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:
III-A: 0-18302; III-B: 0-18636; III-C: 0-18634; III-D: 0-18936
III-E: 0-19010; III-F: 0-19102
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-A
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-B
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-C
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-D
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-E
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-F
-----------------------------------------------
(Exact name of Registrant as specified in its Articles)
III-A: 73-1352993
III-B: 73-1358666
III-C: 73-1356542
III-D: 73-1357374
III-E: 73-1367188
Oklahoma III-F: 73-1377737
- --------------------------------- ----------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
Two West Second Street, Tulsa, Oklahoma 74103
---------------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (918)583-1791
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act:
Depositary Units of Limited Partnership interest
Indicate by check mark if the Registrant is a well-known seasoned issuer,
as defined in Rule 405 of the Securities Act.
Yes X No
---- ----
Indicate by check mark if the Registrant is not required to file reports
pursuant to Section 13 or Section 15(d) of the Act.
Yes X No
---- ----
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Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
Registrant was required to file such reports) and (2) has been subject to the
filing requirements for the past 90 days.
X Yes No
----- -----
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of Registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K.
X Disclosure is not contained herein.
-----
Disclosure is contained herein.
-----
Indicate by check mark whether the Registrant is a large accelerated
filer, an accelerated filer, or a non-accelerated filer. See definition of
"accelerated filer and large accelerated filer" in Rule 12b-2 of the Exchange
Act (check one):
Large accelerated filer
-----
Accelerated filer
-----
X Non-accelerated filer
-----
Indicate by check mark whether the Registrant is a shell company (as
defined in Rule 12b-2 of the Exchange Act).
Yes X No
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The Depositary Units are not publicly traded; therefore, Registrant cannot
compute the aggregate market value of the voting units held by non-affiliates of
the Registrant.
DOCUMENTS INCORPORATED BY REFERENCE: None
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FORM 10-K
TABLE OF CONTENTS
PART I.......................................................................4
ITEM 1. BUSINESS...................................................4
ITEM 1A. RISK FACTORS...............................................9
ITEM 1B. UNRESOLVED STAFF COMMENTS.................................15
ITEM 2. PROPERTIES................................................15
ITEM 3. LEGAL PROCEEDINGS.........................................37
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF LIMITED PARTNERS.......39
PART II.....................................................................39
ITEM 5. MARKET FOR UNITS, RELATED LIMITED PARTNER MATTERS, AND
ISSUER PURCHASES OF UNITS.................................39
ITEM 6. SELECTED FINANCIAL DATA...................................42
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS.......................49
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES
ABOUT MARKET RISK.........................................80
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA...............80
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL DISCLOSURE.......................80
ITEM 9A. CONTROLS AND PROCEDURES...................................81
ITEM 9B. OTHER INFORMATION.........................................81
PART III....................................................................81
ITEM 10. DIRECTORS, EXECUTIVE OFFICERS OF THE GENERAL PARTNER,
AND CORPORATE GOVERNANCE..................................81
ITEM 11. EXECUTIVE COMPENSATION....................................83
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
AND MANAGEMENT............................................91
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS AND
DIRECTOR INDEPENDENCE.....................................93
ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES....................94
PART IV.....................................................................96
ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES................96
SIGNATURES...........................................................108
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PART I
ITEM 1. BUSINESS
General
The Geodyne Energy Income Limited Partnership III-A (the "III-A
Partnership"), Geodyne Energy Income Limited Partnership III-B (the "III-B
Partnership"), Geodyne Energy Income Limited Partnership III-C (the "III-C
Partnership"), Geodyne Energy Income Limited Partnership III-D (the "III-D
Partnership"), Geodyne Energy Income Limited Partnership III-E (the "III-E
Partnership"), and Geodyne Energy Income Limited Partnership III-F (the "III-F
Partnership") (collectively, the "Partnerships") are limited partnerships formed
under the Oklahoma Revised Uniform Limited Partnership Act. Each Partnership is
composed of Geodyne Resources, Inc., a Delaware corporation, as general partner
("Geodyne" or the "General Partner"), Geodyne Depositary Company, a Delaware
corporation, as the sole initial limited partner, and public investors as
substitute limited partners (the "Limited Partners"). The Partnerships commenced
operations on the dates set forth below:
Date of
Partnership Activation
----------- ------------------
III-A November 22, 1989
III-B January 24, 1990
III-C February 27, 1990
III-D September 5, 1990
III-E December 26, 1990
III-F March 7, 1991
The General Partner currently serves as general partner of 26 limited
partnerships and is a wholly-owned subsidiary of Samson Investment Company.
Samson Investment Company and its various corporate subsidiaries, including the
General Partner (collectively "Samson"), are primarily engaged in the production
and development of and exploration for oil and gas reserves and the acquisition
and operation of producing properties. At December 31, 2006, Samson owned
interests in approximately 12,000 oil 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 and Alberta Canada.
Until liquidation (see "Partnership Termination" below), the Partnerships
are engaged in the business of owning interests in producing oil and gas
properties located in the continental United States. The Partnerships may also
engage to a limited extent in development drilling on producing oil and gas
properties as required for the prudent management of the Partnerships.
-4-
As limited partnerships, the Partnerships have no officers, directors, or
employees. They rely instead on the personnel of the General Partner and Samson.
As of February 15, 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].
Pursuant to the terms of the partnership agreements for the Partnerships
(the "Partnership Agreements") the Partnerships were scheduled to terminate on
the dates indicated in the "Initial Termination Date" column of the following
chart. However, the Partnership Agreements provide that the General Partner may
extend the term of each Partnership for up to five periods of two years each.
The General Partner has extended the terms of the Partnerships for the fourth
two-year extension period to the dates indicated in the "Current Termination
Date" column on the following chart:
Initial Extensions Current
Partnership Termination Date Exercised Termination Date
- ----------- ------------------ --------- ------------------
III-A November 22, 1999 4 November 22, 2007
III-B January 24, 2000 4 December 31, 2007
III-C February 28, 2000 4 December 31, 2007
III-D September 5, 2000 4 December 31, 2007
III-E December 26, 2000 4 December 31, 2007
III-F March 7, 2001 4 December 31, 2007
On February 5, 2007, the General Partner mailed a notice to the limited partners
indicating that the Partnerships will terminate at the end of their current term
as listed above. 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 Agreements permit the Partnerships to incur
borrowings, operations and expenses are currently funded out of each
Partnership's revenues from oil and gas sales. The General Partner may, but is
not required to, advance funds to a Partnership for the same purposes for which
Partnership borrowings are authorized.
-5-
Principal Products Produced and Services Rendered
The Partnerships' sole business is the production of, and related
incidental development of, oil and gas. The Partnerships do not refine or
otherwise process crude oil and condensate. The Partnerships do not hold any
patents, trademarks, licenses, or concessions and are not a party to any
government contracts. The Partnerships have no backlog of orders and do not
participate in research and development activities. The Partnerships are not
presently encountering shortages of oilfield tubular goods, compressors,
production material, or other equipment. However, substantial increases in the
global price of steel as well as increases in the prices for oil and gas
supplies and services will further increase the costs of any future workover,
recompletion or drilling activities conducted by the Partnerships.
Competition and Marketing
The primary source of liquidity and Partnership cash distributions comes
from the net revenues generated from the sale of oil and gas produced from the
Partnerships' oil and gas properties. 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.
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.
-6-
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
November 22, 2007 (for the III-A Partnership) and December 31, 2007 (for the
III-B, III-C, III-D, III-E, and III-F Partnerships). 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.
Significant Customers
The following customers accounted for ten percent or more of the
Partnerships' oil and gas sales during the year ended December 31, 2006:
Partnership Purchaser Percentage
----------- ------------------------ ----------
III-A ConocoPhillips Company
("ConocoPhillips") 34.6%
Gulfterra Central Point
Allocation ("Gulfterra") 19.7%
III-B ConocoPhillips 42.7%
Gulfterra 17.2%
III-C Duke Energy Field Services,
Inc.("Duke") 15.3%
NGPL Allocation 11.0%
III-D NGPL Allocation 15.8%
Eaglwing Trading Inc.
("Eaglwing") 12.6%
Duke 12.2%
Enbridge US Inc. - Texas 10.8%
Eagle Rock Field Services LP 10.1%
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III-E Duke 20.3%
Sempra Energy Trading Corp.
("Sempra") 16.2%
Red Desert Central Point
Allocation ("Red Desert") 14.4%
Hunt Crude Oil Supply Co. 13.8%
Kinder Morgan, Inc. 10.1%
III-F Sempra 19.9%
Eaglwing 18.8%
Red Desert 17.7%
Duke 15.4%
In the event of interruption of purchases by one or more of the
Partnerships' significant customers or the cessation or material change in
availability of open access transportation by the Partnerships' pipeline
transporters, the Partnerships may encounter difficulty in marketing their gas
and in maintaining historic sales levels. Management does not expect any of its
open access transporters to seek authorization to terminate their transportation
services. Even if the services were terminated, management believes that
alternatives would be available whereby the Partnerships would be able to
continue to market their gas.
The Partnerships' principal customers for crude oil production are
refiners and other companies which have pipeline facilities near the producing
properties of the Partnerships. In the event pipeline facilities are not
conveniently available to production areas, crude oil is usually trucked by
purchasers to storage facilities.
Oil, Gas, and Environmental Control Regulations
Regulation of Production Operations -- The production of oil and gas is
subject to extensive federal and state laws and regulations governing a wide
variety of matters, including the drilling and spacing of wells, allowable rates
of production, prevention of waste and pollution, and protection of the
environment. In addition to the direct costs borne in complying with such
regulations, operations and revenues may be impacted to the extent that certain
regulations limit oil and gas production to below economic levels.
Regulation of Sales and Transportation of Oil and Gas -- Sales of crude
oil and condensate are made by the Partnerships at market prices and are not
subject to price controls. The sale of gas may be subject to both federal and
state laws and regulations. The provisions of these laws and regulations are
complex and affect all who produce, resell, transport, or purchase gas,
including the Partnerships. Although virtually all of the Partnerships' gas
production is not subject to price regulation, other regulations affect the
availability of gas transportation services and the ability of gas consumers to
continue to purchase
-8-
or use gas at current levels. Accordingly, such regulations may have a material
effect on the Partnerships' operations and projections of future oil and gas
production and revenues.
Future Legislation -- Legislation affecting the oil and gas industry is
under constant review for amendment or expansion. Because such laws and
regulations are frequently amended or reinterpreted, management is unable to
predict what additional energy legislation may be proposed or enacted or the
future cost and impact of complying with existing or future regulations.
Regulation of the Environment -- The Partnerships' operations are subject
to numerous laws and regulations governing the discharge of materials into the
environment or otherwise relating to the protection of environmental,
biological, cultural, and aesthetic resources. Compliance with such laws and
regulations, together with any penalties resulting from noncompliance, may
increase the cost of the Partnerships' operations or may affect the
Partnerships' ability to timely complete existing or future activities.
Management anticipates that various local, state, and federal environmental
control agencies will have an increasing impact on oil and gas operations.
Insurance Coverage
The Partnerships are subject to all of the risks inherent in the
exploration for and production of oil and gas including blowouts, pollution,
fires, and other casualties. The Partnerships maintain insurance coverage as is
customary for entities of a similar size engaged in operations similar to that
of the Partnerships, but losses can occur from uninsurable risks or in amounts
in excess of existing insurance coverage. In particular, many types of pollution
and contamination can exist, undiscovered, for long periods of time and can
result in substantial environmental liabilities which are not insured. The
occurrence of an event which is not fully covered by insurance could have a
material adverse effect on the Partnerships' financial condition and results of
operations.
ITEM 1A. RISK FACTORS
The following factors, among others, could have a material adverse effect
upon the Partnerships' business, financial condition, and results of operations.
The following discussion of risk factors should be read in conjunction
with the financial statements and related notes included herein. Because of
these and other factors, past financial performance should not be considered an
indication of future performance.
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Termination of Partnerships in 2007
------------------------------------
The Partnerships will terminate on November 22, 2007 (for the III-A
Partnership) and December 31, 2007 (for the III-B, III-C, III-D, III-E and III-F
Partnerships). 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 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;
* 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.
-10-
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 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 gas reserves. In accordance with
Securities and Exchange Commission requirements, the Partnerships base the
estimated discounted future net cash flows from their proved
-11-
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 on Form 10-K ("Annual Report") unaudited balance sheets for the
Partnerships which are prepared on a liquidation basis, rather than a going
concern basis. 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 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.
--------
Drilling oil and natural gas wells, including development wells, involves
numerous risks, including the risk that the Partnerships may not encounter
commercially productive oil and natural gas reservoirs. While the Partnerships
do not expend a significant portion of their capital on drilling activities, to
the extent they do drill wells this can be a significant risk factor to them.
They may not recover all or any portion of their investment in new wells. The
presence of unanticipated pressures or irregularities in formations,
miscalculations or accidents may cause their drilling activities to be
unsuccessful and result in a total loss of investment. Further, drilling
operations may be curtailed, delayed or canceled as a result of a variety of
factors, including:
* Unexpected drilling conditions;
* Title problems;
* Restricted access to land for drilling or laying pipeline;
* Pressure or irregularities in formations;
* Equipment failure or accidents;
* Adverse weather conditions; and
* Costs of, or shortages or delays in the availability of, drilling
rigs, tubular materials and equipment.
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The Marketability Of The Partnerships' Production Is
----------------------------------------------------
Dependent Upon Transportation And Processing Facilities Over
------------------------------------------------------------
Which We Have No Control.
-------------------------
The marketability of the Partnerships' production depends in part upon the
availability, proximity and capacity of pipelines, natural gas gathering systems
and processing facilities. Any significant change in market factors affecting
these infrastructure facilities could harm their business. The Partnerships
deliver oil and natural gas through gathering systems and pipelines that they do
not own. These facilities may be temporarily unavailable due to market
conditions or mechanical reasons, or may not be available to us in the future.
Reliance On Third Party Operators
---------------------------------
A substantial portion of the Partnerships' properties are operated by
third parties. The Partnerships have little, if any, control over the
operational decisions and costs associated with these properties. In addition,
the Partnerships are totally reliant on the third party operators' internal
controls associated with the operators' accounting for revenues and expenses.
No Market For Units
-------------------
The Partnerships' Units are not listed on any exchange or national market
system, and there is no established public trading market for 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 November 22,
2007 (for the III-A Partnership) and December 31, 2007 (for the III-B, III-C,
III-D, III-E and III-F Partnerships). 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 Laws And Regulations That Could Adversely Affect Their
------------------------------------------------------------
Business.
---------
Extensive federal, state and local regulation of the oil and gas industry
significantly affects the Partnerships' operations. In particular, they are
subject to stringent environmental regulations. These regulations increase the
costs of planning, designing, drilling, installing, operating and abandoning oil
and natural gas wells and other related facilities. These regulations may become
more demanding in the future. Matters subject to regulation include:
* Discharge permits for drilling operations;
* Drilling bonds;
* Spacing of wells;
* Unitization and pooling of properties;
* Environmental protection;
* Reports concerning operations; and
* Taxation.
Under these laws and regulations, the Partnerships could be liable for:
* Personal injuries;
* Property damage;
* Oil spills;
* Discharge of hazardous materials;
* Reclamation costs;
* Remediation and clean-up costs; and
* Other environmental damages.
While the Partnerships maintain insurance coverage customary for companies
similar to their size and operations, losses can occur from uninsurable risks or
in amounts in excess of existing insurance coverage. See "Item 1. Business."
Conflicts Of Interest
---------------------
Direct and indirect conflicts of interests exist among the Partnerships
and among a Partnership and the General Partner and its affiliates. The General
Partner and its affiliates engage in many aspects of the oil and gas business,
including acting as a general partner of a number of affiliated oil and gas
limited partnerships. The General Partner and its affiliates may engage in
transactions with a Partnership, and Partnerships will frequently engage in
transactions with other oil and gas limited partnerships. These conflicts could
relate to the sale of oil and gas properties in the normal course of business
and well as in the
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liquidation process. See "Item 13. Certain Relationships and Related
Transactions and Director Independence."
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 of the
Partnerships as of December 31, 2006.
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Well Statistics(1)
As of December 31, 2006
Number of Gross Wells(2) Number of Net Wells(3)
-------------------------- ---------------------------
P/ship Total Oil Gas Total Oil Gas
- -------- ----- --- --- ------ ----- -----
III-A 206 50 156 12.21 2.50 9.70
III-B 176 41 135 7.86 3.31 4.55
III-C 239 47 192 23.80 6.93 16.87
III-D 153 47 106 12.59 5.08 7.51
III-E 151 11 140 22.58 1.85 20.73
III-F 373 270 103 16.13 6.45 9.68
- ----------
(1) The designation of a well as an oil well or gas well is made by the
General Partner based on the relative amount of oil and gas reserves for
the well. Regardless of a well's oil or gas designation, it may produce
oil, gas, or both oil and gas.
(2) As used in this Annual Report, "gross well" refers to a well in which a
working interest is owned; accordingly, the number of gross wells is the
total number of wells in which a working interest is owned.
(3) As used in this Annual Report, "net well" refers to the sum of the
fractional working interests owned in gross wells. For example, a 15%
working interest in a well represents one gross well, but 0.15 net well.
Drilling Activities
During the year ended December 31, 2006, the Partnerships directly or
indirectly participated in the drilling activities described below.
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III-A PARTNERSHIP
- -----------------
WORKING REVENUE
WELL NAME COUNTY ST. INTEREST INTEREST TYPE STATUS
- --------- ------ --- -------- -------- ---- ------
Belt Properties #3-8 Pittsburg OK - 0.01101 Gas In Progress
Clayton #11-9 Washita OK - 0.00330 Gas Producing
Hachar #41 Webb TX - 0.00749 Gas Producing
Hoyt #1C (DK) Rio Arriba NM - 0.00016 Gas In Progress
Hoyt #1C (MV) Rio Arriba NM - 0.00050 Gas In Progress
Jenny #1C Rio Arriba NM - 0.00158 Gas Producing
Jicarilla B #1B Rio Arriba NM - 0.00021 Gas Producing
Phillips #1-22 Caddo OK - 0.00215 Gas Producing
Ringo #10-9 Washita OK - 0.00354 Gas Producing
Tafoya #35-5 San Juan NM - 0.00300 Gas Producing
III-B PARTNERSHIP
- -----------------
WORKING REVENUE
WELL NAME COUNTY ST. INTEREST INTEREST TYPE STATUS
- --------- ------ --- -------- -------- ---- ------
Clayton #11-9 Washita OK - 0.00218 Gas Producing
Hachar #41 Webb TX - 0.00349 Gas Producing
Hoyt #1C (DK) Rio Arriba NM - 0.00007 Gas In Progress
Hoyt #1C (MV) Rio Arriba NM - 0.00022 Gas In Progress
Jenny #1C Rio Arriba NM - 0.00066 Gas Producing
Jicarilla B #1B Rio Arriba NM - 0.00009 Gas Producing
Phillips #1-22 Caddo OK - 0.00142 Gas Producing
Ringo #10-9 Washita OK - 0.00233 Gas Producing
Tafoya #35-5 San Juan NM - 0.00126 Gas Producing
-17-
III-C PARTNERSHIP
- -----------------
WORKING REVENUE
WELL NAME COUNTY ST. INTEREST INTEREST TYPE STATUS
- --------- ------ --- -------- -------- ---- ------
Aday #1-9 McClain OK - 0.00206 Gas Producing
Bridges #2-18 LeFlore OK - 0.00029 Gas Producing
Camel, Joe #3 Lea NM - 0.00140 Oil In Progress
Cantrell #7-15H Haskell OK - 0.00112 Gas Producing
Cheyenne 29 #5 Roger Mills OK - 0.00008 Gas Producing
Cory #1-29 Kingfisher OK - 0.00372 Gas Producing
Davis Garry #26 Kay OK - 0.00079 Oil Producing
Delaware 28 #6 Roger Mills OK - 0.00008 Gas Producing
Delaware 28 #7 Roger Mills OK - 0.00008 Gas In Progress
Duncan #2-7H Seminole OK - 0.00018 Oil In Progress
Gilbert A #1 Caddo OK - 0.00225 Gas Producing
Grace #1-H Lincoln OK - 0.00290 Gas Producing
Guinn #1-5 Coal OK - 0.00508 Gas Producing
Hachar #41 Webb TX - 0.00145 Gas Producing
Harris #5-26H Haskell OK - 0.00062 Gas Producing
Hay #10-33 Roger Mills OK - 0.00015 Gas Producing
Hefley #2-36 Wheeler TX - 0.01069 Gas Producing
Hefley #3-37 Wheeler TX - 0.01070 Gas Producing
Hefley #16-47 Wheeler TX - 0.01603 Gas Producing
Hefley #20-47 Wheeler TX - 0.01603 Gas Producing
Hefley #27-47 Wheeler TX - 0.01603 Gas In Progress
Hefley #32-47 Wheeler TX - 0.01603 Gas Producing
Helton #7-60 Wheeler TX - 0.00481 Gas Producing
Helton #8-60 Wheeler TX - 0.00481 Gas Producing
Helton #10A-60 Wheeler TX - 0.00481 Gas Producing
Helton #11-60 Wheeler TX - 0.00481 Gas Producing
Helton #14-60 Wheeler TX - 0.00481 Gas Producing
Hinkle #4-28 Washita OK - 0.00440 Gas In Progress
Hinkle Trust #5-33 Washita OK - 0.00094 Gas Producing
Hoyt #1C (DK) Rio Arriba NM - 0.00003 Gas In Progress
Hoyt #1C (MV) Rio Arriba NM - 0.00009 Gas In Progress
Hubbard #2-13 Beckham OK - 0.00077 Gas Producing
Jenny #1C Rio Arriba NM - 0.00028 Gas Producing
-18-
Jicarilla B #1B Rio Arriba NM - 0.00004 Gas Producing
Litz #1R-2 Harper OK 0.00547 0.00547 Gas Producing
McWilliams #2H-23 Pittsburg OK - 0.00034 Gas In Progress
Melvin #1H-20 Hughes OK 0.00168 0.00168 Gas In Progress
Mooney #1H-19 Hughes OK 0.00184 0.00184 Gas Producing
Morris #1H-21 Hughes OK - 0.00500 Gas Producing
Nutley #4-33 Washita OK - 0.00094 Gas Producing
Oliver #1 McClain OK - 0.00492 Oil Producing
Parker #1-6H Coal OK - 0.00217 Gas Producing
Patterson #1H-31 Hughes OK - 0.00345 Gas Producing
Patterson #2H-31 Hughes OK - 0.00345 Gas Producing
Patton #3-24 Pittsburg OK - 0.01041 Gas In Progress
Pee Wee #1-17 Stephens OK - 0.00433 Gas Producing
Phipps #1-28 Pittsburg OK - 0.00384 Gas Producing
Prater #5-10 Hemphill TX - 0.00268 Gas Producing
Prater #6-10 Hemphill TX - 0.00268 Gas Producing
Prater #7-10 Hemphill TX - 0.00268 Gas In Progress
Prater #8-10 Hemphill TX - 0.00268 Gas Producing
Prater #9-10 Hemphill TX - 0.00268 Gas In Progress
Presson H W #1-5 Pittsburg OK - 0.00031 Gas Producing
Reed #1-8 Beckham OK - 0.00010 Gas Producing
Rice 1-25 LeFlore OK - 0.00020 Gas Producing
Schueler #1-14H Hughes OK 0.00056 0.00056 Gas In Progress
Sites Troy #1-9 Beckham OK 0.00052 0.00052 Gas Producing
Smith #1H-28 Hughes OK - 0.00625 Gas In Progress
Sophia #14-50 Wheeler TX - 0.00315 Gas In Progress
Sophia #21-50 Wheeler TX - 0.00315 Gas Producing
Spradlin Farms #8A-20 Washita OK - 0.00189 Gas Producing
Sugg-Farmar 26 #1 Irion TX - 0.00128 Gas Producing
Tafoya #35-5 San Juan NM - 0.00053 Gas Producing
Trueblood #2-2 Noble OK 0.00476 0.00419 Gas Producing
Trueblood #3-2 Noble OK 0.00476 0.00419 Gas Producing
Trueblood #4-2 Noble OK 0.00478 0.00419 Oil Producing
Trueblood #5-2 Noble OK 0.00476 0.00419 Oil In Progress
Urchison #5-12H LeFlore OK 0.00148 0.00148 Gas Producing
Vanilli #3-36 LeFlore OK - 0.00139 Gas Producing
Verner #5-11 Pittsburg OK - 0.00370 Gas Producing
Walter #5-24 Beckham OK - 0.00065 Gas Producing
(Upr D.Moines GW)
-19-
III-D PARTNERSHIP
- -----------------
WORKING REVENUE
WELL NAME COUNTY ST. INTEREST INTEREST TYPE STATUS
- --------- ------ --- -------- -------- ---- ------
Aday #1-9 McClain OK - 0.00029 Gas Producing
Bridges #2-18 Le Flore OK - 0.00004 Gas Producing
Camel, Joe #3 Lea NM - 0.00020 Oil In Progress
Cantrell #7-15H Haskell OK - 0.00016 Gas Producing
Cheyenne 29 #5 Roger Mills OK - 0.00001 Gas Producing
Cory #1-29 Kingfisher OK - 0.00053 Gas Producing
Davis Garry #26 Kay OK - 0.00011 Oil Producing
Delaware 28 #6 Roger Mills OK - 0.00001 Gas Producing
Delaware 28 #7 Roger Mills OK - 0.00001 Gas In Progress
Duncan #2-7H Seminole OK - 0.00003 Oil In Progress
Gilbert A #1 Caddo OK - 0.00032 Gas Producing
Grace #1-H Lincoln OK - 0.00042 Gas Producing
Guinn #1-5 Coal OK - 0.00073 Gas Producing
Harris #5-26H Haskell OK - 0.00009 Gas Producing
Hay #10-33 Roger Mills OK - 0.00002 Gas Producing
Hefley #2-36 Wheeler TX - 0.00894 Gas Producing
Hefley #3-37 Wheeler TX - 0.00895 Gas Producing
Hefley #16-47 Wheeler TX - 0.01341 Gas Producing
Hefley #20-47 Wheeler TX - 0.01341 Gas Producing
Hefley #27-47 Wheeler TX - 0.01341 Gas In Progress
Hefley #32-47 Wheeler TX - 0.01341 Gas Producing
Helton #7-60 Wheeler TX - 0.00402 Gas Producing
Helton #8-60 Wheeler TX - 0.00402 Gas Producing
Helton #10A-60 Wheeler TX - 0.00402 Gas Producing
Helton #11-60 Wheeler TX - 0.00402 Gas Producing
Helton #14-60 Wheeler TX - 0.00402 Gas Producing
Hinkle #4-28 Washita OK - 0.00063 Gas In Progress
Hinkle Trust #5-33 Washita OK - 0.00013 Gas Producing
Hubbard #2-13 Beckham OK - 0.00011 Gas Producing
Litz #1R-2 Harper OK 0.00078 0.00078 Gas Producing
McWilliams #2H-23 Pittsburg OK - 0.00005 Gas In Progress
Melvin #1H-20 Hughes OK 0.00024 0.00024 Gas In Progress
-20-
Mooney #1H-19 Hughes OK 0.00026 0.00026 Gas Producing
Morris #1H-21 Hughes OK - 0.00072 Gas Producing
Nutley #4-33 Washita OK - 0.00013 Gas Producing
Parker #1-6H Coal OK - 0.00031 Gas Producing
Patterson #1H-31 Hughes OK - 0.00049 Gas Producing
Patterson #2H-31 Hughes OK - 0.00049 Gas Producing
Patton #3-24 Pittsburg OK - 0.00149 Gas In Progress
Pee Wee #1-17 Stephens OK - 0.00062 Gas Producing
Phipps #1-28 Pittsburg OK - 0.00055 Gas Producing
Prater #5-10 Hemphill TX - 0.00224 Gas Producing
Prater #6-10 Hemphill TX - 0.00224 Gas Producing
Prater #7-10 Hemphill TX - 0.00224 Gas In Progress
Prater #8-10 Hemphill TX - 0.00224 Gas Producing
Prater #9-10 Hemphill TX - 0.00224 Gas In Progress
Presson H W #1-5 Pittsburg OK - 0.00004 Gas Producing
Reed #1-8 Beckham OK - 0.00001 Gas Producing
Rice 1-25 Le Flore OK - 0.00003 Gas Producing
Schueler #1-14H Hughes OK 0.00008 0.00008 Gas In Progress
Sites Troy #1-9 Beckham OK 0.00007 0.00007 Gas Producing
Smith #1H-28 Hughes OK - 0.00089 Gas In Progress
Sophia #14-50 Wheeler TX - 0.00263 Gas In Progress
Sophia #21-50 Wheeler TX - 0.00263 Gas Producing
Spradlin Farms #8A-20 Washita OK - 0.00027 Gas Producing
Sugg-Farmar 26 #1 Irion TX - 0.00107 Gas Producing
Trueblood #2-2 Noble OK 0.00068 0.00060 Gas Producing
Trueblood #3-2 Noble OK 0.00068 0.00060 Gas Producing
Trueblood #4-2 Noble OK 0.00068 0.00060 Oil Producing
Trueblood #5-2 Noble OK 0.00068 0.00060 Oil In Progress
Urchison #5-12H Le Flore OK 0.00021 0.00021 Gas Producing
Vanilli #3-36 Le Flore OK - 0.00020 Gas Producing
Verner #5-11 Pittsburg OK - 0.00053 Gas Producing
Walter #5-24 Beckham OK - 0.00009 Gas Producing
(Upr D.Moines GW)
-21-
III-E PARTNERSHIP
- -----------------
WORKING REVENUE
WELL NAME COUNTY ST. INTEREST INTEREST TYPE STATUS
- --------- ------ --- -------- -------- ---- ------
Coquat Et Al #1 Live Oak TX - 0.01187 Gas Dryhole
Fed 5175-25-33CA Campbell WY - 0.00857 Gas Shut-in
Federal 5175-24-21WA Campbell WY - 0.01237 Gas Shut-in
Floyd Fed 5175-23-33WA Campbell WY - 0.01237 Gas Producing
Floyd Fed 5175-24-11WA Campbell WY - 0.01237 Gas Shut-in
Floyd Fed 5175-24-33WA Campbell WY - 0.01237 Gas Shut-in
Hay Reservoir Unit #92 Sweetwater WY - 0.00261 Gas Producing
Hay Reservoir Unit #95 Sweetwater WY - 0.00261 Gas Producing
Hayden 5175-22-13CA Campbell WY - 0.00865 Gas Shut-in
Hayden 5175-22-13WA Campbell WY - 0.00865 Gas Shut-in
Hayden 5175-22-21CA Campbell WY - 0.00865 Gas Shut-in
Hayden 5175-22-21WA Campbell WY - 0.00865 Gas Producing
Hayden 5175-22-41CA Campbell WY - 0.00865 Gas Shut-in
Hayden 5175-22-41WA Campbell WY - 0.00865 Gas Shut-in
Hayden 5175-22-43CA Campbell WY - 0.00865 Gas Shut-in
Hayden 5175-22-43WA Campbell WY - 0.00865 Gas Shut-in
Hayden 5175-27-43WA Campbell WY - 0.00865 Gas Shut-in
Hayden Federal Campbell WY - 0.00857 Gas Shut-in
5175-27-31WA
Mooney Fed 5175-23-13WA Campbell WY - 0.03085 Gas Shut-in
Trail #13C-15J Sweetwater WY - 0.00852 Gas In Progress
Trail Unit Well #13C-15W Sweetwater WY - 0.01206 Gas In Progress
Trail Unit Well #22 Sweetwater WY - 0.01206 Gas Producing
Trail Unit Well #23 Sweetwater WY - 0.01206 Gas Producing
Trail Unit Well #25 Sweetwater WY - 0.01206 Gas Producing
Yonkee 5175-25-31WA Campbell WY - 0.00865 Gas Shut-in
Yonkee Fed 5175-25-41WA Campbell WY - 0.00857 Gas Producing
-22-
III-F PARTNERSHIP
- -----------------
WORKING REVENUE
WELL NAME COUNTY ST. INTEREST INTEREST TYPE STATUS
- --------- ------ --- -------- -------- ---- ------
Hay Reservoir Unit #92 Sweetwater WY - 0.00219 Gas Producing
Hay Reservoir Unit #95 Sweetwater WY - 0.00219 Gas Producing
Trail #13C-15J Sweetwater WY - 0.00716 Gas In Progress
Trail Unit Well #13C-15W Sweetwater WY - 0.01013 Gas In Progress
Trail Unit Well #22 Sweetwater WY - 0.01013 Gas Producing
Trail Unit Well #23 Sweetwater WY - 0.01013 Gas Producing
Trail Unit Well #25 Sweetwater WY - 0.01013 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, net of all royalties,
overriding royalties, and other third party interests, of the Partnerships,
revenues attributable to such production, and certain price and cost
information. As used in the following tables, direct operating expenses include
lease operating expenses and production taxes. In addition, gas production is
converted to oil equivalents at the rate of six Mcf per barrel, representing the
estimated relative energy content of gas and oil, which rate is not necessarily
indicative of the relationship of oil and gas prices. The respective prices of
oil and gas are affected by market and other factors in addition to relative
energy content.
[Remainder of Page Intentionally Left Blank]
-24-
Net Production Data
III-A Partnership
-----------------
Year Ended December 31,
-------------------------------------
2006 2005(1) 2004(1)
---------- ---------- ----------
Production:
Oil (Bbls) 28,373 32,191 36,657
Gas (Mcf) 345,008 369,103 442,066
Oil and gas sales:
Oil $1,834,132 $1,755,167 $1,463,426
Gas 2,247,244 2,818,549 2,555,799
--------- --------- ---------
Total $4,081,376 $4,573,716 $4,019,225
========= ========= =========
Total direct operating
expenses $ 949,988 $1,078,166 $ 780,214
========= ========= =========
Direct operating expenses
as a percentage of oil
and gas sales 23.3% 23.6% 19.4%
Average sales price:
Per barrel of oil $64.64 $54.52 $39.92
Per Mcf of gas 6.51 7.64 5.78
Direct operating expenses
per equivalent Bbl of
oil $11.06 $11.51 $ 7.07
- -------------
(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.
-25-
Net Production Data
III-B Partnership
-----------------
Year Ended December 31,
-------------------------------------
2006 2005(1) 2004(1)
---------- ---------- ----------
Production:
Oil (Bbls) 19,700 22,521 25,353
Gas (Mcf) 145,330 159,150 184,751
Oil and gas sales:
Oil $1,274,905 $1,229,664 $1,012,467
Gas 950,416 1,214,565 1,086,307
--------- --------- ---------
Total $2,225,321 $2,444,229 $2,098,774
========= ========= =========
Total direct operating
expenses $ 582,134 $ 643,874 $ 468,512
========= ========= =========
Direct operating expenses
as a percentage of oil
and gas sales 26.2% 26.3% 22.3%
Average sales price:
Per barrel of oil $64.72 $54.60 $39.93
Per Mcf of gas 6.54 7.63 5.88
Direct operating expenses
per equivalent Bbl of
oil $13.25 $13.13 $ 8.34
- ------------
(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.
