORKING REVENUE
WELL NAME COUNTY ST. INTEREST INTEREST TYPE STATUS
- --------- ------ --- -------- -------- ---- ------
Aday #1-9 McClain OK - 0.00173 Gas Producing
Bridges #2-18 LeFlore OK - 0.00024 Gas Producing
Camel, Joe #3 Lea NM - 0.00118 Oil In Progress
Cantrell #7-15H Haskell OK - 0.00094 Gas Producing
Cheyenne 29 #5 Roger Mills OK - 0.00006 Gas Producing
Cory #1-29 Kingfisher OK - 0.00313 Gas Producing
Davis Garry #26 Kay OK - 0.00067 Oil Producing
Delaware 28 #6 Roger Mills OK - 0.00006 Gas Producing
Delaware 28 #7 Roger Mills OK - 0.00006 Gas In progress
Duncan #2-7H Seminole OK - 0.00015 Oil Producing
Gilbert A #1 Caddo OK - 0.00189 Gas Producing
Grace #1-H Lincoln OK - 0.00244 Gas Producing
Guinn #1-5 Coal OK - 0.00427 Gas Producing
Harris #5-26H Haskell OK - 0.00052 Gas Producing
Hay #10-33 Roger Mills OK - 0.00013 Gas Producing
Hefley #2-36 Wheeler TX - 0.00559 Gas Producing
Hefley #3-37 Wheeler TX - 0.00560 Gas Producing
Hefley #16-47 Wheeler TX - 0.00839 Gas Producing
Hefley #20-47 Wheeler TX - 0.00839 Gas Producing
Hefley #27-47 Wheeler TX - 0.00839 Gas Producing
Hefley #32-47 Wheeler TX - 0.00839 Gas Producing
Helton #7-60 Wheeler TX - 0.00252 Gas Producing
Helton #8-60 Wheeler TX - 0.00252 Gas Producing
Helton #10A-60 Wheeler TX - 0.00252 Gas Producing
Helton #11-60 Wheeler TX - 0.00252 Gas Producing
Helton #14-60 Wheeler TX - 0.00252 Gas Producing
Hinkle #4-28 Washita OK - 0.00370 Gas Producing
Hinkle Trust #5-33 Washita OK - 0.00079 Gas Producing
Hubbard #2-13 Beckham OK - 0.00065 Gas Producing
Litz #1R-2 Harper OK 0.00460 0.00460 Gas Producing
McWilliams #2H-23 Pittsburg OK - 0.00028 Gas Producing
Melvin #1H-20 Hughes OK 0.00142 0.00142 Gas Producing
Mooney #1H-19 Hughes OK 0.00155 0.00155 Gas Producing
Morris #1H-21 Hughes OK - 0.00420 Gas Producing
Nutley #4-33 Washita OK - 0.00079 Gas Producing
Parker #1-6H Coal OK - 0.00183 Gas Producing
-19-
Patterson #1H-31 Hughes OK - 0.00290 Gas Producing
Patterson #2H-31 Hughes OK - 0.00290 Gas Producing
Patton #3-24 Pittsburg OK - 0.00875 Gas Producing
Pee Wee #1-17 Stephens OK - 0.00364 Gas Producing
Phipps #1-28 Pittsburg OK - 0.00323 Gas Producing
Prater #5-10 Hemphill TX - 0.00140 Gas Producing
Prater #6-10 Hemphill TX - 0.00140 Gas Producing
Prater #7-10 Hemphill TX - 0.00140 Gas Producing
Prater #8-10 Hemphill TX - 0.00140 Gas Producing
Prater #9-10 Hemphill TX - 0.00140 Gas Producing
Presson H W #1-5 Pittsburg OK - 0.00026 Gas Producing
Reed #1-8 Beckham OK - 0.00008 Gas Producing
Rice 1-25 LeFlore OK - 0.00017 Gas Producing
Schueler #1-14H Hughes OK 0.00047 0.00047 Gas Producing
Sites Troy #1-9 Beckham OK 0.00043 0.00043 Gas Producing
Smith #1H-28 Hughes OK - 0.00525 Gas Producing
Sophia #14-50 Wheeler TX - 0.00165 Gas Producing
Sophia #21-50 Wheeler TX - 0.00165 Gas Producing
Spradlin Farms #8A-20 Washita OK - 0.00159 Gas Producing
Sugg-Farmar 26 #1 Irion TX - 0.00067 Gas Producing
Trueblood #2-2 Noble OK 0.00400 0.00352 Gas Producing
Trueblood #3-2 Noble OK 0.00400 0.00352 Gas Producing
Trueblood #4-2 Noble OK 0.00402 0.00352 Oil Producing
Trueblood #5-2 Noble OK 0.00400 0.00352 Oil Producing
Urchison #5-12H LeFlore OK 0.00125 0.00125 Gas Producing
Vanilli #3-36 LeFlore OK - 0.00117 Gas Producing
Verner #5-11 Pittsburg OK - 0.00311 Gas Producing
Walter #5-24
(Upr D.Moines GW) Beckham OK - 0.00055 Gas Producing
[Remainder of Page Intentionally Left Blank]
-20-
P-6 PARTNERSHIP
- ---------------
WORKING REVENUE
WELL NAME COUNTY ST. INTEREST INTEREST TYPE STATUS
- --------- ------ --- -------- -------- ---- ------
Aday #1-9 McClain OK - 0.00059 Gas Producing
Bridges #2-18 Le Flore OK - 0.00008 Gas Producing
Camel, Joe #3 Lea NM - 0.00040 Oil In progress
Cantrell #7-15H Haskell OK - 0.00032 Gas Producing
Cheyenne 29 #5 Roger Mills OK - 0.00002 Gas Producing
Coquat Et Al #1 Live Oak TX - 0.01314 Gas Dryhole
Cory #1-29 Kingfisher OK - 0.00107 Gas Producing
Davis Garry #26 Kay OK - 0.00023 Oil Producing
Delaware 28 #6 Roger Mills OK - 0.00002 Gas Producing
Delaware 28 #7 Roger Mills OK - 0.00002 Gas In progress
Duncan #2-7H Seminole OK - 0.00005 Oil Producing
Federal 5175-22-31WA Campbell WY - 0.01395 Gas Shut-in
Federal 5175-24-21WA Campbell WY - 0.01395 Gas Shut-in
Fed 5175-25-33 CA Campbell WY - 0.00966 Gas Shut-in
Floyd Fed 5175-23-33WA Campbell WY - 0.01395 Gas Producing
Floyd Fed 5175-24-11WA Campbell WY - 0.01395 Gas Shut-in
Floyd Fed 5175-24-33WA Campbell WY - 0.01395 Gas Shut-in
Gilbert A #1 Caddo OK - 0.00065 Gas Producing
Grace #1-H Lincoln OK - 0.00084 Gas Producing
Guinn #1-5 Coal OK - 0.00146 Gas Producing
Harris #5-26H Haskell OK - 0.00018 Gas Producing
Hay #10-33 Roger Mills OK - 0.00004 Gas Producing
Hayden 5175-22-13CA Campbell WY - 0.00958 Gas Shut-in
Hayden 5175-22-13WA Campbell WY - 0.00958 Gas Shut-in
Hayden 5175-22-21CA Campbell WY - 0.00958 Gas Shut-in
Hayden 5175-22-21WA Campbell WY - 0.00958 Gas Producing
Hayden 5175-22-41CA Campbell WY - 0.00958 Gas Shut-in
Hayden 5175-22-41WA Campbell WY - 0.00958 Gas Shut-in
Hayden 5175-22-43WA Campbell WY - 0.00958 Gas Shut-in
Hayden 5175-22-43CA Campbell WY - 0.00958 Gas Shut-in
Hayden 5175-27-43WA Campbell WY - 0.00958 Gas Shut-in
Hayden Federal
5175-27-31WA Campbell WY - 0.00966 Gas Shut-in
Hefley #2-36 Wheeler TX - 0.00603 Gas Producing
Hefley #3-37 Wheeler TX - 0.00604 Gas Producing
Hefley #16-47 Wheeler TX - 0.00905 Gas Producing
Hefley #20-47 Wheeler TX - 0.00905 Gas Producing
Hefley #27-47 Wheeler TX - 0.00905 Gas Producing
-21-
Hefley #32-47 Wheeler TX - 0.00905 Gas Producing
Helton #7-60 Wheeler TX - 0.00271 Gas Producing
Helton #8-60 Wheeler TX - 0.00271 Gas Producing
Helton #10A-60 Wheeler TX - 0.00271 Gas Producing
Helton #11-60 Wheeler TX - 0.00271 Gas Producing
Helton #14-60 Wheeler TX - 0.00271 Gas Producing
Hinkle #4-28 Washita OK - 0.00127 Gas Producing
Hinkle Trust #5-33 Washita OK - 0.00027 Gas Producing
Hubbard #2-13 Beckham OK - 0.00022 Gas Producing
Litz #1R-2 Harper OK 0.00158 0.00158 Gas Producing
McWilliams #2H-23 Pittsburg OK - 0.00010 Gas Producing
Melvin #1H-20 Hughes OK 0.00049 0.00049 Gas Producing
Mooney #1H-19 Hughes OK 0.00053 0.00053 Gas Producing
Mooney Fed 5175-23-13WA Campbell WY - 0.01395 Gas Shut-in
Morris #1H-21 Hughes OK - 0.00144 Gas Producing
Nutley #4-33 Washita OK - 0.00027 Gas Producing
Parker #1-6H Coal OK - 0.00063 Gas Producing
Patterson #1H-31 Hughes OK - 0.00100 Gas Producing
Patterson #2H-31 Hughes OK - 0.00100 Gas Producing
Patton #3-24 Pittsburg OK - 0.00300 Gas Producing
Pee Wee #1-17 Stephens OK - 0.00125 Gas Producing
Phipps #1-28 Pittsburg OK - 0.00111 Gas Producing
Prater #5-10 Hemphill TX - 0.00151 Gas Producing
Prater #6-10 Hemphill TX - 0.00151 Gas Producing
Prater #7-10 Hemphill TX - 0.00151 Gas Producing
Prater #8-10 Hemphill TX - 0.00151 Gas Producing
Prater #9-10 Hemphill TX - 0.00151 Gas Producing
Presson H W #1-5 Pittsburg OK - 0.00009 Gas Producing
Reed #1-8 Beckham OK - 0.00003 Gas Producing
Rice 1-25 Le Flore OK - 0.00006 Gas Producing
Schueler #1-14H Hughes OK 0.00016 0.00016 Gas Shut-in
Sites Troy #1-9 Beckham OK 0.00015 0.00015 Gas Producing
Smith #1H-28 Hughes OK - 0.00180 Gas Producing
Sophia #14-50 Wheeler TX - 0.00178 Gas Producing
Sophia #21-50 Wheeler TX - 0.00178 Gas Producing
Spradlin Farms #8A-20 Washita OK - 0.00055 Gas Producing
Sugg-Farmar 26 #1 Irion TX - 0.00072 Gas Producing
Trueblood #4-2 Noble OK 0.00138 0.00121 Oil Producing
Trueblood #5-2 Noble OK 0.00137 0.00121 Oil Producing
Trueblood #3-2 Noble OK 0.00137 0.00121 Gas Producing
Trueblood #2-2 Noble OK 0.00137 0.00121 Gas Producing
Urchison #5-12H Le Flore OK 0.00043 0.00043 Gas Producing
-22-
Vanilli #3-36 Le Flore OK - 0.00040 Gas Producing
Verner #5-11 Pittsburg OK - 0.00107 Gas Producing
Walter #5-24
(Upr D.Moines GW) Beckham OK - 0.00019 Gas Producing
Yonkee 5175-25-31WA Campbell WY - 0.00958 Gas Shut-in
Yonkee Fed 5175-25-41WA Campbell WY - 0.00966 Gas Producing
[Remainder of Page Intentionally Left Blank]
-23-
Oil and Gas Production, Revenue, and Price History
The following tables set forth certain historical information concerning
the oil (including condensates) and gas production attributable to the
Partnerships' Net Profits Interests, revenues attributable to such production,
and certain price information.
Net Production Data
P-1 Partnership
---------------
Year Ended December 31,
---------------------------------------
2006 2005(1) 2004(1)
---------- ---------- --------
Production:
Oil (Bbls) 2,344 2,169 1,924
Gas (Mcf) 126,886 129,240 154,840
Oil and gas sales(2):
Oil $141,089 $ 113,562 $ 69,359
Gas 737,253 889,032 731,696
------- --------- -------
Total $878,342 $1,002,594 $801,055
======= ========= =======
Average sales price:
Per barrel of oil $60.19 $52.36 $36.05
Per Mcf of gas 5.81 6.88 4.73
- ----------
(1) These amounts have been restated to reflect the sale of various oil and
gas properties during 2006 and assets held for sale as of December 31,
2006 as discontinued operations. See Item 7 for more information about
these discontinued operations.
(2) These amounts differ from the Net Profits included in the P-1
Partnership's financial statements because they do not reflect the
reduction in revenues of production expenses of $221,765, $164,977, and
$137,655, respectively, incurred by the Affiliated Programs.
-24-
Net Production Data
P-3 Partnership
---------------
Year Ended December 31,
----------------------------------------
2006 2005(1) 2004(1)
---------- ---------- ----------
Production:
Oil (Bbls) 3,153 3,050 2,805
Gas (Mcf) 216,182 221,758 262,491
Oil and gas sales(2):
Oil $ 190,943 $ 160,271 $ 102,288
Gas 1,318,007 1,565,093 1,293,819
--------- --------- ---------
Total $1,508,950 $1,725,364 $1,396,107
========= ========= =========
Average sales price:
Per barrel of oil $60.56 $52.55 $36.47
Per Mcf of gas 6.10 7.06 4.93
- ----------
(1) These amounts have been restated to reflect the sale of various oil and
gas properties during 2006 and assets held for sale as of December 31,
2006 as discontinued operations. See Item 7 for more information about
these discontinued operations.
(2) These amounts differ from the Net Profits included in the P-3
Partnership's financial statements because they do not reflect the
reduction in revenues of production expenses of $371,995, $304,853, and
$260,481, respectively, incurred by the Affiliated Programs.
-25-
Net Production Data
P-4 Partnership
---------------
Year Ended December 31,
----------------------------------------
2006 2005(1) 2004(1)
---------- ---------- ----------
Production:
Oil (Bbls) 13,435 15,251 17,392
Gas (Mcf) 180,392 190,154 229,139
Oil and gas sales(2):
Oil $ 868,175 $ 830,940 $ 694,127
Gas 1,160,347 1,448,105 1,319,238
--------- --------- ---------
Total $2,028,522 $2,279,045 $2,013,365
========= ========= =========
Average sales price:
Per barrel of oil $64.62 $54.48 $39.91
Per Mcf of gas 6.43 7.62 5.76
- ----------
(1) These amounts have been restated to reflect the sale of various oil and
gas properties during 2006 and assets held for sale as of December 31,
2006 as discontinued operations. See Item 7 for more information about
these discontinued operations.
(2) These amounts differ from the Net Profits included in the P-4
Partnership's financial statements because they do not reflect the
reduction in revenues of production expenses of $464,057, $525,057, and
$382,860, respectively, incurred by the Affiliated Programs.
-26-
Net Production Data
P-5 Partnership
---------------
Year Ended December 31,
----------------------------------------
2006 2005(1) 2004(1)
---------- ---------- ----------
Production:
Oil (Bbls) 5,955 4,457 4,231
Gas (Mcf) 304,838 246,204 276,978
Oil and gas sales(2):
Oil $ 378,344 $ 241,256 $ 167,681
Gas 1,954,423 1,735,135 1,408,528
--------- --------- ---------
Total $2,332,767 $1,976,391 $1,576,209
========= ========= =========
Average sales price:
Per barrel of oil $63.53 $54.13 $39.63
Per Mcf of gas 6.41 7.05 5.09
- ----------
(1) These amounts have been restated to reflect the sale of various oil and
gas properties during 2006 and assets held for sale as of December 31,
2006 as discontinued operations. See Item 7 for more information about
these discontinued operations.
(2) These amounts differ from the Net Profits included in the P-5
Partnership's financial statements because they do not reflect the
reduction in revenues of production expenses of $518,712, $423,567, and
$363,782, respectively, incurred by the Affiliated Programs.
-27-
Net Production Data
P-6 Partnership
---------------
Year Ended December 31,
----------------------------------------
2006 2005(1) 2004(1)
---------- ---------- ----------
Production:
Oil (Bbls) 11,396 10,676 7,599
Gas (Mcf) 450,448 398,416 424,456
Oil and gas sales(2):
Oil $ 700,756 $ 572,488 $ 330,305
Gas 2,693,104 2,779,771 2,271,682
--------- --------- ---------
Total $3,393,860 $3,352,259 $2,601,987
========= ========= =========
Average sales price:
Per barrel of oil $61.49 $53.62 $43.47
Per Mcf of gas 5.98 6.98 5.35
- ----------
(1) These amounts have been restated to reflect the sale of various oil and
gas properties during 2006 and assets held for sale as of December 31,
2006 as discontinued operations. See Item 7 for more information about
these discontinued operations.
(2) These amounts differ from the Net Profits included in the P-6
Partnership's financial statements because they do not reflect the
reduction in revenues of production expenses of $863,210, $812,868, and
$783,975, respectively, incurred by the Affiliated Programs.
-28-
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, 2006 which were
attributable to the Partnerships' Net Profits Interests. 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"). When preparing such reserves, the General Partner follows the SEC's
definition regarding oil and gas reserves, which was first published in 1978.
The General Partner books proved oil and gas reserves which geological and
engineering data show with reasonable certainty to be recovered in the future
from known reserves under existing economic and operating conditions. Probable
reserves are not booked.
The General Partner combines many methods of reserve estimation in order
to obtain the most accurate forecast, including both volumetric and analogy
methods. Many levels of review occur during this process. First, the engineers
review their respective wells, then the operations manager and division vice
presidents review the updated forecasts, and finally the executive vice
president of engineering reviews approximately the top 85% (or more) wells by
value. All engineers reviewing the data have completed their engineering degrees
and/or are licensed petroleum engineers. In addition, reserve information for
the top 80% of each Partnership's reserve base (based on volumes) has been
reviewed by Ryder Scott Company, L.P. ("Ryder Scott"), an independent petroleum
engineering firm. Ryder Scott has stated to the General Partner their opinion
that (i) the estimates of reserves for the properties which they reviewed were
prepared in accordance with generally accepted procedures for the estimation of
reserves, (ii) they found no bias in the utilization and analysis of data, and
(iii) the cash flow projections provided by Samson of gross and net reserves and
associated revenues and costs based on constant pricing in general appear
reasonable.
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. Net present
value attributable to the Partnerships' proved reserves was calculated on the
basis of current costs and prices at December 31, 2006. Such prices were not
escalated except in certain circumstances where escalations were fixed and
readily determinable in accordance with applicable contract provisions. While
oil prices remained relatively constant as of December 31, 2006 and 2005 ($60.85
and $61.06 per barrel, respectively), gas prices were substantially lower as of
December 31, 2006 ($5.64 per Mcf) than December 31, 2005 ($10.08 per Mcf). This
decrease in gas prices caused the estimates of remaining economically
recoverable reserves, as well as the values placed on said reserves, at December
31, 2006 to be lower than such estimates and values at December 31, 2005. 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, 2006. In fact, subsequent to
-29-
December 31, 2006, natural gas prices increased significantly and then declined.
There can be no assurance that the prices used in calculating the net present
value of the Partnerships' proved reserves at December 31, 2006 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.
The reserves table below reflects reserves as either discontinued
operations or continuing operations. The discontinued operation reserves consist
of all the properties classified as assets held for sale as of December 31,
2006. See "Item 7. Management's Discussion and Analysis of Financial Condition
and Results of Operations" for more information about these discontinued
operations.
[Remainder of Page Intentionally Left Blank]
-30-
Proved Reserves and
Net Present Values
From Proved Reserves
As of December 31, 2006(1)
Oil and Net Present Value
Gas Liquids (discounted at)
(Mcf) (Bbls) 10% per annum
--------- ------- -----------------
P-1 Partnership:
- ----------------
Discontinued Operations 586,241 138,826 $4,033,131
Continuing Operations 1,033,530 14,856 2,544,557
P-3 Partnership:
- ----------------
Discontinued Operations 753,962 176,381 $5,162,242
Continuing Operations 1,845,324 29,903 4,646,696
P-4 Partnership:
- ----------------
Discontinued Operations 25,073 3,366 $ 154,559
Continuing Operations 1,511,674 40,996 4,835,185
P-5 Partnership:
- ----------------
Discontinued Operations 15,053 1,257 $ 69,845
Continuing Operations 2,159,887 38,945 5,573,927
P-6 Partnership:
- ----------------
Discontinued Operations 75,198 724 $ 89,473
Continuing Operations 3,197,665 116,911 8,591,042
- ---------
(1) Includes certain gas balancing adjustments which cause the gas volumes and
net present values to differ from the reserve 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.
-31-
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, 2006:
Operated Wells
------------------------------
Partnership Number Percent
----------- ------ -------
P-1 34 2%
P-3 58 3%
P-4 21 7%
P-5 114 24%
P-6 155 24%
The following table sets forth certain well and reserve information as of
December 31, 2006 for each oil and gas basin which holds a significant portion
of the value of the Partnerships' properties. The table contains the following
information for each such basin: (i) the number of wells in which a Net Profits
Interest is owned, (ii) the number and percentage of wells operated by the
Partnership's affiliates, (iii) estimated proved oil reserves, (iv) estimated
proved gas reserves, and (v) 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,
while the Gulf Coast Basin is located in southern Louisiana and southeast Texas.
The Permian Basin is located in west Texas and southeast New Mexico. The South
Oklahoma Folded Belt Basin is located in southern Oklahoma, while the East Texas
Basin is located in east Texas and northern Louisiana.
-32-
Significant Properties as of December 31, 2006
-----------------------------------------------
Wells
Operated by
Affiliates Oil Gas
Total ----------- Reserves Reserves Present
Basin Wells Number %(1) (Bbl) (Mcf) Value
- ------------- ----- ------ ---- -------- --------- -----------
P-1 P/ship:
Permian 1,852 2 - 143,682 802,744 $4,402,423
Anadarko 83 28 34% 2,442 806,397 2,034,101
P-3 P/ship:
Permian 1,852 2 - 180,999 1,012,512 $5,546,624
Anadarko 83 28 34% 4,091 1,239,871 3,103,365
P-4 P/ship:
Gulf Coast 132 4 3% 33,827 452,191 $2,339,590
Anadarko 65 17 26% 3,008 856,597 2,088,825
P-5 P/ship:
Anadarko 181 42 23% 5,702 1,316,623 $3,207,990
South. Ok.
Folded Belt 37 - - 20,876 498,632 1,535,854
Permian 44 39 89% 13,196 254,424 599,521
P-6 P/ship:
Anadarko 181 42 23% 3,896 1,269,533 $3,108,445
South. Ok.
Folded Belt 55 18 33% 87,323 306,806 2,216,509
East Texas 4 3 75% 2,854 748,598 1,477,701
- -------------------------------
(1) Percent of the Partnership's total wells in the basin which are operated by
affiliates of the Partnership.
Title to Oil and Gas Properties
Management believes that the Partnerships have satisfactory title to their
Net Profits Interests. Record title to all of the properties subject to the
Partnerships' Net Profits Interests is held by either the Partnerships or
Geodyne Nominee Corporation, an affiliate of the General Partner.
Title to the Partnerships' Net Profits Interests 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' Net
-33-
Profits Interests therein or materially interfere with their use in the
operation of the Partnerships' business.
ITEM 3. LEGAL PROCEEDINGS
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 2006.
PART II.
ITEM 5. MARKET FOR UNITS, RELATED LIMITED PARTNER MATTERS, AND ISSUER
PURCHASES OF UNITS
As of March 1, 2007, the number of Units outstanding and the approximate
number of Limited Partners of record in the Partnerships were as follows:
Number of Limited
Partnership Units Partners
----------- --------- --------
P-1 108,074 667
P-3 169,637 1,110
P-4 126,306 757
P-5 118,449 835
P-6 143,041 638
Units were initially sold for a price of $100. The 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
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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 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 purposes of this
Annual Report, a Unit represents an initial subscription of $100 to a
Partnership.
Repurchase Offer Prices
-----------------------
2005 2006 2007
------------------------- ------------------------- -------
1st 2nd 3rd 4th 1st 2nd 3rd 4th 1st
P/ship Qtr. Qtr. Qtr. Qtr. Qtr. Qtr. Qtr. Qtr. Qtr.(1)
- ------ ---- ---- ---- ---- ---- ---- ---- ---- -------
P-1 $25 $23 $44 $40 $36 $32 $45 $11 $ 3
P-3 25 22 41 38 34 30 42 14 9
P-4 19 17 27 25 21 18 26 24 19
P-5 18 16 24 21 19 16 27 25 22
P-6 25 22 38 35 32 28 34 31 28
- ------------
(1) Repurchase offer terminated March 9, 2007.
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.
As described in "Item 7. Management's Discussion and Analysis of Financial
Condition and Results of Operations," the Partnerships terminate on December 31,
2007. Due to such termination and the necessary liquidation process, the General
Partner terminated the repurchase offer described above as of March 9, 2007. In
addition, the General Partner will not accept, process, or recognize any
transfers of Units (with the exception of certain transactions between related
persons) for which completed transfer documentation is not mailed to the General
Partner with a postmark on or before June 30, 2007. Accordingly, there will be
no market for the Partnerships' Units after June 30, 2007.
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Cash Distributions
Cash distributions are primarily dependent upon a Partnership's cash
receipts from its Net Profits Interests, the sale of oil and gas properties 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. See "Item 7. Management's
Discussion and Analysis of Financial Condition and Results of Operations" for
more information regarding the cash distribution process during liquidation of
the Partnerships.
The following is a summary of cash distributions paid to the Limited
Partners during 2005 and 2006 and the first quarter of 2007:
Cash Distributions
------------------
2005
-------------------------------------------------
1st 2nd 3rd 4th
P/ship Quarter Quarter Quarter Quarter
------ ------- ------- ------- ---------
P-1 $2.80 $2.82 $3.25 $ 3.56
P-3 2.43 2.62 3.09 3.27
P-4 2.68 2.33 2.69 2.73
P-5 1.82 2.02 2.40 2.59
P-6 1.70 3.31 2.75 2.86
2006 2007
------------------------------------------------- ---------
1st 2nd 3rd 4th 1st
P/ship Quarter Quarter Quarter Quarter Quarter
------ ------- ------- ------- --------- ---------
P-1 $4.29 $4.26 $4.74 $34.60(1) $4.23(2)
P-3 4.04 4.04 4.21 28.23(1) 4.50(2)
P-4 3.64 3.51 2.69 2.77 4.25(3)
P-5 2.51 2.52 1.77 1.51 3.36(3)
P-6 3.31 3.76 2.99 3.04 3.17(3)
- ------------
(1) Includes proceeds from the sale of the Partnerships' interests in various
oil and gas properties at The Oil and Gas Clearinghouse auction in
Houston, Texas on October 11, 2006.
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(2) Includes proceeds from the sale of the Partnerships' interests in various
oil and gas properties at The Oil and Gas Clearinghouse auction in
Houston, Texas on December 13, 2006 and February 1, 2007.
(3) Includes proceeds from the sale of the Partnerships' interests in various
oil and gas properties at The Oil and Gas Clearinghouse auction in
Houston, Texas on December 13, 2006.
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."
The selected financial data tables reflect income from both continuing
operations and discontinued operations for the Partnerships. The discontinued
operations income is the income for various oil and gas properties sold during
2006 and all of the properties classified as assets held for sale as of December
31, 2006. See "Item 7. Management's Discussion and Analysis of Financial
Condition and Results of Operations" for more information about these
discontinued operations.
[Remainder of Page Intentionally Left Blank]
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Selected Financial Data
P-1 Partnership
---------------
2006 2005(1) 2004(1) 2003(1) 2002(1)
------------ ------------ ------------ ------------ ------------
Net Profits $ 656,577 $ 837,617 $ 663,400 $ 602,212 $ 424,026
Income from:
Continuing Operations 455,253 654,946 503,425 462,052 255,567
Discontinued Operations 4,830,079 1,235,452 791,467 731,105 518,789
Net Income:
Limited Partners 4,749,433 1,695,098 1,161,372 1,070,553 686,720
General Partner 535,899 195,300 133,520 126,336 87,636
Total 5,285,332 1,890,398 1,294,892 1,196,889 774,356
Limited Partners' Net
Income per Unit 43.95 15.69 10.75 9.91 6.35
Limited Partners' Cash
Distributions per Unit 47.89 12.43 11.18 9.55 5.21
Total Assets 1,190,000 1,605,641 1,219,098 1,271,859 1,230,892
Partners' Capital (Deficit)
Limited Partners 1,209,475 1,635,042 1,283,944 1,330,572 1,292,019
General Partner ( 19,475) ( 29,401) ( 64,846) ( 58,713) ( 61,127)
Number of Units
Outstanding 108,074 108,074 108,074 108,074 108,074
(1) These amounts have been restated to reflect the sale of various oil and
gas properties during 2006 and assets held for sale as of December 31,
2006 as discontinued operations. See Item 7 for more information about
these discontinued operations.
