FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 2007
Commission File Number:
P-1: 0-17800 P-4: 0-18308 P-6: 0-18937
P-3: 0-18306 P-5: 0-18637
GEODYNE INSTITUTIONAL/PENSION ENERGY INCOME P-1 LIMITED PARTNERSHIP
GEODYNE INSTITUTIONAL/PENSION ENERGY INCOME LIMITED PARTNERSHIP P-3
GEODYNE INSTITUTIONAL/PENSION ENERGY INCOME LIMITED PARTNERSHIP P-4
GEODYNE INSTITUTIONAL/PENSION ENERGY INCOME LIMITED PARTNERSHIP P-5
GEODYNE INSTITUTIONAL/PENSION ENERGY INCOME LIMITED PARTNERSHIP P-6
---------------------------------------------------------------------
(Exact Name of Registrant as specified in its Charter)
P-1 73-1330245
P-3 73-1336573
P-1: Texas P-4 73-1341929
P-3 through P-6: P-5 73-1353774
Oklahoma P-6 73-1357375
---------------------------- -------------------------------
(State or other jurisdiction (I.R.S. Employer Identification
of incorporation or No.)
organization)
Two West Second Street, Tulsa, Oklahoma 74103
------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code:(918) 583-1791
Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the Registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes X No
------ ------
-1-
Indicate by check mark whether the Registrant is a large accelerated filer, an
accelerated filer, or a non-accelerated filer. See definition of accelerated
filer and large accelerated filer in Rule 12b-2 of the Exchange Act (check one):
Large accelerated filer
--------
Accelerated filer
--------
X Non-accelerated filer
--------
Indicate by check mark whether the Registrant is a shell company (as defined in
Rule 12b-2 of the Exchange Act).
Yes No X
------ ------
The Depositary Units are not publicly traded; therefore, Registrant cannot
compute the aggregate market value of the voting units held by non-affiliates of
the Registrant.
-2-
PART I. FINANCIAL INFORMATION
GEODYNE INSTITUTIONAL/PENSION ENERGY INCOME P-1 LIMITED PARTNERSHIP
GEODYNE NPI PARTNERSHIP P-1
COMBINED STATEMENT OF NET ASSETS OF PARTNERSHIP IN LIQUIDATION
(Unaudited)
JUNE 30,
2007
----------
NET ASSETS OF PARTNERSHIP IN LIQUIDATION,
at fair value $7,703,281
==========
PARTNERS' CAPITAL:
General Partner $1,002,370
Limited Partners, issued and
outstanding, 108,074 units 6,700,911
----------
Total Partners' capital $7,703,281
==========
The accompanying condensed notes are an integral part of these
combined unaudited financial statements.
-3-
GEODYNE INSTITUTIONAL/PENSION ENERGY INCOME P-1 LIMITED PARTNERSHIP
GEODYNE NPI PARTNERSIP P-1
COMBINED STATEMENT OF CHANGES IN NET ASSETS OF PARTNERSHIP
IN LIQUIDATION
(Unaudited)
PERIOD FROM
FEBRUARY 5,
TO JUNE 30,
2007
------------
Total Partners' capital at February 4, 2007 $1,714,666
Adjust assets to fair value, net of
estimated selling costs 5,975,259
Partners' distributions from February 5, 2007
to March 31, 2007 ( 576,274)
Revenues from February 5, 2007 to March 31, 2007 235,289
Operating expenses incurred from
February 5, 2007 to March 31, 2007 ( 55,674)
----------
Net assets of partnership in liquidation
at March 31, 2007 $7,293,266
Change in fair value of assets, net of
estimated selling costs 686,114
Partners' distributions from April 1, 2007
to June 30, 2007 ( 601,577)
Revenues from April 1, 2007 to June 30, 2007 367,571
Operating expenses incurred from April 1, 2007
to June 30, 2007 ( 42,093)
----------
Net assets of partnership in liquidation
at June 30, 2007 $7,703,281
==========
The accompanying condensed notes are an integral part of these
combined unaudited financial statements.