-26-
Net Production Data
III-C Partnership
-----------------
Year Ended December 31,
-------------------------------------
2006 2005(1) 2004(1)
---------- ---------- ----------
Production:
Oil (Bbls) 11,648 9,295 9,089
Gas (Mcf) 610,593 506,230 538,840
Oil and gas sales:
Oil $ 742,594 $ 505,633 $ 359,643
Gas 3,925,885 3,662,756 2,916,066
--------- --------- ---------
Total $4,668,479 $4,168,389 $3,275,709
========= ========= =========
Total direct operating
expenses $1,141,691 $ 956,321 $ 848,837
========= ========= =========
Direct operating expenses
as a percentage of oil
and gas sales 24.5% 22.9% 25.9%
Average sales price:
Per barrel of oil $63.75 $54.40 $39.57
Per Mcf of gas 6.43 7.24 5.41
Direct operating expenses
per equivalent Bbl of
oil $10.07 $10.21 $ 8.58
- ------------
(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.
-27-
Net Production Data
III-D Partnership
-----------------
Year Ended December 31,
-------------------------------------
2006 2005(1) 2004(1)
---------- ---------- ----------
Production:
Oil (Bbls) 9,928 8,546 8,347
Gas (Mcf) 367,694 284,998 291,166
Oil and gas sales:
Oil $ 622,932 $ 452,501 $ 316,903
Gas 2,161,887 1,993,009 1,566,013
--------- --------- ---------
Total $2,784,819 $2,445,510 $1,882,916
========= ========= =========
Total direct operating
expenses $ 731,952 $ 594,328 $ 493,312
========= ========= =========
Direct operating expenses
as a percentage of oil
and gas sales 26.3% 24.3% 26.2%
Average sales price:
Per barrel of oil $62.74 $52.95 $37.97
Per Mcf of gas 5.88 6.99 5.38
Direct operating expenses
per equivalent Bbl of
oil $10.28 $10.60 $ 8.67
- ------------
(1) These amounts have been restated to reflect the sale of the Jay Field
during 2004, 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.
-28-
Net Production Data
III-E Partnership
-----------------
Year Ended December 31,
---------------------------------------
2006 2005(1) 2004(1)
---------- ---------- ----------
Production:
Oil (Bbls) 16,782 23,178 22,473
Gas (Mcf) 535,598 634,703 678,604
Oil and gas sales:
Oil $ 989,699 $1,171,095 $ 828,783
Gas 3,182,018 4,546,395 3,574,468
--------- --------- ---------
Total $4,171,717 $5,717,490 $4,403,251
========= ========= =========
Total direct operating
expenses $1,396,094 $1,421,533 $1,272,794
========= ========= =========
Direct operating expenses
as a percentage of oil
and gas sales 33.5% 24.9% 28.9%
Average sales price:
Per barrel of oil $58.97 $50.53 $36.88
Per Mcf of gas 5.94 7.16 5.27
Direct operating expenses
per equivalent Bbl of
oil $13.16 $11.02 $ 9.39
- ----------
(1) These amounts have been restated to reflect the sale of the Jay Field
during 2004, 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.
-29-
Net Production Data
III-F Partnership
-----------------
Year Ended December 31,
-------------------------------------
2006 2005(1) 2004(1)
---------- ---------- ----------
Production:
Oil (Bbls) 9,822 10,893 10,696
Gas (Mcf) 300,359 370,786 393,218
Oil and gas sales:
Oil $ 619,637 $ 590,719 $ 414,003
Gas 1,772,811 2,698,469 2,061,263
--------- --------- ---------
Total $2,392,448 $3,289,188 $2,475,266
========= ========= =========
Total direct operating
expenses $ 823,804 $ 731,732 $ 646,563
========= ========= =========
Direct operating expenses
as a percentage of oil
and gas sales 34.4% 22.2% 26.1%
Average sales price:
Per barrel of oil $63.09 $54.23 $38.71
Per Mcf of gas 5.90 7.28 5.24
Direct operating expenses
per equivalent Bbl of
oil $13.76 $10.07 $ 8.48
- ------------
(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.
-30-
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. 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
-31-
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 December 31, 2006 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 operations 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.
-32-
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)
--------- --------- -----------------
III-A Partnership:
- -----------------
Discontinued operations: 37,095 4,969 $ 228,403
Continuing operations: 2,862,147 85,327 9,404,365
III-B Partnership:
- -----------------
Discontinued operations: 173 - $ 535
Continuing operations: 1,176,144 62,606 4,658,468
III-C Partnership:
- -----------------
Discontinued operations: 17,697 1,497 $ 82,055
Continuing operations: 4,369,825 92,360 11,463,866
III-D Partnership:
- -----------------
Discontinued operations: 4,639 220 $ 20,175
Continuing operations: 2,312,694 77,037 6,377,592
III-E Partnership:
- -----------------
Discontinued operations: 106,932 579 $ 188,756
Continuing operations: 4,413,978 100,547 9,650,553
III-F Partnership:
- -----------------
Discontinued operations: 27,492 137,785 $ 2,641,162
Continuing operations: 2,761,834 158,836 7,449,520
- ------------
(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.
-33-
No estimates of the proved reserves of the Partnerships comparable to
those included herein have been included in reports to any federal agency other
than the SEC. Additional information relating to the Partnerships' proved
reserves is contained in Note 4 to the Partnerships' financial statements,
included in Item 8 of this Annual Report.
Significant Properties
The following table sets forth the number and percent of each
Partnership's total wells which are operated by affiliates of the Partnerships
as of December 31, 2006:
Operated Wells
-----------------------------------------
Partnership Number Percent
----------- ------ -------
III-A 21 7%
III-B 3 1%
III-C 140 21%
III-D 135 27%
III-E 44 13%
III-F 26 6%
The following tables set 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 tables contain the following
information for each such basin: (i) the number of gross wells and net wells,
(ii) the number of wells in which only a non-working interest is owned, (iii)
the Partnership's total number of wells, (iv) the number of wells operated by
the Partnership's affiliates, (v) estimated proved oil reserves, (vi) estimated
proved gas reserves, and (vii) the present value (discounted at 10% per annum)
of estimated future net cash flow.
The Anadarko Basin is located in western Oklahoma and the Texas panhandle.
The Gulf Coast Basin is located in southern Louisiana and southeast Texas. The
Las Animas Arch Basin straddles east Colorado and northwest Kansas. The Southern
Oklahoma Folded Belt Basin is located in southern Oklahoma, while the Green
River Basin is located in southern Wyoming and northwest Colorado. The Permian
Basin straddles west Texas and southeast New Mexico, while the East Texas Basin
is located in east Texas and northern Louisiana.
-34-
Significant Properties as of December 31, 2006
----------------------------------------------
Wells
Operated by
Affiliates Oil Gas
Gross Net Other Total ------------- Reserves Reserves Present
Basin Wells Wells Wells(1) Wells Number %(2) (Bbl) (Mcf) Value
- ------------------ ------ ------- -------- ------ ------ ---- -------- --------- ----------
III-A Partnership:
Gulf Coast 78 6.17 54 132 4 3% 72,218 955,492 $4,964,026
Anadarko 38 2.30 27 65 17 26% 4,918 1,463,815 3,547,805
III-B Partnership:
Gulf Coast 74 3.41 54 128 - - 44,177 466,191 $2,897,400
Anadarko 43 2.58 18 61 3 5% 11,222 463,686 1,243,820
III-C Partnership:
Anadarko 64 6.46 141 205 44 21% 18,792 2,364,233 $5,876,588
Southern Okla.
Folded Belt 46 8.80 20 66 24 36% 49,555 1,217,451 3,755,268
Permian 28 7.47 16 44 39 89% 24,430 481,696 1,116,517
III-D Partnership:
Anadarko 42 3.60 141 183 44 24% 4,753 1,760,923 $4,267,728
Southern Okla.
Folded Belt 37 2.51 19 56 19 34% 43,624 149,213 1,094,480
Permian 28 6.25 16 44 39 89% 19,540 389,840 880,616
- ---------------------
(1) Wells in which only a non-working (e.g. royalty) interest is owned.
(2) Percentage of wells in the applicable basin which are operated by affiliates
of the Partnerships.
-35-
Significant Properties as of December 31, 2006
----------------------------------------------
Wells
Operated by
Affiliates Oil Gas
Gross Net Other Total ------------- Reserves Reserves Present
Basin Wells Wells Wells(1) Wells Number %(2) (Bbl) (Mcf) Value
- ------------------ ------ ------- -------- ------ ------ ---- --------- --------- -----------
<c> <c>
III-E Partnership:
Green River 56 4.29 34 90 - - 13,238 1,958,387 $3,539,298
Anadarko 21 5.05 4 25 18 72% 6,255 772,535 1,819,209
East Texas 3 1.06 1 4 3 75% 2,578 685,169 1,359,438
Gulf Coast 32 3.47 7 39 3 8% 5,006 414,635 1,199,071
III-F Partnership:
Green River 56 3.60 34 90 - - 11,113 1,640,851 $2,957,939
Las Animas Arch 66 1.73 - 66 - - 137,550 - 2,570,984
Anadarko 26 5.65 4 30 23 77% 14,565 722,099 1,656,794
Southern Okla.
Folded Belt 196 3.10 1 197 - - 98,184 - 1,153,421
- --------------------
(1) Wells in which only a non-working (e.g. royalty) interest is owned.
(2) Percentage of wells in the applicable basin which are operated by affiliates
of the Partnerships.
-36-
Title to Oil and Gas Properties
Management believes that the Partnerships have satisfactory title to their
oil and gas properties. Record title to all of the Partnerships' properties is
held by either the Partnerships or Geodyne Nominee Corporation, an affiliate of
the General Partner.
Title to the Partnerships' properties is subject to customary royalty,
overriding royalty, carried, working, and other similar interests and
contractual arrangements customary in the oil and gas industry, to liens for
current taxes not yet due, and to other encumbrances. Management believes that
such burdens do not materially detract from the value of such properties or from
the Partnerships' interest therein or materially interfere with their use in the
operation of the Partnerships' business.
ITEM 3. LEGAL PROCEEDINGS
A lawsuit styled Robert W. Scott, individually and as Managing Member of
R.W. Scott Investments, LLC v. Samson Resources Company, Case No. C-01-385, was
filed in the District Court of Sweetwater County, Wyoming on June 29, 2001. The
lawsuit seeks class action certification and alleges that Samson deducted from
its payments to royalty and overriding royalty owners certain charges which were
improper under the Wyoming royalty payment statutes. A number of these royalty
and overriding royalty payments burden the interests of the III-A, III-B, III-E,
and III-F Partnerships. In February 2003, Samson made a supplemental payment to
the royalty and overriding royalty interest owners who were potential class
members of amounts which were then thought to have been improperly deducted plus
statutory interest thereon. The lawsuit also alleges that Samson's check stubs
did not fully comply with the Wyoming Royalty Payment Act.
On May 13, 2005 the trial court certified this lawsuit as a class action
and denied Samson's motion for summary judgment. On June 25, 2005 the Wyoming
Supreme Court denied Samson's request for it to review these decisions. Samson
and the plaintiffs have reached agreement to settle all of the plaintiffs'
remaining claims in this lawsuit, and Samson expects a formal settlement
agreement to be executed during April 2007. The settlement calls for an
additional royalty payment of $1,000,000 and is subject to Court approval.
Plaintiffs' counsel, subject to Court approval, is responsible for determining
the allocation of the $1,000,000 among the various class members after deduction
of litigation costs and attorneys' fees. Samson cannot determine the portion of
this settlement amount attributable to each Partnership until the allocation is
received from plaintiffs' counsel and approved by the Court.
-37-
On August 4, 1998 the U.S. Minerals Management Service ("MMS") issued an
Order for Samson to recalculate and pay additional royalties to the MMS for
various Federal and Indian leases in several states. A number of these Federal
and Indian royalty interests burden the interests of the III-A, III-B, III-E,
and III-F Partnerships. Samson appealed the Order and on October 22, 2004 the
the Department of the Interior issued its decision which granted the appeal in
part and denied the appeal in part. While the Department's decision did not
approve the recalculation methodology originally ordered by the MMS, the
decision still required Samson to recalculate and pay additional royalties but
under a different recalculation methodology than sought by the MMS.
Samson paid additional royalties to the MMS on August 23, 2006 pursuant to
the Department's decision. The MMS has since requested additional information
and explanation regarding Samson's recalculation. The MMS has also informally
indicated that it disagrees with certain aspects of the recalculation. As of the
date of this Annual Report, Samson cannot determine the amount of additional
royalties (and interest) which may be claimed by or ultimately owed to the MMS.
While Samson maintains that no additional royalties are owed, Samson estimates
that the maximum amount which may be claimed by the MMS attributable to the
III-E and III-F Partnerships is as follows:
Partnership Amount
----------- --------
III-E $208,171
III-F 174,899
While the affiliate maintains that no additional royalties are owed, the General
Partner has accrued $105,000 and $90,000, respectively, for the III-E and III-F
Partnerships, as reasonable estimates of amounts which may become ultimately
owed to the MMS. The amounts attributable to the III-A and III-B Partnerships
are estimated to be immaterial.
Except as described above, to the knowledge of the General Partner,
neither the General Partner nor the Partnerships or their properties are subject
to any litigation, the results of which would have a material effect on the
Partnerships' or the General Partner's financial condition or operations.
-38-
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 Number of
Partnership Units Limited Partners
----------- --------- ----------------
III-A 263,976 1,074
III-B 138,336 652
III-C 244,536 1,002
III-D 131,008 549
III-E 418,266 1,664
III-F 221,484 846
Units were initially sold for a price of $100. Units are not traded on any
exchange and there is no public trading market for them. The General Partner is
aware of certain transfers of Units between unrelated parties, some of which are
facilitated by secondary trading firms and matching services. In addition, as
further described below, the General Partner is aware of certain "4.9% Tender
Offers" which have been made for the Units. The General Partner believes that
the transfers between unrelated parties have been limited and sporadic in number
and volume. Other than trades facilitated by certain secondary trading firms and
matching services, no organized trading market for Units exists and none is
expected to develop. Due to the nature of these transactions, the General
Partner has no verifiable information regarding prices at which Units have been
transferred. Further, a transferee may not become a substitute Limited Partner
without the consent of the General Partner.
Pursuant to the terms of the Partnership Agreements, the General Partner
is obligated to annually issue a repurchase offer which is based on the
estimated future net revenues from the Partnerships' reserves and is calculated
pursuant to the terms of the Partnership Agreements. Such repurchase offer is
recalculated monthly in order to reflect cash distributions to the Limited
Partners and extraordinary events. The following table sets forth the General
Partner's repurchase offer per Unit as of the periods indicated. For purpose of
this Annual Report,
-39-
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)
- ------ ---- ---- ---- ---- ---- ---- ---- ---- -------
III-A $18 $15 $25 $23 $19 $16 $24 $22 $17
III-B 15 13 21 19 16 13 20 17 14
III-C 20 18 25 22 19 17 27 25 22
III-D 20 17 25 23 20 18 28 26 23
III-E 16 14 23 21 19 17 21 20 18
III-F 22 19 33 31 27 23 34 32 30
- ------------
(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 November 22,
2007 (for the III-A Partnership) and on December 31, 2007 (for the III-B, III-C,
III-D, III-E and III-F Partnerships). Due to such termination and the necessary
liquidation process, the General Partner terminated the repurchase offer and
right of presentment 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.
-40-
Cash Distributions
Cash distributions are primarily dependent upon a Partnership's cash
receipts from the sale of oil and gas production, 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, 2006, and the first quarter of 2007:
Cash Distributions
-----------------
2005
-----------------------------------------
1st 2nd 3rd 4th
P/ship Qtr. Qtr. Qtr. Qtr.
------ ----- ----- ----- -----
III-A $2.58 $2.20 $2.58 $2.59
III-B 2.49 1.83 2.47 2.36
III-C 1.36 2.03 2.47 2.50
III-D 1.39 2.27 2.51 2.67
III-E .82 2.06 1.78 1.71
III-F 1.91 2.55 2.37 2.56
-41-
2006 2007
----------------------------------------- --------
1st 2nd 3rd 4th 1st
P/ship Qtr. Qtr. Qtr. Qtr. Qtr.
------ ----- ----- ----- ----- --------
III-A $3.49 $3.38 $2.54 $2.64 $4.19(1)
III-B 3.17 2.94 2.28 2.54 3.64(1)
III-C 2.65 2.56 1.86 1.68 3.30(1)
III-D 2.60 2.29 1.79 1.62 3.00(2)
III-E 2.19 2.55 1.49 1.45 1.44(2)
III-F 3.65 3.21 1.87 1.90 1.95(1)
- ------------
(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 December 13, 2006.
(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.
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]
-42-
Selected Financial Data
III-A Partnership
-----------------
2006 2005(1) 2004(1) 2003(1) 2002(1)
------------ ------------ ------------ ------------ ------------
Oil and Gas Sales $4,081,376 $4,573,716 $4,019,225 $3,935,917 $3,821,352
Income from:
Continuing
operations 2,686,976 3,026,380 2,770,501 2,645,003 2,057,072
Discontinued
operations 613,870 129,491 61,486 61,633 22,847
Net Income:
Limited Partners 2,959,548 2,826,610 2,534,550 2,419,111 1,822,932
General Partner 341,298 329,261 297,437 286,852 256,987
Total 3,300,846 3,155,871 2,831,987 2,705,963 2,079,919
Limited Partners' Net
Income per Unit 11.21 10.71 9.60 9.16 6.91
Limited Partners' Cash
Distributions per
Unit 12.05 9.95 8.86 9.89 8.88
Total Assets 2,820,414 3,006,720 2,577,310 2,357,510 2,465,350
Partners' Capital
(Deficit):
Limited Partners 2,387,038 2,609,490 2,410,880 2,213,330 2,405,219
General Partner ( 59,707) ( 59,217) ( 88,506) ( 104,097) ( 87,091)
Number of Units
Outstanding 263,976 263,976 263,976 263,976 263,976
- ------------
(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. Management's Discussion and
Analysis of Financial Condition and Results of Operations" for more
information about these discontinued operations.
-43-
Selected Financial Data
III-B Partnership
-----------------
2006 2005(1) 2004(1) 2003(1) 2002(1)
------------ ------------ ------------ ------------ ------------
Oil and Gas Sales $2,225,321 $2,444,229 $2,098,774 $2,181,049 $2,264,989
Income from:
Continuing
operations 1,409,948 1,533,857 1,361,176 1,386,080 1,130,755
Discontinued
operations 237,778 31,841 12,547 13,389 2,118
Net Income:
Limited Partners 1,393,201 1,318,911 1,154,435 1,171,730 916,420
General Partner 254,525 246,787 219,288 227,153 216,453
Total 1,647,726 1,565,698 1,373,723 1,398,883 1,132,873
Limited Partners' Net
Income per Unit 10.07 9.53 8.35 8.47 6.62
Limited Partners' Cash
Distributions per
Unit 10.93 9.15 7.63 9.76 9.39
Total Assets 1,476,437 1,577,808 1,379,422 1,270,257 1,390,931
Partners' Capital
(Deficit):
Limited Partners 1,212,771 1,332,570 1,277,659 1,178,224 1,357,494
General Partner ( 41,841) ( 35,041) ( 58,429) ( 68,928) ( 48,554)
Number of Units
Outstanding 138,336 138,336 138,336 138,336 138,336
- ------------
(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. Management's Discussion and
Analysis of Financial Condition and Results of Operations" for more
information about these discontinued operations.
-44-
Selected Financial Data
III-C Partnership
-----------------
2006 2005(1) 2004(1) 2003(1) 2002(1)
------------ ------------ ------------ ------------ ------------
Oil and Gas Sales $4,668,479 $4,168,389 $3,275,709 $3,565,584 $2,710,950
Income from:
Continuing
operations 2,670,707 2,706,951 1,699,118 2,229,002 1,313,872
Discontinued
operations 150,967 56,474 46,184 28,410 22,946
Net Income:
Limited Partners 2,488,289 2,468,202 1,531,505 2,016,059 1,178,582
General Partner 333,385 295,223 213,797 243,670 158,236
Total 2,821,674 2,763,425 1,745,302 2,259,729 1,336,818
Limited Partners' Net
Income per Unit 10.17 10.09 6.26 8.24 4.82
Limited Partners' Cash
Distributions per
Unit 8.75 8.36 7.07 8.14 4.77
Total Assets 3,740,239 3,504,783 2,790,409 2,902,685 2,751,198
Partners' Capital
(Deficit):
Limited Partners 3,119,856 2,769,567 2,345,365 2,542,860 2,517,801
General Partner ( 90,026) ( 105,515) ( 136,932) ( 153,480) ( 150,636)
Number of Units
Outstanding 244,536 244,536 244,536 244,536 244,536
- ------------
(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. Management's Discussion and
Analysis of Financial Condition and Results of Operations" for more
information about these discontinued operations.
-45-
Selected Financial Data
III-D Partnership
-----------------
2006 2005(2) 2004(2) 2003(1),(2) 2002(1),(2)
------------ ------------ ------------ ------------ ------------
Oil and Gas Sales $2,784,819 $2,445,510 $1,882,916 $2,109,687 $1,617,353
Income from:
Continuing
Operations 1,509,641 1,569,088 1,125,630 1,331,150 769,516
Discontinued
Operations 38,639 21,219 ( 75,399) 115,384 29,134
Net Income:
Limited Partners 1,360,009 1,421,578 936,644 1,293,974 705,530
General Partner 188,271 168,729 113,587 155,435 93,120
Total 1,548,280 1,590,307 1,050,231 1,449,409 798,650
Limited Partners' Net
Income per Unit 10.39 10.86 7.15 9.88 5.38
Limited Partners' Cash
Distributions per
Unit 8.30 8.84 8.50 9.55 3.75
Total Assets 1,955,855 1,741,237 1,370,609 1,731,542 1,458,550
Partners' Capital
(Deficit):
Limited Partners 1,487,559 1,214,550 951,972 1,129,328 1,086,354
General Partner ( 17,347) ( 29,279) ( 55,158) ( 47,561) ( 50,949)
Number of Units
Outstanding 131,008 131,008 131,008 131,008 131,008
- -------------
(1) These amounts have been restated to reflect the sale of the Jay Field
during 2004, 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. Management's Discussion and Analysis of Financial Condition
and Results of Operations" for more information about these discontinued
operations.
(2) 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. Management's Discussion and
Analysis of Financial Condition and Results of Operations" for more
information about these discontinued operations.
-46-
Selected Financial Data
III-E Partnership
-----------------
2006 2005(2) 2004(2) 2003(1),(2) 2002(1),(2)
------------ ------------ ------------ ------------ ------------
Oil and Gas Sales $4,171,717 $5,717,490 $4,403,251 $4,234,109 $2,687,391
Income from:
Continuing
operations 2,034,789 3,511,023 2,461,508 2,373,647 671,459
Discontinued
operations 280,844 192,323 ( 460,849) 931,536 254,759
Net Income:
Limited Partners 2,044,349 3,304,874 1,782,244 2,940,848 798,510
General Partner 271,284 398,472 218,415 367,060 127,708
Total 2,315,633 3,703,346 2,000,659 3,307,908 926,218
Limited Partners' Net
Income per Unit 4.89 7.90 4.26 7.03 1.91
Limited Partners' Cash
Distributions per
Unit 7.68 6.37 6.72 5.10 .63
Total Assets 3,578,014 4,755,246 4,254,283 6,654,923 4,442,417
Partners' Capital
(Deficit):
Limited Partners 2,748,000 3,918,651 3,277,777 4,302,533 3,492,685
General Partner ( 263,673) ( 197,010) ( 316,058) ( 177,234) ( 250,684)
Number of Units
Outstanding 418,266 418,266 418,266 418,266 418,266
- ------------
(1) These amounts have been restated to reflect the sale of the Jay Field
during 2004, 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. Management's Discussion and Analysis of Financial Condition
and Results of Operations" for more information about these discontinued
operations.
(2) 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. Management's Discussion and
Analysis of Financial Condition and Results of Operations" for more
information about these discontinued operations.
-47-
Selected Financial Data
III-F Partnership
-----------------
2006 2005(1) 2004(1) 2003(1) 2002(1)
------------ ------------ ------------ ------------ ------------
Oil and Gas Sales $2,392,448 $3,289,188 $2,475,266 $2,125,502 $1,362,125
Income from:
Continuing
operations 1,096,403 2,106,059 1,413,748 970,579 299,035
Discontinued
operations 564,048 458,357 376,474 273,141 197,461
Net Income:
Limited Partners 1,473,768 2,428,636 1,694,433 1,176,685 460,816
General Partner 186,683 135,780 95,789 70,747 35,680
Total 1,660,451 2,564,416 1,790,222 1,247,432 496,496
Limited Partners' Net
Income per Unit 6.65 10.96 7.65 5.31 2.08
Limited Partners' Cash
Distributions per
Unit 10.64 9.39 5.80 4.72 2.60
Total Assets 2,750,005 3,557,937 2,994,343 2,592,302 2,427,147
Partners' Capital
(Deficit):
Limited Partners 2,249,559 3,131,791 2,783,155 2,374,722 2,245,037
General Partner ( 126,790) ( 126,897) ( 142,055) ( 156,356) ( 159,621)
Number of Units
Outstanding 221,484 221,484 221,484 221,484 221,484
- ------------
(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. Management's Discussion and
Analysis of Financial Condition and Results of Operations" for more
information about these discontinued operations.
-48-
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
Use of Forward-Looking Statements and Estimates
This Annual Report contains certain forward-looking statements. The words
"anticipate," "believe," "expect," "plan," "intend," "estimate," "project,"
"could," "may," and similar expressions are intended to identify forward-looking
statements. Such statements reflect management's current views with respect to
future events and financial performance. This Annual Report also includes
certain information which is, or is based upon, estimates and assumptions. Such
estimates and assumptions are management's efforts to accurately reflect the
condition and operation of the Partnerships.
Use of forward-looking statements and estimates and assumptions involve
risks and uncertainties which include, but are not limited to, the volatility of
oil and gas prices, the uncertainty of reserve information, the operating risk
associated with oil and gas properties (including the risk of personal injury,
death, property damage, damage to the well or producing reservoir, environmental
contamination, and other operating risks), the prospect of changing tax and
regulatory laws, the availability and capacity of processing and transportation
facilities, the accuracy of third party payments and billings, the general
economic climate, the supply and price of foreign imports of oil and gas, the
level of consumer product demand, and the price and availability of alternative
fuels. Should one or more of these risks or uncertainties occur or should
estimates or underlying assumptions prove incorrect, actual conditions or
results may vary materially and adversely from those stated, anticipated,
believed, estimated, or otherwise indicated.
Discontinued Operations
The III-D and III-E Partnerships owned working interests in the Jay-Little
Escambia Creek Field in Santa Rosa County, Florida (the "Jay Field"). In May
2004, the III-D and III-E Partnerships sold all of their interests in the Jay
Field. For accounting purposes, the sale was treated as discontinued operations.
The sales proceeds, consisting of approximately $89,000 and $632,000,
respectively, were included in the III-D and III-E Partnerships' August 15, 2004
cash distributions.
The sale of the Jay Field interests impacted the operations of the III-D
and III-E Partnerships. Routine audits of joint interest billings by an
unaffiliated non-operator after the close date of the sale resulted in
additional expenses of approximately $76,000 and $544,000, respectively, billed
to the III-D and III-E Partnerships. The expenses represent costs incurred
before the effective date of the sale. The reader should refer to Note 6 -
Discontinued Operations to the financial statements included in
-49-
Item 8 of this Annual Report for additional information regarding this matter.
In December 2006, the Partnerships sold their interests in a number of
producing properties. This disposal was treated as discontinued operations. The
sales proceeds consisting of approximately $517,000, $218,000, $98,000, $1,000,
$108,000 and $90,000, respectively, were included in the February 15, 2007 cash
distributions paid by the III-A, III-B, III-C, III-D, III-E and III-F
Partnerships. 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 retirement obligations as a result of these sales. The reader
should refer to the combined financial statements indexed in Item 15 hereof for
additional information regarding this matter.
Partnership Terminations
The Partnerships would have terminated on the dates shown below in
accordance with the Partnership Agreements.
III-A November 22, 1999
III-B January 24, 2000
III-C February 28, 2000
III-D September 5, 2000
III-E December 26, 2000
III-F March 7, 2001
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 fourth
two-year extension, thereby extending their termination date to November 22,
2007 (for the III-A Partnership) and to December 31, 2007 (for the III-B, III-C,
III-D, III-E and III-F Partnerships). On February 5, 2007 the General Partner
mailed a notice to the limited partners announcing that (i) the Partnerships
will terminate on November 22, 2007 (for the III-A Partnership) and on December
31, 2007 for the other Partnerships and (ii) the General Partner will liquidate
the Partnerships' assets and satisfy their liabilities as part of the winding-up
process.
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 2007. While these property sales were not related to the
Partnerships' liquidation, all remaining property dispositions will be made as
part of the liquidation and winding-up process.
-50-
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 other properties
which have no or little value or are burdened with actual or potential
liabilities. The General Partner intends to sell such remaining 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
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, 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 balance sheets which are presented on a liquidation basis.
-51-
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;
* 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;
-52-
* The shutting in of wells (or the opening of previously shut-in wells)
due to low oil and gas prices (or high oil and gas prices), mechanical
difficulties, loss of a market or transportation, or performance of
workovers, recompletions, or other operations in the well;
* Prior period volume adjustments (either positive or negative) made by
operators of the properties;
* Adjustments in ownership or rights to production in accordance with
agreements governing the operation or ownership of the well (such as
adjustments that occur at payout or due to gas balancing); and
* Completion of enhanced recovery projects which increase production for
the well.
Many of these factors are very significant as related to a single well or as
related to many wells over a short period of time. However, due to the large
number of wells owned by the Partnerships, these factors are generally not
material as compared to the normal decline in production experienced on all
remaining wells.
Results of Operations
An analysis of the change in net oil and gas operations (oil and gas
sales, less lease operating expenses and production taxes), is presented in the
tables following "Results of Operations" under the heading "Average Sales
Prices, Production Volumes, and Average Production Costs." Following is a
discussion of each 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.
III-A 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 oil and gas sales decreased $492,000 (10.8%) in 2006 as compared to
2005. Of this decrease (i) $208,000 and $184,000 were related to decreases in
volumes of oil and gas sold and (ii) $387,000 was related to a decrease in the
average price of gas
-53-
sold. These decreases were partially offset by an increase of $287,000 related
to an increase in the average price of oil sold.
Volumes of oil and gas sold decreased 3,818 barrels and 24,095 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, (ii) the shutting-in of
several wells during late 2005 through late 2006 in order to perform workovers,
and (iii) positive prior period volume adjustments made by the operators on
several other wells during 2005. As of the date of this Annual Report, the
operator has not determined when, or if, the shut-in wells will return to
production and, if returned to production, at what rate. These decreases were
partially offset by a positive prior period volume adjustment made by the
operator on another significant well during 2006.
Average oil prices increased to $64.64 per barrel in 2006 from $54.52 per
barrel in 2005. Average gas prices decreased to $6.51 per Mcf in 2006 from $7.64
per Mcf in 2005.
Oil and gas production expenses (including lease operating expenses and
production taxes) decreased $128,000 (11.9%) in 2006 as compared to 2005. This
decrease 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 other 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. As a percentage of oil
and gas sales, these expenses decreased to 23.3% in 2006 from 23.6% in 2005.
Depreciation, depletion, and amortization ("DD&A") of oil and gas
properties decreased $12,000 (7.1%) in 2006 as compared to 2005. This decrease
was primarily due to (i) several wells being fully depleted during 2005 due to
their lack of remaining reserves and (ii) the decreases in volumes of oil and
gas sold. These decreases were partially offset by several other wells being
fully depleted during 2006 due to their lack of remaining reserves. As a
percentage of oil and gas sales, this expense increased to 3.8% in 2006 from
3.7% in 2005.
The Partnership recognized a non-cash charge against earnings of $6,000
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
-54-
incurred during 2005.
General and administrative expenses remained relatively constant in 2006
and 2005. As a percentage of oil and gas sales, these expenses increased to 7.8%
in 2006 from 7.0% in 2005, primarily due to the decrease in oil and gas sales.
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 $44,706,701 or 169.36% 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 oil and gas sales increased $554,000 (13.8%) in 2005 as compared to
2004. Of this increase $470,000 and $684,000 were related to increases in the
average prices of oil and gas sold. These increases were partially offset by
decreases of $178,000 and $422,000 related to decreases in volumes of oil and
gas sold.
Volumes of oil and gas sold decreased 4,466 barrels and 72,963 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) the shutting-in of two significant wells during early 2005 in
order to perform workovers, and (iii) a positive prior period volume adjustment
included in the receipt of first revenues on one significant well during 2004.
Average oil and gas prices increased to $54.52 per barrel and $7.64 per
Mcf in 2005 from $39.92 per barrel and $5.78 per Mcf in 2004.
-55-
Oil and gas production expenses (including lease operating expenses and
production taxes) increased $298,000 (38.2%) in 2005 as compared to 2004. This
increase 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. These increases were partially offset by a
negative prior period production tax adjustment made by the operator on another
significant well during 2005. As a percentage of oil and gas sales, these
expenses increased to 23.6% in 2005 from 19.4% in 2004, primarily due to the
dollar increase in oil and gas production expenses.
DD&A of oil and gas properties increased $6,000 (3.7%) in 2005 as compared
to 2004. Of this increase (i) $66,000 was due to the depletion of additional
capitalized costs of oil and gas properties as a result of the upward revision
in the estimate of the asset retirement obligations, of which $44,000 was
related to previously fully depleted wells, and (ii) $8,000 was due to accretion
of these additional asset retirement obligations. These increases were partially
offset by (i) the abandonment of one significant well during 2004 following an
unsuccessful recompletion attempt and (ii) the decreases in volumes of oil and
gas sold. As a percentage of oil and gas sales, this expense decreased to 3.7%
in 2005 from 4.1% in 2004.
General and administrative expenses increased $6,000 (2.0%) in 2005 as
compared to 2004. As a percentage of oil and gas sales, these expenses decreased
to 7.0% in 2005 from 7.8% in 2004, primarily due to the increase in oil and gas
sales.
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.
III-B 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
-56-
information about these discontinued operations.