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Selected Financial Data
P-3 Partnership
---------------
2006 2005(1) 2004(1) 2003(1) 2002(1)
---------- ------------ ------------ ------------ ------------
Net Profits $1,136,955 $1,420,511 $1,135,626 $1,008,153 $ 686,259
Income from:
Continuing Operations 830,383 1,147,598 786,367 782,761 413,210
Discontinued Operations 6,238,259 1,591,882 1,071,253 936,169 659,366
Net Income:
Limited Partners 6,350,257 2,456,223 1,607,490 1,540,460 949,607
General Partner 718,385 283,257 196,130 182,540 122,969
Total 7,068,642 2,739,480 1,803,620 1,723,000 1,072,576
Limited Partners' Net
Income per Unit 37.43 14.48 9.48 9.08 5.60
Limited Partners' Cash
Distributions per
Unit 40.52 11.41 10.24 8.62 4.72
Total Assets 1,900,422 2,404,854 1,835,461 1,971,380 1,889,346
Partners' Capital (Deficit)
Limited Partners 1,885,370 2,409,113 1,888,890 2,018,400 1,940,940
General Partner 15,052 ( 4,259) ( 53,429) ( 47,020) ( 51,594)
Number of Units
Outstanding 169,637 169,637 169,637 169,637 169,637
(1) These amounts have been restated to reflect the sale of various oil and
gas properties during 2006 and assets held for sale as of December 31,
2006 as discontinued operations. See Item 7 for more information about
these discontinued operations.
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Selected Financial Data
P-4 Partnership
---------------
2006 2005(1) 2004(1) 2003(1) 2002(1)
------------ ------------ ------------ ------------ ------------
Net Profits $1,564,465 $1,753,988 $1,630,505 $1,535,438 $1,415,978
Income from:
Continuing Operations 1,331,399 1,514,473 1,395,819 1,287,601 987,984
Discontinued Operations 295,939 71,575 35,589 35,078 14,524
Net Income:
Limited Partners 1,458,615 1,420,887 1,281,492 1,181,958 878,439
General Partner 168,723 165,161 149,916 140,282 124,069
Total 1,627,338 1,586,048 1,431,408 1,322,240 1,002,508
Limited Partners' Net
Income per Unit 11.55 11.25 10.14 9.36 6.95
Limited Partners' Cash
Distributions per Unit 12.61 10.43 9.34 10.07 8.85
Total Assets 1,168,589 1,305,009 1,186,842 1,076,763 1,176,251
Partners' Capital (Deficit)
Limited Partners 1,213,990 1,348,375 1,244,488 1,142,996 1,234,038
General Partner ( 45,401) ( 43,366) ( 57,646) ( 66,233) ( 57,787)
Number of Units
Outstanding 126,306 126,306 126,306 126,306 126,306
(1) These amounts have been restated to reflect the sale of various oil and
gas properties during 2006 and assets held for sale as of December 31,
2006 as discontinued operations. See Item 7 for more information about
these discontinued operations.
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Selected Financial Data
P-5 Partnership
---------------
2006 2005(1) 2004(1) 2003(1) 2002(1)
------------ ------------ ------------ ------------ ------------
Net Profits $1,814,055 $1,552,824 $1,212,427 $1,262,145 $ 868,026
Income from:
Continuing Operations 1,365,400 1,298,186 967,824 1,032,768 626,158
Discontinued Operations 44,114 37,857 33,623 18,385 17,756
Net Income:
Limited Partners 1,241,581 1,193,671 893,019 975,641 607,695
General Partner 167,933 142,372 108,428 78,297 36,219
Total 1,409,514 1,336,043 1,001,447 1,053,938 643,914
Limited Partners' Net
Income per Unit 10.48 10.08 7.53 8.24 5.13
Limited Partners' Cash
Distributions per Unit 8.31 8.83 6.94 8.16 4.61
Total Assets 1,462,047 1,195,474 1,032,135 953,771 930,874
Partners' Capital (Deficit)
Limited Partners 1,486,899 1,229,318 1,080,647 1,009,628 1,000,987
General Partner ( 24,852) ( 33,844) ( 48,512) ( 59,667) ( 70,113)
Number of Units
Outstanding 118,449 118,449 118,449 118,449 118,449
(1) These amounts have been restated to reflect the sale of various oil and
gas properties during 2006 and assets held for sale as of December 31,
2006 as discontinued operations. See Item 7 for more information about
these discontinued operations.
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Selected Financial Data
P-6 Partnership
---------------
2006 2005(1) 2004(1) 2003(1) 2002(1)
------------ ------------ ------------ ------------ ------------
Net Profits $2,530,650 $2,539,391 $1,818,012 $2,253,839 $1,415,508
Income (Loss) from:
Continuing Operations 2,004,803 2,081,847 1,521,994 1,934,995 1,068,521
Discontinued Operations ( 61,312) 56,589 45,139 92,537 60,265
Net Income:
Limited Partners 1,702,058 1,898,927 1,399,899 1,813,666 999,684
General Partner 241,433 239,509 167,234 215,343 129,102
Total 1,943,491 2,138,436 1,567,133 2,029,009 1,128,786
Limited Partners' Net
Income per Unit 11.90 13.28 9.78 12.68 6.99
Limited Partners' Cash
Distributions per Unit 13.10 10.62 11.09 11.81 6.38
Total Assets 1,864,014 2,063,221 1,640,367 1,831,927 1,660,818
Partners' Capital (Deficit)
Limited Partners 1,873,097 2,045,039 1,666,112 1,853,213 1,728,547
General Partner ( 34,262) ( 17,913) ( 52,148) ( 60,944) ( 67,729)
Number of Units
Outstanding 143,041 143,041 143,041 143,041 143,041
(1) These amounts have been restated to reflect the sale of various oil and
gas properties during 2006 and assets held for sale as of December 31,
2006 as discontinued operations. See Item 7 for more information about
these discontinued operations.
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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
In October 2006, the P-1 and P-3 Partnerships sold their interests in a
number of producing properties. This disposal was treated as discontinued
operations. The sales proceeds consisting of approximately $3,285,000 and
$4,141,000, respectively, were included in the November 15, 2006 cash
distributions paid by the P-1 and P-3 Partnerships. In December 2006 the P-1,
P-3, P-4, P-5, and P-6 Partnerships sold their interests in additional producing
properties. The sales proceeds consisting of approximately $322,000, $537,000,
$240,000, $6,000, and $2,000, respectively, were included in the February 15,
2007 cash distributions paid by the P-1, P-3, P-4, P-5, and P-6 Partnerships.
These disposals were treated as discontinued operations. The sale of these
producing properties will impact the continuing future operations of the
Partnerships. It is anticipated that the Partnerships will have lower lease
operating costs, lower oil and gas sales, and a reduction in their asset
-43-
retirement obligations as a result of these sales. The reader should refer to
Note 6 - Discontinued Operations to the combined financial statements included
in Item 8 of this Annual Report for additional information regarding this
matter.
Partnership Terminations
The Partnerships would have terminated on December 31, 2005 in accordance
with the Partnership Agreements. 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. The General Partner has extended the terms of the
Partnerships for their first two-year extension, thereby extending their
termination date to December 31, 2007. On February 5, 2007 the General Partner
mailed a notice to the limited partners announcing that (i) the Partnerships
will terminate on December 31, 2007 and (ii) the General Partner will liquidate
the Partnerships' assets and satisfy their liabilities as part of the winding-up
process required by the Partnership Agreements and state law.
The General Partner has been selling selected oil and gas properties due
to the generally favorable market for oil and gas properties. The last such
sales are anticipated to be The Oil and Gas Asset Clearinghouse auctions in May
through July of 2007. While these property sales were not related to Partnership
liquidation, all remaining property dispositions will be made as part of the
liquidation and winding-up process.
Liquidation and Winding-Up Process. The General Partner intends to
commence liquidating the Partnerships' properties in the second half of 2007,
and hopes to have all or substantially all of the properties sold prior to March
31, 2008. As part of the liquidation process, the General Partner will actively
negotiate for the sale of the properties. These properties will be offered to
all interested parties through normal oil and gas property auction processes as
well as appropriate negotiated transactions. It is possible that the General
Partner will package some properties which have value with properties that have
no or little value or are burdened with actual or potential liabilities. The
General Partner intends to sell such property packages and any associated or
otherwise remaining Partnership assets and liabilities to the highest bidder at
auction. It is possible that affiliates of the General Partner may participate
in any public auction of these properties and may be the successful high bidder
on some or all of the properties.
Cash Distributions. The Partnerships will make routine cash distributions
throughout the remainder of 2007. Proceeds from the sale of Partnership
properties may be included in these normal cash distributions, or may be
distributed to the partners by way of special cash distributions. The General
Partner will analyze the level of cash held by the Partnerships throughout the
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liquidation process and will retain sufficient cash to cover all final expenses
and liabilities of the Partnerships. After final settlement from the sale of all
properties, satisfaction of Partnership expenses and liabilities, and
calculation of any remaining assets and liabilities of the Partnerships, any net
cash will be paid as a final liquidating distribution to all of the remaining
partners in each Partnership. It is expected that the final distribution will be
made no later than December 31, 2008.
Repurchase Offer. In order to ensure that the General Partner makes all
liquidation distributions to the correct parties based on the most accurate
information possible, the General Partner terminated the outstanding repurchase
offer as of March 9, 2007. In addition, the General Partner will not process
transfers among third parties which are not postmarked on or before June 30,
2007 and received by the General Partner on or before July 13, 2007. The General
Partner will not impose these deadlines on transfers between family members,
their trusts, IRA accounts, or similar related entities and transfers due to
death or divorce.
Financial Statements. The financial statements described in "Item 8.
Financial Statements and Supplementary Data" and indexed in Item 15 to this
Annual Report are audited and presented on a going concern basis. However, the
General Partner has included in Note 7 to such financial statements unaudited
pro forma combined balance sheets which are presented on a liquidation basis.
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 and recently the sale of 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 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;
-45-
* The competitiveness of alternative fuels;
* Weather conditions and the impact of weather-related events;
* The availability and proximity of pipelines for transportation;
* Domestic and foreign government regulations and taxes;
* Market expectations; and
* The effect of worldwide energy conservation.
It is not possible to predict the future direction of oil or natural gas
prices. 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
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.
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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 Proceeds and
Units of Production." Following is a discussion of each Partnership's results of
operations for the year ended December 31, 2006 as compared to the year ended
December 31, 2005 and for the year ended December 31, 2005 as compared to the
year ended December 31, 2004.
P-1 Partnership
---------------
Year Ended December 31, 2006 Compared
to Year Ended December 31, 2005
-------------------------------------
The following discussion contains amounts for the year 2005 which have
been restated to reflect the Partnership's assets held for sale as discontinued
operations. See Note 6 to the combined financial statements indexed in Item 15
hereof for more information about these discontinued operations.
Total Net Profits decreased $181,000 (21.6%) in 2006 as compared to 2005.
Of this decrease (i) $136,000 was related to a decrease in the average price of
gas sold and (ii) $57,000 was related to an increase in production expenses.
These decreases were partially offset by an increase of $18,000 associated with
an increase in the average price of oil sold.
Volumes of oil sold increased 175 barrels, while volumes of gas sold
decreased 2,354 Mcf in 2006 as compared to 2005. The increase in volumes of oil
sold was primarily due to the successful completion of several new wells during
late 2005 and mid 2006. This increase was partially offset by (i) a substantial
decline in production during 2006 on one significant well following its 2005
workover and (ii) normal declines in production. The well with a substantial
decline in production is not expected to return to its previously high levels of
production.
The increase in production expenses was primarily due to an increase in
workover expenses. As of the date of this Annual Report, management anticipates
workover costs remaining at or increasing above 2006 levels due to the increased
cost to perform a workover and the age of the wellbores. This increase was
partially offset by a decrease in production taxes associated with the decrease
in oil and gas sales.
-47-
Average oil prices increased to $60.19 per barrel in 2006 from $52.36 per
barrel in 2005. Average gas prices decreased to $5.81 per Mcf in 2006 from $6.88
per Mcf in 2005.
Depletion of Net Profits Interests increased $23,000 (51.7%) in 2006 as
compared to 2005. This increase was primarily due to (i) several wells being
fully depleted during 2006 due to their lack of remaining reserves and (ii) the
abandonment of one significant well during 2006 as a result of its lack of
remaining reserves. These increases were partially offset by several other wells
being fully depleted during 2005 due to their lack of remaining reserves. As a
percentage of Net Profits, this expense increased to 10.1% in 2006 from 5.2% in
2005, primarily due to the dollar increase in depletion of Net Profits Interests
and the decrease in the average price of gas sold.
The Partnership recognized a non-cash charge against earnings of $17,000
during 2006. This charge was related to the decline in oil and gas prices used
to determine recoverability of oil and gas reserves at September 30, 2006. No
such charge was incurred during 2005.
General and administrative expenses increased $2,000 (1.3%) in 2006 as
compared to 2005. As a percentage of Net Profits, these expenses increased to
22.8% in 2006 from 17.7% in 2005, primarily due to the decrease in Net Profits.
As further discussed in Notes 6 and 7 to the combined financial statements
indexed in Item 15 hereof, the Partnership is in the process of selling an
increased amount of the Partnership's properties as a result of the generally
favorable current environment for oil and gas dispositions and will be selling
all of the Partnership's properties in the liquidation process. The Partnership
will have lower future oil and gas sales and lower future production expenses
due to the sale of these properties.
The Limited Partners have received cash distributions through December 31,
2006 totaling $23,379,558 or 216.33% of Limited Partners' capital contributions.
Year Ended December 31, 2005 Compared
to Year Ended December 31, 2004
--------------------------------------
The following discussion contains amounts for the years 2005 and 2004
which have been restated to reflect the Partnership's assets held for sale as
discontinued operations. See Note 6 to the combined financial statements indexed
in Item 15 hereof for more information about these discontinued operations.
Total Net Profits increased $174,000 (26.3%) in 2005 as compared to 2004.
Of this increase $35,000 and $278,000,
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respectively, were related to increases in the average prices of oil and gas
sold. These increases were partially offset by (i) a decrease of $121,000
related to a decrease in volumes of gas sold and (ii) $27,000 related to an
increase in production expenses.
Volumes of oil sold increased 245 barrels, while volumes of gas sold
decreased 25,600 Mcf in 2005 as compared to 2004. The increase in volumes of oil
sold was primarily due to the successful completion of two new wells during late
2004. This increase was partially offset by (i) normal declines in production
and (ii) positive prior period volume adjustments made by the operators on
several wells during 2004. The decrease in volumes of gas sold was primarily due
to (i) normal declines in production and (ii) a positive prior period volume
adjustment included in the receipt of first revenues on one significant well
during 2004.
The increase in production expenses was primarily due to (i) an increase
in workover expenses and (ii) an increase in production taxes associated with
the increase in oil and gas sales.
Average oil and gas prices increased to $52.36 per barrel and $6.88 per
Mcf in 2005 from $36.05 per barrel and $4.73 per Mcf in 2004.
Depletion of Net Profits Interests increased $2,000 (5.2%) in 2005 as
compared to 2004. Of this increase (i) $8,000 was due to the depletion of
additional Net Profits Interests as a result of the upward revision in the
estimate of the asset retirement obligations, of which $6,000 was related to
previously fully depleted wells, and (ii) $2,000 was due to accretion of these
additional asset retirement obligations. These increases were partially offset
by the decrease in volumes of gas sold. As a percentage of Net Profits, this
expense decreased to 5.2% in 2005 from 6.3% in 2004, primarily due to the
increases in the average prices of oil and gas sold.
General and administrative expenses increased $6,000 (4.1%) in 2005 as
compared to 2004. As a percentage of Net Profits, these expenses decreased to
17.7% in 2005 from 21.4% in 2004, primarily due to the increase in Net Profits.
As further discussed in Notes 6 and 7 to the combined financial statements
indexed in Item 15 hereof, the Partnership is in the process of selling an
increased amount of the Partnership's properties as a result of the generally
favorable current environment for oil and gas dispositions and will be selling
all of the Partnership's properties in the liquidation process. The Partnership
will have lower future oil and gas sales and lower future production expenses
due to the sale of these properties.
-49-
P-3 Partnership
---------------
Year Ended December 31, 2006 Compared
to Year Ended December 31, 2005
-------------------------------------
The following discussion contains amounts for the year 2005 which have
been restated to reflect the Partnership's assets held for sale as discontinued
operations. See Note 6 to the combined financial statements indexed in Item 15
hereof for more information about these discontinued operations.
Total Net Profits decreased $284,000 (20.0%) in 2006 as compared to 2005.
Of this decrease (i) $208,000 was related to a decrease in the average price of
gas sold, (ii) $39,000 was related to a decrease in volumes of gas sold, and
(iii) $67,000 was associated with an increase in production expenses.
Volumes of oil sold increased 103 barrels, while volumes of gas sold
decreased 5,576 Mcf in 2006 as compared to 2005. The increase in volumes of oil
sold was primarily due to the successful completion of several new wells during
late 2005 and mid 2006. This increase was partially offset by (i) a substantial
decline in production during 2006 on one significant well following its 2005
workover and (ii) normal declines in production. The well with a substantial
decline in production is not expected to return to its previously high levels of
production.
The increase in production expenses was primarily due to an increase in
workover expenses. As of the date of this Annual Report, management anticipates
workover costs remaining at or increasing above 2006 levels due to the increased
cost to perform a workover and the age of the wellbores. This increase was
partially offset by a decrease in production taxes associated with the decrease
in oil and gas sales.
Average oil prices increased to $60.56 per barrel in 2006 from $52.55 per
barrel in 2005. Average gas prices decreased to $6.10 per Mcf in 2006 from $7.06
per Mcf in 2005.
Depletion of Net Profits Interests increased $38,000 (52.8%) in 2006 as
compared to 2005. This increase was primarily due to (i) several wells being
fully depleted during 2006 due to their lack of remaining reserves and (ii) the
abandonment of one significant well during 2006 as a result of its lack of
remaining reserves. These increases were partially offset by several other wells
being fully depleted during 2005 due to their lack of remaining reserves. As a
percentage of Net Profits, this expense increased to 9.6% in 2006 from 5.0% in
2005, primarily due to the dollar increase in depletion of Net Profits Interests
and the decrease in the average price of gas sold.
-50-
The Partnership recognized a non-cash charge against earnings of $25,000
during 2006. This charge was related to the decline in oil and gas prices used
to determine recoverability of oil and gas reserves at September 30, 2006. No
such charge was incurred during 2005.
General and administrative expenses remained relatively constant in 2006
and 2005. As a percentage of Net Profits, these expenses increased to 19.1% in
2006 from 15.2% in 2005, primarily due to the decrease in Net Profits.
As further discussed in Notes 6 and 7 to the combined financial statements
indexed in Item 15 hereof, the Partnership is in the process of selling an
increased amount of the Partnership's properties as a result of the generally
favorable current environment for oil and gas dispositions and will be selling
all of the Partnership's properties in the liquidation process. The Partnership
will have lower future oil and gas sales and lower future production expenses
due to the sale of these properties.
The Limited Partners have received cash distributions through December 31,
2006 totaling $32,364,401 or 190.79% of Limited Partners' capital contributions.
Year Ended December 31, 2005 Compared
to Year Ended December 31, 2004
--------------------------------------
The following discussion contains amounts for the years 2005 and 2004
which have been restated to reflect the Partnership's assets held for sale as
discontinued operations. See Note 6 to the combined financial statements indexed
in Item 15 hereof for more information about these discontinued operations.
Total Net Profits increased $285,000 (25.1%) in 2005 as compared to 2004.
Of this increase $49,000 and $472,000, respectively, were related to increases
in the average prices of oil and gas sold. These increases were partially offset
by decreases of (i) $201,000 related to a decrease in volumes of gas sold and
(ii) $44,000 related to an increase in production expenses.
Volumes of oil sold increased 245 barrels, while volumes of gas sold
decreased 40,733 Mcf in 2005 as compared to 2004. The increase in volumes of oil
sold was primarily due to the successful completion of two new wells during late
2004. This increase was partially offset by (i) normal declines in production
and (ii) positive prior period volume adjustments made by the operators on
several wells during 2004. The decrease in volumes of gas sold was primarily due
to (i) normal declines in production and (ii) a positive prior period volume
adjustment
-51-
included in the receipt of first revenues on one significant well during 2004.
The increase in production expenses was primarily due to (i) an increase
in workover expenses and (ii) an increase in production taxes associated with
the increase in oil and gas sales.
Average oil and gas prices increased to $52.55 per barrel and $7.06 per
Mcf in 2005 from $36.47 per barrel and $4.93 per Mcf in 2004.
Depletion of Net Profits Interests decreased $99,000 (58.2%) in 2005 as
compared to 2004. This decrease was primarily due to (i) one significant well
being fully depleted during 2004 due to its lack of remaining reserves and (ii)
the decrease in volumes of gas sold. These decreases were partially offset by
(i) an increase of $11,000 due to the depletion of additional Net Profits
Interests as a result of the upward revision in the estimate of the asset
retirement obligations, of which $8,000 was related to previously fully depleted
wells, (ii) an increase of $2,000 due to accretion of these additional asset
retirement obligations, and (iii) one significant well being fully depleted
during 2005 due to its lack of remaining reserves. As a percentage of Net
Profits, this expense decreased to 5.0% in 2005 from 15.0% in 2004, primarily
due to the dollar decrease in depletion of Net Profits Interests.
General and administrative expenses increased $6,000 (2.7%) in 2005 as
compared to 2004. As a percentage of Net Profits, these expenses decreased to
15.2% in 2005 from 18.5% in 2004, primarily due to the increase in Net Profits.
As further discussed in Notes 6 and 7 to the combined financial statements
indexed in Item 15 hereof, the Partnership is in the process of selling an
increased amount of the Partnership's properties as a result of the generally
favorable current environment for oil and gas dispositions and will be selling
all of the Partnership's properties in the liquidation process. The Partnership
will have lower future oil and gas sales and lower future production expenses
due to the sale of these properties.
P-4 Partnership
---------------
Year Ended December 31, 2006 Compared
to Year Ended December 31, 2005
-------------------------------------
The following discussion contains amounts for the year 2005 which have
been restated to reflect the Partnership's assets held
-52-
for sale as discontinued operations. See Note 6 to the combined financial
statements indexed in Item 15 hereof for more information about these
discontinued operations.
Total Net Profits decreased $190,000 (10.8%) in 2006 as compared to 2005.
Of this decrease (i) $214,000 was related to a decrease in the average price of
gas sold and (ii) $99,000 and $74,000, respectively, were related to decreases
in volumes of oil and gas sold. These decreases were partially offset by
increases of (i) $136,000 related to an increase in the average price of oil
sold and (ii) $61,000 related to a decrease in production expenses.
Volumes of oil and gas sold decreased 1,816 barrels and 9,762 Mcf in 2006
as compared to 2005. The decrease in volumes of oil sold was primarily due to
(i) the shutting-in of one significant well during late 2005 through late 2006
in order to perform an unsuccessful workover and (ii) normal declines in
production. As of the date of this Annual 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) positive prior
period volume adjustments made by the operators on several wells during 2005.
These decreases were partially offset by a positive prior period volume
adjustment made by the operator on another significant well during 2006.
The decrease in production expenses was primarily due to (i) workover
expenses incurred on several wells during 2005, (ii) a decrease in production
taxes associated with the decrease in oil and gas sales, and (iii) a decrease in
saltwater disposal expenses incurred on several wells during 2006 as compared to
2005. As of the date of this Annual Report, management anticipates that these
saltwater disposal expenses will remain at 2006 levels. These decreases were
partially offset by workover expenses incurred on one significant well during
2006.
Average oil prices increased to $64.62 per barrel in 2006 from $54.48 per
barrel in 2005. Average gas prices decreased to $6.43 per Mcf in 2006 from $7.62
per Mcf in 2005.
Depletion of Net Profits Interests increased $1,000 (1.4%) in 2006 as
compared to 2005. This increase was primarily due to several wells being fully
depleted during 2006 due to their lack of remaining reserves. This increase was
partially offset by (i) several other wells being fully depleted during 2005 due
to their lack of remaining reserves and (ii) the decreases in volumes of oil and
gas sold. As a percentage of Net Profits, this expense increased to 5.2% in 2006
from 4.6% in 2005, primarily due to the decrease in the average price of gas
sold.
The Partnership recognized a non-cash charge against earnings of $3,000
during 2006. This charge was related to the
-53-
decline in oil and gas prices used to determine recoverability of oil and gas
reserves at September 30, 2006. No such charge was incurred during 2005.
General and administrative expenses decreased $3,000 (1.6%) in 2006 as
compared to 2005. As a percentage of Net Profits, these expenses increased to
10.6% in 2006 from 9.6% in 2005, primarily due to the decrease in Net Profits.
As further discussed in Notes 6 and 7 to the combined financial statements
indexed in Item 15 hereof, the Partnership is in the process of selling an
increased amount of the Partnership's properties as a result of the generally
favorable current environment for oil and gas dispositions and will be selling
all of the Partnership's properties in the liquidation process. The Partnership
will have lower future oil and gas sales and lower future production expenses
due to the sale of these properties.
Cumulative cash distributions to the Limited Partners through December 31,
2006 were $21,807,945 or 172.66% of Limited Partners' capital contributions.
Year Ended December 31, 2005 Compared
to Year Ended December 31, 2004
--------------------------------------
The following discussion contains amounts for the years 2005 and 2004
which have been restated to reflect the Partnership's assets held for sale as
discontinued operations. See Note 6 to the combined financial statements indexed
in Item 15 hereof for more information about these discontinued operations.
Total Net Profits increased $123,000 (7.6%) in 2005 as compared to 2004.
Of this increase $222,000 and $353,000, respectively, were related to increases
in the average prices of oil and gas sold. These increases were partially offset
by decreases of (i) $85,000 and $225,000, respectively, related to decreases in
volumes of oil and gas sold and (ii) $142,000 related to an increase in
production expenses.
Volumes of oil and gas sold decreased 2,141 barrels and 38,985 Mcf 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. The
decrease in volumes of gas sold was primarily due to (i) normal declines in
production, (ii) a positive prior period volume adjustment included in the
receipt of first revenues on one significant well during 2004, and (iii) the
shutting-in of two significant wells during early 2005 in order to perform
workovers.
-54-
The increase in production expenses was primarily due to (i) workover
expenses, (ii) an increase in production taxes associated with the increase in
oil and gas sales, and (iii) a positive prior period production tax adjustment
made by the operator on one significant well during 2005.
Average oil and gas prices increased to $54.48 per barrel and $7.62 per
Mcf in 2005 from $39.91 per barrel and $5.76 per Mcf in 2004.
Depletion of Net Profits Interests increased $3,000 (4.3%) in 2005 as
compared to 2004. Of this increase (i) $31,000 was due to the depletion of
additional Net Profits Interests as a result of the upward revision in the
estimate of the asset retirement obligations, of which $20,000 was related to
previously fully depleted wells, and (ii) $4,000 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 Net Profits, this expense decreased to 4.6% in 2005
from 4.8% in 2004.
General and administrative expenses increased $7,000 (4.2%) in 2005 as
compared to 2004. As a percentage of Net Profits, these expenses decreased to
9.6% in 2005 from 9.9% in 2004.
As further discussed in Notes 6 and 7 to the combined financial statements
indexed in Item 15 hereof, the Partnership is in the process of selling an
increased amount of the Partnership's properties as a result of the generally
favorable current environment for oil and gas dispositions and will be selling
all of the Partnership's properties in the liquidation process. The Partnership
will have lower future oil and gas sales and lower future production expenses
due to the sale of these properties.
P-5 Partnership
---------------
Year Ended December 31, 2006 Compared
to Year Ended December 31, 2005
-------------------------------------
The following discussion contains amounts for the year 2005 which have
been restated to reflect the Partnership's assets held for sale as discontinued
operations. See Note 6 to the combined financial statements indexed in Item 15
hereof for more information about these discontinued operations.
Total Net Profits increased $261,000 (16.8%) in 2006 as compared to 2005.
Of this increase (i) $81,000 and $413,000,
-55-
respectively, were related to increases in volumes of oil and gas sold and (ii)
$56,000 was related to an increase in the average price of oil sold. These
increases were partially offset by decreases of (i) $194,000 related to a
decrease in the average price of gas sold and (ii) $95,000 related to an
increase in production expenses.
Volumes of oil and gas sold increased 1,498 barrels and 58,634 Mcf in 2006
as compared to 2005. The increase in volumes of oil sold was primarily due to
(i) the successful completion of several new wells during mid 2005 through mid
2006 and (ii) an increase in production on two significant wells following their
successful recompletion during early and mid 2006. These increases were
partially offset by (i) normal declines in production and (ii) positive prior
period volume adjustments made by the operator on several wells during 2005. The
increase in volumes of gas sold was primarily due to (i) the successful
completion of several new wells during mid 2005 through late 2006, (ii) upward
revisions in the estimates of remaining gas reserves on one significant well
which reduced the Partnership's overproduced in excess of estimated ultimate
reserves position, thereby decreasing its gas imbalance payable, and (iii) a
negative prior period volume adjustment on one significant well during 2005.