-4-
GEODYNE INSTITUTIONAL/PENSION ENERGY INCOME P-1 LIMITED PARTNERSHIP
GEODYNE NPI PARTNERSHIP P-1
COMBINED BALANCE SHEET
(GOING CONCERN BASIS)
(Unaudited)
ASSETS
DECEMBER 31,
2006
------------
CURRENT ASSETS:
Cash and cash equivalents $ 496,665
Accounts receivable:
Net Profits 54,786
Assets held for sale (Note 3) 311,549
----------
Total current assets $ 863,000
NET PROFITS INTERESTS, net, utilizing
the successful efforts method 327,000
----------
$1,190,000
==========
PARTNERS' CAPITAL (DEFICIT)
PARTNERS' CAPITAL (DEFICIT):
General Partner ($ 19,475)
Limited Partners, issued and
outstanding, 108,074 units 1,209,475
----------
Total Partners' capital $1,190,000
----------
$1,190,000
==========
The accompanying condensed notes are an integral part of these
combined unaudited financial statements.
-5-
GEODYNE INSTITUTIONAL/PENSION ENERGY INCOME P-1 LIMITED PARTNERSHIP
GEODYNE NPI PARTNERSHIP P-1
COMBINED STATEMENTS OF OPERATIONS
(GOING CONCERN BASIS)
(Unaudited)
THREE MONTHS
ENDED
JUNE 30,
2006
------------
REVENUES:
Net Profits $164,493
Interest income 4,562
--------
$169,055
COSTS AND EXPENSES:
Depletion of Net Profits
Interests $ 10,461
General and administrative
(Note 2) 30,705
--------
$ 41,166
--------
INCOME FROM CONTINUING OPERATIONS $127,889
DISCONTINUED OPERATIONS:
Income from discontinued operations
(Note 3) 364,403
--------
NET INCOME $492,292
========
GENERAL PARTNER:
Net income from continuing
operations $ 13,274
Net income from discontinued
operations 37,172
--------
NET INCOME $ 50,446
========
-6-
LIMITED PARTNERS:
Net income from continuing
operations $114,615
Net income from discontinued
operations 327,231
--------
NET INCOME $441,846
========
NET INCOME FROM CONTINUING
OPERATIONS PER UNIT $ 1.06
NET INCOME FROM DISCONTINUED
OPERATIONS PER UNIT 3.03
--------
NET INCOME PER UNIT $ 4.09
========
UNITS OUTSTANDING 108,074
The accompanying condensed notes are an integral part of these
combined unaudited financial statements.
-7-
GEODYNE INSTITUTIONAL/PENSION ENERGY INCOME P-1 LIMITED PARTNERSHIP
GEODYNE NPI PARTNERSHIP P-1
COMBINED STATEMENTS OF OPERATIONS
(GOING CONCERN BASIS)
(Unaudited)
PERIOD FROM SIX MONTHS
JANUARY 1, TO ENDED
FEBRUARY 4, JUNE 30,
2007 2006
------------- -----------
REVENUES:
Net Profits $ 43,565 $351,039
Interest income 787 8,993
Gain on sale of Net Profits
Interests 139 -
-------- --------
$ 44,491 $360,032
COSTS AND EXPENSES:
Depletion of Net Profits
Interests $ 2,644 $ 25,402
General and administrative
(Note 2) 12,149 84,697
-------- --------
$ 14,793 $110,099
-------- --------
INCOME FROM CONTINUING OPERATIONS $ 29,698 $249,933
DISCONTINUED OPERATIONS:
Income from discontinued operations
(Note 3) 65,187 682,726
Gain on disposal of discontinued
operations 442,792 -
-------- --------
NET INCOME $537,677 $932,659
======== ========
GENERAL PARTNER:
Net income from continuing
operations $ 3,129 $ 26,380
Net income from discontinued
operations 50,825 69,846
-------- --------
NET INCOME $ 53,954 $ 96,226
======== ========
-8-
LIMITED PARTNERS:
Net income from continuing
operations $ 26,569 $223,553
Net income from discontinued
operations 457,154 612,880
-------- --------
NET INCOME $483,723 $836,433
======== ========
NET INCOME FROM CONTINUING
OPERATIONS PER UNIT $ 0.25 $ 2.07
NET INCOME FROM DISCONTINUED
OPERATIONS PER UNIT 4.23 5.67
-------- --------
NET INCOME PER UNIT $ 4.48 $ 7.74
======== ========
UNITS OUTSTANDING 108,074 108,074
The accompanying condensed notes are an integral part of these
combined unaudited financial statements.