Total oil and gas sales decreased $219,000 (9.0%) in 2006 as compared to
2005. Of this decrease (i) $154,000 and $105,000 were related to decreases in
volumes of oil and gas sold and (ii) $159,000 was related to a decrease in the
average price of gas sold. These decreases were partially offset by an increase
of $199,000 related to an increase in the average price of oil sold.
Volumes of oil and gas sold decreased 2,821 barrels and 13,820 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, (ii) the shutting-in of
several wells during late 2005 through late 2006 in order to perform workovers,
and (iii) a positive prior period volume adjustment made by the operator on one
significant well during 2005. As of the date of this Annual Report, the operator
has not determined when, or if, the shut-in wells will return to production and,
if returned to production, at what rate. These decreases were partially offset
by a positive prior period volume adjustment made by the operator on another
significant well during 2006.
Average oil prices increased to $64.72 per barrel in 2006 from $54.60 per
barrel in 2005. Average gas prices decreased to $6.54 per Mcf in 2006 from $7.63
per Mcf in 2005.
Oil and gas production expenses (including lease operating expenses and
production taxes) decreased $62,000 (9.6%) in 2006 as compared to 2005. This
decrease 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. As a percentage of oil
and gas sales, these expenses decreased to 26.2% in 2006 from 26.3% in 2005.
DD&A of oil and gas properties decreased $27,000 (28.8%) in 2006 as
compared to 2005. This decrease was primarily due to (i) several wells being
fully depleted during 2005 due to their lack of remaining reserves and (ii) the
decreases in volumes of oil and gas sold. These decreases were partially offset
by two significant wells being fully depleted during 2006 due to their lack of
remaining reserves. As a percentage of oil and gas sales, this expense decreased
to 3.0% in 2006 from 3.8% in 2005,
-57-
primarily due to the dollar decrease in DD&A.
The Partnership recognized a non-cash charge against earnings of $4,000
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 (1.4%) in 2006 as
compared to 2005. As a percentage of oil and gas sales, these expenses increased
to 8.1% in 2006 from 7.5% 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 $24,609,353 or 177.90% 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 oil and gas sales increased $345,000 (16.5%) in 2005 as compared to
2004. Of this increase $330,000 and $279,000 were related to increases in the
average prices of oil and gas sold. These increases were partially offset by
decreases of $113,000 and $151,000 related to decreases in volumes of oil and
gas sold.
Volumes of oil and gas sold decreased 2,832 barrels and 25,601 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 and (ii) the shutting-in of two significant wells during early 2005
in order to perform workovers.
-58-
Average oil and gas prices increased to $54.60 per barrel and $7.63 per
Mcf in 2005 from $39.93 per barrel and $5.88 per Mcf in 2004.
Oil and gas production expenses (including lease operating expenses and
production taxes) increased $175,000 (37.4%) in 2005 as compared to 2004. This
increase 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. These increases were partially offset by a
negative prior period production tax adjustment made by the operator on another
significant well during 2005. As a percentage of oil and gas sales, these
expenses increased to 26.3% in 2005 from 22.3% in 2004, primarily due to the
dollar increase in oil and gas production expenses.
DD&A of oil and gas properties decreased $3,000 (3.0%) in 2005 as compared
to 2004. This decrease was primarily due to (i) the abandonment of one
significant well during 2004 following an unsuccessful recompletion attempt and
(ii) the decreases in volumes of oil and gas sold. These decreases were
partially offset by increases of (i) $44,000 due to the depletion of additional
capitalized costs of oil and gas properties as a result of the upward revision
in the estimate of the asset retirement obligations, of which $27,000 was
related to previously fully depleted wells, and (ii) $5,000 due to accretion of
these additional asset retirement obligations. As a percentage of oil and gas
sales, this expense decreased to 3.8% in 2005 from 4.6% in 2004, primarily due
to the increase in the average prices of oil and gas sold.
General and administrative expenses increased $7,000 (3.9%) in 2005 as
compared to 2004. As a percentage of oil and gas sales, these expenses decreased
to 7.5% in 2005 from 8.4% in 2004, primarily due to the increase in oil and gas
sales.
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.
-59-
III-C 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 oil and gas sales increased $500,000 (12.0%) in 2006 as compared to
2005. Of this increase (i) $128,000 and $755,000 were related to increases in
volumes of oil and gas sold and (ii) $109,000 was related to an increase in the
average price of oil sold. These increases were partially offset by a decrease
of $492,000 related to a decrease in the average price of gas sold.
Volumes of oil and gas sold increased 2,353 barrels and 104,363 Mcf in
2006 as compared to 2005. The increase in volumes of oil sold was primarily due
to (i) an increase in production on two significant wells following their
successful recompletion during early and mid 2006 and (ii) the successful
completion of several new wells. These increases were partially offset by normal
declines in production. The increase in volumes of gas sold was primarily due to
(i) the successful completion of several wells, (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 another significant well during 2005. These increases were
partially offset by normal declines in production.
Average oil prices increased to $63.75 per barrel in 2006 from $54.40 per
barrel in 2005. Average gas prices decreased to $6.43 per Mcf in 2006 from $7.24
per Mcf in 2005.
Oil and gas production expenses (including lease operating expenses and
production taxes) increased $185,000 (19.4%) in 2006 as compared to 2005. This
increase was primarily due to (i) an increase in workover expenses, (ii) a
$60,000 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. As a percentage of oil and gas
sales, these expenses increased to 24.5% in 2006 from 22.9% in 2005.
-60-
DD&A of oil and gas properties increased $294,000 (129.4%) in 2006 as
compared to 2005. This increase was primarily due to (i) an increase in
depletable oil and gas properties during 2006 primarily due to the recompletion
of several wells and (ii) the increases in volumes of oil and gas sold. The
increase in DD&A was partially offset by several wells being fully depleted
during 2005 due to their lack of remaining reserves. As a percentage of oil and
gas sales, this expense increased to 11.2% in 2006 from 5.5% in 2005, primarily
due to the dollar increase in DD&A.
The Partnership recognized a non-cash charge against earnings of $77,000
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 (1.0%) in 2006 as
compared to 2005. As a percentage of oil and gas sales, these expenses decreased
to 6.3% in 2006 from 7.1% in 2005, primarily due to the increase in oil and gas
sales.
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 $33,575,795 or 137.30% 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 oil and gas sales increased $893,000 (27.3%) in 2005 as compared to
2004. Of this increase $138,000 and $923,000 were related to increases in the
average prices of oil and gas sold. These increases were partially offset by a
decrease of $176,000 related to a decrease in volumes of gas sold.
Volumes of oil sold increased 206 barrels, while volumes of
-61-
gas sold decreased 32,610 Mcf in 2005 as compared to 2004. The increase in
volumes of oil sold was primarily due to (i) the successful completion of
several new wells during early to mid 2005 and (ii) an increase in production on
one significant well following its successful workover during late 2004. These
increases were partially offset by normal declines in production. The decrease
in volumes of gas sold was primarily due to (i) normal declines in production,
(ii) substantial declines in production during 2005 on two significant wells
following their unsuccessful workovers during mid to late 2004, and (iii) a
negative prior period volume adjustment on one significant well during 2005. The
wells with substantial declines in production are not expected to return to
their previously high levels of production. These decreases were partially
offset by (i) the successful completion of several new wells during late 2004
and early to mid 2005 and (ii) increases in production on several wells
following their successful workovers during mid to late 2004 and early 2005.
Average oil and gas prices increased to $54.40 per barrel and $7.24 per
Mcf in 2005 from $39.57 per barrel and $5.41 per Mcf in 2004.
Oil and gas production expenses (including lease operating expenses and
production taxes) increased $107,000 (12.7%) in 2005 as compared to 2004. This
increase 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.
As a percentage of oil and gas sales, these expenses decreased to 22.9% in 2005
from 25.9% in 2004, primarily due to the increase in oil and gas sales.
DD&A of oil and gas properties decreased $213,000 (48.4%) 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) $53,000 due to the depletion of additional capitalized costs of oil and gas
properties as a result of the upward revision in the estimate of the asset
retirement obligations, of which $34,000 was related to previously fully
depleted wells, (ii) $8,000 due to accretion of these additional asset
retirement obligations, and (iii) an increase in depletable oil and gas
properties during 2005 primarily due to the drilling of two developmental wells.
As a percentage of oil and gas sales, this expense decreased to 5.5% in 2005
from 13.5% in 2004, primarily due to the dollar decrease in DD&A.
General and administrative expenses increased $6,000 (2.1%) in 2005 as
compared to 2004. As a percentage of oil and gas sales, these expenses decreased
to 7.1% in 2005 from 8.9% in 2004, primarily due to the increase in oil and gas
sales.
As further discussed in Notes 6 and 7 to the combined
-62-
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.
III-D 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 oil and gas sales increased $339,000 (13.9%) in 2006 as compared to
2005. Of this increase (i) $73,000 and $578,000 were related to increases in
volumes of oil and gas sold and (ii) $97,000 was related to an increase in the
average price of oil sold. These increases were partially offset by a decrease
of $409,000 related to a decrease in the average price of gas sold.
Volumes of oil and gas sold increased 1,382 barrels and 82,696 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 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 to
(i) the successful completion of several new wells, (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) increases in production
on several other wells following their successful recompletions during early and
mid 2006. These increases were partially offset by normal declines in
production.
Average oil prices increased to $62.74 per barrel in 2006 from $52.95 per
barrel in 2005. Average gas prices decreased to $5.88 per Mcf in 2006 from $6.99
per Mcf in 2005.
Oil and gas production expenses (including lease operating expenses and
production taxes) increased $138,000 (23.2%) in 2006
-63-
as compared to 2005. This increase was primarily due to (i) an increase in
workover expenses, (ii) a $45,000 decrease in lease operating expense during
2005 resulting from a decrease in the Partnership gas balancing position on
several wells, and (iii) and 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. As a
percentage of oil and gas sales, these expenses increased to 26.3% in 2006 from
24.3% in 2005.
DD&A of oil and gas properties increased $256,000 (216.7%) in 2006 as
compared to 2005. This increase was primarily due to an increase in depletable
oil and gas properties during 2006 primarily due to the recompletion of several
wells. The increase in DD&A was partially offset by several wells being fully
depleted during 2005 due to their lack of remaining reserves. As a percentage of
oil and gas sales, this expense increased to 13.5% in 2006 from 4.8% in 2005,
primarily due to the dollar increase in DD&A.
The Partnership recognized a non-cash charge against earnings of $13,000
during 2006. This charge was related to the decline in 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 $2,000 (1.3%) in 2006 as
compared to 2005. As a percentage of oil and gas sales, these expenses decreased
to 6.2% in 2006 from 7.1% in 2005, primarily due to the increase in oil and gas
sales.
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 $18,671,669 or 142.52% 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
-64-
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 oil and gas sales increased $563,000 (29.9%) in 2005 as compared to
2004. Of this increase $128,000 and $460,000 were related to increases in the
average prices of oil and gas sold.
Volumes of oil sold increased 199 barrels, while volumes of gas sold
decreased 6,168 Mcf in 2005 as compared to 2004. The increase in volumes of oil
sold was primarily due to (i) the successful completion of several new wells
during early to mid 2005 and (ii) an increase in production on one significant
well following its successful workover during late 2004. These increases were
partially offset by normal declines in production. The decrease in volumes of
gas sold was primarily due to (i) normal declines in production and (ii) a
substantial decline in production during 2005 on one significant well following
its unsuccessful workover during mid 2004. The well with a substantial decline
in production is not expected to return to its previously high levels of
production. These decreases were partially offset by (i) the successful
completion of several new wells during late 2004 and early to mid 2005 and (ii)
increases in production on two significant wells following their successful
workovers during mid to late 2004.
Average oil and gas prices increased to $52.95 per barrel and $6.99 per
Mcf in 2005 from $37.97 per barrel and $5.38 per Mcf in 2004.
Oil and gas production expenses (including lease operating expenses and
production taxes) increased $101,000 (20.5%) in 2005 as compared to 2004. This
increase was primarily due to (i) an increase in workover expenses, (ii) an
increase in production taxes associated with the increase in oil and gas sales,
and (iii) repair and maintenance expenses incurred on several wells during 2005.
As a percentage of oil and gas sales these expenses decreased to 24.3% in 2005
from 26.2% in 2004.
DD&A of oil and gas properties increased $22,000 (23.4%) in 2005 as
compared to 2004. Of this increase (i) $34,000 was due to the depletion of
additional capitalized costs of oil and gas properties as a result of the upward
revision in the estimate of the asset retirement obligations, of which $24,000
was related to previously fully depleted wells, and (ii) $5,000 was due to
accretion of these additional asset retirement obligations. This increase was
also due to downward revisions in the estimates of remaining oil and gas
reserves following an unsuccessful recompletion attempt on one significant well
during 2005. These increases were partially offset by (i) one significant well
being fully depleted during 2004 due to its lack of remaining reserves and (ii)
upward revisions in the estimates of remaining oil and gas reserves since
December 31, 2004. As a percentage of oil and gas sales, this expense decreased
to 4.8% in 2005 from 5.1% in 2004.
-65-
General and administrative expenses increased $2,000 (1.4%) in 2005 as
compared to 2004. As a percentage of oil and gas sales, these expenses decreased
to 7.1% in 2005 from 9.1% in 2004, primarily due to the increase in oil and gas
sales.
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.
III-E 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 oil and gas sales decreased $1,546,000 (27.0%) in 2006 as compared
to 2005. Of this decrease (i) $323,000 and $710,000 were related to decreases in
volumes of oil and gas sold and (ii) $654,000 was related to a decrease in the
average price of gas sold.
Volumes of oil and gas sold decreased 6,396 barrels and 99,105 Mcf in 2006
as compared to 2005. The decrease in volumes of oil sold was primarily due to
(i) normal declines in production and (ii) a positive prior period volume
adjustment made by the operator on one significant well during 2005. The
decrease in volumes of gas sold was primarily due to (i) normal declines in
production and (ii) a negative prior period volume adjustment during 2006.
Average oil prices increased to $58.97 per barrel in 2006 from $50.53 per
barrel in 2005. Average gas prices decreased to $5.94 per MCF in 2006 from $7.16
per Mcf in 2005.
Oil and gas production expenses (including lease operating expenses and
production taxes) decreased $25,000 (1.8%) in 2006 as compared to 2005. This
decrease was primarily due to (i) a
-66-
decrease in production taxes associated with the decrease in oil and gas sales,
(ii) a $78,000 decrease in lease operating expenses during 2006 resulting from a
decrease in the Partnership's gas balancing position on several wells, and (iii)
the receipt of a $46,000 lease operating expense credit resulting from the
settlement of a class action lawsuit on one significant unit during 2006. These
decreases were partially offset by 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. As a percentage of oil and gas sales, these
expenses increased to 33.5% in 2006 from 24.9% in 2005, primarily due to the
decrease in oil and gas sales.
DD&A of oil and gas properties decreased $76,000 (23.7%) in 2006 as
compared to 2005. This decrease was primarily due to (i) the decreases in
volumes of oil and gas sold, (ii) several wells being fully depleted during 2005
due to their lack of remaining reserves, and (iii) one significant well being
substantially depleted during 2005 due to its lack of remaining reserves. These
decreases were partially offset by (i) downward revisions in the estimates of
remaining oil and gas reserves since December 31, 2005 and (ii) two other wells
being fully depleted during 2006 due to their lack of remaining reserves. As a
percentage of oil and gas sales, this expense increased to 5.8% in 2006 from
5.6% in 2005.
The Partnership recognized a non-cash charge against earnings of $61,000
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 oil and gas sales, these expenses increased to
11.7% in 2006 from 8.6% in 2005, primarily due to the decrease in oil and gas
sales.
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 $55,174,016, or 131.91% of Limited Partners' capital
contributions.
-67-
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 oil and gas sales increased $1,314,000 (29.8%) in 2005 as compared
to 2004. Of this increase $316,000 and $1,203,000 were related to increases in
the average prices of oil and gas sold. These increases were partially offset by
a decrease of $231,000 related to a decrease in volumes of gas sold.
The increase in volumes of oil sold was primarily due to a negative prior
period volume adjustment on one significant well during 2004. This increase was
partially offset by normal declines in production. The decrease in volumes of
gas sold was primarily due to normal declines in production.
Average oil and gas prices increased to $50.53 per barrel and $7.16 per
Mcf in 2005 from $36.88 per barrel and $5.27 per Mcf in 2004.
Oil and gas production expenses (including lease operating expenses and
production taxes) increased $149,000 (11.7%) in 2005 as compared to 2004. This
increase was primarily due to (i) an increase in production taxes associated
with the increase in oil and gas sales and (ii) an increase in workover
expenses. These increases were partially offset by a positive prior period
production tax adjustment on one significant unit during 2004. As a percentage
of oil and gas sales, these expenses decreased to 24.9% in 2005 from 28.9% in
2004, primarily due to the increase in oil and gas sales.
DD&A of oil and gas properties increased $128,000 (67.2%) in 2005 as
compared to 2004. Of this increase (i) $72,000 was due to the depletion of
additional capitalized costs of oil and gas properties as a result of the upward
revision in the estimate of the asset retirement obligations, of which $51,000
was related to previously fully depleted wells, and (ii) $10,000 was due to
accretion of these additional asset retirement obligations. This increase was
also due to (i) downward revisions in the estimates of remaining gas reserves
since December 31, 2004 and (ii) one significant well being substantially
depleted during 2005 due to its lack of remaining reserves. These increases were
partially offset by (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. As a percentage of oil and gas sales, this expense increased to 5.6% in
2005 from 4.3% in 2004, primarily due to the dollar increase in DD&A.
-68-
General and administrative expenses remained relatively constant in 2005
and 2004. As a percentage of oil and gas sales, these expenses decreased to 8.6%
in 2005 from 11.1% in 2004, primarily due to the increase in oil and gas sales.
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.
III-F 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 oil and gas sales decreased $897,000 (27.3%) in 2006 as compared to
2005. Of this decrease (i) $58,000 and $513,000 were related to decreases in
volumes of oil and gas sold and (ii) $413,000 was related to a decrease in the
average price of gas sold. These decreases were partially offset by an increase
of $87,000 related to an increase in the average price of oil sold.
Volumes of oil and gas sold decreased 1,071 barrels and 70,427 Mcf in 2006
as compared to 2005. The decrease in volumes of oil sold was primarily due to
normal declines in production. The decrease in volumes of gas sold was primarily
due to normal declines in production and a negative prior period volume
adjustment during 2006.
Average oil prices increased to $63.09 per barrel in 2006 from $54.23 per
barrel in 2005. Average gas prices decreased to $5.90 per Mcf in 2006 from $7.28
per Mcf in 2005.
Oil and gas production expenses (including lease operating expenses and
production taxes) increased $92,000 (12.6%) in 2006 as compared to 2005. This
increase was primarily due to (i) an increase in workover expenses and (ii)
repair and maintenance expenses incurred on one significant well during 2006. As
of the date of this Annual Report, management anticipates workover costs
-69-
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 a decrease in production taxes associated with the decrease in oil and
gas sales. As a percentage of oil and gas sales, these expenses increased to
34.4% in 2006 from 22.2% in 2005, primarily due to the decrease in oil and gas
sales.
DD&A of oil and gas properties decreased $10,000 (5.4%) in 2006 as
compared to 2005. This decrease was primarily due to (i) the decreases in
volumes of oil and gas sold and (ii) several wells being fully depleted during
2005 due to their lack of remaining reserves. The decreases in DD&A were
partially offset by (i) downward revisions in the estimates of remaining oil and
gas reserves since December 31, 2005, (ii) two other significant wells being
fully depleted during 2006 due to their lack of remaining reserves, and (iii) an
increase in depletable oil and gas properties during 2006 primarily due to the
recompletion of one significant well. As a percentage of oil and gas sales, this
expense increased to 7.6% in 2006 from 5.9% in 2005, primarily due to the
decrease in the average price of gas sold.
The Partnership recognized a non-cash charge against earnings of $55,000
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 (1.0%) in 2006 as
compared to 2005. As a percentage of oil and gas sales, these expenses increased
to 11.3% in 2006 from 8.3% in 2005, primarily due to the decrease in oil and gas
sales.
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 Partnership achieved payout during the first quarter of 2006. After
payout, operations and revenues for the Partnership are allocated using after
payout percentages. After payout percentages allocate operating income and
expenses 10% to the General Partner and 90% to the Limited Partners. Before
payout, operating income and expenses were allocated 5% to the General Partner
and 95% to the limited partners.
The Limited Partners have received cash distributions through December 31,
2006 totaling $24,108,904 or 108.85% of Limited Partners' capital contributions.
-70-
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 oil and gas sales increased $814,000 (32.9%) in 2005 as compared to
2004. Of this increase $169,000 and $755,000 were related to increases in the
average prices of oil and gas sold. These increases were partially offset by a
decrease of $118,000 related to a decrease in volumes of gas sold.
Volumes of oil sold increased 197 barrels, while volumes of gas sold
decreased 22,432 Mcf in 2005 as compared to 2004. The increase in volumes of oil
sold was primarily due to (i) increases in production on several wells following
their successful workovers during 2005 and (ii) an increase in production on
another significant well following its successful recompletion during mid 2005.
These increases were partially offset by normal declines in production. The
decrease in volumes of gas sold was primarily due to normal declines in
production.
Average oil and gas prices increased to $54.23 per barrel and $7.28 per
Mcf in 2005 from $38.71 per barrel and $5.24 per Mcf in 2004.
Oil and gas production expenses (including lease operating expenses and
production taxes) increased $85,000 (13.2%) in 2005 as compared to 2004. This
increase was primarily due to (i) an increase in production taxes associated
with the increase in oil and gas sales and (ii) workover expenses incurred on
several wells during 2005. As a percentage of oil and gas sales, these expenses
decreased to 22.2% in 2005 from 26.1% in 2004, primarily due to the increase in
oil and gas sales.
DD&A of oil and gas properties increased $41,000 (27.3%) in 2005 as
compared to 2004. Of this increase (i) $24,000 was due to the depletion of
additional capitalized costs of oil and gas properties as a result of the upward
revision in the estimate of the asset retirement obligations, of which $13,000
was related to previously fully depleted wells, and (ii) $6,000 was due to
accretion of these additional asset retirement obligations. This increase was
also due to downward revisions in the estimates of remaining oil and gas
reserves on one significant well since December 31, 2004. These increases were
partially offset by the decrease in volumes of gas sold. As a percentage of oil
and gas sales, this expense decreased to 5.9% in 2005 from 6.1% in 2004.
-71-
General and administrative expenses increased $6,000 (2.3%) in 2005 as
compared to 2004. As a percentage of oil and gas sales, these expenses decreased
to 8.3% in 2005 from 10.8% in 2004, primarily due to the increase in oil and gas
sales.
As further discussed in Notes 6 and 7 to the combined financial statements
indexed in Item 15 hereof, the Partnership is in the process of selling an
increased amount of the Partnership's properties as a result of the generally
favorable current environment for oil and gas dispositions and will be selling
all of the Partnership's properties in the liquidation process. The Partnership
will have lower future oil and gas sales and lower future production expenses
due to the sale of these properties.
Average Sale Prices, Production Volumes, and Average
Production Costs
The following tables are comparisons of annual average oil and gas sales
prices, production volumes, and average production costs (lease operating
expenses and production taxes) per barrel of oil equivalent (one barrel or 6 Mcf
of gas) for 2006, 2005, and 2004.
[Remainder of Page Intentionally Left Blank]
-72-
2006 Compared to 2005
---------------------
Average Sales Prices
- -----------------------------------------------------------------------------
P/ship 2006 2005(1) % Change
- ------ ------------------ ----------------- --------------
Oil Gas Oil Gas
($/Bbl) ($/Mcf) ($/Bbl) ($/Mcf) Oil Gas
------- ------- ------- ------- --- -----
III-A $64.64 $6.51 $54.52 $7.64 19% (15%)
III-B 64.72 6.54 54.60 7.63 19% (14%)
III-C 63.75 6.43 54.40 7.24 17% (11%)
III-D 62.74 5.88 52.95 6.99 18% (16%)
III-E 58.97 5.94 50.53 7.16 17% (17%)
III-F 63.09 5.90 54.23 7.28 16% (19%)
Production Volumes
- -----------------------------------------------------------------------------
P/ship 2006 2005(1) % Change
- ------ ------------------- ----------------- --------------
Oil Gas Oil Gas Oil Gas
(Bbls) (Mcf) (Bbls) (Mcf) (Bbls) (Mcf)
------ ------- ------ ------- ------ -----
III-A 28,373 345,008 32,191 369,103 (12%) ( 7%)
III-B 19,700 145,330 22,521 159,150 (13%) ( 9%)
III-C 11,648 610,593 9,295 506,230 25% 21%
III-D 9,928 367,694 8,546 284,998 16% 29%
III-E 16,782 535,598 23,178 634,703 (28%) (16%)
III-F 9,822 300,359 10,893 370,786 (10%) (19%)
Average Production Costs
per Barrel of Oil Equivalent
----------------------------------------
P/ship 2006 2005(1) % Change
------ ------ ------- --------
III-A $11.06 $11.51 ( 4%)
III-B 13.25 13.13 1%
III-C 10.07 10.21 ( 1%)
III-D 10.28 10.60 ( 3%)
III-E 13.16 11.02 19%
III-F 13.76 10.07 37%
- ------------
(1) These amounts have been restated to reflect the sale of various oil and
gas properties during 2006 and assets held for sale as of December 31,
2006 as discontinued operations. See "Item 7. Management's Discussion and
Analysis of Financial Condition and Results of Operations" for more
information about these discontinued operations.
-73-
2005 Compared to 2004
---------------------
Average Sales Prices
- ---------------------------------------------------------------------------
P/ship 2005(1) 2004(1) % Change
- ------ ------------------- ----------------- ------------
Oil Gas Oil Gas
($/Bbl) ($/Mcf) ($/Bbl) ($/Mcf) Oil Gas
------- ------- ------- ------- --- ---
III-A $54.52 $7.64 $39.92 $5.78 37% 32%
III-B 54.60 7.63 39.93 5.88 37% 30%
III-C 54.40 7.24 39.57 5.41 37% 34%
III-D 52.95 6.99 37.97 5.38 39% 30%
III-E 50.53 7.16 36.88 5.27 37% 36%
III-F 54.23 7.28 38.71 5.24 40% 39%
Production Volumes
- -----------------------------------------------------------------------------
P/ship 2005(1) 2004(1) % Change
- ------ ------------------- ------------------ --------------
Oil Gas Oil Gas Oil Gas
(Bbls) (Mcf) (Bbls) (Mcf) (Bbls) (Mcf)
------ ------- ------ ------- ------ -----
III-A 32,191 369,103 36,657 442,066 (12%) (17%)
III-B 22,521 159,150 25,353 184,751 (11%) (14%)
III-C 9,295 506,230 9,089 538,840 2% ( 6%)
III-D 8,546 284,998 8,347 291,166 2% ( 2%)
III-E 23,178 634,703 22,473 678,604 3% ( 6%)
III-F 10,893 370,786 10,696 393,218 2% ( 6%)
Average Production Costs
per Barrel of Oil Equivalent
-----------------------------------------
P/ship 2005(1) 2004(1) % Change
------ -------- ------- ---------
III-A $11.51 $7.07 63%
III-B 13.13 8.34 57%
III-C 10.21 8.58 19%
III-D 10.60 8.67 22%
III-E 11.02 9.39 17%
III-F 10.07 8.48 19%
- ------------
(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. Management's Discussion and
Analysis of Financial Condition and Results of Operations" for more
information about these discontinued operations.
-74-
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 and Related Limited Partner Matters." The net proceeds from production
are not generally reinvested in productive assets, except to the extent that
producing wells are improved, where methods are employed to permit more
efficient recovery of reserves, or where identified developmental drilling or
recompletion opportunities are pursued, thereby resulting in a positive economic
impact. Assuming 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
----------- --------- --------- --------- ---------
III-A 2.2 13.5 8.3 3.0
III-B - - 8.1 3.2
III-C 2.1 14.1 7.2 7.9
III-D 2.6 11.0 6.3 7.8
III-E 2.7 5.3 8.2 6.0
III-F 3.0 15.0 9.2 16.2
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 in the 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
(November 22, 2007 for the III-A Partnership).
The Partnerships' available capital from the Limited Partners'
subscriptions has been spent on oil and gas properties and there should be no
further material capital resource commitments in the future. The Partnerships
have no debt commitments. Cash for operational purposes will be provided by
current oil and gas production. During 2006, 2005, and 2004, the Partnerships
expended no capital on oil and gas acquisition or exploration activities.
However, during those years the Partnerships expended the following amounts on
oil and gas developmental activities, primarily well recompletions and
developmental drilling:
-75-
Partnership 2006 2005 2004
----------- -------- -------- --------
III-A $ - $ 16,822 $ 78,142
III-B 10,581 2,903 52,376
III-C 680,951 127,299 217,479
III-D 525,931 85,828 27,306
III-E 82,263 158,067 245,429
III-F 69,317 32,310 188,433
The 2006 capital expenditures for the III-C and III-D Partnerships were
primarily due to recompletions of the Sugg AA 3 #1 and Sugg AA 3067 #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. The III-C and III-D Partnerships own
working interests in these wells as follows:
Property III-C III-D
----------------- ----- -----
Sugg AA 3 #1 29.9% 25.0%
Sugg AA 2067 #1 34.2% 28.6%
Loving 1 State #1 17.8% 14.9%
Loving 1 State #2 20.5% 17.2%
While these expenditures may reduce or eliminate cash available for a
particular quarterly cash distribution, the General Partner believes that these
activities are necessary for the prudent operation of the properties and
maximization of their value to the Partnerships.
The Partnerships sold certain oil and gas properties during 2006 and 2004.
No such sales occurred during 2005. The sales of the Partnerships' properties
were made by the General Partner after giving due consideration to both the
offer price and the General Partner's estimate of the property's remaining
proved reserves and future operating costs. Net proceeds from the sales of such
properties were included in the calculation of the Partnerships' cash
distributions for the quarter immediately following the Partnerships' receipt of
the proceeds. The amount of such proceeds from the sales of oil and gas
properties during 2006, 2005, and 2004, were as follows:
Partnership 2006 2005 2004
----------- -------- -------- --------
III-A $517,423 $ - $ 375
III-B 218,220 - -
III-C 98,364 - -
III-D 1,072 - 88,277
III-E 107,714 - 629,332
III-F 90,451 - 1,654
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'
-76-
operating activities 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
replacing production through acquisitions of producing properties and extensive
drilling. The Partnerships' quantity of proved reserves has been reduced by the
sale of oil and gas properties as described above; therefore, it is possible
that the Partnerships' future cash distributions will decline as a result of a
reduction of the Partnerships' reserve base.
If the Partnerships were to continue past December 31, 2007(November 22,
2007 for the III-A Partnership), 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 (November 22, 2007 for the III-A
Partnership), 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.
Contractual Obligations
The Partnerships do not have any contractual obligations of the type which
are required by the SEC to be disclosed in this Annual Report under this
heading.
Critical Accounting Policies
The Partnerships follow the successful efforts method of accounting for
their oil and gas properties. Under the successful efforts method, the
Partnerships capitalize all property acquisition costs and development costs
incurred in connection with the further development of oil and gas reserves.
Property acquisition costs include costs incurred by the Partnerships or the
General Partner to acquire producing properties, including related title
insurance or examination costs, commissions, engineering, legal and accounting
fees, and similar costs directly related to the acquisitions, plus an allocated
portion of the General Partner's property screening
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costs. The acquisition cost to the Partnership of properties acquired by the
General Partner is adjusted to reflect the net cash results of operations,
including interest incurred to finance the acquisition, for the period of time
the properties are held by the General Partner.
Depletion of the cost of producing oil and gas properties, amortization of
related intangible drilling and development costs, and depreciation of tangible
lease and well equipment are computed on the units-of-production method. The
Partnerships' calculation of depreciation, depletion, and amortization includes
estimated dismantlement and abandonment costs, net of estimated salvage values.
When complete units of depreciable property are retired or sold, the asset cost
and related accumulated depreciation are eliminated with any gain or loss
reflected in income.
The Partnerships evaluate the recoverability of the carrying costs of
their proved oil and gas properties for each oil and gas well. If the
unamortized costs, net of salvage value, of oil and gas properties exceed the
expected undiscounted future cash flows from such properties, the cost of the
properties is written down to fair value, which is determined by using the
discounted future cash flows from the properties. 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 $6,000, $4,000, $77,000, $13,000,
$61,000, and $55,000 for the III-A, III-B, III-C, III-D, III-E, and III-F
Partnerships, respectively. Once incurred, an impairment of oil and natural gas
properties is not reversible.
The Deferred Charge on the Balance Sheets included in Item 8 of this
Annual Report represents costs deferred for lease operating expenses incurred in
connection with the Partnerships' underproduced gas imbalance positions.
Conversely, the Accrued Liability represents charges accrued for lease operating
expenses incurred in connection with the Partnerships' overproduced gas
imbalance positions. The rates used in calculating the Deferred Charge and
Accrued Liability are the annual average production cost per Mcf.
The Partnerships' oil and condensate production is sold, title passed, and
revenue recognized at or near the Partnerships' wells under short-term purchase
contracts at prevailing prices in accordance with arrangements which are
customary in the oil and gas industry. Sales of gas applicable to the
Partnerships' interest in producing oil and gas leases are recorded as revenue
when the gas is metered and title transferred pursuant to the gas sales
contracts covering the Partnerships' interest in gas reserves. During such times
as a Partnership's sales of gas exceed its pro rata ownership in a well, such
sales are recorded as revenues unless total sales from the well have exceeded
the
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Partnership's share of estimated total gas reserves underlying the property, at
which time such excess is recorded as a liability. The rates per Mcf used to
calculate this liability are based on the average gas prices received for the
volumes at the time the overproduction occurred. These rates also approximate
the prices for which the Partnerships are currently settling similar
liabilities. These amounts were recorded as gas imbalance payables in accordance
with the sales method. These gas imbalance payables will be settled by either
gas production by the underproduced party in excess of current estimates of
total gas reserves for the well or by a negotiated or contractual payment to the
underproduced party.
The Partnerships' wells must be properly plugged and abandoned after their
oil and gas reserves are exhausted. The Partnerships follow FAS No. 143,
"Accounting for Asset Retirement Obligations" in accounting for the future
expenditures that will be necessary to plug and abandon these wells. FAS No. 143
requires the estimated plugging and abandonment obligations to be recognized in
the period in which they are incurred (i.e. when the well is drilled or
acquired) if a reasonable estimate of fair value can be made and to be
capitalized as part of the carrying amount of the well.
New Accounting Pronouncements
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 costs incurred by the Partnerships.