These increases were partially offset by normal declines in production.
The increase in production expenses was primarily due to (i) an increase
in workover expenses, (ii) a $31,000 decrease in lease operating expenses during
2005 resulting from a decrease in the Partnership's gas balancing position on
several wells, and (iii) an increase in production taxes associated with the
increase in oil and gas sales. As of the date of this Annual Report, management
anticipates workover costs remaining at or increasing above 2006 levels due to
the increased cost to perform a workover and the age of the wellbores.
Average oil prices increased to $63.53 per barrel in 2006 from $54.13 per
barrel in 2005. Average gas prices decreased to $6.41 per Mcf in 2006 from $7.05
per Mcf in 2005.
Depletion of Net Profits Interests increased $149,000 (140.4%) in 2006 as
compared to 2005. This increase was primarily due to (i) an increase in
depletable Net Profits Interests during 2006 primarily due to the recompletion
of several wells and (ii) the increases in volumes of oil and gas sold. These
increases were partially offset by several wells being fully depleted during
2005 due to their lack of remaining reserves. As a percentage of Net Profits,
this expense increased to 14.1% in 2006 from 6.8% in 2005, primarily due to the
dollar increase in depletion of Net Profits Interests.
The Partnership recognized a non-cash charge against earnings of $57,000
during 2006. This charge was related to the decline in oil and gas prices used
to determine recoverability of
-56-
oil and gas reserves at September 30, 2006. No such charge was incurred during
2005.
General and administrative expenses decreased $3,000 (1.7%) in 2006 as
compared to 2005. As a percentage of Net Profits, these expenses decreased to
8.6% in 2006 from 10.3% in 2005, primarily due to the increase in Net Profits.
As further discussed in Notes 6 and 7 to the combined financial statements
indexed in Item 15 hereof, the Partnership is in the process of selling an
increased amount of the Partnership's properties as a result of the generally
favorable current environment for oil and gas dispositions and will be selling
all of the Partnership's properties in the liquidation process. The Partnership
will have lower future oil and gas sales and lower future production expenses
due to the sale of these properties.
Cumulative cash distributions to the Limited Partners through December 31,
2006 were $15,241,759 or 128.68% of Limited Partners' capital contributions.
Year Ended December 31, 2005 Compared
to Year Ended December 31, 2004
--------------------------------------
The following discussion contains amounts for the years 2005 and 2004
which have been restated to reflect the Partnership's assets held for sale as
discontinued operations. See Note 6 to the combined financial statements indexed
in Item 15 hereof for more information about these discontinued operations.
Total Net Profits increased $340,000 (28.1%) in 2005 as compared to 2004.
Of this increase $65,000 and $483,000, respectively, were related to increases
in the average prices of oil and gas sold. These increases were partially offset
by decreases of (i) $156,000 related to a decrease in volumes of gas sold and
(ii) $60,000 related to an increase in production expenses.
Volumes of oil sold increased 226 barrels, while volumes of gas sold
decreased 30,774 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 mid 2004 through mid 2005 and (ii) positive prior period volume
adjustments made by the operator on several wells during 2005. 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) a
negative prior period volume adjustment on one significant well during 2005, and
(iii) a substantial decline in production during 2005 on one significant well
following a workover of that well. The well with a substantial decline in
production is not expected to
-57-
return to its previously high levels of production. These decreases were
partially offset by the successful completion of several new wells during mid
2004 through early 2005.
The increase in production expenses was primarily due to (i) an increase
in workover expenses and (ii) an increase in production taxes associated with
the increase in oil and gas sales.
Average oil and gas prices increased to $54.13 per barrel and $7.05 per
Mcf in 2005 from $39.63 per barrel and $5.09 per Mcf in 2004.
Depletion of Net Profits Interests increased $12,000 (12.9%) in 2005 as
compared to 2004. Of this increase (i) $23,000 was due to the depletion of
additional Net Profits Interests as a result of the upward revision in the
estimate of the asset retirement obligations, of which $16,000 was related to
previously fully depleted wells, and (ii) $3,000 was due to accretion of these
additional asset retirement obligations. This increase was also due to an
increase in depletable Net Profits Interests during 2005 primarily due to the
drilling of two developmental wells. These increases were partially offset by
(i) the decrease in volumes of gas sold, (ii) one significant well being fully
depleted during 2004 due to its lack of remaining reserves, and (iii) upward
revisions in the estimates of remaining oil and gas reserves since December 31,
2004. As a percentage of Net Profits, this expense decreased to 6.8% in 2005
from 7.8% in 2004, primarily due to the increases in the average prices of oil
and gas sold.
General and administrative expenses increased $7,000 (4.5%) in 2005 as
compared to 2004. As a percentage of Net Profits, these expenses decreased to
10.3% in 2005 from 12.6% in 2004, primarily due to the increase in Net Profits.
As further discussed in Notes 6 and 7 to the combined financial statements
indexed in Item 15 hereof, the Partnership is in the process of selling an
increased amount of the Partnership's properties as a result of the generally
favorable current environment for oil and gas dispositions and will be selling
all of the Partnership's properties in the liquidation process. The Partnership
will have lower future oil and gas sales and lower future production expenses
due to the sale of these properties.
-58-
P-6 Partnership
---------------
Year Ended December 31, 2006 Compared
to Year Ended December 31, 2005
-------------------------------------
The following discussion contains amounts for the year 2005 which have
been restated to reflect the Partnership's assets held for sale as discontinued
operations. See Note 6 to the combined financial statements indexed in Item 15
hereof for more information about these discontinued operations.
Total Net Profits remained relatively constant in 2006 and 2005. Decreases
of (i) $450,000 related to a decrease in the average price of gas sold and (ii)
$50,000 related to an increase in production expenses were substantially offset
by increases of (i) $38,000 and $363,000, respectively, related to increases in
volumes of oil and gas sold and (ii) $90,000 related to an increase in the
average price of oil sold.
Volumes of oil and gas sold increased 720 barrels and 52,032 Mcf in 2006
as compared to 2005. The increase in volumes of oil sold was primarily due to
(i) the successful completion of several new wells during mid 2005 through mid
2006 and (ii) an increase in production on two significant wells following their
successful recompletion during early and mid 2006. These increases were
partially offset by normal declines in production. The increase in volumes of
gas sold was primarily due (i) the successful completion of several new wells
during mid 2005 through late 2006, (ii) upward revisions in the estimates of
remaining gas reserves on one significant well which reduced the Partnership's
overproduced in excess of estimated ultimate reserves position, thereby
decreasing its gas imbalance payable, and (iii) an increase in production on one
significant well following its successful workover during early 2006. These
increases were partially offset by normal declines in production.
The increase in production expenses was primarily due to (i) an increase
in workover expenses and (ii) a $43,000 decrease in lease operating expenses
during 2005 resulting from a decrease in the Partnership's gas balancing
position on several wells. As of the date of this Annual Report, management
anticipates workover costs remaining at or increasing above 2006 levels due to
the increased cost to perform a workover and the age of the wellbores. These
increases were partially offset by the receipt of a $51,000 lease operating
expense credit resulting from a class action settlement on one significant unit
during 2006.
Average oil prices increased to $61.49 per barrel in 2006 from $53.62 per
barrel in 2005. Average gas prices decreased to $5.98 per Mcf in 2006 from $6.98
per Mcf in 2005.
-59-
Depletion of Net Profits Interests increased $63,000 (22.2%) in 2006 as
compared to 2005. This increase was primarily due to (i) an increase in
depletable Net Profits Interests during 2006 primarily due to the recompletion
of several wells and (ii) the increases in volumes of oil and gas sold. These
increases were partially offset by (i) several wells being fully depleted during
2005 due to their lack of remaining reserves and (ii) two significant wells
being substantially depleted during 2005 due to their lack of remaining
reserves. As a percentage of Net Profits, this expense increased to 13.7 % in
2006 from 11.2% in 2005, primarily due to the dollar increase in depletion of
Net Profits Interests.
The Partnership recognized a non-cash charge against earnings of $20,000
during 2006. This charge was related to the decline in oil and gas prices used
to determine recoverability of oil and gas reserves at September 30, 2006. No
such charge was incurred during 2005.
General and administrative expenses decreased $3,000 (1.5%) in 2006 as
compared to 2005. As a percentage of Net Profits, these expenses decreased to
7.2% in 2006 from 7.3% in 2005.
As further discussed in Notes 6 and 7 to the combined financial statements
indexed in Item 15 hereof, the Partnership is in the process of selling an
increased amount of the Partnership's properties as a result of the generally
favorable current environment for oil and gas dispositions and will be selling
all of the Partnership's properties in the liquidation process. The Partnership
will have lower future oil and gas sales and lower future production expenses
due to the sale of these properties.
The Limited Partners have received cash distributions through December 31,
2006 totaling $22,865,248 or 159.85% of Limited Partners' capital contributions.
Year Ended December 31, 2005 Compared
to Year Ended December 31, 2004
--------------------------------------
The following discussion contains amounts for the years 2005 and 2004
which have been restated to reflect the Partnership's assets held for sale as
discontinued operations. See Note 6 to the combined financial statements indexed
in Item 15 hereof for more information about these discontinued operations.
Total Net Profits increased $721,000 (39.7%) in 2005 as compared to 2004.
Of this increase (i) $108,000 and $647,000, respectively, were related to
increases in the average prices of oil and gas sold and (ii) $134,000 was
related to an increase in volumes of oil sold. These increases were partially
offset by a
-60-
decrease of $139,000 related to a decrease in volumes of gas sold.
Volumes of oil sold increased 3,077 barrels, while volumes of gas sold
decreased 26,040 Mcf in 2005 as compared to 2004. The increase in volumes of oil
sold was primarily due to (i) a negative prior period volume adjustment made by
the operator on one significant well during 2004 and (ii) the successful
completion of several new wells during early to mid 2005. The decrease in
volumes of gas sold was primarily due to (i) normal declines in production, (ii)
a substantial decline in production during 2005 on one significant well
following a workover of that well, and (iii) a negative prior period volume
adjustment on one significant well during 2005. The well with a substantial
decline in production is not expected to return to its previous levels of
production. These decreases were partially offset by (i) a negative prior period
volume adjustment made by the operator on another significant well during 2004
and (ii) the successful completion of several wells during 2004 and early 2005.
The increase in production expenses was primarily due to (i) an increase
in production taxes associated with the increase in oil and gas sales and (ii)
an increase in workover expenses. These increases were partially offset by (i) a
prior period production tax adjustment on one significant unit during 2004 and
(ii) the abandonment of one significant well during 2004 due to severe
mechanical problems.
Average oil and gas prices increased to $53.62 per barrel and $6.98 per
Mcf in 2005 from $43.47 per barrel and $5.35 per Mcf in 2004.
Depletion of Net Profits Interests increased $163,000 (135.8%) in 2005 as
compared to 2004. Of this increase (i) $74,000 was due to the depletion of
additional Net Profits Interests as a result of the upward revision in the
estimate of the asset retirement obligations, of which $53,000 was related to
previously fully depleted wells, (ii) $9,000 was due to accretion of these
additional asset retirement obligations, and (iii) two significant wells being
substantially depleted during 2005 due to their lack of remaining reserves.
These increases were partially offset by one significant well being fully
depleted during 2004 due to its lack of remaining reserves. As a percentage of
Net Profits, this expense increased to 11.2% in 2005 from 6.6% in 2004,
primarily due to the dollar increase in depletion of Net Profits Interests.
General and administrative expenses increased $7,000 (3.7%) in 2005 as
compared to 2004. As a percentage of Net Profits, these expenses decreased to
7.3% in 2005 from 9.9% in 2004, primarily due to the increase in Net Profits.
-61-
As further discussed in Notes 6 and 7 to the combined financial statements
indexed in Item 15 hereof, the Partnership is in the process of selling an
increased amount of the Partnership's properties as a result of the generally
favorable current environment for oil and gas dispositions and will be selling
all of the Partnership's properties in the liquidation process. The Partnership
will have lower future oil and gas sales and lower future production expenses
due to the sale of these properties.
Average Proceeds and Units of Production
The following tables are comparisons of the annual barrel of oil
equivalent ("boe") (one barrel of oil or six Mcf of gas) and the average
proceeds (oil and gas sales less lease operating expenses and production taxes)
received per boe attributable to the Partnerships' Net Profits for the years
ended December 31, 2006, 2005, and 2004.
2006 Compared to 2005
---------------------
Average Proceeds per
BOE BOE
----------------------------- --------------------------
P/ship 2006 2005(1) % Change 2006 2005(1) % Change
------ ------ ------- -------- ------ ------- --------
P-1 23,492 23,709 ( 1%) $27.95 $35.33 (21%)
P-3 39,183 40,010 ( 2%) 29.02 35.50 (18%)
P-4 43,500 46,943 ( 7%) 35.96 37.36 ( 4%)
P-5 56,761 45,491 25% 31.96 34.13 ( 6%)
P-6 86,471 77,079 12% 29.27 32.95 (11%)
2005 Compared to 2004
---------------------
Average Proceeds per
BOE BOE
----------------------------- --------------------------
P/ship 2005(1) 2004(1) % Change 2005(1) 2004(1) % Change
------ ------- ------- -------- ------- ------- --------
P-1 23,709 27,731 (15%) $35.33 $23.92 48%
P-3 40,010 46,554 (14%) 35.50 24.39 46%
P-4 46,943 55,582 (16%) 37.36 29.34 27%
P-5 45,491 50,394 (10%) 34.13 24.06 42%
P-6 77,079 78,342 ( 2%) 32.95 23.21 42%
-62-
- ------------
(1) These amounts have been restated to reflect the sale of various oil and
gas properties during 2006 and assets held for sale as of December 31,
2006 as discontinued operations. See Item 7 for more information about
these discontinued operations.
Liquidity and Capital Resources
See discussion above under the heading "Partnership Termination" for
information regarding termination of the Partnerships as of December 31, 2007.
Net proceeds from operations less necessary operating capital are
distributed to the Limited Partners on a quarterly basis. See "Item 5. Market
for Units, Related Limited Partner Matters, and Issuer Purchases of Units." The
net proceeds from the Net Profits Interests are generally not reinvested in
productive assets. Assuming 2006 production levels for future years, the
Partnerships' proved reserve quantities at December 31, 2006 would have the
following remaining lives:
Discontinued Operations Continuing Operations
----------------------- ---------------------
Partnership Gas-Years Oil-Years Gas-Years Oil-Years
----------- --------- --------- --------- ---------
P-1 5.3 8.5 8.1 6.3
P-3 5.3 8.5 8.5 9.5
P-4 2.9 12.4 8.4 3.1
P-5 2.8 11.6 7.1 6.5
P-6 2.6 15.7 7.1 10.3
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. Any increase or decrease from the high oil and gas prices at December
31, 2006 may cause an increase or decrease in the estimated life of said
reserves. As discussed above, the Partnerships will terminate on December 31,
2007.
The Partnerships' available capital from the Limited Partners'
subscriptions has been spent on Net Profits Interests and there should be no
further material capital resource commitments in the future. The Partnerships
have no debt commitments.
Expenditures by the Affiliated Programs for new wells, well recompletions,
or workovers, however, may reduce or eliminate cash available for a particular
quarterly cash distribution. The following table sets forth the development
costs related to the working interests which are burdened by the Partnerships'
net Profits Interests during the years ended December 31, 2006, 2005,
-63-
and 2004. Since these acquisition and development costs were charged against the
Net Profits payable to the Partnerships, such costs were indirectly borne by the
Partnerships.
Partnership 2006 2005 2004
----------- -------- -------- -------
P-1 $ 72,683 $ 15,825 $25,183
P-3 89,696 19,244 80,861
P-4 - 7,805 36,380
P-5 371,520 79,369 75,826
P-6 432,269 213,430 26,625
During 2006, capital expenditures affecting the P-5 Partnership's Net
Profits Interests totaled approximately $372,000. These costs were indirectly
incurred primarily as a result of recompletion activities on the Sugg AA 3067 #1
and Sugg AA 3 #1 wells located in Irion County, Texas, and the Loving 1 State #1
and Loving 1 State #2 wells located in Eddy County, New Mexico.
During 2006, capital expenditures affecting the P-6 Partnership's Net
Profits Interests totaled $432,000. These costs were indirectly incurred
primarily as a result of recompletion activities on the Sugg AA 3067 #1, Sugg AA
3 #1, Loving 1 State #1, Loving 1 State #2 wells referenced above and the
Henderson Stovall GU #2 well located in Wharton County, Texas. During 2005,
capital expenditures affecting the P-6 Partnership's Net Profits Interests
totaled $213,000. These costs were indirectly incurred primarily as a result of
recompletion activities on (i) the Henderson Stovall GU #2 well located in
Wharton County, Texas and (ii) the Berniece 1 well located in Grayson County,
Texas. The Henderson Stovall GU #2 well is included in the discontinued
operations and is anticipated to be sold in the next twelve months. The reader
should refer to Note 6 to the combined financial statements included in Item 8
of this Annual Report for additional information regarding this matter.
Other capital expenditures incurred by the Partnerships during 2006, 2005,
and 2004 were not material to the Partnerships' cash flows.
The Partnerships sold certain Net Profits Interests during 2006 and 2004.
No such sales occurred during 2005. These sales were made by the General Partner
after giving due consideration to both the offer price and the General Partner's
estimate of the underlying property's remaining proved reserves and future
operating costs. Net proceeds from the sales were distributed to the
Partnerships and 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 sale of Net Profits Interest
during 2006, 2005, and 2004, were as follows:
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Partnership 2006 2005 2004
----------- ---------- ---- -------
P-1 $3,607,523 $ - $16,707
P-3 4,678,725 - 21,366
P-4 240,230 - 434
P-5 6,297 - -
P-6 2,162 - -
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'
Net Profits Interests and sale of oil and gas properties, 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
generally replacing production.
If the Partnerships were to continue past December 31, 2007, the General
Partner would expect the Partnerships' general and administrative expenses to
increase due to costs required to comply with Section 404 of the Sarbanes-Oxley
Act of 2002. Such anticipated increase would reduce cash available for
distributions. Due to the Partnerships' termination on December 31, 2007, these
expenses will not occur; however, the Partnerships will incur increased expenses
as part of their liquidation (e.g. auction fees, legal and title expenses
associated with property sales, etc.).
Off-Balance Sheet Arrangements
The Partnerships do not have any off-balance sheet arrangements.
Tabular Disclosure of Contractual Obligations
The Partnerships do not have any contractual obligations of the type
required to be disclosed under this heading.
-65-
Critical Accounting Policies
The Partnerships follow the successful efforts method of accounting for
their Net Profits Interests. Under the successful efforts method, the
Partnerships capitalize all acquisition costs. Such acquisition costs include
costs incurred by the Partnerships or the General Partner to acquire a Net
Profits Interest, including related title insurance or examination costs,
commissions, engineering, legal and accounting fees, and similar costs directly
related to the acquisitions plus an allocated portion of the General Partner's
property screening costs. The net acquisition cost to the Partnerships of the
Net Profits Interests in properties acquired by the General Partner consists of
the cost of acquiring the underlying properties adjusted for the net cash
results of operations, including any interest incurred to finance the
acquisition, for the period of time the properties are held by the General
Partner.
Depletion of the cost of Net Profits Interests is computed on the
units-of-production method. The Partnerships' calculation of depletion of its
Net Profits Interests includes estimated dismantlement and abandonment costs,
net of estimated salvage values related to the underlying properties in which
the Partnership has a Net Profits Interest.
The Partnerships evaluate the recoverability of the carrying costs of
their Net Profits Interests in proved oil and gas properties for each oil and
gas well. If the unamortized costs, net of salvage value, of a Net Profits
Interest exceeds the expected undiscounted future cash flows from such Net
Profits Interest, the cost of the Net Profits Interest is written down to fair
value, which is determined by using the discounted future cash flows from the
Net Profits Interest. In the third quarter of 2006, natural gas prices declined
significantly. Consequently, the Partnerships incurred impairments utilizing the
natural gas spot prices that existed on September 30, 2006. The impairments
related to continuing operations recognized in the third quarter totaled
approximately $17,000, $25,000, $3,000, $57,000 and $20,000 for the P-1, P-3,
P-4, P-5, and P-6 Partnerships, respectively. Once incurred, an impairment of
oil and natural gas properties is not reversible.
Revenues from a Net Profits Interest consist of a share of the oil and gas
sales of the property, less operating and production expenses. The Partnerships
accrue for oil and gas revenues less expenses from the Net Profits Interests.
Sales of gas applicable to the Net Profits Interests are recorded as revenue
when the gas is metered and title transferred pursuant to the gas sales
contracts. During such times as sales of gas exceed a Partnership's pro rata Net
Profits Interest 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 attributable to the underlying property, at which time such excess is
recorded as a liability. The rates per Mcf used
-66-
to calculate this liability are based on the average gas price for which the
Partnerships are currently settling this liability. This liability is recorded
as a reduction of accounts receivable.
Also included in accounts receivable(payable)-Net Profits are amounts
which represent costs deferred or accrued for Net Profits relating to lease
operating expenses incurred in connection with the net underproduced or
overproduced gas imbalance positions. The rate used in calculating the deferred
charge or accrued liability is the average annual production costs per Mcf.
Asset Retirement Obligation
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 Pronouncement
In September 2006, the FASB issued FAS No. 157, "Fair Value Measurements"
(FAS No. 157). FAS No. 157 establishes a common definition for fair value to be
applied to US GAAP guidance requiring use of fair value, establishes a framework
for measuring fair value, and expands the disclosure about such fair value
measurements. FAS No. 157 is effective for fiscal years beginning after November
5, 2007. The Partnerships are currently assessing the impact of FAS No. 157 on
their results of operations, financial condition and cash flows.
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 and drilling costs incurred by the
Partnerships. This pressure is expected to continue to the extent 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."
-67-
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
The value of net assets in liquidation of the Partnerships is
substantially dependent on prices of crude oil, natural gas, and natural gas
liquids. Declines in commodity prices will adversely affect the amount of cash
that will be received from the sale of oil and gas and from the sale of the
Partnerships' oil and gas properties in liquidation, and thus ultimately affect
the amount of cash that will be available for distribution to the partners. The
following table presents the estimated change in value presuming a decrease of
10% in forecasted natural gas and crude oil prices. These estimated decreases in
liquidation values are in comparison to the estimated liquidation value
calculated using strip pricing for the unaudited pro-forma balance sheet at
December 31, 2006 presented in Note 7 to the combined financial statements
indexed in Item 15 hereof.
General Limited
Partnership Partner Partners Total
----------- -------- -------- ----------
P-1 $106,000 $602,000 $ 708,000
P-3 103,000 926,000 1,029,000
P-4 53,000 474,000 527,000
P-5 47,000 423,000 470,000
P-6 107,000 964,000 1,071,000
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The financial statements and supplementary data are indexed in Item 15
hereof. Such financial statements and supplementary data are audited and
presented on a going concern basis. Since termination of the Partnerships is now
imminent, the General Partner has prepared unaudited pro forma combined balance
sheets which are presented on a liquidation basis. These unaudited liquidation
basis combined balance sheets are included in Note 7 to the financial statements
indexed in Item 15 hereof.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
None.
-68-
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. This
evaluation did not result in any changes in the Partnerships' internal control
over financial reporting that materially affected, or were reasonably likely to
materially affect, the Partnerships' internal control over financial reporting.
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 2006 but which was not so
reported.
PART III.
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE GENERAL PARTNER, AND
CORPORATE GOVERNANCE
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.
Name Age Position with General Partner
---------------- --- --------------------------------
Dennis R. Neill 55 President and Director
Judy K. Fox 56 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.
-69-
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 2006 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.
Compensation Committee Interlocks and Insider Participation
As described above and in "Item 11. Executive Compensation" below, the
Partnerships have no directors or executive officers. The General Partner is
compensated by way of reimbursement of actual general and administrative and
operating costs incurred and attributable to the Partnerships. Such
reimbursements are governed by the terms of the Partnerships' partnership
agreements. No directors or executive officers of the General Partner receive
compensation directly from the Partnerships. Accordingly, the Partnerships do
not maintain a compensation committee.
-70-
Compensation Committee Report
As described above, the Partnerships do not have a compensation committee
or any board performing equivalent functions. The board of directors of the
General Partner has not reviewed and discussed the Compensation Discussion and
Analysis with management of the General Partner and does not believe that such
Compensation Discussion and Analysis should be included in this Annual Report.
The board of directors of the General Partner consists of Mr. Dennis R. Neill.
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., Samson Plaza, Two West Second Street, Tulsa, OK 74103.
Such request 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 and charged to each
Partnership during 2006, 2005, and 2004, 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.
-71-
Partnership 2006 2005 2004
----------- -------- -------- --------
P-1 $113,760 $113,760 $113,760
P-3 178,560 178,560 178,560
P-4 132,960 132,960 132,960
P-5 124,680 124,680 124,680
P-6 150,564 150,564 150,564
None of the officers or directors of the General Partner receive
compensation directly from the Partnerships. The Partnerships reimburse the
General Partner or its affiliates for that portion of such officers' and
directors' salaries and expenses attributable to time devoted by such
individuals to the Partnerships' activities based on the allocation method
described above. The following tables indicate the approximate amount of general
and administrative expense reimbursement attributable to the salaries of the
directors, officers, and employees of the General Partner and its affiliates
during 2006, 2005, and 2004:
[Remainder of Page Intentionally Left Blank]
-72-
Salary Reimbursements
P-1 Partnership
---------------
Three Years Ended December 31, 2006
Long Term Compensation
-----------------------------------
Annual Compensation Awards Payouts
------------------------------ ----------------------- -------
Securi-
Other ties All
Name Annual Restricted Under- Other
and Compen- Stock lying LTIP Compen-
Principal Salary Bonus sation Award(s) Options/ Payouts sation
Position Year ($) ($) ($) ($) SARs(#) ($) ($)
- --------------- ---- ------- ------- ------- ---------- -------- ------- -------
<s> <c> <c> <c> <c> <c> <c> <c> <c>
Dennis R. Neill,
President(1)(2) 2004 - - - - - - -
2005 - - - - - - -
2006 - - - - - - -
All Executive
Officers,
Directors,
and Employees
as a group(2) 2004 $66,157 - - - - - -
2005 $67,887 - - - - - -
2006 $69,729 - - - - - -
- ----------
(1) The general and administrative expenses paid by the P-1 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 P-1 Partnership and no individual's salary or other
compensation reimbursement from the P-1 Partnership equals or exceeds
$100,000 per annum.
-73-
Salary Reimbursements
P-3 Partnership
---------------
Three Years Ended December 31, 2006
Long Term Compensation
----------------------------------
Annual Compensation Awards Payouts
------------------------------- ---------------------- -------
Securi-
Other ties All
Name Annual Restricted Under- Other
and Compen- Stock lying LTIP Compen-
Principal Salary Bonus sation Award(s) Options/ Payouts sation
Position Year ($) ($) ($) ($) SARs(#) ($) ($)
- --------------- ---- -------- ------- ------- ---------- -------- ------- -------
<s> <c> <c> <c> <c> <c> <c> <c> <c>
Dennis R. Neill,
President(1)(2) 2004 - - - - - - -
2005 - - - - - - -
2006 - - - - - - -
All Executive
Officers,
Directors,
and Employees
as a group(2) 2004 $103,842 - - - - - -
2005 $106,557 - - - - - -
2006 $109,448 - - - - - -
- ---------
(1) The general and administrative expenses paid by the P-3 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 P-3 Partnership and no individual's salary or other
compensation reimbursement from the P-3 Partnership equals or exceeds
$100,000 per annum.
-74-
Salary Reimbursements
P-4 Partnership
---------------
Three Years Ended December 31, 2006
Long Term Compensation
------------------------------------
Annual Compensation Awards Payouts
----------------------------- ----------------------- -------
Securi-
Other ties All
Name Annual Restricted Under- Other
and Compen- Stock lying LTIP Compen-
Principal Salary Bonus sation Award(s) Options/ Payouts sation
Position Year ($) ($) ($) ($) SARs(#) ($) ($)
- --------------- ---- ------- ------- ------- ---------- -------- ------- -------
<s> <c> <c> <c> <c> <c> <c> <c> <c>
Dennis R. Neill,
President(1)(2) 2004 - - - - - - -
2005 - - - - - - -
2006 - - - - - - -
All Executive
Officers,
Directors,
and Employees
as a group(2) 2004 $77,323 - - - - - -
2005 $79,345 - - - - - -
2006 $81,497 - - - - - -
- ----------
(1) The general and administrative expenses paid by the P-4 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 P-4 Partnership and no individual's salary or other
compensation reimbursement from the P-4 Partnership equals or exceeds
$100,000 per annum.