-9-
GEODYNE INSTITUTIONAL/PENSION ENERGY INCOME P-1 LIMITED PARTNERSHIP
GEODYNE NPI PARTNERSHIP P-1
COMBINED STATEMENTS OF CASH FLOWS
(GOING CONCERN BASIS)
(Unaudited)
PERIOD FROM SIX MONTHS
JANUARY 1, TO ENDED
FEBRUARY 4, JUNE 30,
2007 2006
------------- ------------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $537,677 $ 932,659
Adjustments to reconcile net
income to net cash provided
by operating activities:
Depletion of Net Profits
Interests 2,948 42,888
Gain on sale of Net Profits
Interests ( 139) -
Gain on disposal of discontinued
operations ( 442,792) -
Settlement of asset retirement
obligation - ( 228)
Net change in accounts receivable/
accounts payable - Net
Profits 46,089 142,355
-------- ----------
Net cash provided by operating
activities $143,783 $1,117,674
-------- ----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures ($ 4,252) ($ 21,405)
-------- ----------
Net cash used by investing
activities ($ 4,252) ($ 21,405)
-------- ----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Cash distributions ($ 13,011) ($1,033,958)
-------- ----------
Net cash used by financing
activities ($ 13,011) ($1,033,958)
-------- ----------
NET INCREASE IN CASH AND CASH
EQUIVALENTS $126,520 $ 62,311
CASH AND CASH EQUIVALENTS AT
BEGINNING OF PERIOD 496,665 595,286
-------- ----------
CASH AND CASH EQUIVALENTS AT
END OF PERIOD $623,185 $ 657,597
======== ==========
The accompanying condensed notes are an integral part of these
combined unaudited financial statements.
-10-
GEODYNE INSTITUTIONAL/PENSION ENERGY INCOME P-3 LIMITED PARTNERSHIP
GEODYNE NPI PARTNERSHIP P-3
COMBINED STATEMENT OF NET ASSETS OF PARTNERSHIP IN LIQUIDATION
(Unaudited)
JUNE 30,
2007
-----------
NET ASSETS OF PARTNERSHIP IN LIQUIDATION,
at fair value $11,579,074
===========
PARTNERS' CAPITAL:
General Partner $ 1,010,979
Limited Partners, issued and
outstanding, 169,637 units 10,568,095
-----------
Total Partners' capital $11,579,074
===========
The accompanying condensed notes are an integral part of these
combined unaudited financial statements.