This pressure is expected to continue if commodity prices remain at their
current levels. Oil and gas prices have fluctuated during recent years and
generally have not followed the same pattern as inflation. See "Item 2.
Properties-Oil and Gas Production, Revenue, and Price History."
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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 sheets at
December 31, 2006 presented in Note 7 to the financial statements indexed in
Item 15 hereof.
General Limited
Partnership Partner Partners Total
----------- --------- ---------- ----------
III-A $105,000 $ 947,000 $1,052,000
III-B 82,000 464,000 546,000
III-C 102,000 918,000 1,020,000
III-D 57,000 515,000 572,000
III-E 224,000 2,013,000 2,237,000
III-F 186,000 1,676,000 1,862,000
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 balance sheets
which are presented on a liquidation basis. These unaudited liquidation basis
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.
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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, 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 Geodyne
---------------- --- --------------------------------
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.
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.
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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.
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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., Investor Services, Samson Plaza, Two West Second
Street, Tulsa, OK 74103. Such requests must include the address to which the
Code of Ethics should be mailed.
ITEM 11. EXECUTIVE COMPENSATION
The General Partner and its affiliates are reimbursed for actual general
and administrative costs and operating costs incurred and attributable to the
conduct of the business affairs and operations of the Partnerships, computed on
a cost basis, determined in accordance with generally accepted accounting
principles. Such reimbursed costs and expenses allocated to the Partnerships
include office rent, secretarial, employee compensation and benefits, travel and
communication costs, fees for professional services, and other items generally
classified as general or administrative expense. When actual costs incurred
benefit other Partnerships and affiliates, the allocation of costs is based on
the relationship of the Partnerships' reserves to the total reserves owned by
all Partnerships and affiliates. The amount of general and administrative
expense allocated to the General Partner and its affiliates which was charged to
each Partnership during 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.
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Partnership 2006 2005 2004
----------- -------- -------- --------
III-A $277,872 $277,872 $277,872
III-B 145,620 145,620 145,620
III-C 257,412 257,412 257,412
III-D 137,904 137,904 137,904
III-E 440,280 440,280 440,280
III-F 233,136 233,136 233,136
None of the officers or directors of the General Partner receive
compensation directly from the Partnerships. The Partnerships reimburse the
General Partner or its affiliates for that portion of such officers' and
directors' salaries and expenses attributable to time devoted by such
individuals to the Partnerships' activities based on the allocation method
described above. The following tables indicate the approximate amount of general
and administrative expense reimbursement attributable to the salaries of the
directors, officers, and employees of the General Partner and its affiliates
during 2006, 2005, and 2004:
[Remainder of Page Intentionally Left Blank]
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Salary Reimbursements
III-A Partnership
-----------------
Three Years Ended December 31, 2006
Long Term Compensation
-----------------------------------
Annual Compensation Awards Payouts
------------------------------- ----------------------- -------
Securi-
Other ties All
Name Annual Restricted Under- Other
and Compen- Stock lying LTIP Compen-
Principal Salary Bonus sation Award(s) Options/ Payouts sation
Position Year ($) ($) ($) ($) SARs(#) ($) ($)
- --------------- ---- -------- ------- ------- ---------- -------- ------- -------
Dennis R. Neill,
President(1) 2004 - - - - - - -
2005 - - - - - - -
2006 - - - - - - -
All Executive
Officers,
Directors,
and Employees
as a group(2) 2004 $161,596 - - - - - -
2005 $165,823 - - - - - -
2006 $170,321 - - - - - -
- ----------
(1) The general and administrative expenses paid by the III-A Partnership and
attributable to salary reimbursements do not include any salary or other
compensation attributable to Mr. Neill.
(2) No officer or director of Geodyne or its affiliates provides full-time
services to the III-A Partnership and no individual's salary or other
compensation reimbursement from the III-A Partnership equals or exceeds
$100,000 per annum.
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Salary Reimbursements
III-B Partnership
-----------------
Three Years Ended December 31, 2006
Long Term Compensation
-----------------------------------
Annual Compensation Awards Payouts
------------------------------- ------------------------ -------
Securi-
Other ties All
Name Annual Restricted Under- Other
and Compen- Stock lying LTIP Compen-
Principal Salary Bonus sation Award(s) Options/ Payouts sation
Position Year ($) ($) ($) ($) SARs(#) ($) ($)
- --------------- ---- ------- ------- ------- ---------- -------- ------- -------
Dennis R. Neill,
President(1) 2004 - - - - - - -
2005 - - - - - - -
2006 - - - - - - -
All Executive
Officers,
Directors,
and Employees
as a group(2) 2004 $84,685 - - - - - -
2005 $86,900 - - - - - -
2006 $89,257 - - - - - -
- ----------
(1) The general and administrative expenses paid by the III-B Partnership and
attributable to salary reimbursements do not include any salary or other
compensation attributable to Mr. Neill.
(2) No officer or director of Geodyne or its affiliates provides full-time
services to the III-B Partnership and no individual's salary or other
compensation reimbursement from the III-B Partnership equals or exceeds
$100,000 per annum.
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Salary Reimbursements
III-C Partnership
-----------------
Three Years Ended December 31, 2006
Long Term Compensation
------------------------------------
Annual Compensation Awards Payouts
------------------------------- ----------------------- -------
Securi-
Other ties All
Name Annual Restricted Under- Other
and Compen- Stock lying LTIP Compen-
Principal Salary Bonus sation Award(s) Options/ Payouts sation
Position Year ($) ($) ($) ($) SARs(#) ($) ($)
- --------------- ---- -------- ------- ------- ---------- -------- ------- -------
Dennis R. Neill,
President(1) 2004 - - - - - - -
2005 - - - - - - -
2006 - - - - - - -
All Executive
Officers,
Directors,
and Employees
as a group(2) 2004 $149,698 - - - - - -
2005 $153,613 - - - - - -
2006 $157,780 - - - - - -
- ----------
(1) The general and administrative expenses paid by the III-C Partnership and
attributable to salary reimbursements do not include any salary or other
compensation attributable to Mr. Neill.
(2) No officer or director of Geodyne or its affiliates provides full-time
services to the III-C Partnership and no individual's salary or other
compensation reimbursement from the III-C Partnership equals or exceeds
$100,000 per annum.
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Salary Reimbursements
III-D Partnership
-----------------
Three Years Ended December 31, 2006
Long Term Compensation
----------------------------------
Annual Compensation Awards Payouts
------------------------------- ----------------------- -------
Securi-
Other ties All
Name Annual Restricted Under- Other
and Compen- Stock lying LTIP Compen-
Principal Salary Bonus sation Award(s) Options/ Payouts sation
Position Year ($) ($) ($) ($) SARs(#) ($) ($)
- --------------- ---- ------- ------- ------- ---------- -------- ------- -------
Dennis R. Neill,
President(1) 2004 - - - - - - -
2005 - - - - - - -
2006 - - - - - - -
All Executive
Officers,
Directors,
and Employees
as a group(2) 2004 $80,198 - - - - - -
2005 $82,296 - - - - - -
2006 $84,528 - - - - - -
- ----------
(1) The general and administrative expenses paid by the III-D Partnership and
attributable to salary reimbursements do not include any salary or other
compensation attributable to Mr. Neill.
(2) No officer or director of Geodyne or its affiliates provides full-time
services to the III-D Partnership and no individual's salary or other
compensation reimbursement from the III-D Partnership equals or exceeds
$100,000 per annum.
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Salary Reimbursements
III-E Partnership
-----------------
Three Years Ended December 31, 2006
Long Term Compensation
------------------------------------
Annual Compensation Awards Payouts
------------------------------- ----------------------- -------
Securi-
Other ties All
Name Annual Restricted Under- Other
and Compen- Stock lying LTIP Compen-
Principal Salary Bonus sation Award(s) Options/ Payouts sation
Position Year ($) ($) ($) ($) SARs(#) ($) ($)
- --------------- ---- -------- ------- ------- ---------- -------- ------- -------
Dennis R. Neill,
President(1) 2004 - - - - - - -
2005 - - - - - - -
2006 - - - - - - -
All Executive
Officers,
Directors,
and Employees
as a group(2) 2004 $256,045 - - - - - -
2005 $262,741 - - - - - -
2006 $269,868 - - - - - -
- ----------
(1) The general and administrative expenses paid by the III-E Partnership and
attributable to salary reimbursements do not include any salary or other
compensation attributable to Mr. Neill.
(2) No officer or director of Geodyne or its affiliates provides full-time
services to the III-E Partnership and no individual's salary or other
compensation reimbursement from the III-E Partnership equals or exceeds
$100,000 per annum.
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Salary Reimbursements
III-F Partnership
-----------------
Three Years Ended December 31, 2006
Long Term Compensation
-----------------------------------
Annual Compensation Awards Payouts
------------------------------- ---------------------- -------
Securi-
Other ties All
Name Annual Restricted Under- Other
and Compen- Stock lying LTIP Compen-
Principal Salary Bonus sation Award(s) Options/ Payouts sation
Position Year ($) ($) ($) ($) SARs(#) ($) ($)
- --------------- ---- -------- ------- ------- ---------- -------- ------- -------
Dennis R. Neill,
President(1) 2004 - - - - - - -
2005 - - - - - - -
2006 - - - - - - -
All Executive
Officers,
Directors,
and Employees
as a group(2) 2004 $135,580 - - - - - -
2005 $139,126 - - - - - -
2006 $142,900 - - - - - -
- ----------
(1) The general and administrative expenses paid by the III-F Partnership and
attributable to salary reimbursements do not include any salary or other
compensation attributable to Mr. Neill.
(2) No officer or director of Geodyne or its affiliates provides full-time
services to the III-F Partnership and no individual's salary or other
compensation reimbursement from the III-F Partnership equals or exceeds
$100,000 per annum.
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Affiliates of the Partnerships serve as operator of some of the
Partnerships' wells. The General Partner contracts with such affiliates for
services as operator of the wells. As operator, such affiliates are compensated
at rates provided in the operating agreements in effect and charged to all
parties to such agreement. Such compensation may occur both prior and subsequent
to the commencement of commercial marketing of production of oil or gas. The
dollar amount of such compensation paid by the Partnerships to the affiliates
the year ended December 31, 2006 is approximately $14,000, $4,000, $116,000,
$72,000, $104,000, and $49,000, respectively for the III-A, III-B, III-C, III-D,
III-E and III-F 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 an interest. This equipment was provided at prices or rates
equal to or less than those normally charged in the same or comparable
geographic area by unaffiliated persons or companies dealing at arm's length.
The operators of these wells billed the Partnerships for a portion of such costs
based upon the Partnerships' interest in the well.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table provides information as to the beneficial ownership of
the Units as of the date of filing this Annual Report by (i) each beneficial
owner of more than five percent of the issued and outstanding Units, (ii) the
directors and officers of the General Partner, and (iii) the General Partner and
its affiliates. The address of each of such persons is Samson Plaza, Two West
Second Street, Tulsa, Oklahoma 74103.
Number of Units
Beneficially
Owned (Percent
Beneficial Owner of Outstanding)
- ------------------------------------ ------------------
III-A Partnership:
- -----------------
Samson Resources Company 71,677 (27.2%)
All affiliates, directors,
and officers of the General
Partner as a group and
the General Partner (4 persons) 71,677 (27.2%)
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III-B Partnership:
- -----------------
Samson Resources Company 35,082 (25.4%)
All affiliates, directors,
and officers of the General
Partner as a group and
the General Partner (4 persons) 35,082 (25.4%)
III-C Partnership:
- -----------------
Samson Resources Company 74,006 (30.3%)
All affiliates, directors,
and officers of the General
Partner as a group and
the General Partner (4 persons) 74,006 (30.3%)
III-D Partnership:
- -----------------
Samson Resources Company 40,848 (31.2%)
All affiliates, directors,
and officers of the General
Partner as a group and
the General Partner (4 persons) 40,848 (31.2%)
III-E Partnership:
- -----------------
Samson Resources Company 131,657 (31.5%)
All affiliates, directors,
and officers of the General
Partner as a group and
the General Partner (4 persons) 131,657 (31.5%)
III-F Partnership:
- -----------------
Samson Resources Company 72,549 (32.8%)
All affiliates, directors,
and officers of the General
Partner as a group and
the General Partner (4 persons) 72,549 (32.8%)
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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 and
drilling opportunities and the nature of the compensation arrangements between
the Partnerships and the General Partner also create potential conflicts of
interest. An affiliate of the Partnerships owns some of the Partnerships' Units
and therefore has an identity of interest with other Limited Partners with
respect to the operations of the Partnerships.
In order to attempt to assure limited liability for Limited Partners as
well as an orderly conduct of business, management of the Partnerships is
exercised solely by the General Partner. The Partnership Agreements grant the
General Partner broad discretionary authority with respect to the Partnerships'
participation in drilling prospects and expenditure and control of funds,
including borrowings. These provisions are similar to those contained in
prospectuses and partnership agreements for other public oil and gas
partnerships. Broad discretion as to general management of the Partnerships
involves circumstances where the General Partner has conflicts of interest and
where it must allocate costs and expenses, or opportunities, among the
Partnerships and other competing interests.
The General Partner does not devote all of its time, efforts, and
personnel exclusively to the Partnerships. Furthermore, the Partnerships do not
have any employees, but instead rely on the personnel of Samson. The
Partnerships thus compete with Samson (including other oil and gas partnerships)
for the time and resources of such personnel. Samson devotes such time and
personnel to the management of the Partnerships as are indicated by the
circumstances and as are consistent with the General Partner's fiduciary duties.
Affiliates of the Partnerships are solely responsible for the negotiation,
administration, and enforcement of oil and gas sales agreements covering the
Partnerships' leasehold interests. Because affiliates of the Partnerships who
provide services to the Partnerships have fiduciary or other duties to other
members of Samson, contract amendments and negotiating positions taken by them
in their effort to enforce contracts with purchasers may not necessarily
represent the positions that the Partnerships would take if they were to
administer their own contracts without involvement with other members of Samson.
On the other hand, management believes that the Partnerships' negotiating
strength and contractual positions have been enhanced by virtue of their
affiliation with Samson.
The Partnerships will terminate as of December 31, 2007 (November 22, 2007
for the III-A Partnership). As part of the
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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 other properties which have no or little 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
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.
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.
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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.
[Remainder of Page Intentionally Left Blank]
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PART IV
ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
(a) Financial Statements, Financial Statement Schedules, and Exhibits.
(1) Financial Statements: The following financial statements for the
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-A
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-B
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-C
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-D
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-E
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-F
as of December 31, 2006 and 2005 and for each of the three years in
the period ended December 31, 2006 are filed as part of this report:
Report of Independent Registered Public Accounting Firm
Balance Sheets
Statements of Operations
Statements of Changes in Partners' Capital (Deficit)
Statements of Cash Flows
Notes to Financial Statements
(2) Financial Statement Schedules:
None.
(3) Exhibits:
Exh.
No. Exhibit
- ---- -------
4.1 Agreement of Limited Partnership dated November 17, 1989 for Geodyne
Energy Income Limited Partnership III-A filed as Exhibit 4.1 to
Registrant's Annual Report on Form 10-K for the year ended December
31, 1999, filed with the SEC on February 25, 2000, and is hereby
incorporated by reference.
4.2 Certificate of Limited Partnership dated January 24, 1990 for
Geodyne Energy Income Limited Partnership III-A filed as Exhibit 4.2
to Registrant's Annual Report on Form 10-K for the year ended
December 31, 2001, filed with the SEC on February 28, 2002 and is
hereby incorporated by reference.
-96-
4.3 First Amendment to Certificate of Limited Partnership and First
Amendment to Agreement of Limited Partnership dated February 24,
1993 for Geodyne Energy Income Limited Partnership III-A filed as
Exhibit 4.5 to Registrant's Annual Report on Form 10-K for the year
ended December 31, 1999, filed with the SEC on February 25, 2000,
and is hereby incorporated by reference.
4.4 Second Amendment to Agreement of Limited Partnership dated August 4,
1993 for Geodyne Energy Income Limited Partnership III-A filed as
Exhibit 4.8 to Registrant's Annual Report on Form 10-K for the year
ended December 31, 1999, filed with the SEC on February 25, 2000,
and is hereby incorporated by reference.
4.5 Second Amendment to Certificate of Limited Partnership dated July 1,
1996 for Geodyne Energy Income Limited Partnership III-A filed as
Exhibit 4.5 to Registrant's Annual Report on Form 10-K for the year
ended December 31, 2001, filed with the SEC on February 28, 2002 and
is hereby incorporated by reference.
4.6 Third Amendment to Agreement of Limited Partnership dated August 31,
1995 for Geodyne Energy Income Limited Partnership III-A filed as
Exhibit 4.15 to Registrant's Annual Report on Form 10-K for the year
ended December 31, 1999, filed with the SEC on February 25, 2000,
and is hereby incorporated by reference.
4.7 Fourth Amendment to Agreement of Limited Partnership dated July 1,
1996 for Geodyne Energy Income Limited Partnership III-A filed as
Exhibit 4.22 to Registrant's Annual Report on Form 10-K for the year
ended December 31, 1999, filed with the SEC on February 25, 2000,
and is hereby incorporated by reference.
4.8 Fifth Amendment to Agreement of Limited Partnership dated November
15, 1999 for Geodyne Energy Income Limited Partnership III-A filed
as Exhibit 4.25 to Registrant's Annual Report on Form 10-K for the
year ended December 31, 1999, filed with the SEC on February 25,
2000, and is hereby incorporated by reference.
4.9 Sixth Amendment to Agreement of Limited Partnership dated November
14, 2001, for the Geodyne Energy Income Limited Partnership III-A
filed as Exhibit 4.9 to Registrant's Annual Report on Form 10-K for
the year ended December 31, 2001, filed with the SEC on February 28,
2002 and is hereby incorporated by reference.
4.10 Seventh Amendment to Agreement of Limited Partnership dated November
17, 2003, for the Geodyne Energy Income Limited Partnership III-A
filed as Exhibit 4.10 to Registrant's Annual Report on Form 10-K for
the year
-97-
ended December 31, 2003, filed with the SEC on March 30, 2004 and is
hereby incorporated by reference.
4.11 Eighth Amendment to Agreement of Limited Partnership for the Geodyne
Energy Income Limited Partnership III-A dated October 27, 2005,
filed as Exhibit 4.11 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.
4.12 Agreement of Limited Partnership dated January 24, 1990 for Geodyne
Energy Income Limited Partnership III-B filed as Exhibit 4.2 to
Registrant's Annual Report on Form 10-K for the year ended December
31, 1999, filed with the SEC on February 25, 2000, and is hereby
incorporated by reference.
4.13 Certificate of Limited Partnership dated January 24, 1990 for
Geodyne Energy Income Limited Partnership III-B filed as Exhibit
4.11 to Registrant's Annual Report on Form 10-K for the year ended
December 31, 2001, filed with the SEC on February 28, 2002 and is
hereby incorporated by reference.
4.14 First Amendment to Certificate of Limited Partnership and First
Amendment to Agreement of Limited Partnership dated February 24,
1993 for Geodyne Energy Income Limited Partnership III-B filed as
Exhibit 4.6 to Registrant's Annual Report on Form 10-K for the year
ended December 31, 1999, filed with the SEC on February 25, 2000,
and is hereby incorporated by reference.
4.15 Second Amendment to Agreement of Limited Partnership dated August 4,
1993 for Geodyne Energy Income Limited Partnership III-B filed as
Exhibit 4.9 to Registrant's Annual Report on Form 10-K for the year
ended December 31, 1999, filed with the SEC on February 25, 2000,
and is hereby incorporated by reference.
4.16 Third Amendment to Agreement of Limited Partnership dated August 31,
1995 for Geodyne Energy Income Limited Partnership III-B filed as
Exhibit 4.16 to Registrant's Annual Report on Form 10-K for the year
ended December 31, 1999, filed with the SEC on February 25, 2000,
and is hereby incorporated by reference.
4.17 Second Amendment to Certificate of Limited Partnership dated July 1,
1996 for Geodyne Energy Income Limited Partnership III-B filed as
Exhibit 4.15 to Registrant's Annual Report on Form 10-K for the year
ended December 31, 2001, filed with the SEC on February 28, 2002 and
is hereby incorporated by reference.
-98-
4.18 Fourth Amendment to Agreement of Limited Partnership dated July 1,
1996 for Geodyne Energy Income Limited Partnership III-B filed as
Exhibit 4.23 to Registrant's Annual Report on Form 10-K for the year
ended December 31, 1999, filed with the SEC on February 25, 2000,
and is hereby incorporated by reference.
4.19 Fifth Amendment to Agreement of Limited Partnership dated December
30, 1999 for Geodyne Energy Income Limited Partnership III-B filed
as Exhibit 4.26 to Registrant's Annual Report on Form 10-K for the
year ended December 31, 1999, filed with the SEC on February 25,
2000, and is hereby incorporated by reference.
4.20 Sixth Amendment to Agreement of Limited Partnership dated November
14, 2001, for the Geodyne Energy Income Limited Partnership III-B
filed as Exhibit 4.18 to Registrant's Annual Report on Form 10-K for
the year ended December 31, 2001, filed with the SEC on February 28,
2002 and is hereby incorporated by reference.
4.21 Seventh Amendment to Agreement of Limited Partnership dated January
22, 2004, for the Geodyne Energy Income Limited Partnership III-B
filed as Exhibit 4.20 to Registrant's Annual Report on Form 10-K for
the year ended December 31, 2003, filed with the SEC on March 30,
2004 and is hereby incorporated by reference.
4.22 Eighth Amendment to Agreement of Limited Partnership for the Geodyne
Energy Income Limited Partnership III-B dated October 27, 2005 filed
as Exhibit 4.22 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.
4.23 Agreement of Limited Partnership dated February 26, 1990 for Geodyne
Energy Income Limited Partnership III-C filed as Exhibit 4.3 to
Registrant's Annual Report on Form 10-K for the year ended December
31, 1999, filed with the SEC on February 25, 2000, and is hereby
incorporated by reference.
4.24 Certificate of Limited Partnership dated February 26, 1990 for
Geodyne Energy Income Limited Partnership III-C filed as Exhibit
4.20 to Registrant's Annual Report on Form 10-K for the year ended
December 31, 2001, filed with the SEC on February 28, 2002 and is
hereby incorporated by reference.
4.25 First Amendment to Certificate of Limited Partnership and First
Amendment to Agreement of Limited Partnership dated February 24,
1993 for Geodyne Energy Income Limited Partnership III-C filed as
Exhibit 4.7 to Registrant's Annual Report on Form 10-K for the year
ended December 31, 1999, filed with the SEC on February
-99-
25, 2000, and is hereby incorporated by reference.
4.26 Second Amendment to Agreement of Limited Partnership dated August 4,
1993 for Geodyne Energy Income Limited Partnership III-C filed as
Exhibit 4.19 to Registrant's Annual Report on Form 10-K for the year
ended December 31, 1999, filed with the SEC on February 25, 2000,
and is hereby incorporated by reference.
4.27 Third Amendment to Agreement of Limited Partnership dated August 31,
1995 for Geodyne Energy Income Limited Partnership III-C filed as
Exhibit 4.17 to Registrant's Annual Report on Form 10-K for the year
ended December 31, 1999, filed with the SEC on February 25, 2000,
and is hereby incorporated by reference.
4.28 Second Amendment to Certificate of Limited Partnership dated July 1,
1996 for Geodyne Energy Income Limited Partnership III-C filed as
Exhibit 4.24 to Registrant's Annual Report on Form 10-K for the year
ended December 31, 2001, filed with the SEC on February 28, 2002 and
is hereby incorporated by reference.
4.29 Fourth Amendment to Agreement of Limited Partnership dated July 1,
1996 for Geodyne Energy Income Limited Partnership III-C filed as
Exhibit 4.24 to Registrant's Annual Report on Form 10-K for the year
ended December 31, 1999, filed with the SEC on February 25, 2000,
and is hereby incorporated by reference.
4.30 Fifth Amendment to Agreement of Limited Partnership dated December
30, 1999 for Geodyne Energy Income Limited Partnership III-C filed
as Exhibit 4.27 to Registrant's Annual Report on Form 10-K for the
year ended December 31, 1999, filed with the SEC on February 25,
2000, and is hereby incorporated by reference.
4.31 Sixth Amendment to Agreement of Limited Partnership dated November
14, 2001, for the Geodyne Energy Income Limited Partnership III-C
filed as Exhibit 4.27 to Registrant's Annual Report on Form 10-K for
the year ended December 31, 2001, filed with the SEC on February 28,
2002 and is hereby incorporated by reference.
4.32 Seventh Amendment to Agreement of Limited Partnership dated January
22, 2004, for the Geodyne Energy Income Limited Partnership III-C
filed as Exhibit 4.30 to Registrant's Annual Report on Form 10-K for
the year ended December 31, 2003, filed with the SEC on March 30,
2004 and is hereby incorporated by reference.
4.33 Eighth Amendment to Agreement of Limited Partnership for the Geodyne
Energy Income Limited Partnership III-C dated October 27, 2005
filed as Exhibit 4.33 to
-100-
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.
4.34 Agreement of Limited Partnership dated September 5, 1990 for Geodyne
Energy Income Limited Partnership III-D filed as Exhibit 4.4 to
Registrant's Annual Report on Form 10-K for the year ended December
31, 2000, filed with the SEC on March 5, 2001, and is hereby
incorporated by reference.
4.35 Certificate of Limited Partnership dated September 5, 1990 for
Geodyne Energy Income Limited Partnership III-D filed as Exhibit
4.29 to Registrant's Annual Report on Form 10-K for the year ended
December 31, 2001, filed with the SEC on February 28, 2002 and is
hereby incorporated by reference.
4.36 First Amendment to Certificate of Limited Partnership and First
Amendment to Agreement of Limited Partnership dated February 24,
1993 for Geodyne Energy Income Limited Partnership III-D filed as
Exhibit 4.11 to Registrant's Annual Report on Form 10-K for the year
ended December 31, 2000, filed with the SEC on March 5, 2001, and is
hereby incorporated by reference.
4.37 Second Amendment to Agreement of Limited Partnership dated August 4,
1993 for Geodyne Energy Income Limited Partnership III-D filed as
Exhibit 4.18 to Registrant's Annual Report on Form 10-K for the year
ended December 31, 2000, filed with the SEC on March 5, 2001, and is
hereby incorporated by reference.
4.38 Third Amendment to Agreement of Limited Partnership dated August 31,
1995 for Geodyne Energy Income Limited Partnership III-D filed as
Exhibit 4.25 to Registrant's Annual Report on Form 10-K for the year
ended December 31, 2000, filed with the SEC on March 5, 2001, and is
hereby incorporated by reference.
4.39 Second Amendment to Certificate of Limited Partnership dated July 1,
1996 for Geodyne Energy Income Limited Partnership III-D filed as
Exhibit 4.33 to Registrant's Annual Report on Form 10-K for the year
ended December 31, 2001, filed with the SEC on February 28, 2002 and
is hereby incorporated by reference.
4.40 Fourth Amendment to Agreement of Limited Partnership dated July 1,
1996 for the Geodyne Energy Income Limited Partnership III-D filed
as Exhibit 4.32 to Registrant's Annual Report on Form 10-K for the
year ended December 31, 2000, filed with the SEC on March 5, 2001,
and is hereby incorporated by reference.
-101-
4.41 Fifth Amendment to Agreement of Limited Partnership dated August 23,
2000 for the Geodyne Energy Income Limited Partnership III-D filed
as Exhibit 4.39 to Registrant's Annual Report on Form 10-K for the
year ended December 31, 2000, filed with the SEC on March 5, 2001,
and is hereby incorporated by reference.
4.42 Sixth Amendment to Agreement of Limited Partnership dated August 20,
2002 for the Geodyne Energy Income Limited Partnership III-D filed
as Exhibit 4.36 to Registrant's Annual Report on Form 10-K for the
year ended December 31, 2002, filed with the SEC on March 28, 2003,
and is hereby incorporated by reference.
4.43 Seventh Amendment to Agreement of Limited Partnership dated August
18, 2004 for the Geodyne Energy Income Limited Partnership III-D
filed as Exhibit 4.40 to Registrant's Annual Report on Form 10-K for
the year ended December 31, 2004, filed with the SEC on March 30,
2004, and is hereby incorporated by reference.
4.44 Eighth Amendment to Agreement of Limited Partnership for the Geodyne
Energy Income Limited Partnership III-D dated October 27, 2005 filed
as Exhibit 4.44 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.
4.45 Agreement of Limited Partnership dated December 26, 1990 for Geodyne
Energy Income Limited Partnership III-E filed as Exhibit 4.5 to
Registrant's Annual Report on Form 10-K for the year ended December
31, 2000, filed with the SEC on March 5, 2001, and is hereby
incorporated by reference.
4.46 Certificate of Limited Partnership dated December 26, 1990 for
Geodyne Energy Income Limited Partnership III-E filed as Exhibit
4.37 to Registrant's Annual Report on Form 10-K for the year ended
December 31, 2001, filed with the SEC on February 28, 2002 and is
hereby incorporated by reference.
4.47 First Amendment to Certificate of Limited Partnership and First
Amendment to Agreement of Limited Partnership dated February 24,
1993 for Geodyne Energy Income Limited Partnership III-E filed as
Exhibit 4.12 to Registrant's Annual Report on Form 10-K for the year
ended December 31, 2000, filed with the SEC on March 5, 2001, and is
hereby incorporated by reference.
4.48 Second Amendment to Agreement of Limited Partnership dated August 4,
1993 for Geodyne Energy Income Limited Partnership III-E filed as
Exhibit 4.19 to Registrant's Annual Report on Form 10-K for the year
ended December
-102-
31, 2000, filed with the SEC on March 5, 2001, and is hereby
incorporated by reference.
4.49 Third Amendment to Agreement of Limited Partnership dated August 31,
1995 for Geodyne Energy Income Limited Partnership III-E filed as
Exhibit 4.26 to Registrant's Annual Report on Form 10-K for the year
ended December 31, 2000, filed with the SEC on March 5, 2001, and is
hereby incorporated by reference.
4.50 Second Amendment to Certificate of Limited Partnership dated July 1,
1996 for Geodyne Energy Income Limited Partnership III-E filed as
Exhibit 4.41 to Registrant's Annual Report on Form 10-K for the year
ended December 31, 2001, filed with the SEC on February 28, 2002 and
is hereby incorporated by reference.
4.51 Fourth Amendment to Agreement of Limited Partnership dated July 1,
1996 for the Geodyne Energy Income Limited Partnership III-E filed
as Exhibit 4.33 to Registrant's Annual Report on Form 10-K for the
year ended December 31, 2000, filed with the SEC on March 5, 2001,
and is hereby incorporated by reference.
4.52 Fifth Amendment to Agreement of Limited Partnership dated November
15, 2000 for the Geodyne Energy Income Limited Partnership III-E
filed as Exhibit 4.40 to Registrant's Annual Report on Form 10-K for
the year ended December 31, 2000, filed with the SEC on March 5,
2001, and is hereby incorporated by reference.
4.53 Sixth Amendment to Agreement of Limited Partnership for Geodyne
Energy Income Limited Partnership III-E dated November 6, 2002,
filed as Exhibit 4.1 to Registrant's Quarterly Report on Form 10-Q
with the SEC on November 14, 2002, and is hereby incorporated by
reference.
4.54 Seventh Amendment to Agreement of Limited Partnership for the
Geodyne Energy Income Limited Partnership III-E dated August 18,
2004, filed as Exhibit 4.53 to Registrant's Annual Report on Form
10-K for the year ended December 31, 2004, filed with the SEC on
March 30, 2005, and is hereby incorporated by reference.
4.55 Eighth Amendment to Agreement of Limited Partnership for the Geodyne
Energy Income Limited Partnership III-E dated October 27, 2005 filed
as Exhibit 4.55 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.
4.56 Agreement of Limited Partnership dated March 7, 1991 for Geodyne
Energy Income Limited Partnership III-F filed as Exhibit 4.6 to
Registrant's Annual Report on
-103-
Form 10-K for the year ended December 31, 2000, filed with the SEC
on March 5, 2001, and is hereby incorporated by reference.
4.57 Certificate of Limited Partnership dated March 7, 1991 for Geodyne
Energy Income Limited Partnership III-F filed as Exhibit 4.45 to
Registrant's Annual Report on Form 10-K for the year ended December
31, 2001, filed with the SEC on February 28, 2002 and is hereby
incorporated by reference.
4.58 First Amendment to Certificate of Limited Partnership and First
Amendment to Agreement of Limited Partnership dated February 24,
1993 for Geodyne Energy Income Limited Partnership III-F filed as
Exhibit 4.13 to Registrant's Annual Report on Form 10-K for the year
ended December 31, 2000, filed with the SEC on March 5, 2001, and is
hereby incorporated by reference.
4.59 Second Amendment to Agreement of Limited Partnership dated August 4,
1993 for Geodyne Energy Income Limited Partnership III-F filed as
Exhibit 4.20 to Registrant's Annual Report on Form 10-K for the year
ended December 31, 2000, filed with the SEC on March 5, 2001, and is
hereby incorporated by reference.
4.60 Second Amendment to Certificate of Limited Partnership dated July 1,
1996 for Geodyne Energy Income Limited Partnership III-F filed as
Exhibit 4.48 to Registrant's Annual Report on Form 10-K for the year
ended December 31, 2001, filed with the SEC on February 28, 2002 and
is hereby incorporated by reference.
4.61 Third Amendment to Agreement of Limited Partnership dated August 31,
1995 for Geodyne Energy Income Limited Partnership III-F filed as
Exhibit 4.27 to Registrant's Annual Report on Form 10-K for the year
ended December 31, 2000, filed with the SEC on March 5, 2001, and is
hereby incorporated by reference.
4.62 Fourth Amendment to Agreement of Limited Partnership dated July 1,
1996 for the Geodyne Energy Income Limited Partnership III-F filed
as Exhibit 4.34 to Registrant's Annual Report on Form 10-K for the
year ended December 31, 2000, filed with the SEC on March 5, 2001,
and is hereby incorporated by reference.
4.63 Fifth Amendment to Agreement of Limited Partnership dated February
5, 2001 for the Geodyne Energy Income Limited Partnership III-F
filed as Exhibit 4.41 to Registrant's Annual Report on Form 10-K for
the year ended December 31, 2000, filed with the SEC on March 5,
2001, and is hereby incorporated by reference.
-104-
4.64 Sixth Amendment to Agreement of Limited Partnership for the Geodyne
Energy Income Limited Partnership III-F dated February 10, 2003,
filed as Exhibit 4.53(a) to Registrant's Annual Report on Form 10-K
for the year ended December 31, 2002, filed with the SEC on March
28, 2003, and is hereby incorporated by reference.