-75-
Salary Reimbursements
P-5 Partnership
---------------
Three Years Ended December 31, 2006
Long Term Compensation
------------------------------------
Annual Compensation Awards Payouts
----------------------------- ----------------------- -------
Securi-
Other ties All
Name Annual Restricted Under- Other
and Compen- Stock lying LTIP Compen-
Principal Salary Bonus sation Award(s) Options/ Payouts sation
Position Year ($) ($) ($) ($) SARs(#) ($) ($)
- --------------- ---- ------- ------- ------- ---------- -------- ------- -------
<s> <c> <c> <c> <c> <c> <c> <c> <c>
Dennis R. Neill,
President(1)(2) 2004 - - - - - - -
2005 - - - - - - -
2006 - - - - - - -
All Executive
Officers,
Directors,
and Employees
as a group(2) 2004 $72,508 - - - - - -
2005 $74,404 - - - - - -
2006 $76,422 - - - - - -
- ----------
(1) The general and administrative expenses paid by the P-5 Partnership and
attributable to salary reimbursements do not include any salary to other
compensation attributable to Mr. Neill.
(2) No officer or director of Geodyne or its affiliates provides full-time
services to the P-5 Partnership and no individual's salary or other
compensation reimbursement from the P-5 Partnership equals or exceeds
$100,000 per annum.
-76-
Salary Reimbursements
P-6 Partnership
---------------
Three Years Ended December 31, 2006
Long Term Compensation
---------------------------------
Annual Compensation Awards Payouts
------------------------------- ---------------------- -------
Securi-
Other ties All
Name Annual Restricted Under- Other
and Compen- Stock lying LTIP Compen-
Principal Salary Bonus sation Award(s) Options/ Payouts sation
Position Year ($) ($) ($) ($) SARs(#) ($) ($)
- --------------- ---- ------- ------- ------- ---------- -------- ------- -------
<s> <c> <c> <c> <c> <c> <c> <c> <c>
Dennis R. Neill,
President(1)(2) 2004 - - - - - - -
2005 - - - - - - -
2006 - - - - - - -
All Executive
Officers,
Directors,
and Employees
as a group(2) 2004 $87,560 - - - - - -
2005 $89,851 - - - - - -
2006 $92,288 - - - - - -
- ----------
(1) The general and administrative expenses paid by the P-6 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 P-6 Partnership and no individual's salary or other
compensation reimbursement from the P-6 Partnership equals or exceeds
$100,000 per annum.
-77-
Affiliates of the Partnerships serve as operator of some of the wells in
which the Partnerships own a Net Profits Interest. The owners of the working
interests in these wells contract 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 which burdened the Partnerships' Net Profits Interests during the
year ended December 31, 2006 is approximately $8,000, $29,000, $8,000, $39,000,
and $124,000, respectively, for the P-1, P-3, P-4, P-5 and P-6 Partnerships.
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 a Net Profits 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.
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
director and officers of the General Partner, and (iii) the General Partner and
its affiliates. The address of the General Partner, its officers and director,
and Samson Resources Company is Samson Plaza, Two West Second Street, Tulsa,
Oklahoma 74103.
Number of Units
Beneficially
Owned (Percent
Beneficial Owner of Outstanding)
- -------------------------------------------- ---------------
P-1 Partnership:
- ---------------
Samson Resources Company 34,423 (31.9%)
All affiliates, directors, and officers of
the General Partner as a group and the
General Partner (4 persons) 34,423 (31.9%)
-78-
P-3 Partnership:
- ---------------
Samson Resources Company 73,379 (43.3%)
All affiliates, directors, and officers
of the General Partner as a group and
the General Partner (4 persons) 73,379 (43.3%)
P-4 Partnership:
- ---------------
Samson Resources Company 37,572 (29.7%)
All affiliates, directors, and officers
of the General Partner as a group and
the General Partner (4 persons) 37,572 (29.7%)
P-5 Partnership:
- ---------------
Samson Resources Company 32,565 (27.5%)
All affiliates, directors, and officers
of the General Partner as a group and
the General Partner (4 persons) 32,565 (27.5%)
P-6 Partnership:
- ---------------
Samson Resources Company 23,192 (16.2%)
ATL, Inc.
1200 Harbor Boulevard, 5th Floor
Weehawken, NJ 07087 54,887 (38.4%)
All affiliates, directors, and officers
of the General Partner as a group and
the General Partner (4 persons) 23,192 (16.2%)
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS AND
DIRECTOR INDEPENDENCE
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
opportunities and the nature of the compensation arrangements between the
Partnerships and the General Partner also create potential conflicts of
-79-
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 the 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'
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 operate certain wells in which the
Partnerships have a net profits interest and are compensated for such services
at rates comparable to charges of unaffiliated third parties for services in the
same geographic area. These costs are charged to the owners of the working
interest of such wells and are considered when calculating the Net Profits
payable to the Partnerships. These costs are thus indirectly borne by the
Partnership.
Affiliates of the Partnerships are solely responsible for the negotiation,
administration, and enforcement of oil and gas sales agreements covering the
leasehold interests in which the Partnerships hold Net Profits Interests.
Because affiliates of the Partnerships who provide services to the owners of the
Working Interests 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 owners of such Working Interests 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 negotiating strength and contractual
positions of the owners of such Working Interests have been enhanced by virtue
of their affiliation with Samson.
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The Partnerships will terminate as of December 31, 2007. As part of the
liquidation and winding-up process the General Partner will liquidate the
Partnerships' properties by offering them to all interested parties through
normal oil and gas property auction processes as well as appropriate negotiated
transactions. It is possible that the General Partner will package some
properties which have value with properties that have no or low value or are
burdened with actual or potential liabilities. The General Partner intends to
sell all such property packages and any associated or otherwise remaining
Partnership assets and liabilities to the highest bidder at auction. It is
possible that affiliates of the General Partner may participate in any public
auction of these properties and may be the successful high bidder on some or all
of the properties.
ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES
Audit Fees
During 2006 and 2005, each Partnership paid the following audit fees:
2006 2005
------- -------
Year-end audit per engagement letter $26,418 $23,716
1st quarter 10-Q review 1,020 925
2nd quarter 10-Q review 1,020 917
3rd quarter 10-Q review 1,020 917
8-K reviews(1) 4,525 -
--------------
(1) These fees were incurred by only the P-1 and P-3 Partnerships.
Audit-Related Fees
During 2006 and 2005 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 2006 and 2005 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.
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All Other Fees
During 2006 and 2005 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' independent registered public 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 independent registered public accountants' independence.
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 Institutional/Pension Energy Income P-1 Limited Partnership
and Geodyne NPI Partnership P-1 Geodyne Institutional/Pension Energy
Income Limited Partnership P-3 and Geodyne NPI Partnership P-3
Geodyne Institutional/Pension Energy Income Limited Partnership P-4
and Geodyne NPI Partnership P-4 Geodyne Institutional/Pension Energy
Income Limited Partnership P-5 and Geodyne NPI Partnership P-5
Geodyne Institutional/Pension Energy Income Limited Partnership P-6
and Geodyne NPI Partnership P-6
as of December 31, 2006 and 2005 and for each of the three years in
the period ended December 31, 2006 are filed as part of this report:
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Report of Independent Registered Public Accounting Firm
Combined Balance Sheets
Combined Statements of Operations
Combined Statements of Changes in
Partners' Capital (Deficit)
Combined Statements of Cash Flows
Notes to Combined Financial Statements
(2) Financial Statement Schedules:
None.
(3) Exhibits:
Exh.
No. Exhibit
- ---- -------
4.1 Certificate of Limited Partnership dated March 16, 1988 for the Geodyne
Institutional/ Pension Energy Income P-1 Limited Partnership filed as
Exhibit 4.1 to Registrant's Annual Report on Form 10-K for the year
ended December 31, 2001, filed with the SEC on February 26, 2002 and is
hereby incorporated by reference.
4.2 Amended and Restated Agreement of Limited Partnership dated October 25,
1988 for the Geodyne Institutional/Pension Energy Income P-1 Limited
Partnership 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 26, 2002 and is hereby incorporated by reference.
4.3 First Amendment to Certificate of Limited Partnership and First
Amendment to Amended and Restated Agreement of Limited Partnership
dated February 24, 1993, for the Geodyne Institutional/Pension Energy
Income P-1 Limited Partnership filed as Exhibit 4.3 to Registrant's
Annual Report on Form 10-K for the year ended December 31, 2001, filed
with the SEC on February 26, 2002 and is hereby incorporated by
reference.
4.4 Second Amendment to Certificate of Limited Partnership dated July 1,
1996 for the Geodyne Institutional/Pension Energy Income P-1 Limited
Partnership filed as Exhibit 4.4 to Registrant's Annual Report on Form
10-K for the year ended December 31, 2001, filed with the SEC on
February 26, 2002 and is hereby incorporated by reference.
4.5 Second Amendment to Amended and Restated Agreement of Limited
Partnership dated August 4, 1993, for the Geodyne Institutional/Pension
Energy Income P-1 Limited Partnership filed as Exhibit 4.5 to
Registrant's Annual Report on Form 10-K for the year ended December 31,
2001,
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filed with the SEC on February 26, 2002 and is hereby incorporated by
reference.
4.6 Third Amendment to Amended and Restated Agreement of Limited
Partnership dated August 31, 1995, for the Geodyne
Institutional/Pension Energy Income P-1 Limited Partnership filed as
Exhibit 4.6 to Registrant's Annual Report on Form 10-K for the year
ended December 31, 2001, filed with the SEC on February 26, 2002 and is
hereby incorporated by reference.
4.7 Fourth Amendment to Amended and Restated Agreement of Limited
Partnership dated July 1, 1996, for the Geodyne Institutional/Pension
Energy Income P-1 Limited Partnership filed as Exhibit 4.7 to
Registrant's Annual Report on Form 10-K for the year ended December 31,
2001, filed with the SEC on February 26, 2002 and is hereby
incorporated by reference.
4.8 Fifth Amendment to Amended and Restated Agreement of Limited
Partnership dated October 27, 2005, for the Geodyne Institutional/
Pension Energy Income P-1 Limited Partnership filed as Exhibit 4.8 to
Registrant's Annual Report on Form 10-K for the year ended December 31,
2005, filed with the SEC on March 29, 2006 and is hereby incorporated
by reference.
4.9 Certificate of Limited Partnership dated February 13, 1989 for the
Geodyne Institutional/ Pension Energy Income Limited Partnership P-3
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 26,
2002 and is hereby incorporated by reference.
4.10 Amended and Restated Agreement of Limited Partnership dated May 10,
1989 for the Geodyne Institutional/Pension Energy Income Limited
Partnership P-3 filed as Exhibit 4.16 to Registrant's Annual Report on
Form 10-K for the year ended December 31, 2001, filed with the SEC on
February 26, 2002 and is hereby incorporated by reference.
4.11 First Amendment to Certificate of Limited Partnership and First
Amendment to Amended and Restated Agreement of Limited Partnership
dated February 24, 1993, for the Geodyne Institutional/Pension Energy
Income Limited Partnership P-3 filed as Exhibit 4.17 to Registrant's
Annual Report on Form 10-K for the year ended December 31, 2001, filed
with the SEC on February 26, 2002 and is hereby incorporated by
reference.
4.12 Second Amendment to Certificate of Limited Partnership dated July 1,
1996 for the Geodyne Institutional/Pension Energy Income Limited
Partnership P-3 filed as Exhibit 4.18 to Registrant's Annual Report on
Form 10-K for the
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year ended December 31, 2001, filed with the SEC on February 26, 2002
and is hereby incorporated by reference.
4.13 Second Amendment to Amended and Restated Agreement of Limited
Partnership dated August 4, 1993, for the Geodyne Institutional/Pension
Energy Income Limited Partnership P-3 filed as Exhibit 4.19 to
Registrant's Annual Report on Form 10-K for the year ended December 31,
2001, filed with the SEC on February 26, 2002 and is hereby
incorporated by reference.
4.14 Third Amendment to Amended and Restated Agreement of Limited
Partnership dated August 31, 1995, for the Geodyne
Institutional/Pension Energy Income Limited Partnership P-3 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 26, 2002 and is
hereby incorporated by reference.
4.15 Fourth Amendment to Amended and Restated Agreement of Limited
Partnership dated July 1, 1996, for the Geodyne Institutional/Pension
Energy Income Limited Partnership P-3 filed as Exhibit 4.21 to
Registrant's Annual Report on Form 10-K for the year ended December 31,
2001, filed with the SEC on February 26, 2002 and is hereby
incorporated by reference.
4.16 Fifth Amendment to Amended and Restated Agreement of Limited
Partnership dated October 27, 2005, for the Geodyne Institutional/
Pension Energy Income P-3 Limited Partnership filed as Exhibit 4.16 to
Registrant's Annual Report on Form 10-K for the year ended December 31,
2005, filed with the SEC on March 29, 2006 and is hereby incorporated
by reference.
4.17 Certificate of Limited Partnership dated May 10, 1989 for the Geodyne
Institutional/ Pension Energy Income Limited Partnership P-4 filed as
Exhibit 4.22 to Registrant's Annual Report on Form 10-K for the year
ended December 31, 2001, filed with the SEC on February 26, 2002 and is
hereby incorporated by reference.
4.18 Amended and Restated Agreement of Limited Partnership dated November
20, 1989 for the Geodyne Institutional/Pension Energy Income Limited
Partnership P-4 filed as Exhibit 4.23 to Registrant's Annual Report on
Form 10-K for the year ended December 31, 2001, filed with the SEC on
February 26, 2002 and is hereby incorporated by reference.
4.19 First Amendment to Certificate of Limited Partnership and First
Amendment to Amended and Restated Agreement of Limited Partnership
dated February 24, 1993, for the Geodyne Institutional/Pension Energy
Income Limited
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Partnership P-4 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 26, 2002 and is hereby incorporated by reference.
4.20 Second Amendment to Certificate of Limited Partnership dated July 1,
1996 for the Geodyne Institutional/Pension Energy Income Limited
Partnership P-4 filed as Exhibit 4.25 to Registrant's Annual Report on
Form 10-K for the year ended December 31, 2001, filed with the SEC on
February 26, 2002 and is hereby incorporated by reference.
4.21 Second Amendment to Amended and Restated Agreement of Limited
Partnership dated August 4, 1993, for the Geodyne Institutional/Pension
Energy Income Limited Partnership P-4 filed as Exhibit 4.26 to
Registrant's Annual Report on Form 10-K for the year ended December 31,
2001, filed with the SEC on February 26, 2002 and is hereby
incorporated by reference.
4.22 Third Amendment to Amended and Restated Agreement of Limited
Partnership dated August 31, 1995, for the Geodyne
Institutional/Pension Energy Income Limited Partnership P-4 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 26, 2002 and is
hereby incorporated by reference.
4.23 Fourth Amendment to Amended and Restated Agreement of Limited
Partnership dated July 1, 1996, for the Geodyne Institutional/Pension
Energy Income Limited Partnership P-4 filed as Exhibit 4.28 to
Registrant's Annual Report on Form 10-K for the year ended December 31,
2001, filed with the SEC on February 26, 2002 and is hereby
incorporated by reference.
4.24 Fifth Amendment to Amended and Restated Agreement of Limited
Partnership dated October 27, 2005, for the Geodyne Institutional/
Pension Energy Income P-41 Limited Partnership filed as Exhibit 4.24 to
Registrant's Annual Report on Form 10-K for the year ended December 31,
2005, filed with the SEC on March 29, 2006 and is hereby incorporated
by reference.
4.25 Certificate of Limited Partnership dated November 9, 1989 for the
Geodyne Institutional/ Pension Energy Income Limited Partnership P-5
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 26,
2002 and is hereby incorporated by reference.
4.26 Amended and Restated Agreement of Limited Partnership dated February
26, 1990 for the Geodyne Institutional/Pension Energy Income Limited
Partnership P-
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5 filed as Exhibit 4.30 to Registrant's Annual Report on Form 10-K for
the year ended December 31, 2001, filed with the SEC on February 26,
2002 and is hereby incorporated by reference.
4.27 First Amendment to Certificate of Limited Partnership and First
Amendment to Amended and Restated Agreement of Limited Partnership
dated February 24, 1993, for the Geodyne Institutional/Pension Energy
Income Limited Partnership P-5 filed as Exhibit 4.31 to Registrant's
Annual Report on Form 10-K for the year ended December 31, 2001, filed
with the SEC on February 26, 2002 and is hereby incorporated by
reference.
4.28 Second Amendment to Certificate of Limited Partnership dated July 1,
1996 for the Geodyne Institutional/Pension Energy Income Limited
Partnership P-5 filed as Exhibit 4.32 to Registrant's Annual Report on
Form 10-K for the year ended December 31, 2001, filed with the SEC on
February 26, 2002 and is hereby incorporated by reference.
4.29 Second Amendment to Amended and Restated Agreement of Limited
Partnership dated August 4, 1993, for the Geodyne Institutional/Pension
Energy Income Limited Partnership P-5 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 26, 2002 and is hereby
incorporated by reference.
4.30 Third Amendment to Amended and Restated Agreement of Limited
Partnership dated August 31, 1995, for the Geodyne
Institutional/Pension Energy Income Limited Partnership P-5 filed as
Exhibit 4.34 to Registrant's Annual Report on Form 10-K for the year
ended December 31, 2001, filed with the SEC on February 26, 2002 and is
hereby incorporated by reference.
4.31 Fourth Amendment to Amended and Restated Agreement of Limited
Partnership dated July 1, 1996, for the Geodyne Institutional/Pension
Energy Income Limited Partnership P-5 filed as Exhibit 4.35 to
Registrant's Annual Report on Form 10-K for the year ended December 31,
2001, filed with the SEC on February 26, 2002 and is hereby
incorporated by reference.
4.32 Fifth Amendment to Amended and Restated Agreement of Limited
Partnership dated October 27, 2005, for the Geodyne Institutional/
Pension Energy Income P-5 Limited Partnership filed as Exhibit 4.32 to
Registrant's Annual Report on Form 10-K for the year ended December 31,
2005, filed with the SEC on March 29, 2006 and is hereby incorporated
by reference.
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4.33 Certificate of Limited Partnership dated November 28, 1989 for the
Geodyne Institutional/ Pension Energy Income Limited Partnership P-6
filed as Exhibit 4.36 to Registrant's Annual Report on Form 10-K for
the year ended December 31, 2001, filed with the SEC on February 26,
2002 and is hereby incorporated by reference.
4.34 Amended and Restated Agreement of Limited Partnership dated October 5,
1990 for the Geodyne Institutional/Pension Energy Income Limited
Partnership P-6 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 26, 2002 and is hereby incorporated by reference.
4.35 First Amendment to Certificate of Limited Partnership and First
Amendment to Amended and Restated Agreement of Limited Partnership
dated February 24, 1993, for the Geodyne Institutional/Pension Energy
Income Limited Partnership P-6 filed as Exhibit 4.38 to Registrant's
Annual Report on Form 10-K for the year ended December 31, 2001, filed
with the SEC on February 26, 2002 and is hereby incorporated by
reference.
4.36 Second Amendment to Certificate of Limited Partnership dated July 1,
1996 for the Geodyne Institutional/Pension Energy Income Limited
Partnership P-6 filed as Exhibit 4.39 to Registrant's Annual Report on
Form 10-K for the year ended December 31, 2001, filed with the SEC on
February 26, 2002 and is hereby incorporated by reference.
4.37 Second Amendment to Amended and Restated Agreement of Limited
Partnership dated August 4, 1993, for the Geodyne Institutional/Pension
Energy Income Limited Partnership P-6 filed as Exhibit 4.40 to
Registrant's Annual Report on Form 10-K for the year ended December 31,
2001, filed with the SEC on February 26, 2002 and is hereby
incorporated by reference.
4.38 Third Amendment to Amended and Restated Agreement of Limited
Partnership dated August 31, 1995, for the Geodyne
Institutional/Pension Energy Income Limited Partnership P-6 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 26, 2002 and is
hereby incorporated by reference.
4.39 Fourth Amendment to Amended and Restated Agreement of Limited
Partnership dated July 1, 1996, for the Geodyne Institutional/Pension
Energy Income Limited Partnership P-6 filed as Exhibit 4.42 to
Registrant's Annual Report on Form 10-K for the year ended December 31,
2001, filed with the SEC on February 26, 2002 and is hereby
incorporated by reference.
-88-
4.40 Fifth Amendment to Amended and Restated Agreement of Limited
Partnership dated October 27, 2005, for the Geodyne Institutional/
Pension Energy Income P-6 Limited Partnership filed as Exhibit 4.40 to
Registrant's Annual Report on Form 10-K for the year ended December 31,
2005, filed with the SEC on March 29, 2006 and is hereby incorporated
by reference.
10.1 Amended and Restated Agreement of Partnership dated October 25, 1988
for the Geodyne NPI Partnership P-1 filed as Exhibit 10.1 to
Registrant's Annual Report on Form 10-K for the year ended December 31,
2001, filed with the SEC on February 26, 2002 and is hereby
incorporated by reference.
10.2 First Amendment to Amended and Restated Agreement of Partnership dated
February 26, 1993 for the Geodyne NPI Partnership P-1 filed as Exhibit
10.2 to Registrant's Annual Report on Form 10-K for the year ended
December 31, 2001, filed with the SEC on February 26, 2002 and is
hereby incorporated by reference.
10.3 Second Amendment to Amended and Restated Agreement of Partnership dated
July 1, 1996 for the Geodyne NPI Partnership P-1 filed as Exhibit 10.3
to Registrant's Annual Report on Form 10-K for the year ended December
31, 2001, filed with the SEC on February 26, 2002 and is hereby
incorporated by reference.
10.4 Third Amendment to Amended and Restated Agreement of Partnership dated
October 27, 2005 for the Geodyne NPI Partnership P-1 filed as Exhibit
10.4 to Registrant's Annual Report on Form 10-K for the year ended
December 31, 2005, filed with the SEC on March 29, 2006 and is hereby
incorporated by reference.
10.5 Agreement of Partnership dated February 9, 1989 for the Geodyne NPI
Partnership P-3 filed as Exhibit 10.7 to Registrant's Annual Report on
Form 10-K for the year ended December 31, 2001, filed with the SEC on
February 26, 2002 and is hereby incorporated by reference.
10.6 First Amendment to Agreement of Partnership dated February 26, 1993 for
the Geodyne NPI Partnership P-3 filed as Exhibit 10.8 to Registrant's
Annual Report on Form 10-K for the year ended December 31, 2001, filed
with the SEC on February 26, 2002 and is hereby incorporated by
reference.
10.7 Second Amendment to Agreement of Partnership dated July 1, 1996 for the
Geodyne NPI Partnership P-3 filed as Exhibit 10.9 to Registrant's
Annual Report on Form 10-K for the
-89-
year ended December 31, 2001, filed with the SEC on February 26, 2002
and is hereby incorporated by reference.
10.8 Third Amendment to Agreement of Partnership dated October 27, 2005for
the Geodyne NPI Partnership P-3 filed as Exhibit 10.8 to Registrant's
Annual Report on Form 10-K for the year ended December 31, 2005, filed
with the SEC on March 29, 2006 and is hereby incorporated by reference.
10.9 Agreement of Partnership dated April 24, 1989 for the Geodyne NPI
Partnership P-4 filed as Exhibit 10.10 to Registrant's Annual Report on
Form 10-K for the year ended December 31, 2001, filed with the SEC on
February 26, 2002 and is hereby incorporated by reference.
10.10 First Amendment to Agreement of Partnership dated February 26, 1993 for
the Geodyne NPI Partnership P-4 filed as Exhibit 10.11 to Registrant's
Annual Report on Form 10-K for the year ended December 31, 2001, filed
with the SEC on February 26, 2002 and is hereby incorporated by
reference.
10.11 Second Amendment to Agreement of Partnership dated July 1, 1996 for the
Geodyne NPI Partnership P-4 filed as Exhibit 10.12 to Registrant's
Annual Report on Form 10-K for the year ended December 31, 2001, filed
with the SEC on February 26, 2002 and is hereby incorporated by
reference.
10.12 Third Amendment to Agreement of Partnership dated October 27, 2005 for
the Geodyne NPI Partnership P-4 filed as Exhibit 10.12 to Registrant's
Annual Report on Form 10-K for the year ended December 31, 2005, filed
with the SEC on March 29, 2006 and is hereby incorporated by reference.
10.13 Agreement of Partnership dated October 27, 1989 for the Geodyne NPI
Partnership P-5 filed as Exhibit 10.13 to Registrant's Annual Report on
Form 10-K for the year ended December 31, 2001, filed with the SEC on
February 26, 2002 and is hereby incorporated by reference.
10.14 First Amendment to Agreement of Partnership dated February 26, 1993 for
the Geodyne NPI Partnership P-5 filed as Exhibit 10.14 to Registrant's
Annual Report on Form 10-K for the year ended December 31, 2001, filed
with the SEC on February 26, 2002 and is hereby incorporated by
reference.
10.15 Second Amendment to Agreement of Partnership dated July 1, 1996 for the
Geodyne NPI Partnership P-5 filed as Exhibit 10.15 to Registrant's
Annual Report on Form 10-K for the year ended December 31, 2001, filed
with the SEC on February 26, 2002 and is hereby incorporated by
reference.
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10.16 Third Amendment to Agreement of Partnership dated October 27, 2005 for
the Geodyne NPI Partnership P-5 filed as Exhibit 10.16 to Registrant's
Annual Report on Form 10-K for the year ended December 31, 2005, filed
with the SEC on March 29, 2006 and is hereby incorporated by reference.
10.17 Agreement of Partnership dated November 28, 1989 for the Geodyne NPI
Partnership P-6 filed as Exhibit 10.16 to Registrant's Annual Report on
Form 10-K for the year ended December 31, 2001, filed with the SEC on
February 26, 2002 and is hereby incorporated by reference.
10.18 First Amendment to Agreement of Partnership dated February 26, 1993 for
the Geodyne NPI Partnership P-6 filed as Exhibit 10.17 to Registrant's
Annual Report on Form 10-K for the year ended December 31, 2001, filed
with the SEC on February 26, 2002 and is hereby incorporated by
reference.
10.19 Second Amendment to Agreement of Partnership dated July 1, 1996 for the
Geodyne NPI Partnership P-6 filed as Exhibit 10.18 to Registrant's
Annual Report on Form 10-K for the year ended December 31, 2001, filed
with the SEC on February 26, 2002 and is hereby incorporated by
reference.
10.20 Third Amendment to Agreement of Partnership dated October 27, 2005 for
the Geodyne NPI Partnership P-6 filed as Exhibit 10.20 to Registrant's
Annual Report on Form 10-K for the year ended December 31, 2005, filed
with the SEC on March 29, 2006 and is hereby incorporated by reference.
*23.1 Consent of Ryder Scott Company, L.P. for the Geodyne
Institutional/Pension Energy Income P-1 Limited Partnership.
*23.2 Consent of Ryder Scott Company, L.P. for the Geodyne
Institutional/Pension Energy Income Limited Partnership P-3.
*23.3 Consent of Ryder Scott Company, L.P. for the Geodyne
Institutional/Pension Energy Income Limited Partnership P-4.
*23.4 Consent of Ryder Scott Company, L.P. for the Geodyne
Institutional/Pension Energy Income Limited Partnership P-5.
*23.5 Consent of Ryder Scott Company, L.P. for the Geodyne
Institutional/Pension Energy Income Limited Partnership P-6.
*31.1 Certification by Dennis R. Neill required by Rule 13a-14(a)/15d-14(a)
for the Geodyne Institutional/Pension Energy Income P-1 Limited
Partnership.
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*31.2 Certification by Craig D. Loseke required by Rule 13a-14(a)/15d-14(a)
for the Geodyne Institutional/Pension Energy Income P-1 Limited
Partnership.
*31.3 Certification by Dennis R. Neill required by Rule 13a-14(a)/15d-14(a)
for the Geodyne Institutional/Pension Energy Income Limited Partnership
P-3.
*31.4 Certification by Craig D. Loseke required by Rule 13a-14(a)/15d-14(a)
for the Geodyne Institutional/Pension Energy Income Limited Partnership
P-3.
*31.5 Certification by Dennis R. Neill required by Rule 13a-14(a)/15d-14(a)
for the Geodyne Institutional/Pension Energy Income Limited Partnership
P-4.
*31.6 Certification by Craig D. Loseke required by Rule 13a-14(a)/15d-14(a)
for the Geodyne Institutional/Pension Energy Income Limited Partnership
P-4.
*31.7 Certification by Dennis R. Neill required by Rule 13a-14(a)/15d-14(a)
for the Geodyne Institutional/Pension Energy Income Limited Partnership
P-5.
*31.8 Certification by Craig D. Loseke required by Rule 13a-14(a)/15d-14(a)
for the Geodyne Institutional/Pension Energy Income Limited Partnership
P-5.
*31.9 Certification by Dennis R. Neill required by Rule 13a-14(a)/15d-14(a)
for the Geodyne Institutional/Pension Energy Income Limited Partnership
P-6.
*31.10 Certification by Craig D. Loseke required by Rule 13a-14(a)/15d-14(a)
for the Geodyne Institutional/Pension Energy Income Limited Partnership
P-6.
*32.1 Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant
to Section 906 of the Sarbanes-Oxley Act of 2002 for the Geodyne
Institutional/Pension Energy Income P-1 Limited Partnership.
*32.2 Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant
to Section 906 of the Sarbanes-Oxley Act of 2002 for the Geodyne
Institutional/Pension Energy Income Limited Partnership P-3.