-11-
GEODYNE INSTITUTIONAL/PENSION ENERGY INCOME P-3 LIMITED PARTNERSHIP
GEODYNE NPI PARTNERSIP P-3
COMBINED STATEMENT OF CHANGES IN NET ASSETS OF PARTNERSHIP
IN LIQUIDATION
(Unaudited)
PERIOD FROM
FEBRUARY 5,
TO JUNE 30,
2007
-------------
Total Partners' capital at February 4, 2007 $ 2,577,934
Adjust assets to fair value, net of
estimated selling costs 9,020,058
Partners' distributions from February 5, 2007
to March 31, 2007 ( 902,711)
Revenues from February 5, 2007 to March 31, 2007 344,716
Operating expenses incurred from
February 5, 2007 to March 31, 2007 ( 68,728)
-----------
Net assets of partnership in liquidation
at March 31, 2007 $10,971,269
Change in fair value of assets, net of
estimated selling costs 927,275
Partners' distributions from April 1, 2007
to June 30, 2007 ( 810,567)
Revenues from April 1, 2007 to June 30, 2007 553,003
Operating expenses incurred from April 1, 2007
to June 30, 2007 ( 61,906)
-----------
Net assets of partnership in liquidation
at June 30, 2007 $11,579,074
===========
The accompanying condensed notes are an integral part of these
combined unaudited financial statements.
-12-
GEODYNE INSTITUTIONAL/PENSION ENERGY INCOME P-3 LIMITED PARTNERSHIP
GEODYNE NPI PARTNERSHIP P-3
COMBINED BALANCE SHEET
(GOING CONCERN BASIS)
(Unaudited)
ASSETS
DECEMBER 31,
2006
------------
CURRENT ASSETS:
Cash and cash equivalents $ 852,351
Accounts receivable:
Net Profits 86,855
Assets held for sale (Note 3) 404,587
----------
Total current assets $1,343,793
NET PROFITS INTERESTS, net, utilizing
the successful efforts method 556,629
----------
$1,900,422
==========
PARTNERS' CAPITAL
PARTNERS' CAPITAL:
General Partner $ 15,052
Limited Partners, issued and
outstanding, 169,637 units 1,885,370
----------
Total Partners' capital $1,900,422
----------
$1,900,422
==========
The accompanying condensed notes are an integral part of these
combined unaudited financial statements.
-13-
GEODYNE INSTITUTIONAL/PENSION ENERGY INCOME P-3 LIMITED PARTNERSHIP
GEODYNE NPI PARTNERSHIP P-3
COMBINED STATEMENTS OF OPERATIONS
(GOING CONCERN BASIS)
(Unaudited)
THREE MONTHS
ENDED
JUNE 30,
2006
------------
REVENUES:
Net Profits $276,334
Interest income 6,878
--------
$283,212
COSTS AND EXPENSES:
Depletion of Net Profits
Interests $ 15,647
General and administrative
(Note 2) 47,527
--------
$ 63,174
--------
INCOME FROM CONTINUING OPERATIONS $220,038
DISCONTINUED OPERATIONS:
Income from discontinued operations
(Note 3) 468,003
--------
NET INCOME $688,041
========
GENERAL PARTNER:
Net income from continuing
operations $ 22,725
Net income from discontinued
operations 47,750
--------
NET INCOME $ 70,475
========
-14-
LIMITED PARTNERS:
Net income from continuing
operations $197,313
Net income from discontinued
operations 420,253
--------
NET INCOME $617,566
========
NET INCOME FROM CONTINUING
OPERATIONS PER UNIT $ 1.16
NET INCOME FROM DISCONTINUED
OPERATIONS PER UNIT 2.48
--------
NET INCOME PER UNIT $ 3.64
========
UNITS OUTSTANDING 169,637
The accompanying condensed notes are an integral part of these
combined unaudited financial statements.