4.65 Seventh Amendment to Agreement of Limited Partnership for the
Geodyne Energy Income Limited Partnership III-F dated February 7,
2005, filed as Exhibit 4.60 to Registrant's Annual Report on Form
10-K for the year ended December 31, 2004, filed with the SEC on
March 30, 2004, and is hereby incorporated by reference.
4.66 Eighth Amendment to Agreement of Limited Partnership for the Geodyne
Energy Income Limited Partnership III-F dated October 27, 2005 filed
as Exhibit 4.66 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 Geodyne Energy Income
Limited Partnership III-A.
*23.2 Consent of Ryder Scott Company, L.P. for Geodyne Energy Income
Limited Partnership III-B.
*23.3 Consent of Ryder Scott Company, L.P. for Geodyne Energy Income
Limited Partnership III-C.
*23.4 Consent of Ryder Scott Company, L.P. for Geodyne Energy Income
Limited Partnership III-D.
*23.5 Consent of Ryder Scott Company, L.P. for Geodyne Energy Income
Limited Partnership III-E.
*23.6 Consent of Ryder Scott Company, L.P. for Geodyne Energy Income
Limited Partnership III-F.
*31.1 Certification by Dennis R. Neill required by Rule
13a-14(a)/15d-14(a) for the Geodyne Energy Income Limited
Partnership III-A.
*31.2 Certification by Craig D. Loseke required by Rule
13a-14(a)/15d-14(a) for the Geodyne Energy Income Limited
Partnership III-A.
*31.3 Certification by Dennis R. Neill required by Rule
13a-14(a)/15d-14(a) for the Geodyne Energy Income Limited
Partnership III-B.
*31.4 Certification by Craig D. Loseke required by Rule
13a-14(a)/15d-14(a) for the Geodyne Energy Income Limited
Partnership III-B.
-105-
*31.5 Certification by Dennis R. Neill required by Rule
13a-14(a)/15d-14(a) for the Geodyne Energy Income Limited
Partnership III-C.
*31.6 Certification by Craig D. Loseke required by Rule
13a-14(a)/15d-14(a) for the Geodyne Energy Income Limited
Partnership III-C.
*31.7 Certification by Dennis R. Neill required by Rule
13a-14(a)/15d-14(a) for the Geodyne Energy Income Limited
Partnership III-D.
*31.8 Certification by Craig D. Loseke required by Rule
13a-14(a)/15d-14(a) for the Geodyne Energy Income Limited
Partnership III-D.
*31.9 Certification by Dennis R. Neill required by Rule
13a-14(a)/15d-14(a) for the Geodyne Energy Income Limited
Partnership III-E.
*31.10 Certification by Craig D. Loseke required by Rule
13a-14(a)/15d-14(a) for the Geodyne Energy Income Limited
Partnership III-E.
*31.11 Certification by Dennis R. Neill required by Rule
13a-14(a)/15d-14(a) for the Geodyne Energy Income Limited
Partnership III-F.
*31.12 Certification by Craig D. Loseke required by Rule
13a-14(a)/15d-14(a) for the Geodyne Energy Income Limited
Partnership III-F.
*32.1 Certification pursuant to 18 U.S.C. Section 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 for the
Geodyne Energy Income Limited Partnership III-A.
*32.2 Certification pursuant to 18 U.S.C. Section 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 for the
Geodyne Energy Income Limited Partnership III-B.
*32.3 Certification pursuant to 18 U.S.C. Section 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 for the
Geodyne Energy Income Limited Partnership III-C.
*32.4 Certification pursuant to 18 U.S.C. Section 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 for the
Geodyne Energy Income Limited Partnership III-D.
*32.5 Certification pursuant to 18 U.S.C. Section 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 for the
Geodyne Energy Income Limited Partnership III-E.
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*32.6 Certification pursuant to 18 U.S.C. Section 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 for the
Geodyne Energy Income Limited Partnership III-F.
All other Exhibits are omitted as inapplicable.
----------
*Filed herewith.
-107-
SIGNATURES
Pursuant to the requirements of Sections 13 or 15(d) of the Securities Exchange
Act of 1934, the registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly organized.
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-A
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-B
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-C
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-D
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-E
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-F
By: GEODYNE RESOURCES, INC.
General Partner
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 ENERGY INCOME LIMITED PARTNERSHIP III-A
In our opinion, the accompanying balance sheets and the related statements
of operations, changes in partners' capital (deficit) and cash flows present
fairly, in all material respects, the financial position of the Geodyne Energy
Income Limited Partnership III-A, an Oklahoma limited partnership, at December
31, 2006 and 2005, and the results of its operations and its 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 Partnership's 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 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, November 22, 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 ENERGY INCOME LIMITED PARTNERSHIP III-A
Balance Sheets
December 31, 2006 and 2005
ASSETS
------
2006 2005
------------ ------------
CURRENT ASSETS:
Cash and cash equivalents $1,443,396 $1,209,317
Accounts receivable:
Oil and gas sales 571,125 831,772
Assets held for sale (Note 6) 32,307 -
--------- ---------
Total current assets $2,046,828 $2,041,089
NET OIL AND GAS PROPERTIES,
utilizing the successful
efforts method 588,645 775,391
DEFERRED CHARGE 184,941 190,240
--------- ---------
$2,820,414 $3,006,720
========= =========
LIABILITIES AND PARTNERS' CAPITAL (DEFICIT)
-------------------------------------------
CURRENT LIABILITIES:
Accounts payable $ 151,192 $ 126,411
Gas imbalance payable 21,627 17,660
Asset retirement obligation -
current (Note 1) 10,086 14,606
Asset retirement obligation -
held for sale (Note 6) 3,870 -
Liabilities - held for sale
(Note 6) 4,257 -
--------- ---------
Total current liabilities $ 191,032 $ 158,677
LONG-TERM LIABILITIES:
Accrued liability $ 31,040 $ 27,120
Asset retirement obligation
(Note 1) 271,011 270,650
--------- ---------
Total long-term liabilities $ 302,051 $ 297,770
F-2
PARTNERS' CAPITAL (DEFICIT):
General Partner ($ 59,707) ($ 59,217)
Limited Partners, issued and
outstanding, 263,976 Units 2,387,038 2,609,490
--------- ---------
Total Partners' capital $2,327,331 $2,550,273
--------- ---------
$2,820,414 $3,006,720
========= =========
The accompanying notes are an integral
part of these financial statements.
F-3
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-A
Statements of Operations
For the Years Ended December 31, 2006, 2005, and 2004
2006 2005 2004
---------- ---------- ----------
REVENUES:
Oil and gas sales $4,081,376 $4,573,716 $4,019,225
Interest income 34,956 19,441 6,549
Gain on sale of oil
and gas properties - - 1,399
--------- --------- ---------
$4,116,332 $4,593,157 $4,027,173
COSTS AND EXPENSES:
Lease operating $ 591,966 $ 676,015 $ 460,072
Production tax 358,022 402,151 320,142
Depreciation, depletion,
and amortization of oil
and gas properties 156,906 168,849 162,837
Impairment provision 5,577 - -
General and administrative 316,885 319,762 313,621
--------- --------- ---------
$1,429,356 $1,566,777 $1,256,672
--------- --------- ---------
INCOME FROM CONTINUING
OPERATIONS $2,686,976 $3,026,380 $2,770,501
DISCONTINUED OPERATIONS:
Income from discontinued
operations (Note 6) 113,515 129,491 61,486
Gain on disposal of
discontinued operations
(Note 6) 500,355 - -
--------- --------- ---------
NET INCOME $3,300,846 $3,155,871 $2,831,987
========= ========= =========
GENERAL PARTNER:
Net income from
continuing operations $ 279,825 $ 315,890 $ 291,050
Net income from
discontinued
operations 61,473 13,371 6,387
--------- --------- ---------
NET INCOME $ 341,298 $ 329,261 $ 297,437
========= ========= =========
F-4
LIMITED PARTNERS:
Net income from
continuing operations $2,407,151 $2,710,490 $2,479,451
Net income from
discontinued operations 552,397 116,120 55,099
--------- --------- ---------
NET INCOME $2,959,548 $2,826,610 $2,534,550
========= ========= =========
NET INCOME FROM CONTINUING
OPERATIONS PER UNIT $ 9.12 $ 10.27 $ 9.39
NET INCOME FROM DISCONTINUED
OPERATIONS PER UNIT 2.09 .44 .21
--------- --------- ---------
NET INCOME PER UNIT $ 11.21 $ 10.71 $ 9.60
========= ========= =========
UNITS OUTSTANDING 263,976 263,976 263,976
========= ========= =========
The accompanying notes are an integral part of these
financial statements.
F-5
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-A
Statements of Partners' Capital (Deficit)
For the Years Ended December 31, 2006, 2005, and 2004
Limited General
Partners Partner Total
------------ ---------- ------------
Balance, Dec. 31, 2003 $2,213,330 ($104,097) $2,109,233
Net income 2,534,550 297,437 2,831,987
Cash distributions ( 2,337,000) ( 281,846) ( 2,618,846)
--------- ------- ---------
Balance, Dec. 31, 2004 $2,410,880 ($ 88,506) $2,322,374
Net income 2,826,610 329,261 3,155,871
Cash distributions ( 2,628,000) ( 299,972) ( 2,927,972)
--------- ------- ---------
Balance, Dec. 31, 2005 $2,609,490 ($ 59,217) $2,550,273
Net income 2,959,548 341,298 3,300,846
Cash distributions ( 3,182,000) ( 341,788) ( 3,523,788)
--------- ------- ---------
Balance, Dec. 31, 2006 $2,387,038 ($ 59,707) $2,327,331
========= ======= =========
The accompanying notes are an integral part of these
financial statements.
F-6
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-A
Statements of Cash Flows
For the Years Ended December 31, 2006, 2005, and 2004
2006 2005 2004
------------ ------------ ------------
CASH FLOWS FROM OPERATING
ACTIVITIES:
Net income $3,300,846 $3,155,871 $2,831,987
Adjustments to reconcile
net income to net cash
provided by operating
activities:
Depreciation, depletion,
and amortization of oil
and gas properties 157,858 173,536 165,482
Impairment provision 5,577 - -
Settlement of asset
retirement obligation - - ( 165)
Gain on sale of oil and
gas properties - - ( 1,399)
Gain on disposal of
discounted operations
(Note 6) ( 500,355) - -
(Increase) decrease in
accounts receivable -
oil and gas sales 233,255 ( 242,943) ( 79,554)
(Increase) decrease in
deferred charge 5,291 ( 2,282) 7,691
Increase (decrease) in
accounts payable 36,737 43,321 ( 2,055)
Increase (decrease) in
gas imbalance payable 3,967 ( 9,049) 4,420
Increase (decrease) in
accrued liability 3,920 ( 1,598) ( 5,328)
--------- --------- ---------
Net cash provided by
operating activities $3,247,096 $3,116,856 $2,921,079
--------- --------- ---------
CASH FLOWS FROM INVESTING
ACTIVITIES:
Capital expenditures ($ 6,652) ($ 18,286) ($ 68,482)
Proceeds from sale of oil
and gas properties - - 375
Proceeds from disposal of
discontinued operations
(Note 6) 517,423 - -
--------- --------- ---------
Net cash provided (used) by
investing activities $ 510,771 ($ 18,286) ($ 68,107)
--------- --------- ---------
F-7
CASH FLOWS FROM FINANCING
ACTIVITIES:
Cash distributions ($3,523,788) ($2,927,972) ($2,618,846)
--------- --------- ---------
Net cash used by
financing activities ($3,523,788) ($2,927,972) ($2,618,846)
--------- --------- ---------
NET INCREASE IN CASH
AND CASH EQUIVALENTS $ 234,079 $ 170,598 $ 234,126
CASH AND CASH EQUIVALENTS
AT BEGINNING OF PERIOD 1,209,317 1,038,719 804,593
--------- --------- ---------
CASH AND CASH EQUIVALENTS
AT END OF PERIOD $1,443,396 $1,209,317 $1,038,719
========= ========= =========
The accompanying notes are an integral part of these
financial statements.
F-8
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
TO THE PARTNERS
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-B
In our opinion, the accompanying balance sheets and the related statements
of operations, changes in partners' capital (deficit) and cash flows present
fairly, in all material respects, the financial position of the Geodyne Energy
Income Limited Partnership III-B, an Oklahoma limited partnership, at December
31, 2006 and 2005, and the results of its operations and its 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 Partnership's 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 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-9
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-B
Balance Sheets
December 31, 2006 and 2005
ASSETS
------
2006 2005
---------- ----------
CURRENT ASSETS:
Cash and cash equivalents $ 700,511 $ 604,086
Accounts receivable:
Oil and gas sales 296,055 433,785
Assets held for sale (Note 6) 7,506 -
--------- ---------
Total current assets $1,004,072 $1,037,871
NET OIL AND GAS PROPERTIES,
utilizing the successful
efforts method 349,851 414,293
DEFERRED CHARGE 122,514 125,644
--------- ---------
$1,476,437 $1,577,808
========= =========
LIABILITIES AND PARTNERS' CAPITAL (DEFICIT)
-------------------------------------------
CURRENT LIABILITIES:
Accounts payable $ 96,722 $ 76,295
Gas imbalance payable 12,356 9,707
Asset retirement obligation -
current (Note 1) 5,552 9,255
Liabilities - held for sale
(Note 6) 1,049 -
--------- ---------
Total current liabilities $ 115,679 $ 95,257
LONG-TERM LIABILITIES:
Accrued liability $ 8,001 $ 9,664
Asset retirement obligation
(Note 1) 181,827 175,358
--------- ---------
Total long-term liabilities $ 189,828 $ 185,022
F-10
PARTNERS' CAPITAL (DEFICIT):
General Partner ($ 41,841) ($ 35,041)
Limited Partners, issued and
outstanding, 138,336 Units 1,212,771 1,332,570
--------- ---------
Total Partners' capital $1,170,930 $1,297,529
--------- ---------
$1,476,437 $1,577,808
========= =========
The accompanying notes are an integral part of these
financial statements.
F-11
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-B
Statements of Operations
For the Years Ended December 31, 2006, 2005, and 2004
2006 2005 2004
---------- ---------- ----------
REVENUES:
Oil and gas sales $2,225,321 $2,444,229 $2,098,774
Interest income 17,044 9,610 3,114
--------- --------- ---------
$2,242,365 $2,453,839 $2,101,888
COSTS AND EXPENSES:
Lease operating $ 375,402 $ 415,564 $ 294,895
Production tax 206,732 228,310 173,617
Depreciation, depletion,
and amortization of oil
and gas properties 66,804 93,802 96,682
Impairment provision 3,798 - -
General and administrative 179,681 182,306 175,518
--------- --------- ---------
$ 832,417 $ 919,982 $ 740,712
--------- --------- ---------
INCOME FROM CONTINUING
OPERATIONS $1,409,948 $1,533,857 $1,361,176
DISCONTINUED OPERATIONS:
Income from discontinued
operations (Note 6) 26,472 31,841 12,547
Gain on disposal of
discontinued operations
(Note 6) 211,306 - -
--------- --------- ---------
NET INCOME $1,647,726 $1,565,698 $1,373,723
========= ========= =========
GENERAL PARTNER:
Net income from
continuing operations $ 218,820 $ 241,770 $ 217,244
Net income from discontinued
operations 35,705 5,017 2,044
--------- --------- ---------
NET INCOME $ 254,525 $ 246,787 $ 219,288
========= ========= =========
LIMITED PARTNERS:
Net income from
continuing operations $1,191,128 $1,292,087 $1,143,932
Net income from discontinued
operations 202,073 26,824 10,503
--------- --------- ---------
NET INCOME $1,393,201 $1,318,911 $1,154,435
========= ========= =========
F-12
NET INCOME FROM CONTINUING
OPERATIONS PER UNIT $ 8.61 $ 9.34 $ 8.27
NET INCOME FROM DISCONTINUED
OPERATIONS PER UNIT 1.46 .19 .08
--------- --------- ---------
NET INCOME PER UNIT $ 10.07 $ 9.53 $ 8.35
========= ========= =========
UNITS OUTSTANDING 138,336 138,336 138,336
========= ========= =========
The accompanying notes are an integral part of these
financial statements.
F-13
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-B
Statements of Partners' Capital (Deficit)
For the Years Ended December 31, 2006, 2005, and 2004
Limited General
Partners Partner Total
------------ ---------- ------------
Balance, Dec. 31, 2003 $1,178,224 ($ 68,928) $1,109,296
Net income 1,154,435 219,288 1,373,723
Cash distributions ( 1,055,000) ( 208,789) ( 1,263,789)
--------- ------- ---------
Balance, Dec. 31, 2004 $1,277,659 ($ 58,429) $1,219,230
Net income 1,318,911 246,787 1,565,698
Cash distributions ( 1,264,000) ( 223,399) ( 1,487,399)
--------- ------- ---------
Balance, Dec. 31, 2005 $1,332,570 ($ 35,041) $1,297,529
Net income 1,393,201 254,525 1,647,726
Cash distributions ( 1,513,000) ( 261,325) ( 1,774,325)
--------- ------- ---------
Balance, Dec. 31, 2006 $1,212,771 ($ 41,841) $1,170,930
========= ======= =========
The accompanying notes are an integral part of these
financial statements.
F-14
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-B
Statements of Cash Flows
For the Years Ended December 31, 2006, 2005, and 2004
2006 2005 2004
------------ ------------ ------------
CASH FLOWS FROM OPERATING
ACTIVITIES:
Net income $1,647,726 $1,565,698 $1,373,723
Adjustments to reconcile
net income to net cash
provided by operating
activities:
Depreciation, depletion,
and amortization of oil
and gas properties 67,077 95,525 97,836
Impairment provision 3,798 - -
Settlement of asset
retirement obligation - - ( 701)
Gain on disposal of
discontinued operations
(Note 6) ( 211,306) - -
(Increase) decrease in
accounts receivable -
oil and gas sales 130,224 ( 133,231) ( 26,258)
(Increase) decrease in
deferred charge 3,130 ( 5,193) 7,966
Increase (decrease) in
accounts payable 21,353 20,909 ( 2,383)
Increase (decrease) in
gas imbalance payable 2,649 ( 5,053) 3,049
Decrease in accrued
liability ( 1,663) ( 164) ( 3,918)
--------- --------- ---------
Net cash provided by
operating activities $1,662,988 $1,538,491 $1,449,314
--------- --------- ---------
CASH FLOWS FROM INVESTING
ACTIVITIES:
Capital expenditures ($ 10,458) ($ 3,255) ($ 46,547)
Proceeds from disposal of
discontinued operations
(Note 6) 218,220 - -
--------- --------- ---------
Net cash provided (used) by
investing activities $ 207,762 ($ 3,255) ($ 46,547)
--------- --------- ---------
F-15
CASH FLOWS FROM FINANCING
ACTIVITIES:
Cash distributions ($1,774,325) ($1,487,399) ($1,263,789)
--------- --------- ---------
Net cash used by
financing activities ($1,774,325) ($1,487,399) ($1,263,789)
--------- --------- ---------
NET INCREASE IN CASH AND
CASH EQUIVALENTS $ 96,425 $ 47,837 $ 138,978
CASH AND CASH EQUIVALENTS
AT BEGINNING OF PERIOD 604,086 556,249 417,271
--------- --------- ---------
CASH AND CASH EQUIVALENTS
AT END OF PERIOD $ 700,511 $ 604,086 $ 556,249
========= ========= =========
The accompanying notes are an integral part of these
financial statements.
F-16
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
TO THE PARTNERS
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-C
In our opinion, the accompanying balance sheets and the related statements
of operations, changes in partners' capital (deficit) and cash flows present
fairly, in all material respects, the financial position of the Geodyne Energy
Income Limited Partnership III-C, an Oklahoma limited partnership, at December
31, 2006 and 2005, and the results of its operations and its 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 Partnership's 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 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-17
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-C
Balance Sheets
December 31, 2006 and 2005
ASSETS
------
2006 2005
------------ ------------
CURRENT ASSETS:
Cash and cash equivalents $1,129,134 $1,013,378
Accounts receivable:
Oil and gas sales 901,653 884,091
Related party 4,262 -
Assets held for sale (Note 6) 13,656 -
--------- ---------
Total current assets $2,048,705 $1,897,469
NET OIL AND GAS PROPERTIES,
utilizing the successful
efforts method 1,634,985 1,544,711
DEFERRED CHARGE 56,549 62,603
--------- ---------
$3,740,239 $3,504,783
========= =========
LIABILITIES AND PARTNERS' CAPITAL (DEFICIT)
-------------------------------------------
CURRENT LIABILITIES:
Accounts payable $ 168,287 $ 263,892
Gas imbalance payable 27,417 76,928
Asset retirement obligation -
current (Note 1) 24,559 19,679
Asset retirement obligation -
held for sale 291 -
Liabilities - held for sale
(Note 6) 689 -
--------- ---------
Total current liabilities $ 221,243 $ 360,499
LONG-TERM LIABILITIES:
Accrued liability $ 123,503 $ 124,681
Asset retirement obligation
(Note 1) 365,663 355,551
--------- ---------
Total long-term liabilities $ 489,166 $ 480,232
F-18
PARTNERS' CAPITAL (DEFICIT):
General Partner ($ 90,026) ($ 105,515)
Limited Partners, issued and
outstanding, 244,536 Units 3,119,856 2,769,567
--------- ---------
Total Partners' capital $3,029,830 $2,664,052
--------- ---------
$3,740,239 $3,504,783
========= =========
The accompanying notes are an integral part of these
financial statements.
F-19
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-C
Statements of Operations
For the Years Ended December 31, 2006, 2005, and 2004
2006 2005 2004
---------- ------------ ------------
REVENUES:
Oil and gas sales $4,668,479 $4,168,389 $3,275,709
Interest income 29,261 17,355 5,295
Loss on sale of oil
and gas properties - - ( 891)
Other income 8,287 2,541 -
--------- --------- ---------
$4,706,027 $4,188,285 $3,280,113
COSTS AND EXPENSES:
Lease operating $ 830,524 $ 675,992 $ 618,867
Production tax 311,167 280,329 229,970
Depreciation, depletion,
and amortization of oil
and gas properties 521,295 227,246 440,583
Impairment provision 77,435 - -
General and administrative 294,899 297,767 291,575
--------- --------- ---------
$2,035,320 $1,481,334 $1,580,995
--------- --------- ---------
INCOME FROM CONTINUING
OPERATIONS $2,670,707 $2,706,951 $1,699,118
DISCONTINUED OPERATIONS:
Income from discontinued
operations (Note 6) 55,455 56,474 46,184
Gain on disposal of
discontinued operations
(Note 6) 95,512 - -
--------- --------- ---------
NET INCOME $2,821,674 $2,763,425 $1,745,302
========= ========= =========
GENERAL PARTNER:
Net income from
continuing operations $ 318,030 $ 289,411 $ 209,035
Net income from discontinued
operations 15,355 5,812 4,762
--------- --------- ---------
NET INCOME $ 333,385 $ 295,223 $ 213,797
========= ========= =========
F-20
LIMITED PARTNERS:
Net income from
continuing operations $2,352,677 $2,417,540 $1,490,083
Net income from discontinued
operations 135,612 50,662 41,422
--------- --------- ---------
NET INCOME $2,488,289 $2,468,202 $1,531,505
========= ========= =========
NET INCOME FROM CONTINUING
OPERATIONS PER UNIT $ 9.62 $ 9.89 $ 6.09
NET INCOME FROM DISCONTINUED
OPERATIONS PER UNIT .55 .21 .17
--------- --------- ---------
NET INCOME PER UNIT $ 10.17 $ 10.10 $ 6.26
========= ========= =========
UNITS OUTSTANDING 244,536 244,536 244,536
========= ========= =========
The accompanying notes are an integral part of these
financial statements.
F-21
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-C
Statements of Partners' Capital (Deficit)
For the Years Ended December 31, 2006, 2005, and 2004
Limited General
Partners Partner Total
------------ ---------- ------------
Balance, Dec. 31, 2003 $2,542,860 ($153,480) $2,389,380
Net income 1,531,505 213,797 1,745,302
Cash distributions ( 1,729,000) ( 197,249) ( 1,926,249)
--------- ------- ---------
Balance, Dec. 31, 2004 $2,345,365 ($136,932) $2,208,433
Net income 2,468,202 295,223 2,763,425
Cash distributions ( 2,044,000) ( 263,806) ( 2,307,806)
--------- ------- ---------
Balance, Dec. 31, 2005 $2,769,567 ($105,515) $2,664,052
Net income 2,488,289 333,385 2,821,674
Cash distributions ( 2,138,000) ( 317,896) ( 2,455,896)
--------- ------- ---------
Balance, Dec. 31, 2006 $3,119,856 ($ 90,026) $3,029,830
========= ======= =========
The accompanying notes are an integral part of these
financial statements.
F-22
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-C
Statements of Cash Flows
For the Years Ended December 31, 2006, 2005, and 2004
2006 2005 2004
------------ ------------ ------------
CASH FLOWS FROM OPERATING
ACTIVITIES:
Net income $2,821,674 $2,763,425 $1,745,302
Adjustments to reconcile
net income to net cash
provided by operating
activities:
Depreciation, depletion,
and amortization of oil
and gas properties 523,789 229,070 442,183
Impairment provision 77,806 - -
Loss on sale of oil and
gas properties - - 891
Gain on disposal of
discontinued operations
(Note 6) ( 95,512) - -
Settlement of asset
retirement obligation ( 109) - ( 131)
Increase in accounts
receivable - oil and
gas sales ( 29,586) ( 301,082) ( 136,151)
Increase in accounts
receivable-related party ( 4,262) - -
(Increase) decrease in
deferred charge 6,044 ( 13,919) 4,533
Increase (decrease) in
accounts payable ( 59,663) 118,382 15,711
Increase (decrease) in
gas imbalance payable ( 49,511) ( 6,253) 44,994
Decrease in accrued
liability ( 1,173) ( 45,851) ( 32,226)
--------- --------- ---------
Net cash provided by
operating activities $3,189,497 $2,743,772 $2,085,106
--------- --------- ---------
CASH FLOWS FROM INVESTING
ACTIVITIES:
Capital expenditures ($ 716,209) ($ 105,380) ($ 187,506)
Proceeds from disposal of
discontinued operations
(Note 6) 98,364 - -
--------- --------- ---------
Net cash used by
investing activities ($ 617,845) ($ 105,380) ($ 187,506)
--------- --------- ---------
F-23
CASH FLOWS FROM FINANCING
ACTIVITIES:
Cash distributions ($2,455,896) ($2,307,806) ($1,926,249)
--------- --------- ---------
Net cash used by
financing activities ($2,455,896) ($2,307,806) ($1,926,249)
--------- --------- ---------
NET INCREASE (DECREASE) IN
CASH AND CASH EQUIVALENTS $ 115,756 $ 330,586 ($ 28,649)
CASH AND CASH EQUIVALENTS
AT BEGINNING OF PERIOD 1,013,378 682,792 711,441
--------- --------- ---------
CASH AND CASH EQUIVALENTS
AT END OF PERIOD $1,129,134 $1,013,378 $ 682,792
========= ========= =========
The accompanying notes are an integral part of these
financial statements.
F-24
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
TO THE PARTNERS
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-D
In our opinion, the accompanying balance sheets and the related statements
of operations, changes in partners' capital (deficit) and cash flows present
fairly, in all material respects, the financial position of the Geodyne Energy
Income Limited Partnership III-D, an Oklahoma limited partnership, at December
31, 2006 and 2005, and the results of its operations and its 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 Partnership's 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 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-25
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-D
Balance Sheets
December 31, 2006 and 2005
ASSETS
------
2006 2005
------------ ------------
CURRENT ASSETS:
Cash and cash equivalents $ 560,391 $ 547,247
Accounts receivable:
Oil and gas sales 554,939 527,187
Related party 610 -
Other 26,776 -
Assets held for sale (Note 6) 2,524 -
--------- ---------
Total current assets $1,145,240 $1,074,434
NET OIL AND GAS PROPERTIES,
utilizing the successful
efforts method 796,560 651,461
DEFERRED CHARGE 14,055 15,342
--------- ---------
$1,955,855 $1,741,237
========= =========
LIABILITIES AND PARTNERS' CAPITAL (DEFICIT)
-------------------------------------------
CURRENT LIABILITIES:
Accounts payable $ 114,417 $ 155,178
Gas imbalance payable 5,724 42,943
Asset retirement obligation -
current (Note 1) 16,323 17,420
Asset retirement obligation -
held for sale 31 -
Liabilities - held for
sale (Note 6) 298 -
--------- ---------
Total current liabilities $ 136,793 $ 215,541
LONG-TERM LIABILITIES:
Accrued liability $ 154,492 $ 153,747
Asset retirement obligation
(Note 1) 194,358 186,678
--------- ---------
Total long-term liabilities $ 348,850 $ 340,425
F-26
PARTNERS' CAPITAL (DEFICIT):
General Partner ($ 17,347) ($ 29,279)
Limited Partners, issued and
outstanding, 131,008 Units 1,487,559 1,214,550
--------- ---------
Total Partners' capital $1,470,212 $1,185,271
--------- ---------
$1,955,855 $1,741,237
========= =========
The accompanying notes are an integral part of these
financial statements.
F-27
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-D
Statements of Operations
For the Years Ended December 31, 2006, 2005, and 2004
2006 2005 2004
---------- ---------- ------------
REVENUES:
Oil and gas sales $2,784,819 $2,445,510 $1,882,916
Interest income 15,105 9,619 3,313
Loss on sale of oil
and gas properties - - ( 128)
Other income 1,187 364 -
--------- --------- ---------
$2,801,111 $2,455,493 $1,886,101
COSTS AND EXPENSES:
Lease operating $ 546,210 $ 429,772 $ 361,371
Production tax 185,742 164,556 131,941
Depreciation, depletion,
and amortization of oil
and gas properties 374,569 118,272 95,808
Impairment provision 13,348 - -
General and administrative 171,601 173,805 171,351
--------- --------- ---------
$1,291,470 $ 886,405 $ 760,471
--------- --------- ---------
INCOME FROM CONTINUING
OPERATIONS $1,509,641 $1,569,088 $1,125,630
DISCONTINUED OPERATIONS:
Income (loss) from discontinued
operations (Note 6) 37,567 21,219 ( 85,767)
Gain on disposal of
discontinued operations
(Note 6) 1,072 - 10,368
--------- --------- ---------
NET INCOME $1,548,280 $1,590,307 $1,050,231
========= ========= =========
GENERAL PARTNER:
Net income from
continuing operations $ 184,366 $ 166,592 $ 120,854
Net income (loss) from
discontinued operations 3,905 2,137 ( 7,267)
--------- --------- ---------
NET INCOME $ 188,271 $ 168,729 $ 113,587
========= ========= =========
LIMITED PARTNERS:
Net income from
continuing operations $1,325,275 $1,402,496 $1,004,776
Net income (loss) from
discontinued operations 34,734 19,082 ( 68,132)
--------- --------- ---------
NET INCOME $1,360,009 $1,421,578 $ 936,644
========= ========= =========
F-28
NET INCOME FROM CONTINUING
OPERATIONS PER UNIT $ 10.12 $ 10.71 $ 7.67
NET INCOME (LOSS) FROM
DISCONTINUED OPERATIONS
PER UNIT .27 .15 ( .52)
--------- --------- ---------
NET INCOME PER UNIT $ 10.39 $ 10.86 $ 7.15
========= ========= =========
UNITS OUTSTANDING 131,008 131,008 131,008
========= ========= =========
The accompanying notes are an integral part of these
financial statements.
F-29
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-D
Statements of Partners' Capital (Deficit)
For the Years Ended December 31, 2006, 2005, and 2004
Limited General
Partners Partner Total
------------ ---------- ------------
Balance, Dec. 31, 2003 $1,129,328 ($ 47,561) $1,081,767
Net income 936,644 113,587 1,050,231
Cash distributions ( 1,114,000) ( 121,184) ( 1,235,184)
--------- ------- ---------
Balance, Dec. 31, 2004 $ 951,972 ($ 55,158) $ 896,814
Net income 1,421,578 168,729 1,590,307
Cash distributions ( 1,159,000) ( 142,850) ( 1,301,850)
--------- ------- ---------
Balance, Dec. 31, 2005 $1,214,550 ($ 29,279) $1,185,271
Net income 1,360,009 188,271 1,548,280
Cash distributions ( 1,087,000) ( 176,339) ( 1,263,339)
--------- ------- ---------
Balance, Dec. 31, 2006 $1,487,559 ($ 17,347) $1,470,212
========= ======= =========
The accompanying notes are an integral part of these
financial statements.
F-30
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-D
Statements of Cash Flows
For the Years Ended December 31, 2006, 2005, and 2004
2006 2005 2004
------------ ------------ ------------
CASH FLOWS FROM OPERATING
ACTIVITIES:
Net income $1,548,280 $1,590,307 $1,050,231
Adjustments to reconcile
net income to net
cash provided by
operating activities:
Depreciation, depletion,
and amortization of oil
and gas properties 374,933 118,445 98,838
Impairment provision 13,437 - -
Loss on sale of
oil and gas properties - - 128
Gain on disposal of
discontinued operations
(Note 6) ( 1,072) - ( 10,368)
Settlement of asset
retirement obligation ( 1,152) - ( 17)
Increase in accounts
receivable - oil
and gas sales ( 30,048) ( 187,002) ( 719)
Increase in accounts
receivable-related party ( 610) - -
Increase in accounts
receivable-other ( 26,776) - -
(Increase) decrease in
deferred charge 1,287 ( 6,913) 1,523
Increase (decrease) in
accounts payable ( 1,857) ( 16,403) 45,198
Increase (decrease) in gas
imbalance payable ( 37,219) 1,336 36,418
Increase (decrease) in
accrued liability 745 ( 37,938) ( 55,619)
--------- --------- ---------
Net cash provided by
operating activities $1,839,948 $1,461,832 $1,165,613
--------- --------- ---------
CASH FLOWS FROM INVESTING
ACTIVITIES:
Capital expenditures ($ 564,537) ($ 45,569) ($ 24,743)
Proceeds from disposal of
discontinued operations
(Note 6) 1,072 - 88,586
--------- --------- ---------
Net cash provided (used)
by investing activities ($ 563,465) ($ 45,569) $ 63,843
--------- --------- ---------
F-31
CASH FLOWS FROM FINANCING
ACTIVITIES:
Cash distributions ($1,263,339) ($1,301,850) ($1,235,184)
--------- --------- ---------
Net cash used by
financing activities ($1,263,339) ($1,301,850) ($1,235,184)
--------- --------- ---------
NET INCREASE (DECREASE) IN
CASH AND CASH EQUIVALENTS $ 13,144 $ 114,413 ($ 5,728)
CASH AND CASH EQUIVALENTS
AT BEGINNING OF PERIOD 547,247 432,834 438,562
--------- --------- ---------
CASH AND CASH EQUIVALENTS
AT END OF PERIOD $ 560,391 $ 547,247 $ 432,834
========= ========= =========
The accompanying notes are an integral part of these
financial statements.