*32.3 Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant
to Section 906 of the Sarbanes-Oxley Act of 2002 for the Geodyne
Institutional/Pension Energy Income Limited Partnership P-4.
*32.4 Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant
to Section 906 of the Sarbanes-Oxley Act
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of 2002 for the Geodyne Institutional/Pension Energy Income Limited
Partnership P-5.
*32.5 Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant
to Section 906 of the Sarbanes-Oxley Act of 2002 for the Geodyne
Institutional/Pension Energy Income Limited Partnership P-6.
All other Exhibits are omitted as inapplicable.
----------
*Filed herewith.
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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 INSTITUTIONAL/PENSION ENERGY INCOME P-1
LIMITED PARTNERSHIP
GEODYNE INSTITUTIONAL/PENSION ENERGY INCOME
LIMITED PARTNERSHIP P-3
GEODYNE INSTITUTIONAL/PENSION ENERGY INCOME
LIMITED PARTNERSHIP P-4
GEODYNE INSTITUTIONAL/PENSION ENERGY INCOME
LIMITED PARTNERSHIP P-5
GEODYNE INSTITUTIONAL/PENSION ENERGY INCOME
LIMITED PARTNERSHIP P-6
By: GEODYNE RESOURCES, INC.
General Partner
April 16, 2007
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 April 16, 2007
-------------------- Director (Principal
Dennis R. Neill Executive Officer)
//s//Craig D. Loseke Chief Accounting April 16, 2007
-------------------- Officer (Principal
Craig D. Loseke Accounting and
Financial Officer)
//S//Judy K. Fox Secretary April 16, 2007
--------------------
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 INSTITUTIONAL/PENSION ENERGY INCOME P-1 LIMITED PARTNERSHIP AND GEODYNE
NPI PARTNERSHIP P-1
In our opinion, the accompanying combined balance sheets and the related
combined statements of operations, changes in partners' capital (deficit) and
cash flows present fairly, in all material respects, the combined financial
position of the Geodyne Institutional/Pension Energy Income P-1 Limited
Partnership, a Texas limited partnership, and Geodyne NPI Partnership P-1, an
Oklahoma general partnership, at December 31, 2006 and 2005, and the combined
results of their operations and their cash flows for each of the three years in
the period ended December 31, 2006, in conformity with accounting principles
generally accepted in the United States of America. These financial statements
are the responsibility of the Partnerships' management. Our responsibility is to
express an opinion on these financial statements based on our audits. We
conducted our audits of these 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 7 to the combined financial statements, on February
5, 2007 the General Partner mailed a notice to the limited partners that the
Partnership will terminate at the end of its current term, December 31, 2007,
and that in connection with such termination the General Partner would liquidate
all of the Partnership's assets.
PricewaterhouseCoopers LLP
Tulsa, Oklahoma
April 16, 2007
F-1
GEODYNE INSTITUTIONAL/PENSION ENERGY INCOME P-1 LIMITED PARTNERSHIP
GEODYNE NPI PARTNERSHIP P-1
Combined Balance Sheets
December 31, 2006 and 2005
ASSETS
------
2006 2005
------------ ------------
CURRENT ASSETS:
Cash and cash equivalents $ 496,665 $ 595,286
Accounts receivable:
Net Profits 54,786 320,323
Assets held for sale (Note 6) 311,549 -
--------- ---------
Total current assets $ 863,000 $ 915,609
NET PROFITS INTERESTS, net, utilizing
the successful efforts method 327,000 690,032
--------- ---------
$1,190,000 $1,605,641
========= =========
PARTNERS' CAPITAL (DEFICIT)
---------------------------
PARTNERS' CAPITAL (DEFICIT):
General Partner ($ 19,475) ($ 29,401)
Limited Partners, issued and
outstanding, 108,074 Units 1,209,475 1,635,042
--------- ---------
Total Partners' capital $1,190,000 $1,605,641
========= =========
The accompanying notes are an integral
part of these combined financial statements.
F-2
GEODYNE INSTITUTIONAL/PENSION ENERGY INCOME P-1 LIMITED PARTNERSHIP
GEODYNE NPI PARTNERSHIP P-1
Combined Statements of Operations
For the Years Ended December 31, 2006, 2005, and 2004
2006 2005 2004
---------- ---------- ----------
REVENUES:
Net Profits $ 656,577 $ 837,617 $ 663,400
Interest income 18,609 8,941 2,902
Gain on sale of
Net Profits Interests 19 349 17,563
Other income 13,571 - 3,474
-------- --------- ---------
$ 688,776 $ 846,907 $ 687,339
COSTS AND EXPENSES:
Depletion of
Net Profits Interests $ 66,642 $ 43,933 $ 41,781
Impairment provision 16,962 - -
General and administrative 149,919 148,028 142,133
--------- --------- ---------
$ 233,523 $ 191,961 $ 183,914
--------- --------- ---------
INCOME FROM CONTINUING
OPERATIONS $ 455,253 $ 654,946 $ 503,425
DISCONTINUED OPERATIONS:
Income from discontinued
operations (Note 6) 1,348,728 1,235,452 791,467
Gain on disposal of
discontinued operations
(Note 6) 3,481,351 - -
--------- --------- ---------
NET INCOME $5,285,332 $1,890,398 $1,294,892
========= ========= =========
GENERAL PARTNER:
Net income from continuing
operations $ 51,189 $ 68,554 $ 52,040
Net income from discontinued
operations 484,710 126,746 81,480
---------- --------- ---------
NET INCOME $ 535,899 $ 195,300 $ 133,520
========= ========= =========
F-3
LIMITED PARTNERS:
Net income from continuing
operations $ 404,064 $ 586,392 $ 451,385
Net income from
discontinued operations 4,345,369 1,108,706 709,987
--------- --------- ---------
NET INCOME $4,749,433 $1,695,098 $1,161,372
========= ========= =========
NET INCOME FROM CONTINUING
OPERATIONS PER UNIT $ 3.74 $ 5.43 $ 4.18
NET INCOME FROM DISCONTINUED
OPERATIONS PER UNIT 40.21 10.26 6.57
--------- --------- ---------
NET INCOME PER UNIT $ 43.95 $ 15.69 $ 10.75
========= ========= =========
UNITS OUTSTANDING 108,074 108,074 108,074
========= ========= =========
The accompanying notes are an integral
part of these combined financial statements.
F-4
GEODYNE INSTITUTIONAL/PENSION ENERGY INCOME P-1 LIMITED PARTNERSHIP
GEODYNE NPI PARTNERSHIP P-1
Combined Statements of Changes in Partners' Capital (Deficit)
For the Years Ended December 31, 2006, 2005, and 2004
Limited General
Partners Partner Total
------------ ---------- ------------
Balance, Dec. 31, 2003 $1,330,572 ($ 58,713) $1,271,859
Net income 1,161,372 133,520 1,294,892
Cash distributions ( 1,208,000) ( 139,653) ( 1,347,653)
--------- ------- ---------
Balance, Dec. 31, 2004 $1,283,944 ($ 64,846) $1,219,098
Net income 1,695,098 195,300 1,890,398
Cash distributions ( 1,344,000) ( 159,855) ( 1,503,855)
--------- ------- ---------
Balance, Dec. 31, 2005 $1,635,042 ($ 29,401) $1,605,641
Net income 4,749,433 535,899 5,285,332
Cash distributions ( 5,175,000) ( 525,973) ( 5,700,973)
--------- ------- ---------
Balance, Dec. 31, 2006 $1,209,475 ($ 19,475) $1,190,000
========= ======= =========
The accompanying notes are an integral
part of these combined financial statements.
F-5
GEODYNE INSTITUTIONAL/PENSION ENERGY INCOME P-1 LIMITED PARTNERSHIP
GEODYNE NPI PARTNERSHIP P-1
Combined Statements of Cash Flows
For the Years Ended December 31, 2006, 2005, and 2004
2006 2005 2004
------------ ------------ ------------
CASH FLOWS FROM OPERATING
ACTIVITIES:
Net income $5,285,332 $1,890,398 $1,294,892
Adjustments to reconcile
net income to
net cash provided by
operating activities:
Depletion of Net
Profits Interests 85,516 79,493 67,699
Impairment provision 17,000 - -
Gain on sale of
Net Profits Interests ( 19) ( 349) ( 17,563)
Gain on disposal of
discontinued operations
(Note 6) ( 3,481,351) - -
Settlement of asset
retirement obligation ( 263) ( 496) -
Net change in accounts
receivable / accounts
payable - Net Profits 148,160 ( 299,785) 54,004
--------- --------- ----------
Net cash provided by
operating activities $2,054,375 $1,669,261 $1,399,032
--------- --------- ----------
CASH FLOWS FROM INVESTING
ACTIVITIES:
Capital expenditures ($ 59,546) ($ 18,488) ($ 19,298)
Proceeds from sale of
oil and gas properties - - 16,707
Proceeds from sale of
discontinued operations
(Note 6) 3,607,523 - -
--------- --------- ----------
Net cash provided (used) by
investing activities $3,547,977 ($ 18,488) ($ 2,591)
--------- --------- ---------
CASH FLOWS FROM FINANCING
ACTIVITIES:
Cash distributions ($5,700,973) ($1,503,855) ($1,347,653)
--------- --------- ----------
Net cash used by financing
activities ($5,700,973) ($1,503,855) ($1,347,653)
--------- --------- ----------
F-6
NET INCREASE (DECREASE) IN
CASH AND CASH EQUIVALENTS ($ 98,621) $ 146,918 $ 48,788
CASH AND CASH EQUIVALENTS
AT BEGINNING OF PERIOD 595,286 448,368 399,580
--------- --------- ---------
CASH AND CASH EQUIVALENTS
AT END OF PERIOD $ 496,665 $ 595,286 $ 448,368
========= ========= =========
The accompanying notes are an integral
part of these combined financial statements.
F-7
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
TO THE PARTNERS
GEODYNE INSTITUTIONAL/PENSION ENERGY INCOME LIMITED PARTNERSHIP P-3 AND GEODYNE
NPI PARTNERSHIP P-3
In our opinion, the accompanying combined balance sheets and the related
combined statements of operations, changes in partners' capital (deficit) and
cash flows present fairly, in all material respects, the combined financial
position of the Geodyne Institutional/Pension Energy Income Limited Partnership
P-3, an Oklahoma limited partnership, and Geodyne NPI Partnership P-3, an
Oklahoma general partnership, at December 31, 2006 and 2005, and the combined
results of their operations and their cash flows for each of the three years in
the period ended December 31, 2006, in conformity with accounting principles
generally accepted in the United States of America. These financial statements
are the responsibility of the Partnerships' management. Our responsibility is to
express an opinion on these financial statements based on our audits. We
conducted our audits of these 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 7 to the combined financial statements, on February
5, 2007 the General Partner mailed a notice to the limited partners that the
Partnership will terminate at the end of its current term, December 31, 2007,
and that in connection with such termination the General Partner would liquidate
all of the Partnership's assets.
PricewaterhouseCoopers LLP
Tulsa, Oklahoma
April 16, 2007
F-8
GEODYNE INSTITUTIONAL/PENSION ENERGY INCOME LIMITED PARTNERSHIP P-3
GEODYNE NPI PARTNERSHIP P-3
Combined Balance Sheets
December 31, 2006 and 2005
ASSETS
------
2006 2005
---------- ------------
CURRENT ASSETS:
Cash and cash equivalents $ 852,351 $ 885,655
Accounts receivable:
Net Profits 86,855 460,877
Assets held for sale (Note 6) 404,587 -
--------- ---------
Total current assets $1,343,793 $1,346,532
NET PROFITS INTERESTS, net, utilizing
the successful efforts method 556,629 1,058,322
--------- ---------
$1,900,422 $2,404,854
========= =========
PARTNERS' CAPITAL (DEFICIT)
---------------------------
PARTNERS' CAPITAL (DEFICIT):
General Partner $ 15,052 ($ 4,259)
Limited Partners, issued and
outstanding, 169,637 Units 1,885,370 2,409,113
--------- ---------
Total Partners' capital $1,900,422 $2,404,854
========= =========
The accompanying notes are an integral
part of these combined financial statements.
F-9
GEODYNE INSTITUTIONAL/PENSION ENERGY INCOME LIMITED PARTNERSHIP P-3
GEODYNE NPI PARTNERSHIP P-3
Combined Statements of Operations
For the Years Ended December 31, 2006, 2005, and 2004
2006 2005 2004
---------- ---------- ----------
REVENUES:
Net Profits $1,136,955 $1,420,511 $1,135,626
Interest income 27,558 13,401 4,406
Gain on sale of
Net Profits Interests 28 440 22,514
Other income 17,097 - 4,376
--------- --------- ---------
$1,181,638 $1,434,352 $1,166,922
COSTS AND EXPENSES:
Depletion of Net
Profits Interests $ 109,112 $ 71,407 $ 170,836
Impairment provision 25,083 - -
General and administrative 217,060 215,347 209,719
--------- --------- ---------
$ 351,255 $ 286,754 $ 380,555
--------- --------- ---------
INCOME FROM CONTINUING
OPERATIONS $ 830,383 $1,147,598 $ 786,367
DISCONTINUED OPERATIONS:
Income from discontinued
operations (Note 6) 1,727,111 1,591,882 1,017,253
Gain on disposal of
discontinued operations
(Note 6) 4,511,148 - -
--------- --------- ---------
NET INCOME $7,068,642 $2,739,480 $1,803,620
========= ========= =========
GENERAL PARTNER:
Net income from continuing
operations $ 92,360 $ 119,846 $ 91,339
Net income from discontinued
operations 626,025 163,411 104,791
--------- --------- ---------
NET INCOME $ 718,385 $ 283,257 $ 196,130
========= ========= =========
F-10
LIMITED PARTNERS:
Net income from continuing
operations $ 738,023 $1,027,752 $ 695,028
Net income from
discontinued operations 5,612,234 1,428,471 912,462
--------- --------- ---------
NET INCOME $6,350,257 $2,456,223 $1,607,490
========= ========= =========
NET INCOME FROM CONTINUING
OPERATIONS PER UNIT $ 4.35 $ 6.06 $ 4.10
NET INCOME FROM DISCONTINUED
OPERATIONS PER UNIT 33.08 8.42 5.38
--------- --------- ---------
NET INCOME PER UNIT $ 37.43 $ 14.48 $ 9.48
========= ========= =========
UNITS OUTSTANDING 169,637 169,637 169,637
========= ========= =========
The accompanying notes are an integral
part of these combined financial statements.
F-11
GEODYNE INSTITUTIONAL/PENSION ENERGY INCOME LIMITED PARTNERSHIP P-3
GEODYNE NPI PARTNERSHIP P-3
Combined Statements of Changes in Partners' Capital (Deficit)
For the Years Ended December 31, 2006, 2005, and 2004
Limited General
Partners Partner Total
------------ ---------- ------------
Balance, Dec. 31, 2003 $2,018,400 ($ 47,020) $1,971,380
Net income 1,607,490 196,130 1,803,620
Cash distributions ( 1,737,000) ( 202,539) ( 1,939,539)
--------- ------- ---------
Balance, Dec. 31, 2004 $1,888,890 ($ 53,429) $1,835,461
Net income 2,456,223 283,257 2,739,480
Cash distributions ( 1,936,000) ( 234,087) ( 2,170,087)
--------- ------- ---------
Balance, Dec. 31, 2005 $2,409,113 ($ 4,259) $2,404,854
Net income 6,350,257 718,385 7,068,642
Cash distributions ( 6,874,000) ( 699,074) ( 7,573,074)
--------- ------- ---------
Balance, Dec. 31, 2006 $1,885,370 $ 15,052 $1,900,422
========= ======= =========
The accompanying notes are an integral
part of these combined financial statements.
F-12
GEODYNE INSTITUTIONAL/PENSION ENERGY INCOME LIMITED PARTNERSHIP P-3
GEODYNE NPI PARTNERSHIP P-3
Combined Statements of Cash Flows
For the Years Ended December 31, 2006, 2005, and 2004
2006 2005 2004
------------ ------------ ------------
CASH FLOWS FROM OPERATING
ACTIVITIES:
Net income $7,068,642 $2,739,480 $1,803,620
Adjustments to reconcile
net income to
net cash provided by
operating activities:
Depletion of Net
Profits Interests 133,527 118,326 204,906
Impairment provisions 25,105 - -
Gain on sale of
Net Profits Interests ( 28) ( 440) ( 22,514)
Gain on disposal of
discontinued operations
(Note 6) ( 4,511,148) - -
Settlement of asset
retirement obligation ( 330) ( 622) -
Net change in accounts
receivable / accounts
payable - Net Profits 218,171 ( 406,835) 52,782
--------- --------- ---------
Net cash provided by
operating activities $2,933,939 $2,449,909 $2,038,794
--------- --------- ---------
CASH FLOWS FROM INVESTING
ACTIVITIES:
Capital expenditures ($ 72,894) ($ 27,363) ($ 68,952)
Proceeds from sale of
oil and gas properties - - 21,366
Proceeds from disposal of
discontinued operations
(Note 6) 4,678,725 - -
--------- --------- ---------
Net cash provided (used)
by investing activities $4,605,831 ($ 27,363) ($ 47,586)
--------- --------- ---------
F-13
CASH FLOWS FROM FINANCING
ACTIVITIES:
Cash distributions ($7,573,074) ($2,170,087) ($1,939,539)
--------- --------- ---------
Net cash used by financing
activities ($7,573,074) ($2,170,087) ($1,939,539)
--------- --------- ---------
NET INCREASE (DECREASE) IN
CASH AND CASH EQUIVALENTS ($ 33,304) $ 252,459 $ 51,669
CASH AND CASH EQUIVALENTS
AT BEGINNING OF PERIOD 885,655 633,196 581,527
--------- --------- ---------
CASH AND CASH EQUIVALENTS
AT END OF PERIOD $ 852,351 $ 885,655 $ 633,196
========= ========= =========
The accompanying notes are an integral
part of these combined financial statements.
F-14
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
TO THE PARTNERS
GEODYNE INSTITUTIONAL/PENSION ENERGY INCOME LIMITED PARTNERSHIP P-4 AND GEODYNE
NPI PARTNERSHIP P-4
In our opinion, the accompanying combined balance sheets and the related
combined statements of operations, changes in partners' capital (deficit) and
cash flows present fairly, in all material respects, the combined financial
position of the Geodyne Institutional/Pension Energy Income Limited Partnership
P-4, an Oklahoma limited partnership, and Geodyne NPI Partnership P-4, an
Oklahoma general partnership, at December 31, 2006 and 2005, and the combined
results of their operations and their cash flows for each of the three years in
the period ended December 31, 2006, in conformity with accounting principles
generally accepted in the United States of America. These financial statements
are the responsibility of the Partnerships' management. Our responsibility is to
express an opinion on these financial statements based on our audits. We
conducted our audits of these 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 7 to the combined financial statements, on February
5, 2007 the General Partner mailed a notice to the limited partners that the
Partnership will terminate at the end of its current term, December 31, 2007,
and that in connection with such termination the General Partner would liquidate
all of the Partnership's assets.
PricewaterhouseCoopers LLP
Tulsa, Oklahoma
April 16, 2007
F-15
GEODYNE INSTITUTIONAL/PENSION ENERGY INCOME LIMITED PARTNERSHIP P-4
GEODYNE NPI PARTNERSHIP P-4
Combined Balance Sheets
December 31, 2006 and 2005
ASSETS
------
2006 2005
------------ ------------
CURRENT ASSETS:
Cash and cash equivalents $ 697,647 $ 599,645
Accounts receivable:
Net Profits 154,779 304,105
Assets held for sale (Note 6) 12,789 -
--------- ---------
Total current assets $ 865,215 $ 903,750
NET PROFITS INTERESTS, net, utilizing
the successful efforts method 303,374 401,259
--------- ---------
$1,168,589 $1,305,009
========= =========
PARTNERS' CAPITAL (DEFICIT)
---------------------------
PARTNERS' CAPITAL (DEFICIT):
General Partner ($ 45,401) ($ 43,366)
Limited Partners, issued and
outstanding, 126,306 Units 1,213,990 1,348,375
--------- ---------
Total Partners' capital $1,168,589 $1,305,009
========= =========
The accompanying notes are an integral
part of these combined financial statements.
F-16
GEODYNE INSTITUTIONAL/PENSION ENERGY INCOME LIMITED PARTNERSHIP P-4
GEODYNE NPI PARTNERSHIP P-4
Combined Statements of Operations
For the Years Ended December 31, 2006, 2005, and 2004
2006 2005 2004
---------- ---------- ----------
REVENUES:
Net Profits $1,564,465 $1,753,988 $1,630,505
Interest income 16,816 9,403 3,147
Gain on sale of
Net Profits Interests - - 962
--------- --------- ---------
$1,581,281 $1,763,391 $1,634,614
COSTS AND EXPENSES:
Depletion of Net
Profits Interests $ 82,128 $ 81,028 $ 77,685
Impairment provision 2,591 - -
General and administrative 165,163 167,890 161,110
--------- --------- ---------
$ 249,882 $ 248,918 $ 238,795
--------- --------- ---------
INCOME FROM CONTINUING
OPERATIONS $1,331,399 $1,514,473 $1,395,819
DISCONTINUED OPERATIONS:
Income from discontinued
operations (Note 6) 63,260 71,575 35,589
Gain on disposal of
discontinued operations
(Note 6) 232,679 - -
--------- --------- ---------
NET INCOME $1,627,338 $1,586,048 $1,431,408
========= ========= =========
GENERAL PARTNER:
Net income from continuing
operations $ 139,083 $ 157,799 $ 146,259
Net income from discontinued
operations 29,640 7,362 3,657
--------- --------- ---------
NET INCOME $ 168,723 $ 165,161 $ 149,916
========= ========= =========
LIMITED PARTNERS -
Net income from continuing
operations $1,192,316 $1,356,674 $1,249,560
Net income from
discontinued operations 266,299 64,213 31,932
--------- --------- ---------
NET INCOME $1,458,615 $1,420,887 $1,281,492
========= ========= =========
F-17
NET INCOME FROM CONTINUING
OPERATIONS PER UNIT $ 9.44 $ 10.74 $ 9.89
NET INCOME FROM DISCONTINUED
OPERATIONS PER UNIT 2.11 .51 .25
--------- --------- ---------
NET INCOME PER UNIT $ 11.55 $ 11.25 $ 10.14
========= ========= =========
UNITS OUTSTANDING 126,306 126,306 126,306
========= ========= =========
The accompanying notes are an integral
part of these combined financial statements.
F-18
GEODYNE INSTITUTIONAL/PENSION ENERGY INCOME LIMITED PARTNERSHIP P-4
GEODYNE NPI PARTNERSHIP P-4
Combined Statements of Changes in Partners' Capital (Deficit)
For the Years Ended December 31, 2006, 2005, and 2004
Limited General
Partners Partner Total
------------ ---------- ------------
Balance, Dec. 31, 2003 $1,142,996 ($ 66,233) $1,076,763
Net income 1,281,492 149,916 1,431,408
Cash distributions ( 1,180,000) ( 141,329) ( 1,321,329)
--------- ------- ---------
Balance, Dec. 31, 2004 $1,244,488 ($ 57,646) $1,186,842
Net income 1,420,887 165,161 1,586,048
Cash distributions ( 1,317,000) ( 150,881) ( 1,467,881)
--------- ------- ---------
Balance, Dec. 31, 2005 $1,348,375 ($ 43,366) $1,305,009
Net income 1,458,615 168,723 1,627,338
Cash distributions ( 1,593,000) ( 170,758) ( 1,763,758)
--------- ------- ---------
Balance, Dec. 31, 2006 $1,213,990 ($ 45,401) $1,168,589
========= ======= =========
The accompanying notes are an integral
part of these combined financial statements.
F-19
GEODYNE INSTITUTIONAL/PENSION ENERGY INCOME LIMITED PARTNERSHIP P-4
GEODYNE NPI PARTNERSHIP P-4
Combined Statements of Cash Flows
For the Years Ended December 31, 2006, 2005, and 2004
2006 2005 2004
------------ ------------ ------------
CASH FLOWS FROM OPERATING
ACTIVITIES:
Net income $1,627,338 $1,586,048 $1,431,408
Adjustments to reconcile
net income to net cash
provided by operating
activities:
Depletion of Net
Profits Interests 82,637 83,298 78,779
Impairment Provision 2,591 - -
Gain on sale of Net
Profits Interests - - ( 962)
Gain on disposal of
discontinued operations
(Note 6) ( 232,679) - -
Settlement of asset
retirement obligation - - ( 77)
Net changes in accounts
receivable / accounts
payable - Net Profits 143,466 ( 103,529) ( 46,036)
--------- --------- ---------
Net cash provided by
operating activities $1,623,353 $1,565,817 $1,463,112
--------- --------- ---------
CASH FLOWS FROM INVESTING
ACTIVITIES:
Capital expenditures ($ 1,823) ($ 8,504) ($ 31,868)
Proceeds from sale of
oil and gas properties - - 434
Proceeds from disposal of
discontinued operations
(Note 6) 240,230 - -
--------- --------- ---------
Net cash provided (used) by
investing activities $ 238,407 ($ 8,504) ($ 31,434)
--------- --------- ---------
F-20
CASH FLOWS FROM FINANCING
ACTIVITIES:
Cash distributions ($1,763,758) ($1,467,881) ($1,321,329)
--------- --------- ---------
Net cash used by financing
activities ($1,763,758) ($1,467,881) ($1,321,329)
--------- --------- ---------
NET INCREASE IN CASH
AND CASH EQUIVALENTS $ 98,002 $ 89,432 $ 110,349
CASH AND CASH EQUIVALENTS
AT BEGINNING OF PERIOD 599,645 510,213 399,864
--------- --------- ---------
CASH AND CASH EQUIVALENTS
AT END OF PERIOD $ 697,647 $ 599,645 $ 510,213
========= ========= =========
The accompanying notes are an integral
part of these combined financial statements.
F-21
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
TO THE PARTNERS
GEODYNE INSTITUTIONAL/PENSION ENERGY INCOME LIMITED PARTNERSHIP P-5 AND GEODYNE
NPI PARTNERSHIP P-5
In our opinion, the accompanying combined balance sheets and the related
combined statements of operations, changes in partners' capital (deficit) and
cash flows present fairly, in all material respects, the combined financial
position of the Geodyne Institutional/Pension Energy Income Limited Partnership
P-5, an Oklahoma limited partnership, and Geodyne NPI Partnership P-5, an
Oklahoma general partnership, at December 31, 2006 and 2005, and the combined
results of their operations and their cash flows for each of the three years in
the period ended December 31, 2006, in conformity with accounting principles
generally accepted in the United States of America. These financial statements
are the responsibility of the Partnerships' management. Our responsibility is to
express an opinion on these financial statements based on our audits. We
conducted our audits of these 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 7 to the combined financial statements, on February
5, 2007 the General Partner mailed a notice to the limited partners that the
Partnership will terminate at the end of its current term, December 31, 2007,
and that in connection with such termination the General Partner would liquidate
all of the Partnership's assets.
PricewaterhouseCoopers LLP
Tulsa, Oklahoma
April 16, 2007
F-22
GEODYNE INSTITUTIONAL/PENSION ENERGY INCOME LIMITED PARTNERSHIP P-5
GEODYNE NPI PARTNERSHIP P-5
Combined Balance Sheets
December 31, 2006 and 2005
ASSETS
------
2006 2005
------------ ------------
CURRENT ASSETS:
Cash and cash equivalents $ 546,848 $ 479,513
Accounts receivable:
Net Profits 205,280 76,668
Assets held for sale (Note 6) 8,219 -
--------- ---------
Total current assets $ 760,347 $ 556,181
NET PROFITS INTERESTS, net, utilizing
the successful efforts method 701,700 639,293
--------- ---------
$1,462,047 $1,195,474
========= =========
PARTNERS' CAPITAL (DEFICIT)
---------------------------
PARTNERS' CAPITAL (DEFICIT):
General Partner ($ 24,852) ($ 33,844)
Limited Partners, issued and
outstanding, 118,449 Units 1,486,899 1,229,318
--------- ---------
Total Partners' capital $1,462,047 $1,195,474
========= =========
The accompanying notes are an integral
part of these combined financial statements.