-15-
GEODYNE INSTITUTIONAL/PENSION ENERGY INCOME P-3 LIMITED PARTNERSHIP
GEODYNE NPI PARTNERSHIP P-3
COMBINED STATEMENTS OF OPERATIONS
(GOING CONCERN BASIS)
(Unaudited)
PERIOD FROM SIX MONTHS
JANUARY 1, TO ENDED
FEBRUARY 4, JUNE 30,
2007 2006
------------- -----------
REVENUES:
Net Profits $ 74,689 $ 594,181
Interest income 1,315 13,544
Gain on sale of Net Profits
Interests 175 -
-------- ----------
$ 76,179 $ 607,725
COSTS AND EXPENSES:
Depletion of Net Profits
Interests $ 4,529 $ 36,210
General and administrative
(Note 2) 17,860 118,655
-------- ----------
$ 22,389 $ 154,865
-------- ----------
INCOME FROM CONTINUING OPERATIONS $ 53,790 $ 452,860
DISCONTINUED OPERATIONS:
Income from discontinued operations
(Note 3) 85,123 875,138
Gain on disposal of discontinued
operations 556,720 -
-------- ----------
NET INCOME $695,633 $1,327,998
======== ==========
GENERAL PARTNER:
Net income from continuing
operations $ 5,655 $ 47,191
Net income from discontinued
operations 64,216 89,551
-------- ----------
NET INCOME $ 69,871 $ 136,742
======== ==========
-16-
LIMITED PARTNERS:
Net income from continuing
operations $ 48,135 $ 405,669
Net income from discontinued
operations 577,627 785,587
-------- ----------
NET INCOME $625,762 $1,191,256
======== ==========
NET INCOME FROM CONTINUING
OPERATIONS PER UNIT $ 0.28 $ 2.39
NET INCOME FROM DISCONTINUED
OPERATIONS PER UNIT 3.41 4.63
-------- ----------
NET INCOME PER UNIT $ 3.69 $ 7.02
======== ==========
UNITS OUTSTANDING 169,637 169,637
The accompanying condensed notes are an integral part of these
combined unaudited financial statements.
-17-
GEODYNE INSTITUTIONAL/PENSION ENERGY INCOME P-3 LIMITED PARTNERSHIP
GEODYNE NPI PARTNERSHIP P-3
COMBINED STATEMENTS OF CASH FLOWS
(GOING CONCERN BASIS)
(Unaudited)
PERIOD FROM SIX MONTHS
JANUARY 1, TO ENDED
FEBRUARY 4, JUNE 30,
2007 2006
------------- ------------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 695,633 $1,327,998
Adjustments to reconcile net
income to net cash provided
by operating activities:
Depletion of Net Profits
Interests 4,884 58,841
Gain on sale of Net Profits
Interests ( 175) -
Gain on sale of discontinued
operations ( 556,720) -
Settlement of asset retirement
obligations - ( 285)
Net change in accounts receivable/
accounts payable - Net
Profits 59,024 216,510
---------- ----------
Net cash provided by operating
activities $ 202,646 $1,603,064
---------- ----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures ($ 5,340) ($ 28,027)
---------- ----------
Net cash used by investing
activities ($ 5,340) ($ 28,027)
---------- ----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Cash distributions ($ 18,121) ($1,529,041)
---------- ----------
Net cash used by financing
activities ($ 18,121) ($1,529,041)
---------- ----------
NET INCREASE IN CASH AND CASH
EQUIVALENTS $ 179,185 $ 45,996
CASH AND CASH EQUIVALENTS AT
BEGINNING OF PERIOD 852,351 885,655
---------- ----------
CASH AND CASH EQUIVALENTS AT
END OF PERIOD $1,031,536 $ 931,651
========== ==========
The accompanying condensed notes are an integral part of these
combined unaudited financial statements.
-18-
GEODYNE INSTITUTIONAL/PENSION ENERGY INCOME P-4 LIMITED PARTNERSHIP
GEODYNE NPI PARTNERSHIP P-4
COMBINED STATEMENT OF NET ASSETS OF PARTNERSHIP IN LIQUIDATION
(Unaudited)
JUNE 30,
2007
----------
NET ASSETS OF PARTNERSHIP IN LIQUIDATION,
at fair value $6,092,502
==========
PARTNERS' CAPITAL:
General Partner $ 567,804
Limited Partners, issued and
outstanding, 126,306 units 5,524,698
----------
Total Partners' capital $6,092,502
==========
The accompanying condensed notes are an integral part of these
combined unaudited financial statements.