F-32
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
TO THE PARTNERS
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-E
In our opinion, the accompanying balance sheets and the related statements
of operations, changes in partners' capital (deficit) and cash flows present
fairly, in all material respects, the financial position of the Geodyne Energy
Income Limited Partnership III-E, an Oklahoma limited partnership, at December
31, 2006 and 2005, and the results of its operations and its 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 Partnership's 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 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-33
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-E
Balance Sheets
December 31, 2006 and 2005
ASSETS
------
2006 2005
------------ ------------
CURRENT ASSETS:
Cash and cash equivalents $ 981,324 $1,460,559
Accounts receivable:
Oil and gas sales 743,001 1,272,925
Other 191,092 -
Assets held for sale (Note 6) 40,781 -
--------- ---------
Total current assets $1,956,198 $2,733,484
NET OIL AND GAS PROPERTIES,
utilizing the successful
efforts method 1,592,366 1,981,508
DEFERRED CHARGE 29,450 40,254
--------- ---------
$3,578,014 $4,755,246
========= =========
LIABILITIES AND PARTNERS' CAPITAL (DEFICIT)
-------------------------------------------
CURRENT LIABILITIES:
Accounts payable $ 318,209 $ 324,885
Accrued liability - other
(Note 1) 105,000 -
Gas imbalance payable 21,870 16,538
Asset retirement obligation -
current (Note 1) 63,380 23,971
Asset retirement obligation -
held for sale 31,202 -
Liabilities - held for sale
(Note 6) 33,812 -
--------- ---------
Total current liabilities $ 573,473 $ 365,394
LONG-TERM LIABILITIES:
Accrued liability $ 157,310 $ 254,420
Asset retirement obligation
(Note 1) 362,904 413,791
--------- ---------
Total long-term liabilities $ 520,214 $ 668,211
F-34
PARTNERS' CAPITAL (DEFICIT):
General Partner ($ 263,673) ($ 197,010)
Limited Partners, issued and
outstanding, 418,266 Units 2,748,000 3,918,651
--------- ---------
Total Partners' capital $2,484,327 $3,721,641
--------- ---------
$3,578,014 $4,755,246
========= =========
The accompanying notes are an integral part of these
financial statements.
F-35
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-E
Statements of Operations
For the Years Ended December 31, 2006, 2005, and 2004
2006 2005 2004
---------- ---------- ------------
REVENUES:
Oil and gas sales $4,171,717 $5,717,490 $4,403,251
Interest income 41,309 24,217 10,677
Other income 10,740 - -
--------- --------- ---------
$4,223,766 $5,741,707 $4,413,928
COSTS AND EXPENSES:
Lease operating $1,101,862 $1,030,177 $ 920,005
Production tax 294,232 391,356 352,789
Depreciation, depletion,
and amortization of oil
and gas properties 243,785 319,317 190,924
Impairment provision 61,448 - -
General and administrative 487,650 489,834 488,702
--------- --------- ---------
$2,188,977 $2,230,684 $1,952,420
--------- --------- ---------
INCOME FROM CONTINUING
OPERATIONS $2,034,789 $3,511,023 $2,461,508
DISCONTINUED OPERATIONS:
Income (loss) from
discontinued operations
(Note 6) 176,993 192,323 ( 549,606)
Gain on disposal of
discontinued operations
(Note 6) 103,851 - 88,757
--------- --------- ---------
NET INCOME $2,315,633 $3,703,346 $2,000,659
========= ========= =========
GENERAL PARTNER:
Net income from
continuing operations $ 226,819 $ 377,419 $ 262,266
Net income (loss) from
discontinued operations 44,465 21,053 ( 43,851)
--------- --------- ---------
NET INCOME $ 271,284 $ 398,472 $ 218,415
========= ========= =========
LIMITED PARTNERS:
Net income from
continuing operations $1,807,970 $3,133,604 $2,199,242
Net income (loss) from
discontinued operations 236,379 171,270 ( 416,998)
--------- --------- ---------
NET INCOME $2,044,349 $3,304,874 $1,782,244
========= ========= =========
F-36
NET INCOME FROM CONTINUING
OPERATIONS PER UNIT $ 4.32 $ 7.49 $ 5.26
NET INCOME (LOSS) FROM
DISCONTINUED OPERATIONS
PER UNIT .57 .41 ( 1.00)
--------- --------- ---------
NET INCOME PER UNIT $ 4.89 $ 7.90 $ 4.26
========= ========= =========
UNITS OUTSTANDING 418,266 418,266 418,266
========= ========= =========
The accompanying notes are an integral part of these
financial statements.
F-37
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-E
Statements of Partners' Capital (Deficit)
For the Years Ended December 31, 2006, 2005, and 2004
Limited General
Partners Partner Total
------------ ---------- ------------
Balance, Dec. 31, 2003 $4,302,533 ($177,234) $4,125,299
Net income 1,782,244 218,415 2,000,659
Cash distributions ( 2,807,000) ( 357,239) ( 3,164,239)
--------- ------- ---------
Balance, Dec. 31, 2004 $3,277,777 ($316,058) $2,961,719
Net income 3,304,874 398,472 3,703,346
Cash distributions ( 2,664,000) ( 279,424) ( 2,943,424)
--------- ------- ---------
Balance, Dec. 31, 2005 $3,918,651 ($197,010) $3,721,641
Net income 2,044,349 271,284 2,315,633
Cash distributions ( 3,215,000) ( 337,947) ( 3,552,947)
--------- ------- ---------
Balance, Dec. 31, 2006 $2,748,000 ($263,673) $2,484,327
========= ======= =========
The accompanying notes are an integral part of these
financial statements.
F-38
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-E
Statements of Cash Flows
For the Years Ended December 31, 2006, 2005, and 2004
2006 2005 2004
------------ ------------ ------------
CASH FLOWS FROM OPERATING
ACTIVITIES:
Net income $2,315,633 $3,703,346 $2,000,659
Adjustments to reconcile
net income to net cash
provided by operating
activities:
Depreciation, depletion,
and amortization of oil
and gas properties 263,444 339,544 215,745
Impairment provision 223,793 - -
Gain on disposal of
discontinued operations
(Note 6) ( 103,851) - ( 88,757)
Settlement of asset
retirement obligation - ( 345) ( 319)
(Increase) decrease in
accounts receivable -
oil and gas sales 491,664 ( 423,171) 237,935
Increase in accounts
receivable - other ( 191,092) - -
Decrease in deferred charge 8,312 8,724 718
Increase (decrease) in
accounts payable 73,300 ( 500,913) 342,489
Increase in accrued
liability - other (Note 1) 105,000 - -
Increase in gas imbalance
payable 5,332 10,895 2,907
Decrease in accrued
liability ( 85,006) ( 47,174) ( 41,237)
--------- --------- ---------
Net cash provided by
operating activities $3,106,529 $3,090,906 $2,670,140
--------- --------- ---------
CASH FLOWS FROM INVESTING
ACTIVITIES:
Capital expenditures ($ 140,531) ($ 100,420) ($ 237,849)
Proceeds from disposal of
discontinued operations
(Note 6) 107,714 - 632,221
--------- --------- ---------
Net cash provided (used)
by investing activities ($ 32,817) ($ 100,420) $ 394,372
--------- --------- ---------
F-39
CASH FLOWS FROM FINANCING
ACTIVITIES:
Cash distributions ($3,552,947) ($2,943,424) ($3,164,239)
--------- --------- ---------
Net cash used by
financing activities ($3,552,947) ($2,943,424) ($3,164,239)
--------- --------- ---------
NET INCREASE (DECREASE) IN
CASH AND CASH EQUIVALENTS ($ 479,235) $ 47,062 ($ 99,727)
CASH AND CASH EQUIVALENTS
AT BEGINNING OF PERIOD 1,460,559 1,413,497 1,513,224
--------- --------- ---------
CASH AND CASH EQUIVALENTS
AT END OF PERIOD $ 981,324 $1,460,559 $1,413,497
========= ========= =========
The accompanying notes are an integral part of these
financial statements.
F-40
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
TO THE PARTNERS
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-F
In our opinion, the accompanying balance sheets and the related statements
of operations, changes in partners' capital (deficit) and cash flows present
fairly, in all material respects, the financial position of the Geodyne Energy
Income Limited Partnership III-F, an Oklahoma limited partnership, at December
31, 2006 and 2005, and the results of its operations and its 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 Partnership's 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 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-41
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-F
Balance Sheets
December 31, 2006 and 2005
ASSETS
------
2006 2005
---------- ----------
CURRENT ASSETS:
Cash and cash equivalents $ 697,184 $1,062,866
Accounts receivable:
Oil and gas sales 452,134 797,469
Assets held for sale (Note 6) 205,453 -
--------- ---------
Total current assets $1,354,771 $1,860,335
NET OIL AND GAS PROPERTIES,
utilizing the successful
efforts method 1,381,325 1,680,470
DEFERRED CHARGE 13,909 17,132
--------- ---------
$2,750,005 $3,557,937
========= =========
LIABILITIES AND PARTNERS' CAPITAL (DEFICIT)
-------------------------------------------
CURRENT LIABILITIES:
Accounts payable $ 136,660 $ 176,398
Accrued liability - other
(Note 1) 90,000 -
Gas imbalance payable 18,329 13,857
Asset retirement obligation -
current (Note 1) 11,729 1,948
Asset retirement obligation -
held for sale 33,931 -
Liabilities - held for sale
(Note 6) 24,291 -
--------- ---------
Total current liabilities $ 314,940 $ 192,203
LONG-TERM LIABILITIES:
Accrued liability $ 68,572 $ 84,584
Asset retirement obligation
(Note 1) 243,724 276,256
--------- ---------
Total long-term liabilities $ 312,296 $ 360,840
F-42
PARTNERS' CAPITAL (DEFICIT):
General Partner ($ 126,790) ($ 126,897)
Limited Partners, issued and
outstanding, 221,484 Units 2,249,559 3,131,791
--------- ---------
Total Partners' capital $2,122,769 $3,004,894
--------- ---------
$2,750,005 $3,557,937
========= =========
The accompanying notes are an integral part of these
financial statements.
F-43
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-F
Statements of Operations
For the Years Ended December 31, 2006, 2005, and 2004
2006 2005 2004
---------- ---------- ----------
REVENUES:
Oil and gas sales $2,392,448 $3,289,188 $2,475,266
Interest income 27,194 15,044 3,841
Other income 9,018 - -
--------- --------- ---------
$2,428,660 $3,304,232 $2,479,107
COSTS AND EXPENSES:
Lease operating $ 668,407 $ 532,795 $ 497,819
Production tax 155,397 198,937 148,744
Depreciation, depletion,
and amortization of oil
and gas properties 182,891 193,331 151,884
Impairment provision 55,288 - -
General and administrative 270,274 273,110 266,912
--------- --------- ---------
$1,332,257 $1,198,173 $1,065,359
--------- --------- ---------
INCOME FROM CONTINUING
OPERATIONS $1,096,403 $2,106,059 $1,413,748
DISCONTINUED OPERATIONS:
Income from discontinued
operations (Note 6) 477,135 458,357 376,474
Gain on disposal of
discontinued operations
(Note 6) 86,913 - -
--------- --------- ---------
NET INCOME $1,660,451 $2,564,416 $1,790,222
========= ========= =========
GENERAL PARTNER:
Net income from
continuing operations $ 128,357 $ 112,284 $ 76,571
Net income from discontinued
operations 58,326 23,496 19,218
--------- --------- ---------
NET INCOME $ 186,683 $ 135,780 $ 95,789
========= ========= =========
LIMITED PARTNERS:
Net income from
continuing operations $ 968,046 $1,993,775 $1,337,177
Net income from discontinued
operations 505,722 434,861 357,256
--------- --------- ---------
NET INCOME $1,473,768 $2,428,636 $1,694,433
========= ========= =========
F-44
NET INCOME FROM CONTINUING
OPERATIONS PER UNIT $ 4.37 $ 9.00 $ 6.04
NET INCOME FROM DISCONTINUED
OPERATIONS PER UNIT 2.28 1.96 1.61
--------- --------- ---------
NET INCOME PER UNIT $ 6.65 $ 10.96 $ 7.65
========= ========= =========
UNITS OUTSTANDING 221,484 221,484 221,484
========= ========= =========
The accompanying notes are an integral part of these
financial statements.
F-45
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-F
Statements of Partners' Capital (Deficit)
For the Years Ended December 31, 2006, 2005, and 2004
Limited General
Partners Partner Total
------------ ---------- ------------
Balance, Dec. 31, 2003 $2,374,722 ($156,356) $2,218,366
Net income 1,694,433 95,789 1,790,222
Cash distributions ( 1,286,000) ( 81,488) ( 1,367,488)
--------- ------- ---------
Balance, Dec. 31, 2004 $2,783,155 ($142,055) $2,641,100
Net income 2,428,636 135,780 2,564,416
Cash distributions ( 2,080,000) ( 120,622) ( 2,200,622)
--------- ------- ---------
Balance, Dec. 31, 2005 $3,131,791 ($126,897) $3,004,894
Net income 1,473,768 186,683 1,660,451
Cash distributions ( 2,356,000) ( 186,576) ( 2,542,576)
--------- ------- ---------
Balance, Dec. 31, 2006 $2,249,559 ($126,790) $2,122,769
========= ======= =========
The accompanying notes are an integral part of these
financial statements.
F-46
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-F
Statements of Cash Flows
For the Years Ended December 31, 2006, 2005, and 2004
2006 2005 2004
------------ ------------ ------------
CASH FLOWS FROM OPERATING
ACTIVITIES:
Net income $1,660,451 $2,564,416 $1,790,222
Adjustments to reconcile
net income to net cash
provided by operating
activities:
Depreciation, depletion,
and amortization of oil
and gas properties 193,266 207,776 161,752
Impairment provision 66,259 - -
Gain on disposal of
discontinued operations
(Note 6) ( 86,913) - -
Settlement of asset
retirement obligation ( 1,590) - -
(Increase) decrease in
accounts receivable -
oil and gas sales 258,051 ( 249,464) ( 195,540)
Decrease in deferred charge 3,223 4,815 290
Increase (decrease) in
accounts payable ( 12,450) 84,991 ( 12,362)
Increase in accrued
liability - other (Note 1) 90,000 - -
Increase in gas
imbalance payable 4,472 9,136 2,426
Decrease in
accrued liability ( 16,012) ( 21,293) ( 25,891)
--------- --------- ---------
Net cash provided by
operating activities $2,158,757 $2,600,377 $1,720,897
--------- --------- ---------
CASH FLOWS FROM INVESTING
ACTIVITIES:
Capital expenditures ($ 72,314) ($ 33,349) ($ 180,521)
Proceeds from sale of oil
and gas properties - - 1,654
Proceeds from disposal of
discontinued operations
(Note 6) 90,451 - -
--------- --------- ---------
Net cash provided (used)
by investing activities $ 18,137 ($ 33,349) ($ 178,867)
--------- --------- ---------
F-47
CASH FLOWS FROM FINANCING
ACTIVITIES:
Cash distributions ($2,542,576) ($2,200,622) ($1,367,488)
--------- --------- ---------
Net cash used by
financing activities ($2,542,576) ($2,200,622) ($1,367,488)
--------- --------- ---------
NET INCREASE (DECREASE) IN
CASH AND CASH EQUIVALENTS ($ 365,682) $ 366,406 $ 174,542
CASH AND CASH EQUIVALENTS
AT BEGINNING OF PERIOD 1,062,866 696,460 521,918
--------- --------- ---------
CASH AND CASH EQUIVALENTS
AT END OF PERIOD $ 697,184 $1,062,866 $ 696,460
========= ========= =========
The accompanying notes are an integral part of these
financial statements.
F-48
GEODYNE ENERGY INCOME PROGRAM III LIMITED PARTNERSHIPS
Notes to Financial Statements
For the Years Ended December 31, 2006, 2005, and 2004
1. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Organization and Nature of Operations
The Geodyne Energy Income Limited Partnerships (the "Partnerships") were
formed pursuant to a public offering of depositary units ("Units"). Upon
formation, investors became limited partners (the "Limited Partners") and held
Units issued by each Partnership. Geodyne Resources, Inc. (the "General
Partner") is the general partner of each Partnership. Limited Partner capital
contributions were invested in producing oil and gas properties. The
Partnerships were activated on the following dates with the following Limited
Partner capital contributions.
Limited Partner
Date of Capital
Partnership Activation Contributions
----------- ------------------ ---------------
III-A November 22, 1989 $26,397,600
III-B January 24, 1990 13,833,600
III-C February 27, 1990 24,453,600
III-D September 5, 1990 13,100,800
III-E December 26, 1990 41,826,600
III-F March 7, 1991 22,148,400
Pursuant to the terms of the partnership agreements for the Partnerships
(the "Partnership Agreements") the Partnerships were scheduled to terminate on
the dates indicated in the "Initial Termination Date" column of the following
chart. However, the Partnership Agreements provide that the General Partner may
extend the term of each Partnership for up to five periods of two years each.
The General Partner has extended the term of the Partnerships for the fourth
extension period. On February 5, 2007 the General Partner mailed a notice to the
limited partners indicating that the Partnerships will terminate at the end of
their current term as indicated in the following chart. See Note 7 for more
information regarding the Partnership terminations. These audited financial
statements are presented on a going concern basis.
Initial Extensions Current
Partnership Termination Date Exercised Termination Date
- ----------- ------------------ --------- ------------------
III-A November 22, 1999 4 November 22, 2007
III-B January 24, 2000 4 December 31, 2007
III-C February 28, 2000 4 December 31, 2007
III-D September 5, 2000 4 December 31, 2007
III-E December 26, 2000 4 December 31, 2007
III-F March 7, 2001 4 December 31, 2007
F-49
An affiliate of the General Partner owned the following Units at
December 31, 2006:
Number of Percent of
Partnership Units Owned Outstanding
----------- ----------- -----------
III-A 70,627 26.75%
III-B 34,757 25.13%
III-C 71,481 29.23%
III-D 39,759 30.35%
III-E 127,037 30.37%
III-F 70,228 31.71%
The Partnerships' sole business is the development and production of oil
and gas. Substantially all of the Partnerships' gas production is being sold
regionally on the "spot market." Due to the highly competitive nature of the
spot market, prices on the spot market are subject to wide seasonal and regional
pricing fluctuations. In addition, such spot market sales are generally short
term in nature and are dependent upon obtaining transportation services provided
by pipelines. The Partnerships' oil is sold at or near the Partnerships' wells
under short-term purchase contracts at prevailing arrangements which are
customary in the oil industry. The prices received for the Partnerships' oil and
gas are subject to influences such as global consumption and supply trends.
Basis of Presentation
These financial statements are presented on a going concern basis.
Allocation of Costs and Revenues
The terms of each Partnership's Limited Partnership Agreement (the
"Partnership Agreement") allocate costs and income between the Limited Partners
and the General Partner as follows:
F-50
Before Payout (1) After Payout(1)
------------------ ------------------
General Limited General Limited
Partner Partners Partner Partners
-------- -------- -------- --------
Costs(2)
- ------------------------
Sales commissions, payment
for organization and
offering costs and
management fee 1% 99% - -
Property acquisition
costs 1% 99% 1% 99%
Identified development
drilling 1% 99% 1% 99%
Development drilling(2) 5% 95% 15% 85%
General and administra-
tive costs, direct
administrative costs
and operating costs(2) 5% 95% 15% 85%
Income(2)
- ------------------------
Temporary investments of
Limited Partners'
subscriptions 1% 99% 1% 99%
Income from oil and gas
production(2) 5% 95% 15% 85%
Gain on sale of
producing properties(2) 5% 95% 15% 85%
All other income(2) 5% 95% 15% 85%
- ----------
(1) Payout occurs when total distributions to Limited Partners equal total
original Limited Partner subscriptions.
(2) If at payout the Limited Partners have received distributions at an annual
rate less than 12% of their subscriptions, the percentage of income and
costs allocated to the General Partner will increase to only 10% and the
Limited Partners will be allocated 90%. Thereafter, if the distribution to
Limited Partners reaches an average annual rate of 12% the allocation will
change to 15% to the General Partner and 85% to the Limited Partners.
The Partnerships' payout dates and current general partner/limited partner
sharing ratio of costs and income are shown on the following chart:
F-51
Current
Payout Costs and Income
Partnership Occurred Sharing
----------- ------------- ----------------
III-A 2nd Qtr. 2000 10%/90%
III-B 1st Qtr. 1998 15%/85%
III-C 4th Qtr. 2001 10%/90%
III-D 3rd Qtr. 2001 10%/90%
III-E 3rd Qtr. 2001 10%/90%
III-F 1st Qtr. 2006 10%/90%
Cash and Cash Equivalents
The Partnerships consider all highly liquid investments with a maturity of
three months or less when purchased to be cash equivalents. Cash equivalents are
not insured, which cause the Partnerships to be subject to risk.
Credit Risks
Accrued oil and gas sales which are due from a variety of oil and gas
purchasers subject the Partnerships to a concentration of credit risk. Some of
these purchasers are discussed in Note 3 - Major Customers.
Oil and Gas Properties
The Partnerships follow the successful efforts method of accounting for
their oil and gas properties. Under the successful efforts method, the
Partnerships capitalize all property acquisition costs and development costs
incurred in connection with the further development of oil and gas reserves.
Property acquisition costs include costs incurred by the Partnerships or the
General Partner to acquire producing properties, including related title
insurance or examination costs, commissions, engineering, legal and accounting
fees, and similar costs directly related to the acquisitions, plus an allocated
portion of the General Partner's property screening costs. The acquisition cost
to the Partnerships of properties acquired by the General Partner is adjusted to
reflect the net cash results of operations, including interest incurred to
finance the acquisition, for the period of time the properties are held by the
General Partner.
Depletion of the costs of producing oil and gas properties, amortization
of related intangible drilling and development costs, and depreciation of
tangible lease and well equipment are computed on the units-of-production
method. The Partnerships' calculation of depreciation, depletion, and
amortization includes
F-52
estimated dismantlement and abandonment costs, net of estimated salvage values.
The depreciation, depletion, and amortization rates, which include accretion of
the asset retirement obligation, per equivalent barrel of oil produced during
the years ended December 31, 2006, 2005, and 2004 were as follows:
Partnership 2006 2005(1) 2004(1)
----------- ----- ------- -------
III-A $1.83 $1.80 $1.48
III-B 1.52 1.91 1.72
III-C 4.60 2.43 4.46
III-D 5.26 2.11 1.68
III-E 2.30 2.48 1.41
III-F 3.05 2.66 1.99
(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.
When complete units of depreciable property are retired or sold, the asset
cost, related accumulated depreciation, and remaining asset retirement
obligation, are eliminated with any gain or loss reflected in income.
The Partnerships evaluate the recoverability of the carrying costs of
their proved oil and gas properties for each oil and gas well. If the
unamortized costs, net of salvage value, of oil and gas properties exceed the
expected undiscounted future cash flows from such properties, the cost of the
properties is written down to fair value, which is determined by using the
discounted future cash flows from the properties. 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 $6,000, $4,000, $77,000, $13,000,
$61,000, and $55,000 for the III-A, III-B, III-C, III-D, III-E and III-F
Partnerships, respectively. Once incurred, an impairment of oil and natural gas
properties is not reversible.
Deferred Charge
Deferred Charge represents costs deferred for lease operating expenses
incurred in connection with the Partnerships' underproduced gas imbalance
positions. The rate used in calculating the deferred charge is the average of
the annual production costs per Mcf. At December 31, 2006 and 2005, cumulative
total gas sales volumes for underproduced wells were
F-53
less than the Partnerships' pro-rata share of total gas production from these
wells by the following amounts:
2006 2005
------------------ ------------------
Partnership Mcf Amount Mcf Amount
----------- ------- -------- ------- --------
III-A 211,417 $184,941 217,477 $190,240
III-B 108,144 122,514 110,907 125,644
III-C 83,559 56,549 92,496 62,603
III-D 11,416 14,055 12,461 15,342
III-E 14,941 29,450 20,422 40,254
III-F 12,590 13,909 15,507 17,132
Accrued Liability - Other
The Accrued Liability - Other at December 31, 2006 for the III-E and III-F
Partnerships represents a charge accrued for a potential liability to the U.S.
Minerals Management Service ("MMS"). On August 4, 1998 the MMS issued an Order
for an affiliate of the General Partner to recalculate and pay additional
royalties to the MMS for various Federal and Indian leases in several states. A
number of these Federal and Indian royalty interests burden the interests of the
Partnerships. The affiliate appealed the Order and on October 22, 2004 the
Department of the Interior issued its decision which granted the appeal in part
and denied the appeal in part. While the Department's decision did not approve
the recalculation methodology originally ordered by the MMS, the decision still
required the affiliate to recalculate and pay additional royalties but under a
different recalculation methodology than sought by the MMS.
The affiliate paid additional royalties to the MMS on August 23, 2006
pursuant to the Department's decision. The MMS has informally indicated its
disagreement with certain aspects of the recalculation. As of the date of these
financial statements, the affiliate cannot determine the amount of additional
royalties (and interest) which may be claimed by or ultimately owed to the MMS.
While the affiliate maintains that no additional royalties are owed, the General
Partner has accrued $105,000 and $90,000, respectively, for the III-E and III-F
Partnerships, as reasonable estimates of amounts which may become ultimately
owed to the MMS.
Accrued Liability
Accrued liability represents charges accrued for lease operating expenses
incurred in connection with the Partnerships' overproduced gas imbalance
positions. The rate used in calculating the accrued liability is the average of
the annual production costs per Mcf. At December 31, 2006 and 2005,
F-54
cumulative total gas sales volumes for overproduced wells exceeded the
Partnerships' pro-rata share of total gas production from these wells by the
following amounts:
2006 2005
------------------ ------------------
Partnership Mcf Amount Mcf Amount
----------- ------- -------- ------- --------
III-A 33,537 $ 31,040 31,198 $ 27,120
III-B 7,234 8,001 8,738 9,664
III-C 202,862 123,503 204,788 124,681
III-D 151,177 154,492 150,673 153,747
III-E 79,808 157,310 129,075 254,420
III-F 62,068 68,572 76,561 84,584
Oil and Gas Sales and Gas Imbalance Payable
The Partnerships' oil and condensate production is sold, title passed, and
revenue recognized at or near the Partnerships' wells under short-term purchase
contracts at prevailing prices in accordance with arrangements which are
customary in the oil and gas industry. Sales of gas applicable to the
Partnerships' interest in producing oil and gas leases are recorded as revenue
when the gas is metered and title transferred pursuant to the gas sales
contracts covering the Partnerships' interest in gas reserves. During such times
as a Partnership's sales of gas exceed its pro rata ownership in a well, such
sales are recorded as revenue unless total sales from the well have exceeded the
Partnership's share of estimated total gas reserves underlying the property, at
which time such excess is recorded as a liability. The rates per Mcf used to
calculate this liability are based on the average gas prices for which the
Partnerships are currently settling this liability. At December 31, 2006 and
2005 total sales exceeded the Partnerships' share of estimated total gas
reserves as follows:
2006 2005
----------------- -----------------
Partnership Mcf Amount Mcf Amount
----------- ------ ------- ------ -------
III-A 14,418 $21,627 11,773 $17,660
III-B 8,237 12,356 6,471 9,707
III-C 18,278 27,417 52,079 76,928
III-D 3,816 5,724 28,742 42,943
III-E 14,580 21,870 11,025 16,538
III-F 12,219 18,329 9,238 13,857
These amounts were recorded as gas imbalance payables in accordance with the
sales method. These gas imbalance payables will be settled by either gas
production by the underproduced party in excess of the current estimates of
total gas reserves
F-55
for the well or by a negotiated or contractual payment to the underproduced
party.
The Partnerships have not entered into any hedging or derivative contracts
in connection with their production and sale of oil and gas.
General and Administrative Overhead
The General Partner and its affiliates are reimbursed for actual general
and administrative costs incurred and attributable to the conduct of the
business affairs and operations of the Partnerships.
Use of Estimates in Financial Statements
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates. Further, the
deferred charge, the gas imbalance payable, the asset retirement obligations,
accrued liability-other, and the accrued liability all involve estimates which
could materially differ from the actual amounts ultimately realized or incurred
in the near term. Oil and gas reserves (see Note 4) also involve significant
estimates which could materially differ from the actual amounts ultimately
realized.
Legal Contingency
A class action lawsuit styled Robert W. Scott, individually and as
Managing Member of R.W. Scott Investments, LLC v. Samson Resources Company, Case
No. C-01-385, was filed in the District Court of Sweetwater County, Wyoming on
June 29, 2001. Samson Resources Company ("Samson") is an affiliate of the
General Partner and operates certain wells in which the Partnerships own
interests. The lawsuit alleges that Samson deducted from its payments to royalty
and overriding royalty owners certain charges which were improper under the
Wyoming royalty payment statutes and also alleges that Samson's check stubs did
not fully comply with the Wyoming Royalty Payment Act. A number of these royalty
and overriding royalty payments burden the interests of the III-A, III-B, III-E,
and III-F Partnerships. Samson and the plaintiffs have reached agreement to
settle all of the plaintiffs' remaining claims in this lawsuit, and Samson
expects a formal settlement agreement to be executed during April 2007. The
settlement calls for an additional royalty payment of $1,000,000, and is subject
to Court approval. The Plaintiffs' counsel, subject to Court approval, is
responsible for determining the allocation of the $1,000,000 among the various
class members after deduction of litigation costs and attorneys' fees.
F-56
The method of allocation selected by the Plantiffs' counsel and approved by the
Court will determine the allocation of the settlement amount among Samson's
Wyoming gas wells. This allocation is necessary in order to determine the
portion of the settlement for which each Partnership is responsible.
Consequently, until the allocation among the class members is received from the
Plantiffs' counsel and approved by the Court, the General Partner cannot
determine the portion of the settlement for which each Partnership will be
responsible. Therefore, there have been no amounts accrued as of December 31,
2006.
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.
The components of the change in asset retirement obligations for the years
ended December 31, 2006 and 2005 are as shown below.
F-57
III-A Partnership
-----------------
2006 2005
---------- --------
Total Asset Retirement
Obligation, January 1 $285,256 $114,955
Additions 262 -
Revisions - 157,334
Settlements and disposals ( 14,158) -
Accretion expense 13,607 12,967
Discontinued operations ( 3,870) -
------- -------
Total Asset Retirement
Obligation, December 31 $281,097 $285,256
======= =======
Asset Retirement Obligation -
Current $ 10,086 $ 14,606
Asset Retirement Obligation -
Long-Term 271,011 270,650
III-B Partnership
-----------------
2006 2005
---------- --------
Total Asset Retirement
Obligation, January 1 $184,613 $ 79,865
Additions 111 -
Revisions - 96,512
Settlements and disposals ( 5,974) -
Accretion expense 8,629 8,236
------- -------
Total Asset Retirement
Obligation, December 31 $187,379 $184,613
======= =======
Asset Retirement Obligation -
Current $ 5,552 $ 9,255
Asset Retirement Obligation -
Long-Term 181,827 175,358
F-58
III-C Partnership
-----------------
2006 2005
---------- --------
Total Asset Retirement
Obligation, January 1 $375,230 $204,672
Additions 455 1,809
Revisions - 152,220
Settlements and disposals ( 2,596) -
Accretion expense 17,424 16,529
Discontinued operations ( 291) -
------- -------
Total Asset Retirement
Obligation, December 31 $390,222 $375,230
======= =======
Asset Retirement Obligation -
Current $ 24,559 $ 19,679
Asset Retirement Obligation -
Long-Term 365,663 355,551
III-D Partnership
-----------------
2006 2005
---------- ----------
Total Asset Retirement
Obligation, January 1 $204,098 $109,182
Additions 60 592
Revisions - 85,391
Settlements and disposals ( 2,732) -
Accretion expense 9,286 8,933
Discontinued operations ( 31) -
------- -------
Total Asset Retirement
Obligation, December 31 $210,681 $204,098
======= =======
Asset Retirement Obligation -
Current $ 16,323 $ 17,420
Asset Retirement Obligation -
Long-Term 194,358 186,678
F-59
III-E Partnership
-----------------
2006 2005
---------- ----------
Total Asset Retirement
Obligation, January 1 $437,762 $217,175
Additions - 750
Revisions - 205,703
Settlements and disposals ( 416) ( 5,091)
Accretion expense 20,140 19,225
Discontinued operations ( 31,202) -
------- -------
Total Asset Retirement
Obligation, December 31 $426,284 $437,762
======= =======
Asset Retirement Obligation -
Current $ 63,380 $ 23,971
Asset Retirement Obligation -
Long-Term 362,904 413,791
III-F Partnership
-----------------
2006 2005
---------- --------
Total Asset Retirement
Obligation, January 1 $278,204 $150,199
Settlements and disposals ( 2,559) -
Revisions - 114,910
Accretion expense 13,739 13,095
Discontinued operations ( 33,931) -
------- -------
Total Asset Retirement
Obligation, December 31 $255,453 $278,204
======= =======
Asset Retirement Obligation -
Current $ 11,729 $ 1,948
Asset Retirement Obligation -
Long-Term 243,724 276,256
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
F-60
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 6, the Partnerships sold their interests in a
number of producing properties to independent third parties at the Oil and Gas
Clearinghouse auction in Houston, Texas on December 13, 2006. Additional
properties will be sold at auction in 2007. The properties sold in the December
auction, those scheduled to be sold in 2007 auctions, and the sale of the Jay
Field 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
accrue any depreciation, depletion, or amortization expense.
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 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 General Partner believes this allocation
method is reasonable. Although the actual costs incurred by the General Partner
and its affiliates have fluctuated during the three years presented, the amounts
charged to the Partnerships have not fluctuated due to the expense limitations
imposed by the Partnership Agreement. The following is a summary of payments
made to the General Partner or its affiliates by the Partnerships for general
and administrative overhead costs for the years ended December 31, 2006, 2005,
and 2004:
F-61
Partnership 2006 2005 2004
----------- -------- -------- --------
III-A $277,872 $277,872 $277,872
III-B 145,620 145,620 145,620
III-C 257,412 257,412 257,412
III-D 137,904 137,904 137,904
III-E 440,280 440,280 440,280
III-F 233,136 233,136 233,136
Affiliates of the Partnerships 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
the year ended December 31, 2006 is approximately $14,000, $4,000, $116,000,
$72,000, $104,000, and $49,000, respectively, for the III-A, III-B, III-C,
III-D, III-E and III-F Partnerships.