F-23
GEODYNE INSTITUTIONAL/PENSION ENERGY INCOME LIMITED PARTNERSHIP P-5
GEODYNE NPI PARTNERSHIP P-5
Combined Statements of Operations
For the Years Ended December 31, 2006, 2005, and 2004
2006 2005 2004
---------- ---------- ------------
REVENUES:
Net Profits $1,814,055 $1,552,824 $1,212,427
Interest income 13,511 8,691 2,632
Loss on sale of Net
Profits Interests - - ( 749)
Other income 6,968 2,136 -
--------- --------- ---------
$1,834,534 $1,563,651 $1,214,310
COSTS AND EXPENSES:
Depletion of Net
Profits Interests $ 255,240 $ 106,181 $ 94,021
Impairment provision 57,321 - -
General and administrative 156,573 159,284 152,465
--------- --------- ---------
$ 469,134 $ 265,465 $ 246,486
--------- --------- ---------
INCOME FROM CONTINUING
OPERATIONS $1,365,400 $1,298,186 $ 967,824
DISCONTINUED OPERATIONS:
Income from discontinued
operations (Note 6) 37,817 37,857 33,623
Gain on disposal of
discontinued operations
(Note 6) 6,297 - -
--------- --------- ---------
NET INCOME $1,409,514 $1,336,043 $1,001,447
========= ========= =========
GENERAL PARTNER:
Net income from continuing
operations $ 163,319 $ 138,506 $ 104,981
Net income from discontinued
operations 4,614 3,866 3,447
--------- --------- ---------
NET INCOME $ 167,933 $ 142,372 $ 108,428
========= ========= =========
F-24
LIMITED PARTNERS:
Net income from continuing
operations $1,202,081 $1,159,680 $ 862,843
Net income from
discontinued operations 39,500 33,991 30,176
--------- --------- ---------
NET INCOME $1,241,581 $1,193,671 $ 893,019
========= ========= =========
NET INCOME FROM CONTINUING
OPERATIONS PER UNIT $ 10.15 $ 9.79 $ 7.28
NET INCOME FROM DISCONTINUED
OPERATIONS PER UNIT .33 .29 .25
--------- --------- ---------
NET INCOME PER UNIT $ 10.48 $ 10.08 $ 7.53
========= ========= =========
UNITS OUTSTANDING 118,449 118,449 118,449
========= ========= =========
The accompanying notes are an integral
part of these combined financial statements.
F-25
GEODYNE INSTITUTIONAL/PENSION ENERGY INCOME LIMITED PARTNERSHIP P-5
GEODYNE NPI PARTNERSHIP P-5
Combined Statements of Changes in Partners' Capital (Deficit)
For the Years Ended December 31, 2006, 2005, and 2004
Limited General
Partners Partner Total
------------ ---------- ------------
Balance, Dec. 31, 2003 $1,009,628 ($ 59,667) $ 949,961
Net income 893,019 108,428 1,001,447
Cash distributions ( 822,000) ( 97,273) ( 919,273)
--------- ------- ---------
Balance, Dec. 31, 2004 $1,080,647 ($ 48,512) $1,032,135
Net income 1,193,671 142,372 1,336,043
Cash distributions ( 1,045,000) ( 127,704) ( 1,172,704)
--------- ------- ---------
Balance, Dec. 31, 2005 $1,229,318 ($ 33,844) $1,195,474
Net income 1,241,581 167,933 1,409,514
Cash distributions ( 984,000) ( 158,941) ( 1,142,941)
--------- ------- ---------
Balance, Dec. 31, 2006 $1,486,899 ($ 24,852) $1,462,047
========= ======= =========
The accompanying notes are an integral
part of these combined financial statements.
F-26
GEODYNE INSTITUTIONAL/PENSION ENERGY INCOME LIMITED PARTNERSHIP P-5
GEODYNE NPI PARTNERSHIP P-5
Combined Statements of Cash Flows
For the Years Ended December 31, 2006, 2005, and 2004
2006 2005 2004
------------ ------------ ------------
CASH FLOWS FROM OPERATING
ACTIVITIES:
Net income $1,409,514 $1,336,043 $1,001,447
Adjustments to reconcile
net income to
net cash provided by
operating activities:
Depletion of Net
Profits Interests 257,205 107,072 94,961
Impairment provision 57,609 - -
Loss on sale of Net
Profits Interests - - 749
Gain on disposal of
discontinued operations
(Note 6) ( 6,297) - -
Settlement of asset
retirement obligation ( 91) - ( 104)
Net change in accounts
receivable / accounts
payable - Net Profits ( 123,464) ( 116,235) ( 62,284)
--------- --------- ---------
Net cash provided by
operating activities $1,594,476 $1,326,880 $1,034,769
--------- --------- ---------
CASH FLOWS FROM INVESTING
ACTIVITIES:
Capital expenditures ($ 390,497) ($ 68,503) ($ 59,150)
Proceeds from disposal of
discontinued operations
(Note 6) 6,297 - -
--------- --------- ---------
Net cash used by
investing activities ($ 384,200) ($ 68,503) ($ 59,150)
--------- --------- ---------
CASH FLOWS FROM FINANCING
ACTIVITIES:
Cash distributions ($1,142,941) ($1,172,704) ($ 919,273)
--------- --------- ---------
Net cash used by financing
activities ($1,142,941) ($1,172,704) ($ 919,273)
--------- --------- ---------
F-27
NET INCREASE IN CASH
AND CASH EQUIVALENTS $ 67,335 $ 85,673 $ 56,346
CASH AND CASH EQUIVALENTS
AT BEGINNING OF PERIOD 479,513 393,840 337,494
--------- --------- ---------
CASH AND CASH EQUIVALENTS
AT END OF PERIOD $ 546,848 $ 479,513 $ 393,840
========= ========= =========
The accompanying notes are an integral
part of these combined financial statements.
F-28
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
TO THE PARTNERS
GEODYNE INSTITUTIONAL/PENSION ENERGY INCOME LIMITED PARTNERSHIP P-6 AND GEODYNE
NPI PARTNERSHIP P-6
In our opinion, the accompanying combined balance sheets and the related
combined statements of operations, changes in partners' capital (deficit) and
cash flows present fairly, in all material respects, the combined financial
position of the Geodyne Institutional/Pension Energy Income Limited Partnership
P-6, an Oklahoma limited partnership, and Geodyne NPI Partnership P-6, an
Oklahoma general partnership, at December 31, 2006 and 2005, and the combined
results of their operations and their cash flows for each of the three years in
the period ended December 31, 2006, in conformity with accounting principles
generally accepted in the United States of America. These financial statements
are the responsibility of the Partnerships' management. Our responsibility is to
express an opinion on these financial statements based on our audits. We
conducted our audits of these 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 7 to the combined financial statements, on February
5, 2007 the General Partner mailed a notice to the limited partners that the
Partnership will terminate at the end of its current term, December 31, 2007,
and that in connection with such termination the General Partner would liquidate
all of the Partnership's assets.
PricewaterhouseCoopers LLP
Tulsa, Oklahoma
April 16, 2007
F-29
GEODYNE INSTITUTIONAL/PENSION ENERGY INCOME LIMITED PARTNERSHIP P-6
GEODYNE NPI PARTNERSHIP P-6
Combined Balance Sheets
December 31, 2006 and 2005
ASSETS
------
2006 2005
------------ ------------
CURRENT ASSETS:
Cash and cash equivalents $ 661,731 $ 770,659
Accounts receivable:
Net Profits 6,110 -
--------- ---------
Total current assets $ 667,841 $ 770,659
NET PROFITS INTERESTS, net, utilizing
the successful efforts method 1,196,173 1,292,562
--------- ---------
$1,864,014 $2,063,221
========= =========
LIABILITIES AND PARTNERS' CAPITAL (DEFICIT)
-------------------------------------------
CURRENT LIABILITIES:
Accounts payable:
Net Profits $ - $ 36,095
Liabilities - held for sale
(Note 6) 25,179 -
--------- ---------
Total current liabilities $ 25,179 $ 36,095
PARTNERS' CAPITAL (DEFICIT):
General Partner ($ 34,262) ($ 17,913)
Limited Partners, issued and
outstanding, 143,041 Units 1,873,097 2,045,039
--------- ---------
Total Partners' capital $1,838,835 $2,027,126
========= =========
$1,864,014 $2,063,221
========= =========
The accompanying notes are an integral
part of these combined financial statements.
F-30
GEODYNE INSTITUTIONAL/PENSION ENERGY INCOME
LIMITED PARTNERSHIP P-6
GEODYNE NPI PARTNERSHIP P-6
Combined Statements of Operations
For the Years Ended December 31, 2006, 2005, and 2004
2006 2005 2004
------------ ---------- ------------
REVENUES:
Net Profits $2,530,650 $2,539,391 $1,818,012
Interest income 21,454 11,284 3,941
Loss on sale of Net
Profits Interests - - ( 256)
Other income 2,392 733 -
--------- --------- ---------
$2,554,496 $2,551,408 $1,821,697
COSTS AND EXPENSES:
Depletion of Net
Profits Interests $ 346,157 $ 283,347 $ 120,184
Impairment provision 20,082 - -
General and administrative 183,454 186,214 179,519
--------- --------- ---------
$ 549,693 $ 469,561 $ 299,703
--------- --------- ---------
INCOME FROM CONTINUING
OPERATIONS $2,004,803 $2,081,847 $1,521,994
DISCONTINUED OPERATIONS:
Income (loss) from discontinued
operations (Note 6) ( 63,474) 56,589 45,139
Gain on disposal of
discontinued operations
(Note 6) 2,162 - -
--------- --------- ---------
NET INCOME $1,943,491 $2,138,436 $1,567,133
========= ========= =========
GENERAL PARTNER:
Net income from continuing
operations $ 231,296 $ 232,558 $ 162,622
Net income from discontinued
operations 10,137 6,951 4,612
--------- --------- ---------
NET INCOME $ 241,433 $ 239,509 $ 167,234
========= ========= =========
F-31
LIMITED PARTNERS:
Net income from continuing
operations $1,773,507 $1,849,289 $1,359,372
Net income (loss) from
discontinued operations ( 71,449) 49,638 40,527
--------- --------- ---------
NET INCOME $1,702,058 $1,898,927 $1,399,899
========= ========= =========
NET INCOME FROM CONTINUING
OPERATIONS PER UNIT $ 12.40 $ 12.93 $ 9.50
NET INCOME (LOSS) FROM
DISCONTINUED OPERATIONS
PER UNIT ( .50) .35 .28
--------- --------- ---------
NET INCOME PER UNIT $ 11.90 $ 13.28 $ 9.78
========= ========= =========
UNITS OUTSTANDING 143,041 143,041 143,041
========= ========= =========
The accompanying notes are an integral part of these
combined financial statements.
F-32
GEODYNE INSTITUTIONAL/PENSION ENERGY INCOME
LIMITED PARTNERSHIP P-6
GEODYNE NPI PARTNERSHIP P-6
Combined Statements of Changes in Partners' Capital (Deficit)
For the Years Ended December 31, 2006, 2005, and 2004
Limited General
Partners Partner Total
------------ ---------- ------------
Balance, Dec. 31, 2003 $1,853,213 ($ 60,944) $1,792,269
Net income 1,399,899 167,234 1,567,133
Cash distributions ( 1,587,000) ( 158,438) ( 1,745,438)
--------- ------- ---------
Balance, Dec. 31, 2004 $1,666,112 ($ 52,148) $1,613,964
Net income 1,898,927 239,509 2,138,436
Cash distributions ( 1,520,000) ( 205,274) ( 1,725,274)
--------- ------- ---------
Balance, Dec. 31, 2005 $2,045,039 ($ 17,913) $2,027,126
Net income 1,702,058 241,433 1,943,491
Cash distributions ( 1,874,000) ( 257,782) ( 2,131,782)
--------- ------- ---------
Balance, Dec. 31, 2006 $1,873,097 ($ 34,262) $1,838,835
========= ======= =========
The accompanying notes are an integral
part of these combined financial statements.
F-33
GEODYNE INSTITUTIONAL/PENSION ENERGY INCOME
LIMITED PARTNERSHIP P-6
GEODYNE NPI PARTNERSHIP P-6
Combined Statements of Cash Flows
For the Years Ended December 31, 2006, 2005, and 2004
2006 2005 2004
------------ ------------ ------------
CASH FLOWS FROM OPERATING
ACTIVITIES:
Net income $1,943,491 $2,138,436 $1,567,133
Adjustments to reconcile
net income to net
cash provided by
operating activities:
Depletion of Net
Profits Interests 357,769 297,704 121,279
Impairment provision 189,225 - -
Loss on sale of Net
Profits Interests - - 256
Gain on disposal of
discontinued operations
(Note 6) ( 2,162) - -
Settlement of asset
retirement obligation ( 2,312) ( 382) ( 388)
Net change in accounts
receivable / accounts
payable - Net Profits 50,323 ( 279,798) ( 19,939)
--------- --------- ---------
Net cash provided by
operating activities $2,536,334 $2,155,960 $1,668,341
--------- --------- ---------
CASH FLOWS FROM INVESTING
ACTIVITIES:
Capital expenditures ($ 515,642) ($ 129,299) ($ 21,366)
Proceeds from disposal of
discontinued operations
(Note 6) 2,162 - -
--------- --------- ---------
Net cash used by
investing activities ($ 513,480) ($ 129,299) ($ 21,366)
--------- --------- ---------
CASH FLOWS FROM FINANCING
ACTIVITIES:
Cash distributions ($2,131,782) ($1,725,274) ($1,745,438)
--------- --------- ---------
Net cash used by financing
activities ($2,131,782) ($1,725,274) ($1,745,438)
--------- --------- ---------
F-34
NET INCREASE (DECREASE) IN
CASH AND CASH EQUIVALENTS ($ 108,928) $ 301,387 ($ 98,463)
CASH AND CASH EQUIVALENTS
AT BEGINNING OF PERIOD 770,659 469,272 567,735
--------- --------- ---------
CASH AND CASH EQUIVALENTS
AT END OF PERIOD $ 661,731 $ 770,659 $ 469,272
========= ========= =========
The accompanying notes are an integral
part of these combined financial statements.
F-35
GEODYNE INSTITUTIONAL/PENSION PROGRAM
Notes to the Combined Financial Statements For the Periods
Ended December 31, 2006, 2005, and 2004
1. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Organization and Nature of Operations
The Geodyne Institutional/Pension 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.
("Geodyne") is the general partner of each of the Partnerships. Each Partnership
is a general partner in the related Geodyne NPI Partnership (the "NPI
Partnerships") in which Geodyne serves as the managing partner. Limited
Partners' capital contributions were contributed to the related NPI Partnerships
for investment in net profits interests, royalty interests, and other
nonoperating interests in producing oil and gas properties. Most of the net
profits interests acquired by the Partnerships have been carved out of working
interests in producing properties, located in the continental United States,
which were acquired by affiliated oil and gas investment programs (the
"Affiliated Programs").
Net profits interests entitle the Partnerships to a share of net revenues
from producing properties measured by a specific percentage of the net profits
realized by such Affiliated Programs as owners of the working interests in the
producing properties. Except where otherwise noted, references to certain
operational activities of the Partnerships are actually the activities of the
Affiliated Programs. As the holder of a net profits interest, a Partnership is
not liable to pay any amount by which oil and gas operating costs and expenses
exceed revenues for any period, although any deficit, together with interest, is
applied to reduce the amounts payable to the Partnership in subsequent periods.
As used in these financial statements, the Partnerships' net profits and royalty
interests in oil and gas sales are referred to as "Net Profits" and the
Partnerships' net profits and royalty interests in oil and gas properties are
referred to as "Net Profits Interests." The Partnerships do not directly bear
capital costs. However, the Partnerships indirectly bear certain capital costs
incurred by the Affiliated Programs to the extent such capital costs are charged
against the applicable oil and gas revenues in calculating the net profits
payable to the Partnerships. For financial reporting purposes, such capital
costs are reported as capital expenditures in the Partnerships' Statements of
Cash Flows.
For purposes of these financial statements, the Partnerships and NPI
Partnerships are collectively referred to as the
F-36
"Partnerships" and the general partner and managing partner are collectively
referred to as the "General Partner".
The Partnerships were activated on the following dates with the following
Limited Partner capital contributions:
Limited Partner
Date of Capital
Partnership Activation Contributions
----------- ----------------- ---------------
P-1 October 25, 1988 $10,807,400
P-3 May 10, 1989 16,963,700
P-4 November 21, 1989 12,630,600
P-5 February 27, 1990 11,844,900
P-6 September 5, 1990 14,304,100
The Partnerships' original termination date under their partnership
agreements was December 31, 2005. The General Partner may extend the terms of
the Partnerships for up to five two-year extension periods. The General Partner
has extended the terms of the Partnerships for their first two-year period to
December 31, 2007. On February 5, 2007 the General Partner mailed a notice to
the limited partners announcing that the Partnerships will terminate at the end
of their current term, December 31, 2007. See Note 7 for more information
regarding the Partnership terminations.
An affiliate of the General Partner owned the following Units at December
31, 2006:
Percent of
Number of Outstanding
Partnership Units Owned Units
----------- ----------- -----------
P-1 34,348 31.78%
P-3 73,164 43.13%
P-4 36,858 29.18%
P-5 32,277 27.25%
P-6 22,653 15.84%
The Partnerships' sole business is owning Net Profits Interests.
Substantially all of the gas production attributable to the Partnerships' Net
Profits Interests 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.
F-37
The prices received for the Partnerships' oil and gas are subject to influences
such as global consumption and supply trends.
Basis of Presentation
These financial statements reflect the combined accounts of each Geodyne
Institutional/Pension Energy Income Limited Partnership and its related Geodyne
NPI Partnership after the elimination of all inter-partnership transactions and
balances. These financial statements are presented on a going concern basis.
Allocation of Costs and Revenues
The combination of the allocation provisions in each Partnerships' limited
partnership agreement and NPI Partnerships' partnership agreement (collectively,
the "Partnership Agreement") results in allocations of costs and income between
the Limited Partners and General Partner as follows:
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
acquisition fee 1% 99% - -
Property Acquisition
Costs 1% 99% 1% 99%
General and administrative
costs and direct
administrative costs(3) 5% 95% 15% 85%
Income(2)
- --------------------------
Temporary investments of
Limited Partners'
Subscriptions 1% 99% 1% 99%
Income from oil and
gas production(3) 5% 95% 15% 85%
Gain on sale of
Net Profits Interests(3) 5% 95% 15% 85%
All other income(3) 5% 95% 15% 85%
F-38
- ----------
(1) Payout occurs when total distributions to Limited Partners equal total
original Limited Partner subscriptions.
(2) The allocations in the table result generally from the combined effect of
the allocation provisions in the Partnership Agreements. For example,
direct administrative costs of the NPI Partnership are allocated 95.9596%
to the Partnership and 4.0404% to the managing partner. The 95.9596%
portion of these costs allocated to the limited partnership, when passed
through the limited partnership, is further allocated 99% to the Limited
Partners and 1% to the general partner. In this manner the Limited
Partners are allocated 95% of such costs and the General Partner is
allocated 5% of such costs.
(3) If at payout the total distributions received by the Limited Partners from
the commencement of the property investment period have averaged on an
annualized basis an amount that is less than 12% of the Limited Partners'
subscriptions, the percentage of income, and costs which are shared in the
same proportions as income, allocated to the General Partner will increase
to only 10% and the Limited Partners will be allocated 90% thereof until
such time, if ever, that the distributions to the Limited Partners from
the commencement of the property investment period reaches a yearly
average equal to at least 12% of the Limited Partners' subscriptions.
Thereafter, income, and costs shared in the same proportions as income,
will be allocated 15% to the General Partner and 85% to the Limited
Partners.
After payout, operations and revenues for the Partnerships are allocated
using the 10%/90% after payout percentages set forth in Footnote 3 to the table
above. The Partnerships achieved payout during the following periods:
Partnership Payout Occurred
----------- ---------------
P-1 3rd Qtr. 1998
P-3 2nd Qtr. 2000
P-4 4th Qtr. 1999
P-5 3rd Qtr. 2003
P-6 3rd Qtr. 2001
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.
F-39
Credit Risk
Accrued oil and gas sales, which are included in the Partnerships'
accounts receivable (accounts payable) - Net Profits, are due from a variety of
oil and gas purchasers and, therefore, indirectly subject the Partnerships to a
concentration of credit risk. Some of these purchasers are discussed in Note 3 -
Major Customers.
Net Profits Interests
The Partnerships follow the successful efforts method of accounting for
their Net Profits Interests. Under the successful efforts method, the
Partnerships capitalize all acquisition costs. Such acquisition costs include
costs incurred by the Partnerships or the General Partner to acquire a Net
Profits Interest, including related title insurance or examination costs,
commissions, engineering, legal and accounting fees, and similar costs directly
related to the acquisitions plus an allocated portion of the General Partner's
property screening costs. The net acquisition cost to the Partnerships of the
Net Profits Interests in properties acquired by the General Partner consists of
the cost of acquiring the underlying properties, adjusted for the net cash
results of operations, including interest incurred to finance the net
acquisition, for the period of time the properties are held by the General
Partner.
Depletion of the cost of Net Profits Interests is computed on the
units-of-production method. The Partnerships' calculation of depletion of its
Net Profits Interests includes estimated dismantlement and abandonment costs,
net of estimated salvage values. The depletion rate, which includes accretion of
the asset retirement obligation, per equivalent barrel of oil produced during
the years ended December 31, 2006, 2005, and 2004 were as follows:
Partnership 2006 2005(1) 2004(1)
----------- ----- ------- -------
P-1 $2.84 $1.85 $1.51
P-3 2.78 1.78 3.67
P-4 1.89 1.73 1.40
P-5 4.50 2.33 1.87
P-6 4.00 3.68 1.53
(1) These amounts have been restated to reflect the sale of various oil and
gas properties during 2006 and assets held for sale as of December 31,
2006 as discontinued operations. See Note 6 for more information about
these discontinued operations.
The Partnerships evaluate the recoverability of the carrying costs of
their Net Profits Interests in proved oil and gas
F-40
properties for each oil and gas well. If the unamortized costs, net of salvage
value, of a Net Profits Interest exceed the expected undiscounted future cash
flows from such Net Profits Interest, the cost of the Net Profits Interest is
written down to fair value, which is determined by using the discounted future
cash flows from the Net Profits Interest. In the third quarter of 2006, natural
gas prices declined significantly. Consequently, the partnerships incurred
impairments utilizing the natural gas spot prices that existed on September 30,
2006. The impairments related to continuing operations recognized in the third
quarter totaled approximately $17,000, $25,000, $3,000, $57,000, and $20,000 for
the P-1, P-3, P-4, P-5 and P-6 Partnerships, respectively. Once incurred, an
impairment of oil and natural gas properties is not reversible.
Accounts Receivable (Accounts Payable) - Net Profits
Revenues from a Net Profits Interest consist of a share of the oil and gas
sales of the property, less operating and production expenses. The Partnerships
accrue for oil and gas revenues less expenses from its Net Profits Interests.
Sales of gas applicable to the Net Profits Interests are recorded as revenue
when the gas is metered and title transferred pursuant to the gas sales
contracts. During such times as sales of gas exceed a Partnership's pro rata Net
Profits Interest 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 attributable to the underlying property, at which time such excess is
recorded as a liability. The rates per Mcf used to calculate the liability are
based on the average gas price for which the Partnerships are currently settling
this liability. This liability is recorded as a reduction of accounts
receivable.
Also included in accounts receivable (accounts payable) - Net Profits are
the estimated asset retirement obligations (see "Asset Retirement Obligation")
and the amounts which represent costs deferred or accrued for Net Profits
relating to lease operating expenses incurred in connection with the net
underproduced or overproduced gas imbalance positions. The rate used in
calculating the deferred charge or accrued liability is the average annual
production costs per Mcf.
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.
F-41
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,
accounts receivable (accounts payable) - Net Profits includes accrued
liabilities, accrued lease operating expenses, asset retirement obligations, and
deferred lease operating expenses related to gas balancing which involve
estimates that 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. 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.
F-42
The components of the change in asset retirement obligations for the years
ended December 31, 2006 and 2005 are as shown below.
P-1 Partnership
---------------
2006 2005
---------- ----------
Total Asset Retirement
Obligation, January 1 $118,480 $ 58,753
Additions 558 803
Revisions - 54,482
Settlements and Disposals ( 5,402) ( 1,250)
Accretion Expense 5,942 5,692
Discontinued operations ( 54,420) -
------- -------
Total Asset Retirement
Obligation, December 31 $ 65,158 $118,480
======= =======
P-3 Partnership
---------------
2006 2005
---------- ----------
Total Asset Retirement
Obligation, January 1 $184,212 $ 99,718
Additions 772 1,016
Revisions - 76,321
Settlements and Disposals ( 10,189) ( 1,574)
Accretion Expense 9,101 8,731
Discontinued operations ( 66,837) -
------- -------
Total Asset Retirement
Obligation, December 31 $117,059 $184,212
======= =======
F-43
P-4 Partnership
---------------
2006 2005
---------- ----------
Total Asset Retirement
Obligation, January 1 $138,714 $ 56,920
Additions 122 -
Revisions - 75,529
Settlements and Disposals ( 6,577) -
Accretion Expense 6,561 6,265
Discontinued operations ( 2,621) -
------- -------
Total Asset Retirement
Obligation, December 31 $136,199 $138,714
======= =======
P-5 Partnership
---------------
2006 2005
---------- ----------
Total Asset Retirement
Obligation, January 1 $142,799 $ 76,681
Additions 340 1,477
Revisions - 58,400
Settlements and Disposals ( 91) -
Accretion Expense 6,625 6,241
Discontinued operations ( 164) -
------- --------
Total Asset Retirement
Obligation, December 31 $149,509 $142,799
======= =======
F-44
P-6 Partnership
---------------
2006 2005
---------- ----------
Total Asset Retirement
Obligation, January 1 $413,445 $208,086
Additions 120 573
Revisions - 192,567
Settlements and Disposals ( 5,470) ( 5,636)
Accretion Expense 18,467 17,855
Discontinued operations ( 27,527) -
------- --------
Total Asset Retirement
Obligation, December 31 $399,035 $413,445
======= =======
New Accounting Pronouncement
In September 2006, the FASB issued FAS No. 157, "Fair Value Measurements"
(FAS No. 157). FAS No. 157 establishes a common definition for fair value to be
applied to US GAAP guidance requiring use of fair value, establishes a framework
for measuring fair value, and expands the disclosure about such fair value
measurements. FAS No 157 is effective for fiscal years beginning after November
5, 2007. The Partnerships are currently assessing the impact of FAS No. 157 on
their results of operations, financial condition and cash flows.
Discontinued Operations
As further discussed in Note 3, the P-1, P-3, P-4, P-5 and P-6
Partnerships sold their interests in a number of producing properties to
independent third parties at large public oil and gas auctions in 2006.
Additional properties for all of the Partnerships will be sold at auctions in
2007. The properties sold in the 2006 auctions and those scheduled to be sold in
2007 auctions represent a disposal of a component under Statement of Financial
Accounting Standards No. 144, "Accounting for the Impairment or Disposal of
Long-Lived Assets" (FAS 144). Accordingly, current year results of these
properties have been classified as discontinued, and prior periods have been
restated. Once properties are classified as assets held for sale, they no longer
incur any depreciation, depletion, and amortization expenses.
F-45
Reclassification
Certain prior year balances have been reclassified to conform with current
year presentation.
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 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 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 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, 2006, 2005, and
2004:
Partnership 2006 2005 2004
----------- -------- -------- --------
P-1 $113,760 $113,760 $113,760
P-3 178,560 178,560 178,560
P-4 132,960 132,960 132,960
P-5 124,680 124,680 124,680
P-6 150,564 150,564 150,564
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
during the year ended December 31, 2006 is approximately as set forth in the
table below:
Partnership Amount
----------- -------
P-1 $ 8,000
P-3 29,000
P-4 8,000
P-5 39,000
P-6 124,000
F-46
3. MAJOR CUSTOMERS
The following table sets forth purchasers who individually accounted for
ten percent or more of combined oil and gas sales attributable to each of the
Partnership's Net Profits Interest during the years ended December 31, 2006,
2005, and 2004:
Percentage
----------------------------
Partnership Purchaser 2006 2005 2004
- ----------- ------------------------ ----- ----- -----
P-1 Chevron North American
Exploration &
Production Company 10.4% - 11.3%
Duke Energy Field
Services, Inc.
("Duke") - 10.7% 11.5%
Cinergy Marketing
("Cinergy") - - 13.2%
P-3 Duke 11.2% 13.9% 14.9%
Cinergy - - 12.0%
P-4 ConocoPhillips Company 32.4% 27.8% -
Gulfterra Central
Point Allocation 18.5% 21.8% 11.4%
Enogex Services
Corporation ("Enogex") 10.5% 10.1% -
Eaglwing Trading, Inc. - - 25.3%
P-5 Enogex 16.3% 18.2% 20.2%
NGPL Allocation 11.8% - -
ONEOK Texas Energy
Resources ("ONEOK") - 21.0% 14.6%
Cinergy - 11.7% 16.1%
Duke - 10.3% 11.5%
P-6 Duke 18.0% 19.8% 23.1%
Kinder Morgan, Inc. 15.5% 17.1% 19.5%
Eaglwing Trading, Inc. 10.2% - -
ONEOK - 13.3% 11.1%
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 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-47
4. SUPPLEMENTAL OIL AND GAS INFORMATION
The following supplemental information regarding the Net Profits Interest
activities of the Partnerships is presented pursuant to the disclosure
requirements promulgated by the SEC.