F-62
3. MAJOR CUSTOMERS
The following table sets forth purchasers who individually accounted for
ten percent or more of each Partnership's combined oil and gas sales during
2006, 2005, and 2004:
Partnership Purchaser Percentage
----------- ------------------------ -----------------------
2006 2005 2004
----- ----- -----
III-A ConocoPhillips Company
("ConocoPhillips") 34.6% 29.7% -
Gulfterra Central Point
Allocation
("Gulfterra") 19.7% 23.2% 12.2%
Eaglwing Trading, Inc.
("Eaglwing") - - 26.9%
III-B ConocoPhillips 42.7% 37.6% -
Gulfterra 17.2% 20.8% 11.0%
Eaglwing - - 33.8%
III-C Duke Energy Field
Services, Inc. ("Duke") 15.3% 16.9% 18.3%
NGPL Allocation 11.0% - -
ONEOK Texas Energy
Resources ("ONEOK") - 19.1% 13.4%
Cinergy Marketing Company
("Cinergy") - 10.4% 14.5%
Enogex Services
Corporation - 10.3% 11.5%
ONEOK Field Services
Company ("ONEOK FSC") - - 13.3%
III-D NGPL Allocation 15.8% - -
Eaglwing 12.6% - 16.2%
Duke 12.2% 13.8% 14.1%
Enbridge US Inc.-Texas 10.8% - -
Eagle Rock Field
Services, LP 10.1% - -
ONEOK - 28.3% 18.0%
Cinergy - 14.9% 19.1%
ONEOK FSC - - 10.8%
F-63
III-E Duke 20.3% 18.2% 15.1%
Sempra Energy Trading
Corp. ("Sempra") 16.2% 16.2% 11.6%
Red Desert Central
Point Allocation
("Red Desert") 14.4% 17.5% -
Hunt Crude Oil Supply
Company 13.8% 13.9% 10.4%
Kinder Morgan, Inc. 10.1% - -
Eaglwing - - 24.4%
Mountain Gas Resources,
Inc. ("Mountain") - - 13.5%
III-F Sempra 19.9% 20.4% 19.8%
Eaglwing 18.8% 17.0% 18.4%
Red Desert 17.7% 21.9% -
Duke 15.4% 14.1% 14.7%
Mountain - - 23.1%
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 the Partnerships' pipeline transporters, the
Partnerships may encounter difficulty in marketing their gas and in maintaining
historic sales levels. Alternative purchasers or transporters may not be readily
available.
4. SUPPLEMENTAL OIL AND GAS INFORMATION
The following supplemental information regarding the oil and gas
activities of the Partnerships is presented pursuant to the disclosure
requirements promulgated by the SEC.
Capitalized Costs
Capitalized costs and accumulated depreciation, depletion, amortization,
and valuation allowance at December 31, 2006 and 2005 were as follows:
F-64
III-A Partnership
-----------------
2006 2005
------------- -------------
Proved properties $15,158,202 $15,679,530
Less accumulated
depreciation, depletion,
amortization, and valuation
allowance ( 14,569,557) ( 14,904,139)
---------- ----------
Net oil and gas
properties $ 588,645 $ 775,391
========== ==========
III-B Partnership
-----------------
2006 2005
------------- -------------
Proved properties $ 9,202,445 $ 9,378,899
Less accumulated
depreciation, depletion,
amortization, and valuation
allowance ( 8,852,594) ( 8,964,606)
---------- ----------
Net oil and gas
properties $ 349,851 $ 414,293
========== ==========
III-C Partnership
-----------------
2006 2005
------------- -------------
Proved properties $18,429,188 $17,887,094
Less accumulated
depreciation, depletion,
amortization, and valuation
allowance ( 16,794,203) ( 16,342,383)
---------- ----------
Net oil and gas
properties $ 1,634,985 $ 1,544,711
========== ==========
F-65
III-D Partnership
-----------------
2006 2005
------------- -------------
Proved properties $ 9,904,907 $ 9,388,350
Less accumulated
depreciation, depletion,
amortization, and valuation
allowance ( 9,108,347) ( 8,736,889)
---------- ----------
Net oil and gas
properties $ 796,560 $ 651,461
========== ==========
III-E Partnership
-----------------
2006 2005
------------- -------------
Proved properties $20,617,856 $21,182,856
Less accumulated
depreciation, depletion,
amortization, and valuation
allowance ( 19,025,490) ( 19,201,348)
---------- ----------
Net oil and gas
properties $ 1,592,366 $ 1,981,508
========== ==========
III-F Partnership
-----------------
2006 2005
------------- -------------
Proved properties $12,842,078 $14,020,664
Less accumulated
depreciation, depletion,
amortization, and valuation
allowance ( 11,460,753) ( 12,340,194)
---------- ----------
Net oil and gas
properties $ 1,381,325 $ 1,680,470
========== ==========
F-66
Costs Incurred
The Partnerships incurred no costs in connection with oil and gas
acquisition or exploration activities during the years ended December 31, 2006,
2005, and 2004. Costs incurred by the Partnerships in connection with oil and
gas property development activities for the years ended December 31, 2006, 2005,
and 2004 were as follows:
Partnership 2006 2005(1) 2004
----------- -------- -------- --------
III-A $ - $ 16,822 $ 78,142
III-B 10,581 2,903 52,376
III-C 680,951 127,299 217,479
III-D 525,931 85,828 27,306
III-E 82,263 158,067 245,429
III-F 69,317 32,310 188,433
----------------
(1) Excludes the estimated asset retirement costs for the III-A,
III-B, III-C, III-D, III-E, and III-F Partnerships of
approximately $157,000, $97,000, $152,000, $85,000, $206,000,
and $115,000, respectively, recorded as a revision in FAS No.
143 during 2005 due to an increase in both the labor and rig
costs associated with plugging wells.
Quantities of Proved Oil and Gas Reserves - Unaudited
The following tables summarize changes in net quantities of the
Partnerships' proved reserves, all of which are located in the United States of
America, for the periods indicated. The proved reserves at December 31, 2006,
2005, and 2004 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
volumes to differ from the reserve reports prepared by the General Partner and
reviewed by Ryder Scott.
F-67
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 III-A, III-C, and
III-D Partnerships had an increase in gas reserves due to revised forecasts on
several properties based on actual production experience. The III-F Partnership
had an increase in gas reserves on one material property, which is discussed
below.
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 III-A and III-B Partnerships' estimated proved oil
reserves increased approximately 26,000 barrels and 17,000 barrels,
respectively, in the Amoco Fee #3 due to a revised forecast in
reserves based on actual production experience.
In addition, the III-B Partnership's estimated proved oil
reserves increased approximately 7,000 barrels in the F. H. Gray
Unit D due to a revised forecast in reserves based on actual
production experience.
The III-E Partnership's estimated proved oil reserves
decreased approximately 19,000 barrels in the Womack Hill Field Unit
due to a revised forecast in reserves based on actual production
experience and an increase in monthly lease operating expenses.
The III-F Partnership's estimated proved gas reserves
decreased approximately 110,000 Mcf and 49,000 Mcf on the Trail Unit
and Gray #1-9, respectively, due to a steeper decline rate resulting
in a shorter reserve life and an increase in monthly lease operating
expenses.
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 III-E Partnership's estimated proved gas reserves
decreased approximately 56,000 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.
The III-F Partnership's estimated proved gas reserves
increased approximately 23,000 Mcf in the Stutes SU T (Breaux #2)
due to a revised forecast in
F-68
reserves based on actual production experience and a lower decline rate
resulting in a longer reserve life.
[Remainder of Page Intentionally Left Blank]
F-69
III-A Partnership
-----------------
Discontinued Operations Continuing Operations
------------------------ ----------------------
Crude Natural Crude Natural
Oil Gas Oil Gas
(Barrels) (Mcf) (Barrels) (Mcf)
--------- --------- --------- -----------
Proved reserves, Dec. 31, 2003 1,933 222,084 137,278 3,817,394
Production ( 466) ( 18,237) ( 36,657) ( 442,066)
Sale of minerals in place - - ( 78) -
Extensions and discoveries - - 1,037 3,108
Revisions of previous estimates 3,749 30,267 16,607 160,187
----- ------- -------- ---------
Proved reserves, Dec. 31, 2004 5,216 234,114 118,187 3,538,623
Production ( 817) ( 19,307) ( 32,191) ( 369,103)
Extensions and discoveries - - 366 12,296
Revisions of previous estimates 1,677 ( 38,428) 4,297 125,653
----- ------- -------- ---------
Proved reserves, Dec. 31, 2005 6,076 176,379 90,659 3,307,469
Production ( 367) ( 16,779) ( 28,373) ( 345,008)
Sale of minerals in place (1,183) (125,978) - -
Extensions and discoveries - - 141 21,975
Revisions of previous estimates 443 3,473 22,900 ( 122,289)
----- ------- -------- ---------
Proved reserves, Dec. 31, 2006 4,969 37,095 85,327 2,862,147
===== ======= ======= =========
PROVED DEVELOPED RESERVES:
December 31, 2004 5,216 234,114 118,187 3,538,623
===== ======= ======= =========
December 31, 2005 6,076 176,379 90,659 3,307,469
===== ======= ======= =========
December 31, 2006 4,969 37,095 85,327 2,862,147
===== ======= ======= =========
F-70
III-B Partnership
-----------------
Discontinued Operations Continuing Operations
------------------------ ----------------------
Crude Natural Crude Natural
Oil Gas Oil Gas
(Barrels) (Mcf) (Barrels) (Mcf)
--------- --------- --------- -----------
Proved reserves, Dec. 31, 2003 633 77,139 87,006 1,600,701
Production ( 42) ( 6,030) (25,353) ( 184,751)
Extensions and discoveries - - 684 2,050
Revisions of previous estimates 51 11,588 11,715 56,374
--- ------ ------ ---------
Proved reserves, Dec. 31, 2004 642 82,697 74,052 1,474,374
Production (127) ( 6,228) (22,521) ( 159,150)
Extensions and discoveries - - 235 5,798
Revisions of previous estimates 12 (17,117) 8,298 28,586
--- ------ ------ ---------
Proved reserves, Dec. 31, 2005 527 59,352 60,064 1,349,608
Production 55 ( 5,386) (19,700) ( 145,330)
Sale of minerals in place (498) (53,130) - -
Extensions and discoveries - - 86 11,077
Revisions of previous estimates ( 84) ( 663) 22,156 ( 39,211)
--- ------ ------ ---------
Proved reserves, Dec. 31, 2006 - 173 62,606 1,176,144
=== ====== ====== =========
PROVED DEVELOPED RESERVES:
December 31, 2004 642 82,697 74,052 1,474,374
=== ====== ====== =========
December 31, 2005 527 59,352 60,064 1,349,608
=== ====== ====== =========
December 31, 2006 - 173 62,606 1,176,144
=== ====== ====== =========
F-71
III-C Partnership
-----------------
Discontinued Operations Continuing Operations
------------------------ ----------------------
Crude Natural Crude Natural
Oil Gas Oil Gas
(Barrels) (Mcf) (Barrels) (Mcf)
--------- --------- --------- -----------
Proved reserves, Dec. 31, 2003 9,147 73,565 90,572 5,275,540
Production ( 462) ( 9,715) ( 9,089) ( 538,840)
Sale of minerals in place ( 6) - - -
Extensions and discoveries 2 423 2 37,331
Revisions of previous estimates (7,923) (15,911) ( 569) ( 189,890)
----- ------- ------ ---------
Proved reserves, Dec. 31, 2004 758 48,362 80,916 4,584,141
Production ( 319) ( 8,072) ( 9,295) ( 506,230)
Extensions and discoveries 32 1,294 966 188,978
Revisions of previous estimates 146 265 16,086 395,703
----- ------ ------ ---------
Proved reserves, Dec. 31, 2005 617 41,849 88,673 4,662,592
Production ( 106) ( 8,588) (11,648) ( 610,593)
Sale of minerals in place ( 281) (22,321) - -
Extensions and discoveries 10 409 5,374 413,298
Revisions of previous estimates 1,257 6,348 9,961 ( 95,472)
----- ------ ------ ---------
Proved reserves, Dec. 31, 2006 1,497 17,697 92,360 4,369,825
===== ====== ====== =========
PROVED DEVELOPED RESERVES:
December 31, 2004 758 48,362 80,916 4,584,141
===== ====== ====== =========
December 31, 2005 617 41,849 88,673 4,662,592
===== ====== ====== =========
December 31, 2006 1,497 17,697 92,360 4,369,825
===== ====== ====== =========
F-72
III-D Partnership
-----------------
Discontinued Operations Continuing Operations
------------------------ ----------------------
Crude Natural Crude Natural
Oil Gas Oil Gas
(Barrels) (Mcf) (Barrels) (Mcf)
--------- --------- --------- -----------
Proved reserves, Dec. 31, 2003 73,941 45,304 83,103 2,607,310
Production ( 4,067) ( 7,561) ( 8,347) ( 291,166)
Sale of minerals in place (72,676) (14,536) - -
Extensions and discoveries - 60 - 5,465
Revisions of previous estimates 2,871 (10,617) 6,248 75,702
------ ------ ------ ---------
Proved reserves, Dec. 31, 2004 69 12,650 81,004 2,397,311
Production ( 65) ( 3,657) ( 8,546) ( 284,998)
Extensions and discoveries 4 186 776 106,472
Revisions of previous estimates 60 ( 1,903) 10,575 181,207
------ ------ ------ ---------
Proved reserves, Dec. 31, 2005 68 7,276 83,809 2,399,992
Production ( 20) ( 1,763) ( 9,928) ( 367,694)
Sale of minerals in place ( 10) ( 28) - -
Extensions and discoveries - - 4,145 253,564
Revisions of previous estimates 182 ( 846) ( 989) 26,832
------ ------ ------ ---------
Proved reserves, Dec. 31, 2006 220 4,639 77,037 2,312,694
====== ====== ====== =========
PROVED DEVELOPED RESERVES:
December 31, 2004 69 12,650 81,004 2,397,311
====== ====== ====== =========
December 31, 2005 68 7,276 83,809 2,399,992
====== ====== ====== =========
December 31, 2006 220 4,639 77,037 2,312,694
====== ====== ====== =========
F-73
III-E Partnership
-----------------
Discontinued Operations Continuing Operations
------------------------ ----------------------
Crude Natural Crude Natural
Oil Gas Oil Gas
(Barrels) (Mcf) (Barrels) (Mcf)
--------- --------- --------- -----------
Proved reserves, Dec. 31, 2003 519,254 468,657 155,670 6,097,290
Production ( 28,755) ( 80,966) ( 22,473) ( 678,604)
Sale of minerals in place (518,676) (103,734) - -
Extensions and discoveries - - 1,189 11,923
Revisions of previous estimates 28,878 ( 64,106) 23,421 789,619
------- ------- ------- ---------
Proved reserves, Dec. 31, 2004 701 219,851 157,807 6,220,228
Production ( 383) ( 44,154) ( 23,178) ( 634,703)
Extensions and discoveries 71 1,508 4,621 112,711
Revisions of previous estimates 508 41,648 10,048 ( 607,380)
------- ------- ------- ---------
Proved reserves, Dec. 31, 2005 897 218,853 149,298 5,090,856
Production ( 109) ( 40,040) ( 16,782) ( 535,598)
Sale of minerals in place ( 213) ( 35,481) - -
Extensions and discoveries - - 611 252,261
Revisions of previous estimates 4 ( 36,400) ( 32,580) ( 393,541)
------- ------- ------- ---------
Proved reserves, Dec. 31, 2006 579 106,932 100,547 4,413,978
======= ======= ======= =========
PROVED DEVELOPED RESERVES:
December 31, 2004 701 219,851 157,807 6,220,228
======= ======= ======= =========
December 31, 2005 897 218,853 149,298 5,090,856
======= ======= ======= =========
December 31, 2006 579 106,932 100,547 4,412,334
======= ======= ======= =========
F-74
III-F Partnership
-----------------
Discontinued Operations Continuing Operations
------------------------ ----------------------
Crude Natural Crude Natural
Oil Gas Oil Gas
(Barrels) (Mcf) (Barrels) (Mcf)
--------- --------- --------- -----------
Proved reserves, Dec. 31, 2003 151,358 720,827 208,930 3,761,556
Production ( 9,556) ( 15,528) ( 10,696) ( 393,218)
Extensions and discoveries - - 1,000 10,015
Revisions of previous estimates 16,575 (360,256) ( 42,745) 417,329
------- ------- ------- ---------
Proved reserves, Dec. 31, 2004 158,377 345,043 156,489 3,795,682
Production ( 8,074) ( 11,248) ( 10,893) ( 370,786)
Extensions and discoveries - - 3,395 94,386
Revisions of previous estimates 12,379 (284,602) 25,557 ( 64,082)
------- ------- ------- ---------
Proved reserves, Dec. 31, 2005 162,682 49,193 174,548 3,455,200
Production ( 9,183) ( 9,045) ( 9,822) ( 300,359)
Sale of minerals in place ( 179) ( 29,795) - -
Extensions and discoveries - - 515 107,209
Revisions of previous estimates ( 15,535) 17,139 ( 6,405) ( 500,216)
------- ------- ------- ---------
Proved reserves, Dec. 31, 2006 137,785 27,492 158,836 2,761,834
======= ======= ======= =========
PROVED DEVELOPED RESERVES:
December 31, 2004 158,377 345,043 156,489 3,795,682
======= ======= ======= =========
December 31, 2005 162,682 49,193 174,548 3,455,200
======= ======= ======= =========
December 31, 2006 137,785 27,492 158,836 2,761,834
======= ======= ======= =========
F-75
5. QUARTERLY FINANCIAL DATA (Unaudited)
Summarized unaudited quarterly financial data for 2006 and 2005 are as
follows:
F-76
III-A Partnership
-----------------
2006
------------------------------------------------------
First Second Third Fourth
Quarter(2) Quarter(2) Quarter(2) Quarter
---------- ---------- ---------- ----------
Total Revenues $1,090,874 $1,011,994 $1,055,647 $ 957,817
Gross Profit(1) 819,583 737,509 768,464 678,305
Income from continuing
operations 722,103 664,114 695,992 604,767
Income from discontinued
operations 21,975 28,600 30,548 532,747
Net Income 744,078 692,714 726,540 1,137,514
Limited Partners' Net
Income per Unit 2.53 2.35 2.46 3.87
2005
------------------------------------------------------
First Second Third Fourth
Quarter(2) Quarter(2) Quarter(2) Quarter(2)
--------- ----------- ---------- ----------
Total Revenues $ 990,208 $1,104,544 $1,170,643 $1,327,762
Gross Profit(1) 615,275 875,355 823,718 1,031,794
Income from continuing
operations 520,311 801,932 749,498 954,639
Income from discontinued
operations 35,965 28,363 31,505 33,658
Net Income 556,276 830,295 781,003 988,297
Limited Partners' Net
Income per Unit 1.89 2.83 2.64 3.35
F-77
- ------------
(1) Total revenues less oil and gas production expenses and depreciation,
depletion and amortization expenses, 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 financial statements of the Partnership.
[Remainder of Page Intentionally Left Blank]
F-78
III-B Partnership
-----------------
2006
------------------------------------------------------
First Second Third Fourth
Quarter(2) Quarter(2) Quarter(2) Quarter
---------- ---------- ---------- ----------
Total Revenues $588,150 $557,770 $581,937 $514,508
Gross Profit(1) 419,917 386,779 431,638 351,295
Income from continuing
operations 357,421 347,801 393,149 311,577
Income from discontinued
operations 3,913 6,994 7,619 219,252
Net Income 361,334 354,795 400,768 530,829
Limited Partners' Net
Income per Unit 2.21 2.15 2.45 3.26
2005
------------------------------------------------------
First Second Third Fourth
Quarter(2) Quarter(2) Quarter(2) Quarter(2)
---------- ---------- ---------- ----------
Total Revenues $514,344 $598,059 $630,024 $711,412
Gross Profit(1) 296,108 469,843 398,892 551,320
Income from continuing
operations 235,858 430,720 358,895 508,384
Income from discontinued
operations 9,267 6,953 7,231 8,390
Net Income 245,125 437,673 366,126 516,774
Limited Partners' Net
Income per Unit 1.51 2.67 2.20 3.15
F-79
- ------------
(1) Total revenues less oil and gas production expenses and depreciation,
depletion and amortization expenses, 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 financial statements of the Partnership.
[Remainder of Page Intentionally Left Blank]
F-80
III-C Partnership
-----------------
2006
------------------------------------------------------
First Second Third Fourth
Quarter(2) Quarter(2) Quarter(2) Quarter
---------- ---------- ---------- ----------
Total Revenues $1,226,199 $992,287 $1,199,818 $1,287,723
Gross Profit(1) 899,855 662,859 804,225 598,667
Income from continuing
operations 807,863 594,794 737,011 531,039
Income from discontinued
operations 10,431 14,458 13,556 112,522
Net Income 818,294 609,252 750,567 643,561
Limited Partners' Net
Income per Unit 3.00 2.21 2.71 2.25
2005
------------------------------------------------------
First Second Third Fourth
Quarter(2) Quarter(2) Quarter(2) Quarter(2)
---------- ---------- ---------- ----------
Total Revenues $ 943,164 $974,640 $1,110,926 $1,159,555
Gross Profit(1) 672,877 781,920 767,357 782,564
Income from continuing
operations 583,359 713,807 699,081 710,704
Income from discontinued
operations 12,604 10,821 14,963 18,086
Net Income 595,963 724,628 714,044 728,790
Limited Partners' Net
Income per Unit 2.18 2.65 2.59 2.68
F-81
- ------------
(1) Total revenues less oil and gas production expenses and depreciation,
depletion and amortization expenses, 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 financial statements of the Partnership.
[Remainder of Page Intentionally Left Blank]
F-82
III-D Partnership
-----------------
2006
------------------------------------------------------
First Second Third Fourth
Quarter(2) Quarter(2) Quarter(2) Quarter
---------- ---------- ---------- ----------
Total Revenues $715,669 $587,490 $607,936 $890,016
Gross Profit(1) 514,633 411,878 402,444 352,287
Income from continuing
operations 454,257 374,238 365,940 315,206
Income from discontinued
operations 2,921 2,099 3,992 29,627
Net Income 457,178 376,337 369,932 344,833
Limited Partners' Net
Income per Unit 3.12 2.56 2.51 2.20
2005
------------------------------------------------------
First Second Third Fourth
Quarter(2) Quarter(2) Quarter(2) Quarter(2)
---------- ---------- ---------- ----------
Total Revenues $530,151 $553,012 $644,859 $727,471
Gross Profit(1) 389,060 441,363 466,078 446,392
Income from continuing
operations 330,914 404,006 428,713 405,455
Income from discontinued
operations 5,887 5,916 5,269 4,147
Net Income 336,801 409,922 433,982 409,602
Limited Partners' Net
Income per Unit 2.30 2.80 2.97 2.79
F-83
- ------------
(1) Total revenues less oil and gas production expenses and depreciation,
depletion and amortization expenses, 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 financial statements of the Partnership.
[Remainder of Page Intentionally Left Blank]
F-84
III-E Partnership
-----------------
2006
------------------------------------------------------
First Second Third Fourth
Quarter(2) Quarter(2) Quarter(2) Quarter
---------- ---------- ------------ ----------
Total Revenues $1,260,924 $1,027,182 $1,018,660 $ 917,000
Gross Profit(1) 903,255 749,591 552,915 316,678
Income from continuing
operations 762,887 631,446 438,712 201,744
Income (loss)from
discontinued
operations 32,968 75,896 ( 130,949) 302,929
Net Income 795,855 707,342 307,763 504,673
Limited Partners' Net
Income per Unit 1.70 1.51 0.60 1.08
2005
------------------------------------------------------
First Second Third Fourth
Quarter(2) Quarter(2) Quarter(2) Quarter(2)
---------- ---------- ------------ ----------
Total Revenues $1,131,630 $1,287,386 $1,466,570 $1,856,121
Gross Profit(1) 753,051 955,691 1,010,430 1,281,685
Income from continuing
operations 615,533 838,665 894,317 1,162,508
Income from discontinued
operations 65,428 54,347 8,236 64,312
Net Income 680,961 893,012 902,553 1,226,820
Limited Partners' Net
Income per Unit 1.46 1.91 1.91 2.62
F-85
- ------------
(1) Total revenues less oil and gas production expenses and depreciation,
depletion and amortization expenses, 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 financial statements of the Partnership.
[Remainder of Page Intentionally Left Blank]
F-86
III-F Partnership
-----------------
2006
------------------------------------------------------
First Second Third Fourth
Quarter(2) Quarter(2) Quarter(2) Quarter
---------- ---------- ---------- ---------
Total Revenues $698,406 $586,136 $617,650 $526,468
Gross Profit(1) 465,997 388,185 312,810 199,685
Income from continuing
operations 380,430 326,156 251,836 137,981
Income from discontinued
operations 149,945 104,281 123,085 186,737
Net Income 530,375 430,437 374,921 324,718
Limited Partners' Net
Income per Unit 2.14 1.73 1.47 1.31
2005
------------------------------------------------------
First Second Third Fourth
Quarter(2) Quarter(2) Quarter(2) Quarter(2)
---------- ---------- ---------- ----------
Total Revenues $667,365 $697,199 $857,349 $1,082,319
Gross Profit(1) 447,452 524,142 624,204 783,371
Income from continuing
Operations 364,309 462,018 561,938 717,794
Income from discontinued
operations 130,084 87,096 137,128 104,049
Net Income 494,393 549,114 699,066 821,843
Limited Partners' Net
Income per Unit 2.12 2.34 2.99 3.51
F-87
- ------------
(1) Total revenues less oil and gas production expenses and depreciation,
depletion and amortization expenses, 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 financial statements of the Partnership.
[Remainder of Page Intentionally Left Blank]
F-88
6. DISCONTINUED OPERATIONS
On May 12, 2004 the III-D and III-E Partnerships sold all of their
interests in the Jay-Little Escambia Creek Field located in Santa Rosa County,
Florida (the "Jay Field") at a large public oil and gas auction for
approximately $721,000, subject to standard transaction requirements and
adjustments. These proceeds were allocated approximately $89,000 and $632,000,
respectively, to the III-D and III-E Partnerships. This represents the sale of
all oil and gas assets held by the III-D and III-E Partnerships in the Jay
Field. The sale resulted in a gain on disposal of discontinued operations of
approximately $10,000 and $89,000, respectively, for the III-D and III-E
Partnerships.
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 December 13, 2006,
the Partnerships sold their interests in a number of producing properties at a
large public oil and gas auction which resulted in proceeds of approximately
$517,000, $218,000, $98,000, $1,000, $108,000, and $90,000 (net of fees),
respectively, to the III-A, III-B, III-C, III-D, III-E, and III-F Partnerships.
The sale resulted in a gain on disposal of discontinued operations of
approximately $500,000, $211,000, $96,000, $1,000, $104,000, and $87,000,
respectively, for the III-A, III-B, III-C, III-D, III-E, and III-F Partnerships.
Additional properties will be sold at auctions in 2007. The properties sold in
the December auction, those scheduled to be sold in 2007 auctions, and the sale
of the Jay Field 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
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, or amortization expense.
Net income from discontinued operations is as follows:
F-89
III-A Partnership
-----------------
2006 2005 2004
---------- ---------- ----------
Oil and gas sales $150,996 $172,252 $118,675
Lease operating ( 23,537) ( 23,555) ( 44,248)
Production tax ( 12,992) ( 14,519) ( 10,296)
Depreciation, depletion, and
amortization of oil and gas
properties ( 952) ( 4,687) ( 2,645)
------- ------- -------
Income from discontinued
operations $113,515 $129,491 $ 61,486
======= ======= =======
III-B Partnership
-----------------
2006 2005 2004
---------- ---------- ----------
Oil and gas sales $ 35,788 $ 43,968 $ 31,679
Lease operating ( 5,587) ( 6,340) ( 14,977)
Production tax ( 3,456) ( 4,064) ( 3,001)
Depreciation, depletion, and
amortization of oil and gas
properties ( 273) ( 1,723) ( 1,154)
------- ------- -------
Income from discontinued
operations $ 26,472 $ 31,841 $ 12,547
======= ======= =======
F-90
III-C Partnership
-----------------
2006 2005 2004
---------- --------- ----------
Oil and gas sales $ 65,630 $66,420 $ 58,809
Lease operating ( 2,877) ( 3,297) ( 6,731)
Production tax ( 4,433) ( 4,825) ( 4,294)
Depreciation, depletion, and
amortization of oil and gas
properties ( 2,494) ( 1,824) ( 1,600)
Impairment provision ( 371) - -
------- ------ -------
Income from discontinued
operations $ 55,455 $56,474 $ 46,184
======= ====== =======
III-D Partnership
-----------------
2006 2005 2004
---------- --------- ----------
Oil and gas sales $ 11,974 $23,268 $161,977
Lease operating 26,426 ( 347) ( 10,575)
Production tax ( 380) ( 1,529) ( 234,139)
Depreciation, depletion, and
amortization of oil and gas
properties ( 364) ( 173) ( 3,030)
Impairment provision ( 89) - -
------- ------ -------
Income (loss) from discontinued
operations $ 37,567 $21,219 ($ 85,767)
======= ====== =======
F-91
III-E Partnership
-----------------
2006 2005 2004
---------- ---------- ------------
Oil and gas sales $255,286 $309,813 $1,301,085
Lease operating 116,640 ( 78,664) ( 1,742,518)
Production tax ( 12,929) ( 18,599) ( 83,352)
Depreciation, depletion, and
amortization of oil and gas
properties ( 19,659) ( 20,227) ( 24,821)
Impairment provision ( 162,345) - -
------- ------- ---------
Income (loss) from discontinued
operations $176,993 $192,323 ($ 549,606)
======= ======= =========
III-F Partnership
-----------------
2006 2005 2004
---------- ---------- -----------
Oil and gas sales $621,629 $578,767 $ 466,466
Lease operating ( 98,931) ( 97,126) ( 71,591)
Production tax ( 24,217) ( 8,839) ( 8,533)
Depreciation, depletion, and
amortization of oil and gas
properties ( 10,375) ( 14,445) ( 9,868)
Impairment provision ( 10,971) - -
------- ------- ---------
Income from discontinued
operations $477,135 $458,357 $ 376,474
======= ======= =========
F-92
Assets of the discontinued operations as of December 31, 2006 were as follows:
III-A
Partnership
-----------
Accounts receivable - oil and gas sales $ 27,392
Oil and gas properties 82,229
Accumulated depreciation, depletion,
amortization and valuation allowance ( 77,322)
Deferred charge 8
---------
Net assets held for sale $ 32,307
=========
III-B
Partnership
-----------
Accounts receivable - oil and gas sales $ 7,506
Oil and gas properties 750
Accumulated depreciation, depletion,
amortization and valuation allowance ( 750)
---------
Net assets held for sale $ 7,506
=========
III-C
Partnership
-----------
Accounts receivable - oil and gas sales $ 12,024
Oil and gas properties 57,240
Accumulated depreciation, depletion,
amortization and valuation allowance ( 55,618)
Deferred charge 10
---------
Net assets held for sale $ 13,656
=========
F-93
III-D
Partnership
-----------
Accounts receivable - oil and gas sales $ 2,296
Oil and gas properties 7,652
Accumulated depreciation, depletion,
amortization and valuation allowance ( 7,424)
---------
Net assets held for sale $ 2,524
=========
III-E
Partnership
-----------
Accounts receivable - oil and gas sales $ 38,260
Oil and gas properties 634,280
Accumulated depreciation, depletion,
amortization and valuation allowance ( 634,251)
Deferred charge 2,492
---------
Net assets held for sale $ 40,781
=========
III-F
Partnership
-----------
Accounts receivable - oil and gas sales $ 87,284
Oil and gas properties 1,219,907
Accumulated depreciation, depletion,
amortization and valuation allowance ( 1,101,738)
---------
Net assets held for sale $ 205,453
=========
Liabilities of the discontinued operations as of December 31, 2006 were as
follows:
III-A
Partnership
-----------
Accounts payable $ 4,257
---------
Net liabilities - held for sale $ 4,257
=========
F-94
III-B
Partnership
-----------
Accounts payable $ 1,049
---------
Net liabilities - held for sale $ 1,049
=========
III-C
Partnership
-----------
Accounts payable $ 684
Accrued liability 5
---------
Net liabilities - held for sale $ 689
=========
III-D
Partnership
-----------
Accounts payable $ 298
---------
Net liabilities - held for sale $ 298
=========
III-E
Partnership
-----------
Accounts payable $ 21,708
Accrued liability 12,104
---------
Net liabilities - held for sale $ 33,812
=========
III-F
Partnership
-----------
Accounts payable $ 24,291
---------
Net liabilities - held for sale $ 24,291
=========
F-95
7. SUBSEQUENT EVENT
On February 5, 2007, the General Partner mailed a notice to the limited
partners announcing that the III-A Partnership will terminate on November 22,
2007 and the other Partnerships will terminate on December 31, 2007.
The following unaudited pro forma 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 balance sheets are
presented as if the change had occurred on December 31, 2006. The unaudited pro
forma balance sheets are based on assumptions and include adjustments as
explained in the notes to the unaudited pro forma 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 balance sheets.