Capitalized Costs
Capitalized costs and accumulated depletion at December 31, 2006 and 2005
were as follows:
P-1 Partnership
---------------
2006 2005
------------- -------------
Net Profits Interests in proved
oil and gas properties $ 3,677,284 $ 6,474,014
Less accumulated depletion
and valuation allowance ( 3,350,284) ( 5,783,982)
---------- ----------
Net Profits Interests, net $ 327,000 $ 690,032
========== ==========
P-3 Partnership
---------------
2006 2005
------------- -------------
Net Profits Interests in proved
oil and gas properties $ 6,247,289 $ 9,889,591
Less accumulated depletion
and valuation allowance ( 5,690,660) ( 8,831,269)
---------- ----------
Net Profits Interests, net $ 556,629 $ 1,058,322
========== ==========
F-48
P-4 Partnership
---------------
2006 2005
------------- -------------
Net Profits Interests in proved
oil and gas properties $ 7,878,970 $ 8,134,269
Less accumulated depletion
and valuation allowance ( 7,575,596) ( 7,733,010)
---------- ----------
Net Profits Interests, net $ 303,374 $ 401,259
========== ==========
P-5 Partnership
---------------
2006 2005
------------- -------------
Net Profits Interests in proved
oil and gas properties $ 9,483,512 $ 9,156,799
Less accumulated depletion
and valuation allowance ( 8,781,812) ( 8,517,506)
---------- ----------
Net Profits Interest, net $ 701,700 $ 639,293
========== ==========
P-6 Partnership
---------------
2006 2005
------------- -------------
Net Profits Interests in proved
oil and gas properties $11,473,716 $11,605,260
Less accumulated depletion
and valuation allowance ( 10,277,543) ( 10,312,698)
---------- ----------
Net Profits Interests, net $ 1,196,173 $ 1,292,562
========== ==========
F-49
Costs Incurred
No property acquisition or exploration costs were incurred by the
Partnerships during the three years ended December 31, 2006. The following table
sets forth the development costs related to the working interests which are
burdened by the Partnerships' Net Profits Interests during the years ended
December 31, 2006, 2005, and 2004. Since these acquisition and development costs
were charged against the Net Profits payable to the Partnerships, such costs
were indirectly borne by the Partnerships.
Partnership 2006 2005(1) 2004
----------- ---------- -------- -------
P-1 $ 72,683 $ 15,825 $25,183
P-3 89,696 19,244 80,861
P-4 - 7,805 36,380
P-5 371,520 79,369 75,826
P-6 432,269 213,430 26,625
---------------
(1) Excludes the estimated asset retirement costs for the P-1, P-3, P-4,
P-5, and P-6 Partnerships of approximately $54,000, $76,000,
$76,000, $58,000, and $193,000, 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.
Quantities of Proved Oil and Gas Reserves - Unaudited
The following tables summarize changes in net quantities of proved
reserves attributable to the Partnerships' Net Profits Interests, all of which
are located in the United States of America, for the periods indicated. The
proved reserves were estimated by petroleum engineers employed by affiliates of
the Partnerships. In addition, reserve information for the top 80% of each
Partnership's reserve base (based on volumes) has been reviewed by Ryder Scott
Company, L.P. ("Ryder Scott"), an independent petroleum engineering firm. Ryder
Scott has stated to the General Partner their opinion that (i) the estimates of
reserves for the properties which they reviewed were prepared in accordance with
generally accepted procedures for the estimation of reserves, (ii) they found no
bias in the utilization and analysis of data, and (iii) the cash flow
projections provided by Samson of gross and net reserves and associated revenues
and costs based on constant pricing in general appear reasonable. The following
information includes certain gas balancing adjustments which cause the gas
volume to differ from the reserve reports prepared by the General Partner and
reviewed by Ryder Scott.
F-50
In general, the Partnerships experienced downward revisions in gas
reserves at December 31, 2006 as compared to December 31, 2005 due to the
decrease in the gas prices used to estimate reserves. The P-4, P-5, and P-6
Partnerships had an increase in gas reserves due to revised forecasts on several
properties based on actual production experience.
Following is a description of those oil and gas properties for which
revisions in the continuing operations estimated proved reserves as of December
31, 2006 as compared to December 31, 2005 were significant to the Partnerships:
The P-1 and P-3 Partnerships' estimated proved oil
reserves decreased approximately 13,000 barrels and 17,000
barrels, respectively, in the Pecos Valley Unit due to a
revised forecast in reserves based on actual production
experience and a steeper decline rate resulting in a shorter
reserve life.
In addition, the P-4 Partnership's estimated proved
oil reserves increased approximately 12,000 barrels in the
Amoco Fee #3 due to a revised forecast in reserves based on
actual production experience.
Following is a description of those oil and gas properties for which
revisions in the discontinued operations estimated proved reserves as of
December 31, 2006 as compared to December 31, 2005 were significant to the
Partnerships:
The P-5 Partnership's estimated proved oil reserves
increased approximately 1,100 barrels in the North Robertson
Unit due to a revised forecast in reserves based on actual
production experience and a lower decline rate resulting in a
long reserve life.
The P-6 Partnership's estimated proved gas reserves
decreased approximately 62,000 Mcf in the Jo Neal #1 due to a
revised forecast in reserves based on actual production
experience and an increase in monthly lease operating
expenses.
F-51
P-1 Partnership
---------------
Discontinued Operations Continuing Operations
------------------------ ------------------------
Crude Natural Crude Natural
Oil Gas Oil Gas
(Barrels) (Mcf) (Barrels) (Mcf)
--------- ----------- --------- -----------
Proved reserves, Dec. 31, 2003 180,163 1,015,901 28,110 1,250,809
Production ( 17,453) ( 96,953) ( 1,924) ( 154,840)
Sale of minerals in place - - ( 30) -
Extensions and discoveries 4,500 6,244 143 2,037
Revisions of previous estimates 39,696 49,252 10,777 219,284
------- --------- ------ ---------
Proved reserves, Dec. 31, 2004 206,906 974,444 37,076 1,317,290
Production ( 16,467) ( 109,169) ( 2,169) ( 129,240)
Extensions and discoveries 2,285 9,533 1,302 13,737
Revisions of previous estimates 19,524 61,714 ( 7,963) 53,909
------- --------- ------ ---------
Proved reserves, Dec. 31, 2005 212,248 936,522 28,246 1,255,696
Production ( 16,331) ( 110,069) ( 2,344) ( 126,886)
Sale of minerals in place ( 58,830) ( 201,861) - -
Extensions and discoveries 2 10,634 2,140 6,872
Revisions of previous estimates 1,737 ( 48,985) (13,186) ( 102,152)
------- --------- ------ ---------
Proved reserves, Dec. 31, 2006 138,826 586,241 14,856 1,033,530
======= ========= ====== =========
PROVED DEVELOPED RESERVES:
December 31, 2004 206,906 974,444 37,076 1,317,290
======= ========= ====== =========
December 31, 2005 212,248 936,522 28,246 1,255,696
======= ========= ====== =========
December 31, 2006 138,826 586,241 14,856 1,033,530
======= ========= ====== =========
F-52
P-3 Partnership
---------------
Discontinued Operations Continuing Operations
------------------------ ----------------------
Crude Natural Crude Natural
Oil Gas Oil Gas
(Barrels) (Mcf) (Barrels) (Mcf)
--------- ----------- --------- -----------
Proved reserves, Dec. 31, 2003 227,587 1,339,389 48,908 2,379,916
Production ( 22,120) ( 127,009) ( 2,805) ( 262,491)
Sale of minerals in place - - ( 57) -
Extensions and discoveries 5,665 7,865 90 1,428
Revisions of previous estimates 51,132 69,024 11,965 201,987
------- --------- ------ ---------
Proved reserves, Dec. 31, 2004 262,264 1,289,269 58,101 2,320,840
Production ( 20,982) ( 142,691) ( 3,050) ( 221,758)
Extensions and discoveries 2,876 11,993 1,641 18,148
Revisions of previous estimates 25,108 67,787 ( 9,478) 106,629
------- --------- ------ ---------
Proved reserves, Dec. 31, 2005 269,266 1,226,358 47,214 2,223,859
Production ( 20,700) ( 143,110) ( 3,153) ( 216,182)
Sale of minerals in place ( 74,416) ( 282,504) - -
Extensions and discoveries 1 13,395 2,700 10,880
Revisions of previous estimates 2,230 ( 60,177) (16,858) ( 173,233)
------- --------- ------ ---------
Proved reserves, Dec. 31, 2006 176,381 753,962 29,903 1,845,324
======= ========= ====== =========
PROVED DEVELOPED RESERVES:
December 31, 2004 262,264 1,289,269 58,101 2,320,840
======= ========= ====== =========
December 31, 2005 269,266 1,226,358 47,214 2,223,859
======= ========= ====== =========
December 31, 2006 176,381 753,962 29,903 1,845,324
======= ========= ====== =========
F-53
P-4 Partnership
---------------
Discontinued Operations Continuing Operations
------------------------ ----------------------
Crude Natural Crude Natural
Oil Gas Oil Gas
(Barrels) (Mcf) (Barrels) (Mcf)
--------- --------- --------- -----------
Proved reserves, Dec. 31, 2003 990 111,492 65,000 1,987,051
Production ( 295) ( 9,312) (17,392) ( 229,139)
Sale of minerals in place ( 52) - - -
Extensions and discoveries - - 485 1,456
Revisions of previous estimates 2,566 14,646 8,354 92,974
----- ------- ------- ---------
Proved reserves, Dec. 31, 2004 3,209 116,826 56,447 1,852,342
Production ( 488) ( 9,933) (15,251) ( 190,154)
Extensions and discoveries - - 173 5,745
Revisions of previous estimates 1,127 ( 17,185) 2,290 68,127
----- ------- ------ ---------
Proved reserves, Dec. 31, 2005 3,848 89,708 43,659 1,736,060
Production ( 271) ( 8,652) (13,435) ( 180,392)
Sale of minerals in place ( 548) ( 58,489) - -
Extensions and discoveries - - 68 9,861
Revisions of previous estimates 337 2,506 10,704 ( 53,855)
----- ------- ------ ---------
Proved reserves, Dec. 31, 2006 3,366 25,073 40,996 1,511,674
===== ======= ====== =========
PROVED DEVELOPED RESERVES:
December 31, 2004 3,209 116,826 56,447 1,852,342
===== ======= ====== =========
December 31, 2005 3,848 89,708 43,659 1,736,060
===== ======= ====== =========
December 31, 2006 3,366 25,073 40,996 1,511,674
===== ======= ====== =========
F-54
P-5 Partnership
---------------
Discontinued Operations Continuing Operations
------------------------ ------------------------
Crude Natural Crude Natural
Oil Gas Oil Gas
(Barrels) (Mcf) (Barrels) (Mcf)
--------- -------- --------- -----------
Proved reserves, Dec. 31, 2003 7,464 34,441 40,006 2,312,200
Production ( 372) ( 5,994) ( 4,231) ( 276,978)
Sale of minerals in place - - ( 5) -
Extensions and discoveries 1 357 1 31,365
Revisions of previous estimates (6,682) (17,387) 1,975 52,609
----- ------ ------ ---------
Proved reserves, Dec. 31, 2004 411 11,417 37,746 2,119,196
Production ( 225) ( 4,875) ( 4,457) ( 246,204)
Extensions and discoveries 25 1,089 551 120,988
Revisions of previous estimates 116 7,402 5,963 192,486
----- ------ ------- ---------
Proved reserves, Dec. 31, 2005 327 15,033 39,803 2,186,466
Production ( 108) ( 5,426) ( 5,955) ( 304,838)
Sale of minerals in place ( 61) ( 165) - -
Extensions and discoveries 7 343 2,965 256,098
Revisions of previous estimates 1,092 5,268 2,132 22,161
----- ------ ------ ---------
Proved reserves, Dec. 31, 2006 1,257 15,053 38,945 2,159,887
===== ====== ====== =========
PROVED DEVELOPED RESERVES:
December 31, 2004 411 11,417 37,746 2,119,196
===== ====== ====== =========
December 31, 2005 327 15,033 39,803 2,186,466
===== ====== ====== =========
December 31, 2006 1,257 15,053 38,945 2,159,887
===== ====== ====== =========
F-55
P-6 Partnership
---------------
Discontinued Operations Continuing Operations
-------------------------- ----------------------
Crude Natural Crude Natural
Oil Gas Oil Gas
(Barrels) (Mcf) (Barrels) (Mcf)
--------- --------- --------- -----------
Proved reserves, Dec. 31, 2003 3,107 133,114 122,732 3,977,572
Production ( 225) ( 22,049) ( 7,599) ( 424,456)
Extensions and discoveries 1 122 1 10,869
Revisions of previous estimates (2,311) ( 27,161) 9,188 292,323
----- ------- ------- ---------
Proved reserves, Dec. 31, 2004 572 84,026 124,322 3,856,308
Production ( 205) ( 16,128) ( 10,676) ( 398,416)
Extensions and discoveries 88 2,043 499 85,615
Revisions of previous estimates 225 86,981 11,290 ( 370,122)
----- ------- ------- ---------
Proved reserves, Dec. 31, 2005 680 156,922 125,435 3,173,385
Production ( 46) ( 28,550) ( 11,396) ( 450,448)
Sale of minerals in place ( 21) ( 56) - -
Extensions and discoveries 2 12,927 2,890 336,198
Revisions of previous estimates 109 ( 66,045) ( 18) 138,530
----- ------- ------- ---------
Proved reserves, Dec. 31, 2006 724 75,198 116,911 3,197,665
===== ======= ======= =========
PROVED DEVELOPED RESERVES:
December 31, 2004 572 84,026 124,322 3,856,308
===== ======= ======= =========
December 31, 2005 680 156,922 125,435 3,173,385
===== ======= ======= =========
December 31, 2006 724 75,198 116,911 3,195,812
===== ======= ======= =========
F-56
QUARTERLY FINANCIAL DATA (Unaudited)
Summarized unaudited quarterly financial data for 2006 and 2005 are as
follows:
P-1 Partnership
---------------
2006
--------------------------------------------------
First Second Third Fourth
Quarter(2) Quarter(2) Quarter(2) Quarter
---------- ---------- ---------- ----------
Total Revenues $190,977 $169,055 $191,915 $ 136,829
Gross Profit(1) 176,036 158,594 140,909 129,633
Income from continuing
operations 122,044 127,889 110,656 94,664
Income from discontinued
operations 318,323 364,403 402,796 3,744,557
Net Income 440,367 492,292 513,452 3,839,221
Limited Partners' Net
Income per Unit 3.65 4.09 4.23 31.98
2005
--------------------------------------------------
First Second Third Fourth
Quarter(2) Quarter(2) Quarter(2) Quarter(2)
---------- ---------- ---------- ----------
Total Revenues $192,981 $188,789 $237,614 $ 227,523
Gross Profit(1) 185,644 177,916 221,882 217,532
Income from continuing
operations 133,832 147,090 191,183 182,841
Income from discontinued
operations 349,940 245,638 380,325 259,549
Net Income 483,772 392,728 571,508 442,390
Limited Partners' Net
Income per Unit 4.02 3.26 4.74 3.67
F-57
- ------------
(1) Total revenues less depletion of Net Profits Interests and impairment
provision.
(2) Quarterly and prior year amounts have been restated to reflect the sale
of various oil and gas properties during 2006 and assets held for sale
as of December 31, 2006 as discontinued operations, as described in Note
6 to the combined financial statements of the Partnership.
[Remainder of Page Intentionally Left Blank]
F-58
P-3 Partnership
---------------
2006
--------------------------------------------------
First Second Third Fourth
Quarter(2) Quarter(2) Quarter(2) Quarter
---------- ---------- ---------- ----------
Total Revenues $324,513 $283,212 $330,252 $ 243,661
Gross Profit(1) 303,950 267,565 247,124 228,804
Income from continuing
operations 232,822 220,038 200,173 177,350
Income from discontinued
operations 407,135 468,003 518,482 4,844,639
Net Income 639,957 688,041 718,655 5,021,989
Limited Partners' Net
Income per Unit 3.38 3.64 3.77 26.64
2005
--------------------------------------------------
First Second Third Fourth
Quarter(2) Quarter(2) Quarter(2) Quarter(2)
---------- ---------- ---------- ----------
Total Revenues $361,170 $281,766 $393,443 $ 397,973
Gross Profit(1) 345,453 265,739 365,575 386,178
Income from continuing
operations 276,638 218,096 318,142 334,722
Income from discontinued
operations 416,137 351,776 485,782 338,187
Net Income 692,775 569,872 803,924 672,909
Limited Partners' Net
Income per Unit 3.66 3.01 4.25 3.56
F-59
- ------------
(1) Total revenues less depletion of Net Profits Interests and impairment
provision.
(2) Quarterly and prior year amounts have been restated to reflect the sale
of various oil and gas properties during 2006 and assets held for sale
as of December 31, 2006 as discontinued operations, as described in Note
6 to the combined financial statements of the Partnership.
[Remainder of Page Intentionally Left Blank]
F-60
P-4 Partnership
---------------
2006
--------------------------------------------------
First Second Third Fourth
Quarter(2) Quarter(2) Quarter(2) Quarter
---------- ---------- ---------- ----------
Total Revenues $428,190 $394,152 $416,025 $342,914
Gross Profit(1) 415,261 368,036 377,073 336,192
Income from continuing
operations 356,195 332,383 341,841 300,980
Income from discontinued
operations 12,776 15,593 16,992 250,578
Net Income 368,971 347,976 358,833 551,558
Limited Partners' Net
Income per Unit 2.62 2.47 2.53 3.93
2005
--------------------------------------------------
First Second Third Fourth
Quarter(2) Quarter(2) Quarter(2) Quarter(2)
--------- --------- --------- ----------
Total Revenues $327,295 $431,806 $443,553 $560,737
Gross Profit(1) 316,062 421,238 415,683 529,380
Income from continuing
operations 259,216 385,431 380,104 489,722
Income from discontinued
operations 19,674 15,398 17,045 19,458
Net Income 278,890 400,829 397,149 509,180
Limited Partners' Net
Income per Unit 1.98 2.85 2.81 3.61
F-61
- ---------------------------
(1) Total revenues less depletion of Net Profits Interests and impairment
provision.
(2) Quarterly and prior year amounts have been restated to reflect the sale
of various oil and gas properties during 2006 and assets held for sale
as of December 31, 2006 as discontinued operations, as described in Note
6 to the combined financial statements of the Partnership.
[Remainder of Page Intentionally Left Blank]
F-62
P-5 Partnership
---------------
2006
--------------------------------------------------
First Second Third Fourth
Quarter(2) Quarter(2) Quarter(2) Quarter
---------- ---------- ---------- ---------
Total Revenues $495,847 $361,950 $511,505 $465,232
Gross Profit(1) 471,769 333,716 353,219 363,269
Income from continuing
operations 414,889 300,217 320,112 330,182
Income from discontinued
operations 7,827 9,788 8,403 18,096
Net Income 422,716 310,005 328,515 348,278
Limited Partners' Net
Income per Unit 3.20 2.33 2.38 2.57
2005
--------------------------------------------------
First Second Third Fourth
Quarter(2) Quarter(2) Quarter(2) Quarter(2)
---------- ---------- ---------- ---------
Total Revenues $371,486 $409,046 $433,322 $349,797
Gross Profit(1) 342,027 399,823 395,158 320,462
Income from continuing
operations 287,350 366,163 361,727 282,946
Income from discontinued
operations 7,694 7,639 10,176 12,348
Net Income 295,044 373,802 371,903 295,294
Limited Partners' Net
Income per Unit 2.22 2.84 2.79 2.23
F-63
- ------------
(1) Total revenues less depletion of Net Profits Interests and impairment
provision.
(2) Quarterly and prior year amounts have been restated to reflect the sale
of various oil and gas properties during 2006 and assets held for sale
as of December 31, 2006 as discontinued operations, as described in Note
6 to the combined financial statements of the Partnership.
[Remainder of Page Intentionally Left Blank]
F-64
P-6 Partnership
---------------
2006
--------------------------------------------------
First Second Third Fourth
Quarter(2) Quarter(2) Quarter(2) Quarter
---------- ---------- ---------- ---------
Total Revenues $662,349 $623,995 $686,923 $581,229
Gross Profit(1) 608,637 596,617 576,075 406,928
Income from continuing
operations 544,914 556,379 536,318 367,192
Income (Loss) from
discontinued
operations 5,211 88,542 ( 154,181) ( 884)
Net Income 550,125 644,921 382,137 366,308
Limited Partners' Net
Income per Unit 3.42 4.05 2.24 2.19
2005
--------------------------------------------------
First Second Third Fourth
Quarter(2) Quarter(2) Quarter(2) Quarter(2)
---------- ---------- ---------- ---------
Total Revenues $559,322 $655,860 $640,422 $695,804
Gross Profit(1) 530,061 604,343 552,253 581,404
Income from continuing
operations 468,593 563,966 512,096 537,192
Income (Loss) from
discontinued
operations 32,521 16,593 ( 24,742) 32,217
Net Income 501,114 580,559 487,354 569,409
Limited Partners' Net
Income per Unit 3.13 3.63 2.99 3.53
F-65
- ------------
(1) Total revenues less depletion of Net Profits Interests and impairment
provision.
(2) Quarterly and prior year amounts have been restated to reflect the sale
of various oil and gas properties during 2006 and assets held for sale
as of December 31, 2006 as discontinued operations, as described in Note
6 to the combined financial statements of the Partnership.
[Remainder of Page Intentionally Left Blank]
F-66
6. DISCONTINUED OPERATIONS
During August 2006, the General Partner approved a plan to sell an
increased amount of the Partnerships' properties as a result of the generally
favorable current environment for oil and gas properties. On October 11, 2006
and December 13, 2006, the P-1, P-3, P-4, P-5, and P-6 Partnerships sold their
interests in several producing properties at a large public oil and gas auction
which resulted in proceeds of approximately $3,608,000, $4,679,000, $240,000,
$6,000, and $2,000 (net of fees), respectively, to the P-1, P-3, P-4, P-5, and
P-6 Partnerships. The sale resulted in a gain on disposal of discontinued
operations of approximately $3,481,000, $4,511,000, $233,000, $6,000, and
$2,000, respectively, for the P-1, P-3, P-4, P-5, and P-6 Partnerships.
Additional properties of the Partnerships will be sold at auctions in 2007. The
properties sold in the 2006 auctions and those scheduled to be sold in 2007
auctions represent "disposal of a component" under Statement of Financial
Accounting Standards No. 144, "Accounting for the Impairment or Disposal of
Long-Lived Assets" (FAS 144). Accordingly, current year results of operations
for these properties have been classified as discontinued, and prior periods
have been restated. In conjunction with the planned sales, the Partnerships will
retain all assets and liabilities through the effective date of the sale and
purchasers will assume the asset retirement obligations associated with the sold
interests.
Net income (loss) from discontinued operations is as follows:
F-67
P-1 Partnership
---------------
2006 2005 2004
------------ ------------ ------------
Net profits $1,367,640 $1,271,012 $ 817,385
Depreciation, depletion, and
amortization of oil and gas
properties ( 18,874) ( 35,560) ( 25,918)
Impairment provision ( 38) - -
--------- --------- ---------
Income from discontinued
operations $1,348,728 $1,235,452 $ 791,467
========= ========= =========
P-3 Partnership
---------------
2006 2005 2004
------------ ------------ ------------
Net profits $1,751,548 $1,638,801 $1,051,323
Depreciation, depletion, and
amortization of oil and gas
properties ( 24,415) ( 46,919) ( 34,070)
Impairment provision ( 22) - -
--------- --------- ---------
Income from discontinued
operations $1,727,111 $1,591,882 $1,017,253
========= ========= =========
F-68
P-4 Partnership
---------------
2006 2005 2004
----------- ----------- ----------
Net profits $ 63,769 $ 73,845 $ 36,683
Depreciation, depletion, and
amortization of oil and gas
properties ( 509) ( 2,270) ( 1,094)
--------- --------- -------
Income from discontinued
operations $ 63,260 $ 71,575 $ 35,589
========= ========= =======
P-5 Partnership
---------------
2006 2005 2004
------------ ------------ ----------
Net profits $ 40,070 $ 38,748 $ 34,563
Depreciation, depletion, and
amortization of oil and gas
properties ( 1,965) ( 891) ( 940)
Impairment provision ( 288) - -
--------- --------- -------
Income from discontinued
operations $ 37,817 $ 37,857 $ 33,623
========= ========= =======
F-69
P-6 Partnership
---------------
2006 2005 2004
------------ ------------ ----------
Net profits $ 117,281 $ 70,946 $ 46,234
Depreciation, depletion, and
amortization of oil and gas
properties ( 11,612) ( 14,357) ( 1,095)
Impairment provision ( 169,143) - -
--------- --------- -------
Income (Loss) from discontinued
operations ($ 63,474) $ 56,589 $ 45,139
========= ========= =======
F-70
Assets (liabilities) of the discontinued operations as of December 31,
2006 were as follows:
P-1
Partnership
-----------
Accounts receivable - Net Profits $ 103,142
Net Profits Interests 1,968,201
Accumulated depreciation, depletion,
and amortization of Net Profits
Interests and valuation allowance ( 1,759,794)
---------
Net assets held for sale $ 311,549
=========
P-3
Partnership
-----------
Accounts receivable - Net Profits $ 139,365
Net Profits Interests 2,489,494
Accumulated depreciation, depletion,
and amortization of Net Profits
Interests and valuation allowance ( 2,224,272)
---------
Net assets held for sale $ 404,587
=========
P-4
Partnership
-----------
Accounts receivable - Net Profits $ 9,348
Net Profits Interests 46,525
Accumulated depreciation, depletion,
and amortization of Net Profits
Interests and valuation allowance ( 43,084)
---------
Net assets held for sale $ 12,789
=========
F-71
P-5
Partnership
-----------
Accounts receivable - Net Profits $ 6,955
Net Profits Interests 44,972
Accumulated depreciation, depletion,
and amortization of Net Profits
Interests and valuation allowance ( 43,708)
---------
Net assets held for sale $ 8,219
=========
P-6
Partnership
-----------
Accounts payable - Net Profits ($ 25,179)
Net Profits Interests 560,299
Accumulated depreciation, depletion,
and amortization of Net Profits
Interests and valuation allowance ( 560,299)
---------
Net liabilities held for sale ($ 25,179)
=========
7. SUBSEQUENT EVENT
On February 5, 2007, the General Partner mailed a notice to the limited
partners announcing that the Partnerships will terminate on December 31, 2007.
The following unaudited pro forma combined balance sheets as of December
31, 2006 give effect to a change from the going concern basis of accounting to
the liquidation basis of accounting. The unaudited pro forma combined balance
sheets are presented as if the change had occurred on December 31, 2006. The
unaudited pro forma combined balance sheets are based on assumptions and include
adjustments as explained in the notes to the unaudited pro forma combined
balance sheets. While these balance sheets are prepared with the intent of
showing fair value, they are also based on estimates regarding (i) future net
cash flows until the properties are sold and (ii) sales prices which will be
received for the properties through the liquidation process. Actual current and
future prices and costs, as well as the prices purchasers are willing to pay at
the time the properties are sold, may differ materially from the estimates used
in the preparation of the unaudited liquidation basis combined balance sheets.
F-72
GEODYNE INSTITUTION/PENSION ENERGY INCOME LIMITED PARTNERSHIP P-1
Unaudited Pro Forma Combined Balance Sheet
December 31, 2006
Pro Forma
Adjustments
To Liquidation Liquidation
Basis Accounting Basis
Historical (Note B) Pro Forma
----------- ---------------- -----------
CURRENT ASSETS:
Cash and cash equivalents $ 496,665 ($ 496,665) $ -
Accounts receivable:
Net profits 54,786 ( 54,786) -
Assets held for sale 311,549 ( 311,549) -
--------- ---------- ---------
Total current assets $ 863,000 ($ 863,000) $ -
NET PROFITS INTEREST utilizing
the successful efforts
method $ 327,000 ($ 327,000) $ -
NET ASSETS OF PARTNERSHIP IN
LIQUIDATION, at fair value - 7,727,575 7,727,575
--------- --------- ---------
$1,190,000 $6,537,575 $7,727,575
========= ========= ==========
F-73
Pro Forma
Adjustments
To Liquidation Liquidation
Basis Accounting Basis
Historical (Note B) Pro Forma
----------- ---------------- -----------
PARTNER'S CAPITAL (DEFICIT):
General Partner ($ 19,475) $1,058,331 $1,038,856
Limited Partners, issued
and outstanding
108,074 units 1,209,475 5,479,244 6,688,719
--------- --------- ----------
Total partners'
capital $1,190,000 $6,537,575 $7,727,575
--------- -------- ---------
$1,190,000 $6,537,575 $7,727,575
========= ========= =========
F-74
GEODYNE INSTITUTION/PENSION ENERGY INCOME LIMITED PARTNERSHIP P-3
Unaudited Pro Forma Combined Balance Sheet
December 31, 2006
Pro Forma
Adjustments
To Liquidation Liquidation
Basis Accounting Basis
Historical (Note B) Pro Forma
----------- ---------------- -----------
CURRENT ASSETS:
Cash and cash equivalents $ 852,351 ($ 852,351) $ -
Accounts receivable:
Net profits 86,855 ( 86,855) -
Assets held for sale 404,587 ( 404,587) -
--------- ---------- ----------
Total current assets $1,343,793 ($ 1,343,793) $ -
NET PROFITS INTEREST utilizing
the successful efforts
method $ 556,629 ($ 556,629) $ -
NET ASSETS OF PARTNERSHIP IN
LIQUIDATION, at fair value - 11,637,467 11,637,467
--------- ---------- ----------
$1,900,422 $ 9,737,045 $11,637,467
========= ========== ==========
F-75
Pro Forma
Adjustments
To Liquidation Liquidation
Basis Accounting Basis
Historical (Note B) Pro Forma
----------- ---------------- -----------
PARTNER'S CAPITAL:
General Partner $ 15,052 $ 1,013,363 $ 1,028,415
Limited Partners, issued
and outstanding
169,637 units 1,885,370 8,723,682 10,609,052
--------- ---------- ----------
Total partners'
capital $1,900,422 $ 9,737,045 $11,637,467
--------- ---------- ----------
$1,900,422 $ 9,737,045 $11,637,467
========= ========== ==========
F-76
GEODYNE INSTITUTION/PENSION ENERGY INCOME LIMITED PARTNERSHIP P-4
Unaudited Pro Forma Combined Balance Sheet
December 31, 2006
Pro Forma
Adjustments
To Liquidation Liquidation
Basis Accounting Basis
Historical (Note B) Pro Forma
----------- ---------------- -----------
CURRENT ASSETS:
Cash and cash equivalents $ 697,647 ($ 697,647) $ -
Accounts receivable:
Net profits 154,779 ( 154,779) -
Assets held for sale 12,789 ( 12,789) -
--------- --------- ---------
Total current assets $ 865,215 ($ 865,215) $ -
NET PROFITS INTEREST utilizing
the successful efforts
method $ 303,374 ($ 303,374) $ -
NET ASSETS OF PARTNERSHIP IN
LIQUIDATION, at fair value - 6,401,959 6,401,959
--------- --------- ---------
$1,168,589 $5,233,370 $6,401,959
========= ========= =========
F-77
Pro Forma
Adjustments
To Liquidation Liquidation
Basis Accounting Basis
Historical (Note B) Pro Forma
----------- ---------------- ------------
PARTNER'S CAPITAL (DEFICIT):
General Partner ($ 45,401) $ 588,529 $ 543,128
Limited Partners, issued
and outstanding
126,306 units 1,213,990 4,644,841 5,858,831
--------- --------- ---------
Total partners'
capital $1,168,589 $5,233,370 $6,401,959
--------- --------- ---------
$1,168,589 $5,233,370 $6,401,959
========= ========= =========
F-78
GEODYNE INSTITUTION/PENSION ENERGY INCOME LIMITED PARTNERSHIP P-5
Unaudited Pro Forma Combined Balance Sheet
December 31, 2006
Pro Forma
Adjustments
To Liquidation Liquidation
Basis Accounting Basis
Historical (Note B) Pro Forma
----------- ---------------- -----------
CURRENT ASSETS:
Cash and cash equivalents $ 546,848 ($ 546,848) $ -
Accounts receivable:
Net profits 205,280 ( 205,280) -
Assets held for sale 8,219 ( 8,219) -
--------- --------- ---------
Total current assets $ 760,347 ($ 760,347) $ -
NET PROFITS INTEREST utilizing
the successful efforts
method $ 701,700 ($ 701,700) $ -
NET ASSETS OF PARTNERSHIP
IN LIQUIDATION, at fair value - 6,960,346 6,960,346
--------- --------- ---------
$1,462,047 $5,498,299 $6,960,346
========= ========== =========
F-79
Pro Forma
Adjustments
To Liquidation Liquidation
Basis Accounting Basis
Historical (Note B) Pro Forma
----------- ---------------- -----------
PARTNER'S CAPITAL (DEFICIT):
General Partner ($ 24,852) $ 603,049 $ 578,197
Limited Partners, issued
and outstanding
118,449 units 1,486,899 4,895,250 6,382,149
--------- --------- ---------
Total partners'
capital $1,462,047 $5,498,299 $6,960,346
--------- --------- ---------
$1,462,047 $5,498,299 $6,960,346
========= ========= =========
F-80
GEODYNE INSTITUTION/PENSION ENERGY INCOME LIMITED PARTNERSHIP P-6
Unaudited Pro Forma Combined Balance Sheet
December 31, 2006
Pro Forma
Adjustments
To Liquidation Liquidation
Basis Accounting Basis
Historical (Note B) Pro Forma
----------- ---------------- -----------
CURRENT ASSETS:
Cash and cash equivalents $ 661,731 ($ 661,731) $ -
Accounts receivable:
Net profits 6,110 ( 6,110) -
--------- ---------- ----------
Total current assets $ 667,841 ($ 667,841) $ -
NET PROFITS INTEREST utilizing
the successful efforts
method $1,196,173 ($ 1,196,173) $ -
NET ASSETS OF PARTNERSHIP IN
LIQUIDATION, at fair value - 10,308,752 10,308,752
--------- ---------- ----------
$1,864,014 $ 8,444,738 $10,308,752
========= ========== ==========
F-81
Pro Forma
Adjustments
To Liquidation Liquidation
Basis Accounting Basis
Historical (Note B) Pro Forma
----------- ---------------- -----------
CURRENT LIABILITIES:
Accounts payable:
Liabilities - held
for sale $ 25,179 ($ 25,179) $ -
--------- ---------- ----------
Total current
liabilities $ 25,179 ($ 25,179) $ -
PARTNER'S CAPITAL (DEFICIT):
General Partner ($ 34,262) $ 891,308 $ 857,046
Limited Partners, issued
and outstanding
143,041 units 1,873,097 7,578,609 9,451,706
--------- ---------- ----------
Total partners'
capital $1,838,835 $ 8,469,917 $10,308,752
========= ========== ==========
$1,864,014 $ 8,444,738 $10,308,752
========= ========== ==========
F-82
NOTE A - Basis of presentation
The unaudited pro forma combined balance sheets as of December 31, 2006
are presented as if the change in the basis of accounting from the going concern
basis to the liquidation basis occurred on December 31, 2006. The liquidation
basis of accounting reports the net assets of the Partnerships at their net
realizable value.
NOTE B - Pro forma adjustments
Adjustments have been made to reduce all balance sheet categories into
one line, net assets of partnership in liquidation, which is an estimate of the
net fair value of all partnership assets and liabilities. Cash, accounts
receivable, and accounts payable have all been valued at their historical cost,
which approximates fair value. Oil and gas properties have been valued at their
estimated net sales price, which have been estimated utilizing discounted cash
flows based on strip pricing as of February 5, 2007 at a discount rate of 10%
for proved developed producing reserves, 18% for proved developed non- producing
reserves and 20% for proved undeveloped reserves. An adjustment has been made to
the discounted cash flows for the effects of gas balancing and asset retirement
obligations. A provision has also been made to account for expenses that will be
incurred directly related to the sale of the oil and gas properties. The
allocation of the net assets of partnership in liquidation to the General
Partner and limited partners was calculated using the current allocation of
income and expense, which may change.
F-83
INDEX TO EXHIBITS
-----------------
Exh.
No. Description
- ---- -----------
4.1 Certificate of Limited Partnership dated March 16, 1988 for the
Geodyne Institutional/ Pension Energy Income P-1 Limited Partnership
filed as Exhibit 4.1 to Registrant's Annual Report on Form 10-K for
the year ended December 31, 2001, filed with the SEC on February 26,
2002 and is hereby incorporated by reference.
4.2 Amended and Restated Agreement of Limited Partnership dated October
25, 1988 for the Geodyne Institutional/Pension Energy Income P-1
Limited Partnership 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 26, 2002 and is hereby incorporated by reference.
4.3 First Amendment to Certificate of Limited Partnership and First
Amendment to Amended and Restated Agreement of Limited Partnership
dated February 24, 1993, for the Geodyne Institutional/Pension Energy
Income P-1 Limited Partnership filed as Exhibit 4.3 to Registrant's
Annual Report on Form 10-K for the year ended December 31, 2001, filed
with the SEC on February 26, 2002 and is hereby incorporated by
reference.
4.4 Second Amendment to Certificate of Limited Partnership dated July 1,
1996 for the Geodyne Institutional/Pension Energy Income P-1 Limited
Partnership filed as Exhibit 4.4 to Registrant's Annual Report on Form
10-K for the year ended December 31, 2001, filed with the SEC on
February 26, 2002 and is hereby incorporated by reference.
4.5 Second Amendment to Amended and Restated Agreement of Limited
Partnership dated August 4, 1993, for the Geodyne
Institutional/Pension Energy Income P-1 Limited Partnership 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 26, 2002 and
is hereby incorporated by reference.
4.6 Third Amendment to Amended and Restated Agreement of Limited
Partnership dated August 31, 1995, for the Geodyne
Institutional/Pension Energy Income P-1 Limited Partnership filed as
Exhibit 4.6 to Registrant's Annual Report on Form 10-K for the year
ended December 31, 2001, filed with the SEC on February 26, 2002 and
is hereby incorporated by reference.
F-84
4.7 Fourth Amendment to Amended and Restated Agreement of Limited
Partnership dated July 1, 1996, for the Geodyne Institutional/Pension
Energy Income P-1 Limited Partnership filed as Exhibit 4.7 to
Registrant's Annual Report on Form 10-K for the year ended December
31, 2001, filed with the SEC on February 26, 2002 and is hereby
incorporated by reference.
4.8 Fifth Amendment to Amended and Restated Agreement of Limited
Partnership dated October 27, 2005, for the Geodyne Institutional/
Pension Energy Income P-1 Limited Partnership filed as Exhibit 4.8 to
Registrant's Annual Report on Form 10-K for the year ended December
31, 2005, filed with the SEC on March 29, 2006 and is hereby
incorporated by reference.
4.9 Certificate of Limited Partnership dated February 13, 1989 for the
Geodyne Institutional/ Pension Energy Income Limited Partnership P-3
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 26,
2002 and is hereby incorporated by reference.
4.10 Amended and Restated Agreement of Limited Partnership dated May 10,
1989 for the Geodyne Institutional/Pension Energy Income Limited
Partnership P-3 filed as Exhibit 4.16 to Registrant's Annual Report on
Form 10-K for the year ended December 31, 2001, filed with the SEC on
February 26, 2002 and is hereby incorporated by reference.
4.11 First Amendment to Certificate of Limited Partnership and First
Amendment to Amended and Restated Agreement of Limited Partnership
dated February 24, 1993, for the Geodyne Institutional/Pension Energy
Income Limited Partnership P-3 filed as Exhibit 4.17 to Registrant's
Annual Report on Form 10-K for the year ended December 31, 2001, filed
with the SEC on February 26, 2002 and is hereby incorporated by
reference.
4.12 Second Amendment to Certificate of Limited Partnership dated July 1,
1996 for the Geodyne Institutional/Pension Energy Income Limited
Partnership P-3 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 26, 2002 and is hereby incorporated by reference.
4.13 Second Amendment to Amended and Restated Agreement of Limited
Partnership dated August 4, 1993, for the Geodyne
Institutional/Pension Energy Income Limited Partnership P-3 filed as
Exhibit 4.19 to Registrant's Annual Report on Form 10-K for the year
ended December 31, 2001, filed with the SEC on February 26, 2002 and
is hereby incorporated by reference.
F-85
4.14 Third Amendment to Amended and Restated Agreement of Limited
Partnership dated August 31, 1995, for the Geodyne
Institutional/Pension Energy Income Limited Partnership P-3 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 26, 2002 and
is hereby incorporated by reference.
4.15 Fourth Amendment to Amended and Restated Agreement of Limited
Partnership dated July 1, 1996, for the Geodyne Institutional/Pension
Energy Income Limited Partnership P-3 filed as Exhibit 4.21 to
Registrant's Annual Report on Form 10-K for the year ended December
31, 2001, filed with the SEC on February 26, 2002 and is hereby
incorporated by reference.
4.16 Fifth Amendment to Amended and Restated Agreement of Limited
Partnership dated October 27, 2005, for the Geodyne Institutional/
Pension Energy Income P-3 Limited Partnership filed as Exhibit 4.16 to
Registrant's Annual Report on Form 10-K for the year ended December
31, 2005, filed with the SEC on March 29, 2006 and is hereby
incorporated by reference.
4.17 Certificate of Limited Partnership dated May 10, 1989 for the Geodyne
Institutional/ Pension Energy Income Limited Partnership P-4 filed as
Exhibit 4.22 to Registrant's Annual Report on Form 10-K for the year
ended December 31, 2001, filed with the SEC on February 26, 2002 and
is hereby incorporated by reference.
4.18 Amended and Restated Agreement of Limited Partnership dated November
20, 1989 for the Geodyne Institutional/Pension Energy Income Limited
Partnership P-4 filed as Exhibit 4.23 to Registrant's Annual Report on
Form 10-K for the year ended December 31, 2001, filed with the SEC on
February 26, 2002 and is hereby incorporated by reference.
4.19 First Amendment to Certificate of Limited Partnership and First
Amendment to Amended and Restated Agreement of Limited Partnership
dated February 24, 1993, for the Geodyne Institutional/Pension Energy
Income Limited Partnership P-4 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 26, 2002 and is hereby incorporated by
reference.
4.20 Second Amendment to Certificate of Limited Partnership dated July 1,
1996 for the Geodyne Institutional/Pension Energy Income Limited
Partnership P-4 filed as Exhibit 4.25 to Registrant's Annual Report on
Form 10-K for the
F-86
year ended December 31, 2001, filed with the SEC on February 26, 2002
and is hereby incorporated by reference.
4.21 Second Amendment to Amended and Restated Agreement of Limited
Partnership dated August 4, 1993, for the Geodyne
Institutional/Pension Energy Income Limited Partnership P-4 filed as
Exhibit 4.26 to Registrant's Annual Report on Form 10-K for the year
ended December 31, 2001, filed with the SEC on February 26, 2002 and
is hereby incorporated by reference.
4.22 Third Amendment to Amended and Restated Agreement of Limited
Partnership dated August 31, 1995, for the Geodyne
Institutional/Pension Energy Income Limited Partnership P-4 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 26, 2002 and
is hereby incorporated by reference.
4.23 Fourth Amendment to Amended and Restated Agreement of Limited
Partnership dated July 1, 1996, for the Geodyne Institutional/Pension
Energy Income Limited Partnership P-4 filed as Exhibit 4.28 to
Registrant's Annual Report on Form 10-K for the year ended December
31, 2001, filed with the SEC on February 26, 2002 and is hereby
incorporated by reference.
4.24 Fifth Amendment to Amended and Restated Agreement of Limited
Partnership dated October 27, 2005, for the Geodyne Institutional/
Pension Energy Income P-41 Limited Partnership filed as Exhibit 4.24
to Registrant's Annual Report on Form 10-K for the year ended December
31, 2005, filed with the SEC on March 29, 2006 and is hereby
incorporated by reference.
4.25 Certificate of Limited Partnership dated November 9, 1989 for the
Geodyne Institutional/ Pension Energy Income Limited Partnership P-5
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 26,
2002 and is hereby incorporated by reference.
4.26 Amended and Restated Agreement of Limited Partnership dated February
26, 1990 for the Geodyne Institutional/Pension Energy Income Limited
Partnership P-5 filed as Exhibit 4.30 to Registrant's Annual Report on
Form 10-K for the year ended December 31, 2001, filed with the SEC on
February 26, 2002 and is hereby incorporated by reference.
4.27 First Amendment to Certificate of Limited Partnership and First
Amendment to Amended and Restated Agreement of Limited Partnership
dated February 24, 1993, for the Geodyne Institutional/Pension Energy
Income Limited
F-87
Partnership P-5 filed as Exhibit 4.31 to Registrant's Annual Report on
Form 10-K for the year ended December 31, 2001, filed with the SEC on
February 26, 2002 and is hereby incorporated by reference.
4.28 Second Amendment to Certificate of Limited Partnership dated July 1,
1996 for the Geodyne Institutional/Pension Energy Income Limited
Partnership P-5 filed as Exhibit 4.32 to Registrant's Annual Report on
Form 10-K for the year ended December 31, 2001, filed with the SEC on
February 26, 2002 and is hereby incorporated by reference.
4.29 Second Amendment to Amended and Restated Agreement of Limited
Partnership dated August 4, 1993, for the Geodyne
Institutional/Pension Energy Income Limited Partnership P-5 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 26, 2002 and
is hereby incorporated by reference.
4.30 Third Amendment to Amended and Restated Agreement of Limited
Partnership dated August 31, 1995, for the Geodyne
Institutional/Pension Energy Income Limited Partnership P-5 filed as
Exhibit 4.34 to Registrant's Annual Report on Form 10-K for the year
ended December 31, 2001, filed with the SEC on February 26, 2002 and
is hereby incorporated by reference.
4.31 Fourth Amendment to Amended and Restated Agreement of Limited
Partnership dated July 1, 1996, for the Geodyne Institutional/Pension
Energy Income Limited Partnership P-5 filed as Exhibit 4.35 to
Registrant's Annual Report on Form 10-K for the year ended December
31, 2001, filed with the SEC on February 26, 2002 and is hereby
incorporated by reference.
4.32 Fifth Amendment to Amended and Restated Agreement of Limited
Partnership dated October 27, 2005, for the Geodyne Institutional/
Pension Energy Income P-5 Limited Partnership filed as Exhibit 4.32 to
Registrant's Annual Report on Form 10-K for the year ended December
31, 2005, filed with the SEC on March 29, 2006 and is hereby
incorporated by reference.
4.33 Certificate of Limited Partnership dated November 28, 1989 for the
Geodyne Institutional/ Pension Energy Income Limited Partnership P-6
filed as Exhibit 4.36 to Registrant's Annual Report on Form 10-K for
the year ended December 31, 2001, filed with the SEC on February 26,
2002 and is hereby incorporated by reference.
4.34 Amended and Restated Agreement of Limited Partnership dated October 5,
1990 for the Geodyne Institutional/Pension Energy Income Limited
Partnership P-
F-88
6 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
26, 2002 and is hereby incorporated by reference.
4.35 First Amendment to Certificate of Limited Partnership and First
Amendment to Amended and Restated Agreement of Limited Partnership
dated February 24, 1993, for the Geodyne Institutional/Pension Energy
Income Limited Partnership P-6 filed as Exhibit 4.38 to Registrant's
Annual Report on Form 10-K for the year ended December 31, 2001, filed
with the SEC on February 26, 2002 and is hereby incorporated by
reference.
4.36 Second Amendment to Certificate of Limited Partnership dated July 1,
1996 for the Geodyne Institutional/Pension Energy Income Limited
Partnership P-6 filed as Exhibit 4.39 to Registrant's Annual Report on
Form 10-K for the year ended December 31, 2001, filed with the SEC on
February 26, 2002 and is hereby incorporated by reference.
4.37 Second Amendment to Amended and Restated Agreement of Limited
Partnership dated August 4, 1993, for the Geodyne
Institutional/Pension Energy Income Limited Partnership P-6 filed as
Exhibit 4.40 to Registrant's Annual Report on Form 10-K for the year
ended December 31, 2001, filed with the SEC on February 26, 2002 and
is hereby incorporated by reference.
4.38 Third Amendment to Amended and Restated Agreement of Limited
Partnership dated August 31, 1995, for the Geodyne
Institutional/Pension Energy Income Limited Partnership P-6 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 26, 2002 and
is hereby incorporated by reference.
4.39 Fourth Amendment to Amended and Restated Agreement of Limited
Partnership dated July 1, 1996, for the Geodyne Institutional/Pension
Energy Income Limited Partnership P-6 filed as Exhibit 4.42 to
Registrant's Annual Report on Form 10-K for the year ended December
31, 2001, filed with the SEC on February 26, 2002 and is hereby
incorporated by reference.
4.40 Fifth Amendment to Amended and Restated Agreement of Limited
Partnership dated October 27, 2005, for the Geodyne Institutional/
Pension Energy Income P-6 Limited Partnership filed as Exhibit 4.40 to
Registrant's Annual Report on Form 10-K for the year ended December
31, 2005, filed with the SEC on March 29, 2006 and is hereby
incorporated by reference.
F-89
10.1 Amended and Restated Agreement of Partnership dated October 25, 1988
for the Geodyne NPI Partnership P-1 filed as Exhibit 10.1 to
Registrant's Annual Report on Form 10-K for the year ended December
31, 2001, filed with the SEC on February 26, 2002 and is hereby
incorporated by reference.
10.2 First Amendment to Amended and Restated Agreement of Partnership dated
February 26, 1993 for the Geodyne NPI Partnership P-1 filed as Exhibit
10.2 to Registrant's Annual Report on Form 10-K for the year ended
December 31, 2001, filed with the SEC on February 26, 2002 and is
hereby incorporated by reference.
10.3 Second Amendment to Amended and Restated Agreement of Partnership
dated July 1, 1996 for the Geodyne NPI Partnership P-1 filed as
Exhibit 10.3 to Registrant's Annual Report on Form 10-K for the year
ended December 31, 2001, filed with the SEC on February 26, 2002 and
is hereby incorporated by reference.
10.4 Third Amendment to Amended and Restated Agreement of Partnership dated
October 27, 2005 for the Geodyne NPI Partnership P-1 filed as Exhibit
10.4 to Registrant's Annual Report on Form 10-K for the year ended
December 31, 2005, filed with the SEC on March 29, 2006 and is hereby
incorporated by reference.
10.5 Agreement of Partnership dated February 9, 1989 for the Geodyne NPI
Partnership P-3 filed as Exhibit 10.7 to Registrant's Annual Report on
Form 10-K for the year ended December 31, 2001, filed with the SEC on
February 26, 2002 and is hereby incorporated by reference.
10.6 First Amendment to Agreement of Partnership dated February 26, 1993
for the Geodyne NPI Partnership P-3 filed as Exhibit 10.8 to
Registrant's Annual Report on Form 10-K for the year ended December
31, 2001, filed with the SEC on February 26, 2002 and is hereby
incorporated by reference.
10.7 Second Amendment to Agreement of Partnership dated July 1, 1996 for
the Geodyne NPI Partnership P-3 filed as Exhibit 10.9 to Registrant's
Annual Report on Form 10-K for the year ended December 31, 2001, filed
with the SEC on February 26, 2002 and is hereby incorporated by
reference.
10.8 Third Amendment to Agreement of Partnership dated October 27, 2005for
the Geodyne NPI Partnership P-3 filed as Exhibit 10.8 to Registrant's
Annual Report on Form 10-K for the year ended December 31, 2005, filed
with the SEC on March 29, 2006 and is hereby incorporated by
reference.
F-90
10.9 Agreement of Partnership dated April 24, 1989 for the Geodyne NPI
Partnership P-4 filed as Exhibit 10.10 to Registrant's Annual Report
on Form 10-K for the year ended December 31, 2001, filed with the SEC
on February 26, 2002 and is hereby incorporated by reference.
10.10 First Amendment to Agreement of Partnership dated February 26, 1993
for the Geodyne NPI Partnership P-4 filed as Exhibit 10.11 to
Registrant's Annual Report on Form 10-K for the year ended December
31, 2001, filed with the SEC on February 26, 2002 and is hereby
incorporated by reference.
10.11 Second Amendment to Agreement of Partnership dated July 1, 1996 for
the Geodyne NPI Partnership P-4 filed as Exhibit 10.12 to Registrant's
Annual Report on Form 10-K for the year ended December 31, 2001, filed
with the SEC on February 26, 2002 and is hereby incorporated by
reference.
10.12 Third Amendment to Agreement of Partnership dated October 27, 2005 for
the Geodyne NPI Partnership P-4 filed as Exhibit 10.12 to Registrant's
Annual Report on Form 10-K for the year ended December 31, 2005, filed
with the SEC on March 29, 2006 and is hereby incorporated by
reference.
10.13 Agreement of Partnership dated October 27, 1989 for the Geodyne NPI
Partnership P-5 filed as Exhibit 10.13 to Registrant's Annual Report
on Form 10-K for the year ended December 31, 2001, filed with the SEC
on February 26, 2002 and is hereby incorporated by reference.
10.14 First Amendment to Agreement of Partnership dated February 26, 1993
for the Geodyne NPI Partnership P-5 filed as Exhibit 10.14 to
Registrant's Annual Report on Form 10-K for the year ended December
31, 2001, filed with the SEC on February 26, 2002 and is hereby
incorporated by reference.
10.15 Second Amendment to Agreement of Partnership dated July 1, 1996 for
the Geodyne NPI Partnership P-5 filed as Exhibit 10.15 to Registrant's
Annual Report on Form 10-K for the year ended December 31, 2001, filed
with the SEC on February 26, 2002 and is hereby incorporated by
reference.
10.16 Third Amendment to Agreement of Partnership dated October 27, 2005 for
the Geodyne NPI Partnership P-5 filed as Exhibit 10.16 to Registrant's
Annual Report on Form 10-K for the year ended December 31, 2005, filed
with the SEC on March 29, 2006 and is hereby incorporated by
reference.
10.17 Agreement of Partnership dated November 28, 1989 for the Geodyne NPI
Partnership P-6 filed as Exhibit 10.16 to Registrant's Annual Report
on Form 10-K for the year ended
F-91
December 31, 2001, filed with the SEC on February 26, 2002 and is
hereby incorporated by reference.
10.18 First Amendment to Agreement of Partnership dated February 26, 1993
for the Geodyne NPI Partnership P-6 filed as Exhibit 10.17 to
Registrant's Annual Report on Form 10-K for the year ended December
31, 2001, filed with the SEC on February 26, 2002 and is hereby
incorporated by reference.
10.19 Second Amendment to Agreement of Partnership dated July 1, 1996 for
the Geodyne NPI Partnership P-6 filed as Exhibit 10.18 to Registrant's
Annual Report on Form 10-K for the year ended December 31, 2001, filed
with the SEC on February 26, 2002 and is hereby incorporated by
reference.
10.20 Third Amendment to Agreement of Partnership dated October 27, 2005 for
the Geodyne NPI Partnership P-6 filed as Exhibit 10.20 to Registrant's
Annual Report on Form 10-K for the year ended December 31, 2005, filed
with the SEC on March 29, 2006 and is hereby incorporated by
reference.
*23.1 Consent of Ryder Scott Company, L.P. for the Geodyne
Institutional/Pension Energy Income P-1 Limited Partnership.
*23.2 Consent of Ryder Scott Company, L.P. for the Geodyne
Institutional/Pension Energy Income Limited Partnership P-3.
*23.3 Consent of Ryder Scott Company, L.P. for the Geodyne
Institutional/Pension Energy Income Limited Partnership P-4.
*23.4 Consent of Ryder Scott Company, L.P. for the Geodyne
Institutional/Pension Energy Income Limited Partnership P-5.
*23.5 Consent of Ryder Scott Company, L.P. for the Geodyne
Institutional/Pension Energy Income Limited Partnership P-6.
*31.1 Certification by Dennis R. Neill required by Rule 13a-14(a)/15d-14(a)
for the Geodyne Institutional/Pension Energy Income P-1 Limited
Partnership.
*31.2 Certification by Craig D. Loseke required by Rule 13a-14(a)/15d-14(a)
for the Geodyne Institutional/Pension Energy Income P-1 Limited
Partnership.
*31.3 Certification by Dennis R. Neill required by Rule 13a-14(a)/15d-14(a)
for the Geodyne Institutional/Pension Energy Income Limited
Partnership P-3.
F-92
*31.4 Certification by Craig D. Loseke required by Rule 13a-14(a)/15d-14(a)
for the Geodyne Institutional/Pension Energy Income Limited
Partnership P-3.
*31.5 Certification by Dennis R. Neill required by Rule 13a-14(a)/15d-14(a)
for the Geodyne Institutional/Pension Energy Income Limited
Partnership P-4.
*31.6 Certification by Craig D. Loseke required by Rule 13a-14(a)/15d-14(a)
for the Geodyne Institutional/Pension Energy Income Limited
Partnership P-4.
*31.7 Certification by Dennis R. Neill required by Rule 13a-14(a)/15d-14(a)
for the Geodyne Institutional/Pension Energy Income Limited
Partnership P-5.
*31.8 Certification by Craig D. Loseke required by Rule 13a-14(a)/15d-14(a)
for the Geodyne Institutional/Pension Energy Income Limited
Partnership P-5.
*31.9 Certification by Dennis R. Neill required by Rule 13a-14(a)/15d-14(a)
for the Geodyne Institutional/Pension Energy Income Limited
Partnership P-6.
*31.10 Certification by Craig D. Loseke required by Rule 13a-14(a)/15d-14(a)
for the Geodyne Institutional/Pension Energy Income Limited
Partnership P-6.
*32.1 Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant
to Section 906 of the Sarbanes-Oxley Act of 2002 for the Geodyne
Institutional/Pension Energy Income P-1 Limited Partnership.
*32.2 Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant
to Section 906 of the Sarbanes-Oxley Act of 2002 for the Geodyne
Institutional/Pension Energy Income Limited Partnership P-3.
*32.3 Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant
to Section 906 of the Sarbanes-Oxley Act of 2002 for the Geodyne
Institutional/Pension Energy Income Limited Partnership P-4.
*32.4 Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant
to Section 906 of the Sarbanes-Oxley Act of 2002 for the Geodyne
Institutional/Pension Energy Income Limited Partnership P-5.
*32.5 Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant
to Section 906 of the Sarbanes-Oxley Act of 2002 for the Geodyne
Institutional/Pension Energy Income Limited Partnership P-6.
F-93
All other Exhibits are omitted as inapplicable.
----------
*Filed herewith.
F-94