F-96
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-A
Unaudited Pro Forma 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 $1,443,396 ($ 1,443,396) $ -
Accounts receivable:
Oil and gas sales 571,125 ( 571,125) -
Assets held for sale 32,307 ( 32,307) -
--------- ---------- ----------
Total current assets $2,046,828 ($ 2,046,828) $ -
NET OIL AND GAS PROPERTIES,
utilizing the successful
efforts method 588,645 ( 588,645) -
DEFERRED CHARGE 184,941 ( 184,941) -
NET ASSETS OF PARTNERSHIP
IN LIQUIDATION, at fair value - 12,419,479 12,419,479
--------- ---------- ----------
$2,820,414 $ 9,599,065 $12,419,479
========= ========== ==========
F-97
Pro Forma
Adjustments
To Liquidation Liquidation
Basis Accounting Basis
Historical (Note B) Pro Forma
----------- ---------------- -----------
CURRENT LIABILITIES:
Accounts payable $ 151,192 ($ 151,192) $ -
Gas imbalance payable 21,627 ( 21,627) -
Asset retirement obligation -
current 10,086 ( 10,086) -
Asset retirement obligation -
held for sale 3,870 ( 3,870) -
Liabilities - held for sale 4,257 ( 4,257) -
--------- ----------- ----------
Total current
liabilities $ 191,032 ($ 191,032) $ -
LONG-TERM LIABILITIES:
Accrued liability $ 31,040 ($ 31,040) $ -
Asset retirement obligation 271,011 ( 271,011) -
--------- ---------- -----------
Total long-term
liabilities $ 302,051 ($ 302,051) $ -
PARTNER'S CAPITAL (DEFICIT):
General Partner ($ 59,707) $ 1,104,337 $ 1,044,630
Limited Partners, issued
and outstanding
263,976 units 2,387,038 8,987,811 11,374,849
--------- ---------- ----------
Total partners'
capital $2,327,331 $10,092,148 $12,419,479
--------- ---------- ----------
$2,820,414 $ 9,599,065 $12,419,479
========= ========== ==========
F-98
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-B
Unaudited Pro Forma 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 $ 700,511 ($ 700,511) $ -
Accounts receivable:
Oil and gas sales 296,055 ( 296,055) -
Assets held for sale 7,506 ( 7,506) -
--------- ---------- ---------
Total current assets $1,004,072 ($ 1,004,072) $ -
NET OIL AND GAS PROPERTIES,
utilizing the successful
efforts method 349,851 ( 349,851) -
DEFERRED CHARGE 122,514 ( 122,514) -
NET ASSETS OF PARTNERSHIP
IN LIQUIDATION, at fair value - 5,825,778 5,825,778
--------- ---------- ---------
$1,476,437 $ 4,349,341 $5,825,778
========= ========== =========
F-99
Pro Forma
Adjustments
To Liquidation Liquidation
Basis Accounting Basis
Historical (Note B) Pro Forma
----------- ---------------- -----------
CURRENT LIABILITIES:
Accounts payable $ 96,722 ( $ 96,722) $ -
Gas imbalance payable 12,356 ( 12,356) -
Asset retirement obligation -
current 5,552 ( 5,552) -
Liabilities - held for sale 1,049 ( 1,049) -
--------- ----------- ---------
Total current
liabilities $ 115,679 ($ 115,679) $ -
LONG-TERM LIABILITIES:
Accrued liability $ 8,001 ($ 8,001) $ -
Asset retirement obligation 181,827 ( 181,827) -
--------- ---------- ---------
Total long-term
liabilities $ 189,828 ($ 189,828) $ -
PARTNER'S CAPITAL (DEFICIT):
General Partner ($ 41,841) $ 761,652 $ 719,811
Limited Partners, issued
and outstanding
138,336 units 1,212,771 3,893,196 5,105,967
--------- ---------- ---------
Total partners'
capital $1,170,930 $ 4,654,848 $5,825,778
--------- ---------- ---------
$1,476,437 $ 4,349,341 $5,825,778
========= ========== =========
F-100
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-C
Unaudited Pro Forma 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 $1,129,134 ($ 1,129,134) $ -
Accounts receivable:
Oil and gas sales 901,653 ( 901,653) -
Related party 4,262 ( 4,262) -
Assets held for sale 13,656 ( 13,656) -
--------- ---------- ----------
Total current assets $2,048,705 ($ 2,048,705) $ -
NET OIL AND GAS PROPERTIES,
utilizing the successful
efforts method 1,634,985 ( 1,634,985) -
DEFERRED CHARGE 56,549 ( 56,549) -
NET ASSETS OF PARTNERSHIP
IN LIQUIDATION, at fair value - 13,966,177 13,966,177
--------- ---------- ----------
$3,740,239 $10,225,938 $13,966,177
========= ========== ==========
F-101
Pro Forma
Adjustments
To Liquidation Liquidation
Basis Accounting Basis
Historical (Note B) Pro Forma
----------- ---------------- -----------
CURRENT LIABILITIES:
Accounts payable $ 168,287 ($ 168,287) $ -
Gas imbalance payable 27,417 ( 27,417) -
Asset retirement obligation -
current 24,559 ( 24,559) -
Asset retirement obligation -
held for sale 291 ( 291) -
Liabilities - held for sale 689 ( 689) -
--------- ----------- ----------
Total current
liabilities $ 221,243 ($ 221,243) $ -
LONG-TERM LIABILITIES:
Accrued liability $ 123,503 ($ 123,503) $ -
Asset retirement obligation 365,663 ( 365,663) -
--------- ---------- ----------
Total long-term
liabilities $ 489,166 ($ 489,166) $ -
PARTNER'S CAPITAL (DEFICIT):
General Partner ($ 90,026) $ 1,226,582 $ 1,136,556
Limited Partners, issued
and outstanding
244,536 units 3,119,856 9,709,765 12,829,621
--------- ---------- ----------
Total partners'
capital $3,029,830 $10,936,347 $13,966,177
--------- ---------- ----------
$3,740,239 $10,225,938 $13,966,177
========= ========== ==========
F-102
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-D
Unaudited Pro Forma 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 $ 560,391 ($ 560,391) $ -
Accounts receivable:
Oil and gas sales 554,939 ( 554,939) -
Related party 610 ( 610) -
Other 26,776 ( 26,776) -
Assets held for sale 2,524 ( 2,524) -
--------- ---------- ---------
Total current assets $1,145,240 ($ 1,145,240) $ -
NET OIL AND GAS PROPERTIES,
utilizing the successful
efforts method 796,560 ( 796,560) -
DEFERRED CHARGE 14,055 ( 14,055) -
NET ASSETS OF PARTNERSHIP
IN LIQUIDATION, at fair value - 7,709,045 7,709,045
--------- ---------- ---------
$1,955,855 $ 5,753,190 $7,709,045
========= ========== =========
F-103
Pro Forma
Adjustments
To Liquidation Liquidation
Basis Accounting Basis
Historical (Note B) Pro Forma
----------- ---------------- -----------
CURRENT LIABILITIES:
Accounts payable $ 114,417 ($ 114,417) $ -
Gas imbalance payable 5,724 ( 5,724) -
Asset retirement obligation -
current 16,323 ( 16,323) -
Asset retirement obligation -
held for sale 31 ( 31) -
Liabilities - held for sale 298 ( 298) -
--------- ----------- ---------
Total current
liabilities $ 136,793 ($ 136,793) $ -
LONG-TERM LIABILITIES:
Accrued liability $ 154,492 ( 154,492) $ -
Asset retirement obligation 194,358 ( 194,358) -
--------- ---------- ---------
Total long-term
liabilities $ 348,850 ($ 348,850) $ -
PARTNER'S CAPITAL (DEFICIT):
General Partner ( 17,347) $ 660,522 643,175
Limited Partners, issued
and outstanding
131,008 units 1,487,559 5,578,310 7,065,870
--------- ---------- ---------
Total partners'
capital $1,470,212 $ 6,238,832 $7,709,045
--------- ---------- ---------
$1,955,855 $ 5,753,190 $7,709,045
========= ========== =========
F-104
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-E
Unaudited Pro Forma 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 $ 981,324 ($ 981,324) $ -
Accounts receivable:
Oil and gas sales 743,001 ( 743,001) -
Other 191,092 ( 191,092) -
Assets held for sale 40,781 ( 40,781) -
--------- ---------- ----------
Total current assets $1,956,198 ($ 1,956,198) $ -
NET OIL AND GAS PROPERTIES,
utilizing the successful
efforts method 1,592,366 ( 1,592,366) -
DEFERRED CHARGE 29,450 ( 29,450) -
NET ASSETS OF PARTNERSHIP
IN LIQUIDATION, at fair value - 13,439,878 13,439,878
--------- ---------- ----------
$3,578,014 $ 9,861,864 $13,439,878
========= ========== ==========
F-105
Pro Forma
Adjustments
To Liquidation Liquidation
Basis Accounting Basis
Historical (Note B) Pro Forma
----------- ---------------- -----------
CURRENT LIABILITIES:
Accounts payable $ 318,209 ($ 318,209) $ -
Accrued liability - other 105,000 ( 105,000) -
Gas imbalance payable 21,870 ( 21,870) -
Asset retirement obligation -
current 63,380 ( 63,380) -
Asset retirement obligation -
held for sale 31,202 ( 31,202) -
Liabilities - held for sale 33,812 ( 33,812) -
--------- ----------- ----------
Total current
liabilities $ 573,473 ($ 573,473) $ -
LONG-TERM LIABILITIES:
Accrued liability $ 157,310 ($ 157,310) $ -
Asset retirement obligation 362,904 ( 362,904) -
--------- ---------- ----------
Total long-term
liabilities $ 520,214 ($ 520,214) $ -
PARTNER'S CAPITAL (DEFICIT):
General Partner ($ 263,673) $ 1,366,215 $ 1,102,542
Limited Partners, issued
and outstanding
418,266 units 2,748,000 9,589,336 12,337,336
--------- ---------- ----------
Total partners'
capital $2,484,327 $10,955,551 $13,439,878
--------- ---------- ----------
$3,578,014 $ 9,861,864 $13,439,878
========= ========== ==========
F-106
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-F
Unaudited Pro Forma 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 $ 697,184 ($ 697,184) $ -
Accounts receivable:
Oil and gas sales 452,134 ( 452,134) -
Assets held for sale 205,453 ( 205,453) -
--------- ---------- ----------
Total current assets $1,354,771 ($ 1,354,771) $ -
NET OIL AND GAS PROPERTIES,
utilizing the successful
efforts method 1,381,325 ( 1,381,325) -
DEFERRED CHARGE 13,909 ( 13,909) -
NET ASSETS OF PARTNERSHIP
IN LIQUIDATION, at fair value - 12,216,142 12,216,142
--------- ---------- ----------
$2,750,005 $ 9,466,137 $12,216,142
========= ========== ==========
F-107
Pro Forma
Adjustments
To Liquidation Liquidation
Basis Accounting Basis
Historical (Note B) Pro Forma
----------- ---------------- -----------
CURRENT LIABILITIES:
Accounts payable $ 136,660 ($ 136,660) $ -
Accrued liability - other 90,000 ( 90,000) -
Gas imbalance payable 18,329 ( 18,329) -
Asset retirement obligation -
current 11,729 ( 11,729) -
Asset retirement obligation -
held for sale 33,931 ( 33,931) -
Liabilities - held for sale 24,291 ( 24,291) -
--------- ----------- ----------
Total current
liabilities $ 314,940 ($ 314,940) $ -
LONG-TERM LIABILITIES:
Accrued liability $ 68,572 ($ 68,572) $ -
Asset retirement obligation 243,724 ( 243,724) -
--------- ---------- ----------
Total long-term
liabilities $ 312,296 ($ 312,296) $ -
PARTNER'S CAPITAL (DEFICIT):
General Partner ($ 126,790) $ 1,154,367 $ 1,027,577
Limited Partners, issued
and outstanding
221,484 units 2,249,559 8,939,006 11,188,565
--------- ---------- ----------
Total partners'
capital $2,122,769 $10,093,373 $12,216,142
--------- ---------- ----------
$2,750,005 $ 9,466,137 $12,216,142
========= ========== ==========
F-108
NOTE A - Basis of presentation
The unaudited pro forma 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 not 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 Partnerships in liquidation to
the General Partner and limited partners were calculated using the current
allocation of income and expense, which may change.
F-109
INDEX TO EXHIBITS
-----------------
Exh.
No. Exhibit
- ---- -------
4.1 Agreement of Limited Partnership dated November 17, 1989 for Geodyne
Energy Income Limited Partnership III-A filed as Exhibit 4.1 to
Registrant's Annual Report on Form 10-K for the year ended December
31, 1999, filed with the SEC on February 25, 2000, and is hereby
incorporated by reference.
4.2 Certificate of Limited Partnership dated January 24, 1990 for Geodyne
Energy Income Limited Partnership III-A filed as Exhibit 4.2 to
Registrant's Annual Report on Form 10-K for the year ended December
31, 2001, filed with the SEC on February 28, 2002 and is hereby
incorporated by reference.
4.3 First Amendment to Certificate of Limited Partnership and First
Amendment to Agreement of Limited Partnership dated February 24, 1993
for Geodyne Energy Income Limited Partnership III-A filed as Exhibit
4.5 to Registrant's Annual Report on Form 10-K for the year ended
December 31, 1999, filed with the SEC on February 25, 2000, and is
hereby incorporated by reference.
4.4 Second Amendment to Agreement of Limited Partnership dated August 4,
1993 for Geodyne Energy Income Limited Partnership III-A filed as
Exhibit 4.8 to Registrant's Annual Report on Form 10-K for the year
ended December 31, 1999, filed with the SEC on February 25, 2000, and
is hereby incorporated by reference.
4.5 Second Amendment to Certificate of Limited Partnership dated July 1,
1996 for Geodyne Energy Income Limited Partnership III-A filed as
Exhibit 4.5 to Registrant's Annual Report on Form 10-K for the year
ended December 31, 2001, filed with the SEC on February 28, 2002 and
is hereby incorporated by reference.
4.6 Third Amendment to Agreement of Limited Partnership dated August 31,
1995 for Geodyne Energy Income Limited Partnership III-A filed as
Exhibit 4.15 to Registrant's Annual Report on Form 10-K for the year
ended December 31, 1999, filed with the SEC on February 25, 2000, and
is hereby incorporated by reference.
4.7 Fourth Amendment to Agreement of Limited Partnership dated July 1,
1996 for Geodyne Energy Income Limited Partnership III-A filed as
Exhibit 4.22 to Registrant's Annual Report on Form 10-K for the year
ended December
F-110
31, 1999, filed with the SEC on February 25, 2000, and is hereby
incorporated by reference.
4.8 Fifth Amendment to Agreement of Limited Partnership dated November
15, 1999 for Geodyne Energy Income Limited Partnership III-A filed as
Exhibit 4.25 to Registrant's Annual Report on Form 10-K for the year
ended December 31, 1999, filed with the SEC on February 25, 2000, and
is hereby incorporated by reference.
4.9 Sixth Amendment to Agreement of Limited Partnership dated November
14, 2001, for the Geodyne Energy Income Limited Partnership III-A
filed as Exhibit 4.9 to Registrant's Annual Report on Form 10-K for
the year ended December 31, 2001, filed with the SEC on February 28,
2002 and is hereby incorporated by reference.
4.10 Seventh Amendment to Agreement of Limited Partnership dated November
17, 2003, for the Geodyne Energy Income Limited Partnership III-A
filed as Exhibit 4.10 to Registrant's Annual Report on Form 10-K for
the year ended December 31, 2003, filed with the SEC on March 30,
2004 and is hereby incorporated by reference.
4.11 Eighth Amendment to Agreement of Limited Partnership for the Geodyne
Energy Income Limited Partnership III-A dated October 27, 2005, filed
as Exhibit 4.11 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.
4.12 Agreement of Limited Partnership dated January 24, 1990 for Geodyne
Energy Income Limited Partnership III-B filed as Exhibit 4.2 to
Registrant's Annual Report on Form 10-K for the year ended December
31, 1999, filed with the SEC on February 25, 2000, and is hereby
incorporated by reference.
4.13 Certificate of Limited Partnership dated January 24, 1990 for Geodyne
Energy Income Limited Partnership III-B filed as Exhibit 4.11 to
Registrant's Annual Report on Form 10-K for the year ended December
31, 2001, filed with the SEC on February 28, 2002 and is hereby
incorporated by reference.
4.14 First Amendment to Certificate of Limited Partnership and First
Amendment to Agreement of Limited Partnership dated February 24, 1993
for Geodyne Energy Income Limited Partnership III-B filed as Exhibit
4.6 to Registrant's Annual Report on Form 10-K for the year ended
December 31, 1999, filed with the SEC on February 25, 2000, and is
hereby incorporated by reference.
F-111
4.15 Second Amendment to Agreement of Limited Partnership dated August 4,
1993 for Geodyne Energy Income Limited Partnership III-B filed as
Exhibit 4.9 to Registrant's Annual Report on Form 10-K for the year
ended December 31, 1999, filed with the SEC on February 25, 2000, and
is hereby incorporated by reference.
4.16 Third Amendment to Agreement of Limited Partnership dated August 31,
1995 for Geodyne Energy Income Limited Partnership III-B filed as
Exhibit 4.16 to Registrant's Annual Report on Form 10-K for the year
ended December 31, 1999, filed with the SEC on February 25, 2000, and
is hereby incorporated by reference.
4.17 Second Amendment to Certificate of Limited Partnership dated July 1,
1996 for Geodyne Energy Income Limited Partnership III-B filed as
Exhibit 4.15 to Registrant's Annual Report on Form 10-K for the year
ended December 31, 2001, filed with the SEC on February 28, 2002 and
is hereby incorporated by reference.
4.18 Fourth Amendment to Agreement of Limited Partnership dated July 1,
1996 for Geodyne Energy Income Limited Partnership III-B filed as
Exhibit 4.23 to Registrant's Annual Report on Form 10-K for the year
ended December 31, 1999, filed with the SEC on February 25, 2000, and
is hereby incorporated by reference.
4.19 Fifth Amendment to Agreement of Limited Partnership dated December
30, 1999 for Geodyne Energy Income Limited Partnership III-B filed as
Exhibit 4.26 to Registrant's Annual Report on Form 10-K for the year
ended December 31, 1999, filed with the SEC on February 25, 2000, and
is hereby incorporated by reference.
4.20 Sixth Amendment to Agreement of Limited Partnership dated November
14, 2001, for the Geodyne Energy Income Limited Partnership III-B
filed as Exhibit 4.18 to Registrant's Annual Report on Form 10-K for
the year ended December 31, 2001, filed with the SEC on February 28,
2002 and is hereby incorporated by reference.
4.21 Seventh Amendment to Agreement of Limited Partnership dated January
22, 2004, for the Geodyne Energy Income Limited Partnership III-B
filed as Exhibit 4.20 to Registrant's Annual Report on Form 10-K for
the year ended December 31, 2003, filed with the SEC on March 30,
2004 and is hereby incorporated by reference.
4.22 Eighth Amendment to Agreement of Limited Partnership for the Geodyne
Energy Income Limited Partnership III-B dated October 27, 2005 filed
as Exhibit 4.22 to Registrant's Annual Report on Form 10-K for the
year
F-112
ended December 31, 2005, filed with the SEC on March 29, 2006 and is
hereby incorporated by reference.
4.23 Agreement of Limited Partnership dated February 26, 1990 for Geodyne
Energy Income Limited Partnership III-C filed as Exhibit 4.3 to
Registrant's Annual Report on Form 10-K for the year ended December
31, 1999, filed with the SEC on February 25, 2000, and is hereby
incorporated by reference.
4.24 Certificate of Limited Partnership dated February 26, 1990 for
Geodyne Energy Income Limited Partnership III-C filed as Exhibit 4.20
to Registrant's Annual Report on Form 10-K for the year ended
December 31, 2001, filed with the SEC on February 28, 2002 and is
hereby incorporated by reference.
4.25 First Amendment to Certificate of Limited Partnership and First
Amendment to Agreement of Limited Partnership dated February 24, 1993
for Geodyne Energy Income Limited Partnership III-C filed as Exhibit
4.7 to Registrant's Annual Report on Form 10-K for the year ended
December 31, 1999, filed with the SEC on February 25, 2000, and is
hereby incorporated by reference.
4.26 Second Amendment to Agreement of Limited Partnership dated August 4,
1993 for Geodyne Energy Income Limited Partnership III-C filed as
Exhibit 4.19 to Registrant's Annual Report on Form 10-K for the year
ended December 31, 1999, filed with the SEC on February 25, 2000, and
is hereby incorporated by reference.
4.27 Third Amendment to Agreement of Limited Partnership dated August 31,
1995 for Geodyne Energy Income Limited Partnership III-C filed as
Exhibit 4.17 to Registrant's Annual Report on Form 10-K for the year
ended December 31, 1999, filed with the SEC on February 25, 2000, and
is hereby incorporated by reference.
4.28 Second Amendment to Certificate of Limited Partnership dated July 1,
1996 for Geodyne Energy Income Limited Partnership III-C filed as
Exhibit 4.24 to Registrant's Annual Report on Form 10-K for the year
ended December 31, 2001, filed with the SEC on February 28, 2002 and
is hereby incorporated by reference.
4.29 Fourth Amendment to Agreement of Limited Partnership dated July 1,
1996 for Geodyne Energy Income Limited Partnership III-C filed as
Exhibit 4.24 to Registrant's Annual Report on Form 10-K for the year
ended December 31, 1999, filed with the SEC on February 25, 2000, and
is hereby incorporated by reference.
F-113
4.30 Fifth Amendment to Agreement of Limited Partnership dated December
30, 1999 for Geodyne Energy Income Limited Partnership III-C filed as
Exhibit 4.27 to Registrant's Annual Report on Form 10-K for the year
ended December 31, 1999, filed with the SEC on February 25, 2000, and
is hereby incorporated by reference.
4.31 Sixth Amendment to Agreement of Limited Partnership dated November
14, 2001, for the Geodyne Energy Income Limited Partnership III-C
filed as Exhibit 4.27 to Registrant's Annual Report on Form 10-K for
the year ended December 31, 2001, filed with the SEC on February 28,
2002 and is hereby incorporated by reference.
4.32 Seventh Amendment to Agreement of Limited Partnership dated January
22, 2004, for the Geodyne Energy Income Limited Partnership III-C
filed as Exhibit 4.30 to Registrant's Annual Report on Form 10-K for
the year ended December 31, 2003, filed with the SEC on March 30,
2004 and is hereby incorporated by reference.
4.33 Eighth Amendment to Agreement of Limited Partnership for the Geodyne
Energy Income Limited Partnership III-C dated October 27, 2005 filed
as Exhibit 4.33 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.
4.34 Agreement of Limited Partnership dated September 5, 1990 for Geodyne
Energy Income Limited Partnership III-D filed as Exhibit 4.4 to
Registrant's Annual Report on Form 10-K for the year ended December
31, 2000, filed with the SEC on March 5, 2001, and is hereby
incorporated by reference.
4.35 Certificate of Limited Partnership dated September 5, 1990 for
Geodyne Energy Income Limited Partnership III-D filed as Exhibit 4.29
to Registrant's Annual Report on Form 10-K for the year ended
December 31, 2001, filed with the SEC on February 28, 2002 and is
hereby incorporated by reference.
4.36 First Amendment to Certificate of Limited Partnership and First
Amendment to Agreement of Limited Partnership dated February 24, 1993
for Geodyne Energy Income Limited Partnership III-D filed as Exhibit
4.11 to Registrant's Annual Report on Form 10-K for the year ended
December 31, 2000, filed with the SEC on March 5, 2001, and is hereby
incorporated by reference.
4.37 Second Amendment to Agreement of Limited Partnership dated August 4,
1993 for Geodyne Energy Income Limited Partnership III-D filed as
Exhibit 4.18 to Registrant's Annual Report on Form 10-K for the year
ended December
F-114
31, 2000, filed with the SEC on March 5, 2001, and is hereby
incorporated by reference.
4.38 Third Amendment to Agreement of Limited Partnership dated August 31,
1995 for Geodyne Energy Income Limited Partnership III-D filed as
Exhibit 4.25 to Registrant's Annual Report on Form 10-K for the year
ended December 31, 2000, filed with the SEC on March 5, 2001, and is
hereby incorporated by reference.
4.39 Second Amendment to Certificate of Limited Partnership dated July 1,
1996 for Geodyne Energy Income Limited Partnership III-D filed as
Exhibit 4.33 to Registrant's Annual Report on Form 10-K for the year
ended December 31, 2001, filed with the SEC on February 28, 2002 and
is hereby incorporated by reference.
4.40 Fourth Amendment to Agreement of Limited Partnership dated July 1,
1996 for the Geodyne Energy Income Limited Partnership III-D filed as
Exhibit 4.32 to Registrant's Annual Report on Form 10-K for the year
ended December 31, 2000, filed with the SEC on March 5, 2001, and is
hereby incorporated by reference.
4.41 Fifth Amendment to Agreement of Limited Partnership dated August 23,
2000 for the Geodyne Energy Income Limited Partnership III-D filed as
Exhibit 4.39 to Registrant's Annual Report on Form 10-K for the year
ended December 31, 2000, filed with the SEC on March 5, 2001, and is
hereby incorporated by reference.
4.42 Sixth Amendment to Agreement of Limited Partnership dated August 20,
2002 for the Geodyne Energy Income Limited Partnership III-D filed as
Exhibit 4.36 to Registrant's Annual Report on Form 10-K for the year
ended December 31, 2002, filed with the SEC on March 28, 2003, and is
hereby incorporated by reference.
4.43 Seventh Amendment to Agreement of Limited Partnership dated August
18, 2004 for the Geodyne Energy Income Limited Partnership III-D
filed as Exhibit 4.40 to Registrant's Annual Report on Form 10-K for
the year ended December 31, 2004, filed with the SEC on March 30,
2004, and is hereby incorporated by reference.
4.44 Eighth Amendment to Agreement of Limited Partnership for the Geodyne
Energy Income Limited Partnership III-D dated October 27, 2005 filed
as Exhibit 4.44 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.
4.45 Agreement of Limited Partnership dated December 26, 1990 for Geodyne
Energy Income Limited Partnership III-
F-115
E filed as Exhibit 4.5 to Registrant's Annual Report on Form 10-K for
the year ended December 31, 2000, filed with the SEC on March 5,
2001, and is hereby incorporated by reference.
4.46 Certificate of Limited Partnership dated December 26, 1990 for
Geodyne Energy Income Limited Partnership III-E filed as Exhibit 4.37
to Registrant's Annual Report on Form 10-K for the year ended
December 31, 2001, filed with the SEC on February 28, 2002 and is
hereby incorporated by reference.
4.47 First Amendment to Certificate of Limited Partnership and First
Amendment to Agreement of Limited Partnership dated February 24, 1993
for Geodyne Energy Income Limited Partnership III-E filed as Exhibit
4.12 to Registrant's Annual Report on Form 10-K for the year ended
December 31, 2000, filed with the SEC on March 5, 2001, and is hereby
incorporated by reference.
4.48 Second Amendment to Agreement of Limited Partnership dated August 4,
1993 for Geodyne Energy Income Limited Partnership III-E filed as
Exhibit 4.19 to Registrant's Annual Report on Form 10-K for the year
ended December 31, 2000, filed with the SEC on March 5, 2001, and is
hereby incorporated by reference.
4.49 Third Amendment to Agreement of Limited Partnership dated August 31,
1995 for Geodyne Energy Income Limited Partnership III-E filed as
Exhibit 4.26 to Registrant's Annual Report on Form 10-K for the year
ended December 31, 2000, filed with the SEC on March 5, 2001, and is
hereby incorporated by reference.
4.50 Second Amendment to Certificate of Limited Partnership dated July 1,
1996 for Geodyne Energy Income Limited Partnership III-E filed as
Exhibit 4.41 to Registrant's Annual Report on Form 10-K for the year
ended December 31, 2001, filed with the SEC on February 28, 2002 and
is hereby incorporated by reference.
4.51 Fourth Amendment to Agreement of Limited Partnership dated July 1,
1996 for the Geodyne Energy Income Limited Partnership III-E filed as
Exhibit 4.33 to Registrant's Annual Report on Form 10-K for the year
ended December 31, 2000, filed with the SEC on March 5, 2001, and is
hereby incorporated by reference.
4.52 Fifth Amendment to Agreement of Limited Partnership dated November
15, 2000 for the Geodyne Energy Income Limited Partnership III-E
filed as Exhibit 4.40 to Registrant's Annual Report on Form 10-K for
the year ended December 31, 2000, filed with the SEC on March 5,
2001, and is hereby incorporated by reference.
F-116
4.53 Sixth Amendment to Agreement of Limited Partnership for Geodyne
Energy Income Limited Partnership III-E dated November 6, 2002, filed
as Exhibit 4.1 to Registrant's Quarterly Report on Form 10-Q with the
SEC on November 14, 2002, and is hereby incorporated by reference.
4.54 Seventh Amendment to Agreement of Limited Partnership for the Geodyne
Energy Income Limited Partnership III-E dated August 18, 2004, filed
as Exhibit 4.53 to Registrant's Annual Report on Form 10-K for the
year ended December 31, 2004, filed with the SEC on March 30, 2005,
and is hereby incorporated by reference.
4.55 Eighth Amendment to Agreement of Limited Partnership for the Geodyne
Energy Income Limited Partnership III-E dated October 27, 2005 filed
as Exhibit 4.55 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.
4.56 Agreement of Limited Partnership dated March 7, 1991 for Geodyne
Energy Income Limited Partnership III-F filed as Exhibit 4.6 to
Registrant's Annual Report on Form 10-K for the year ended December
31, 2000, filed with the SEC on March 5, 2001, and is hereby
incorporated by reference.
4.57 Certificate of Limited Partnership dated March 7, 1991 for Geodyne
Energy Income Limited Partnership III-F filed as Exhibit 4.45 to
Registrant's Annual Report on Form 10-K for the year ended December
31, 2001, filed with the SEC on February 28, 2002 and is hereby
incorporated by reference.
4.58 First Amendment to Certificate of Limited Partnership and First
Amendment to Agreement of Limited Partnership dated February 24, 1993
for Geodyne Energy Income Limited Partnership III-F filed as Exhibit
4.13 to Registrant's Annual Report on Form 10-K for the year ended
December 31, 2000, filed with the SEC on March 5, 2001, and is hereby
incorporated by reference.
4.59 Second Amendment to Agreement of Limited Partnership dated August 4,
1993 for Geodyne Energy Income Limited Partnership III-F filed as
Exhibit 4.20 to Registrant's Annual Report on Form 10-K for the year
ended December 31, 2000, filed with the SEC on March 5, 2001, and is
hereby incorporated by reference.
4.60 Second Amendment to Certificate of Limited Partnership dated July 1,
1996 for Geodyne Energy Income Limited Partnership III-F filed as
Exhibit 4.48 to Registrant's Annual Report on Form 10-K for the year
ended December
F-117
31, 2001, filed with the SEC on February 28, 2002 and is hereby
incorporated by reference.
4.61 Third Amendment to Agreement of Limited Partnership dated August 31,
1995 for Geodyne Energy Income Limited Partnership III-F filed as
Exhibit 4.27 to Registrant's Annual Report on Form 10-K for the year
ended December 31, 2000, filed with the SEC on March 5, 2001, and is
hereby incorporated by reference.
4.62 Fourth Amendment to Agreement of Limited Partnership dated July 1,
1996 for the Geodyne Energy Income Limited Partnership III-F filed as
Exhibit 4.34 to Registrant's Annual Report on Form 10-K for the year
ended December 31, 2000, filed with the SEC on March 5, 2001, and is
hereby incorporated by reference.
4.63 Fifth Amendment to Agreement of Limited Partnership dated February 5,
2001 for the Geodyne Energy Income Limited Partnership III-F filed as
Exhibit 4.41 to Registrant's Annual Report on Form 10-K for the year
ended December 31, 2000, filed with the SEC on March 5, 2001, and is
hereby incorporated by reference.
4.64 Sixth Amendment to Agreement of Limited Partnership for the Geodyne
Energy Income Limited Partnership III-F dated February 10, 2003,
filed as Exhibit 4.53(a) to Registrant's Annual Report on Form 10-K
for the year ended December 31, 2002, filed with the SEC on March 28,
2003, and is hereby incorporated by reference.
4.65 Seventh Amendment to Agreement of Limited Partnership for the Geodyne
Energy Income Limited Partnership III-F dated February 7, 2005, filed
as Exhibit 4.60 to Registrant's Annual Report on Form 10-K for the
year ended December 31, 2004, filed with the SEC on March 30, 2004,
and is hereby incorporated by reference.
4.66 Eighth Amendment to Agreement of Limited Partnership for the Geodyne
Energy Income Limited Partnership III-F dated October 27, 2005 filed
as Exhibit 4.66 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 Geodyne Energy Income
Limited Partnership III-A.
*23.2 Consent of Ryder Scott Company, L.P. for Geodyne Energy Income
Limited Partnership III-B.
*23.3 Consent of Ryder Scott Company, L.P. for Geodyne Energy Income
Limited Partnership III-C.
F-118
*23.4 Consent of Ryder Scott Company, L.P. for Geodyne Energy Income
Limited Partnership III-D.
*23.5 Consent of Ryder Scott Company, L.P. for Geodyne Energy Income
Limited Partnership III-E.
*23.6 Consent of Ryder Scott Company, L.P. for Geodyne Energy Income
Limited Partnership III-F.
*31.1 Certification by Dennis R. Neill required by Rule 13a-14(a)/15d-14(a)
for the Geodyne Energy Income Limited Partnership III-A.
*31.2 Certification by Craig D. Loseke required by Rule 13a-14(a)/15d-14(a)
for the Geodyne Energy Income Limited Partnership III-A.
*31.3 Certification by Dennis R. Neill required by Rule 13a-14(a)/15d-14(a)
for the Geodyne Energy Income Limited Partnership III-B.
*31.4 Certification by Craig D. Loseke required by Rule 13a-14(a)/15d-14(a)
for the Geodyne Energy Income Limited Partnership III-B.
*31.5 Certification by Dennis R. Neill required by Rule 13a-14(a)/15d-14(a)
for the Geodyne Energy Income Limited Partnership III-C.
*31.6 Certification by Craig D. Loseke required by Rule 13a-14(a)/15d-14(a)
for the Geodyne Energy Income Limited Partnership III-C.
*31.7 Certification by Dennis R. Neill required by Rule 13a-14(a)/15d-14(a)
for the Geodyne Energy Income Limited Partnership III-D.
*31.8 Certification by Craig D. Loseke required by Rule 13a-14(a)/15d-14(a)
for the Geodyne Energy Income Limited Partnership III-D.
*31.9 Certification by Dennis R. Neill required by Rule 13a-14(a)/15d-14(a)
for the Geodyne Energy Income Limited Partnership III-E.
*31.10 Certification by Craig D. Loseke required by Rule 13a-14(a)/15d-14(a)
for the Geodyne Energy Income Limited Partnership III-E.
*31.11 Certification by Dennis R. Neill required by Rule 13a-14(a)/15d-14(a)
for the Geodyne Energy Income Limited Partnership III-F.
F-119
*31.12 Certification by Craig D. Loseke required by Rule 13a-14(a)/15d-14(a)
for the Geodyne Energy Income Limited Partnership III-F.
*32.1 Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant
to Section 906 of the Sarbanes-Oxley Act of 2002 for the Geodyne
Energy Income Limited Partnership III-A.
*32.2 Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant
to Section 906 of the Sarbanes-Oxley Act of 2002 for the Geodyne
Energy Income Limited Partnership III-B.
*32.3 Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant
to Section 906 of the Sarbanes-Oxley Act of 2002 for the Geodyne
Energy Income Limited Partnership III-C.
*32.4 Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant
to Section 906 of the Sarbanes-Oxley Act of 2002 for the Geodyne
Energy Income Limited Partnership III-D.
*32.5 Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant
to Section 906 of the Sarbanes-Oxley Act of 2002 for the Geodyne
Energy Income Limited Partnership III-E.
*32.6 Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant
to Section 906 of the Sarbanes-Oxley Act of 2002 for the Geodyne
Energy Income Limited Partnership III-F.
All other Exhibits are omitted as inapplicable.
----------
*Filed herewith.
F-120