-19-
GEODYNE INSTITUTIONAL/PENSION ENERGY INCOME P-4 LIMITED PARTNERSHIP
GEODYNE NPI PARTNERSIP P-4
COMBINED STATEMENT OF CHANGES IN NET ASSETS OF PARTNERSHIP
IN LIQUIDATION
(Unaudited)
PERIOD FROM
FEBRUARY 5,
TO JUNE 30,
2007
------------
Total Partners' capital at February 4, 2007 $1,249,484
Adjust assets to fair value, net of
estimated selling costs 4,826,220
Partners' distributions from February 5, 2007
to March 31, 2007 ( 578,019)
Revenues from February 5, 2007 to March 31, 2007 265,540
Operating expenses incurred from
February 5, 2007 to March 31, 2007 ( 56,480)
----------
Net assets of partnership in liquidation
at March 31, 2007 $5,706,745
Change in fair value of assets, net of
estimated selling costs 304,005
Partners' distributions from April 1, 2007
to June 30, 2007 ( 278,504)
Revenues from April 1, 2007 to June 30, 2007 406,220
Operating expenses incurred from April 1, 2007
to June 30, 2007 ( 45,964)
----------
Net assets of partnership in liquidation
at June 30, 2007 $6,092,502
==========
The accompanying condensed notes are an integral part of these
combined unaudited financial statements.
-20-
GEODYNE INSTITUTIONAL/PENSION ENERGY INCOME P-4 LIMITED PARTNERSHIP
GEODYNE NPI PARTNERSHIP P-4
COMBINED BALANCE SHEET
(GOING CONCERN BASIS)
(Unaudited)
ASSETS
DECEMBER 31,
2006
------------
CURRENT ASSETS:
Cash and cash equivalents $ 697,647
Accounts receivable:
Net Profits 154,779
Assets held for sale (Note 3) 12,789
----------
Total current assets $ 865,215
NET PROFITS INTERESTS, net, utilizing
the successful efforts method 303,374
----------
$1,168,589
==========
PARTNERS' CAPITAL (DEFICIT)
PARTNERS' CAPITAL (DEFICIT):
General Partner ($ 45,401)
Limited Partners, issued and
outstanding, 126,306 units 1,213,990
----------
Total Partners' capital $1,168,589
----------
$1,168,589
==========
The accompanying condensed notes are an integral part of these
combined unaudited financial statements.
-21-
GEODYNE INSTITUTIONAL/PENSION ENERGY INCOME P-4 LIMITED PARTNERSHIP
GEODYNE NPI PARTNERSHIP P-4
COMBINED STATEMENTS OF OPERATIONS
(GOING CONCERN BASIS)
(Unaudited)
THREE MONTHS
ENDED
JUNE 30,
2006
------------
REVENUES:
Net Profits $389,848
Interest income 4,304
--------
$394,152
COSTS AND EXPENSES:
Depletion of Net Profits
Interests $ 26,116
General and administrative
(Note 2) 35,653
--------
$ 61,769
--------
INCOME FROM CONTINUING OPERATIONS $332,383
DISCONTINUED OPERATIONS:
Income from discontinued operations
(Note 3) 15,593
--------
NET INCOME $347,976
========
GENERAL PARTNER:
Net income from continuing
operations $ 35,158
Net income from discontinued
operations 1,609
--------
NET INCOME $ 36,767
========
-22-
LIMITED PARTNERS:
Net income from continuing
operations $297,225
Net income from discontinued
operations 13,984
--------
NET INCOME $311,209
========
NET INCOME FROM CONTINUING
OPERATIONS PER UNIT $ 2.36
NET INCOME FROM DISCONTINUED
OPERATIONS PER UNIT 0.11
--------
NET INCOME PER UNIT $ 2.47
========
UNITS OUTSTANDING 126,306
The accompanying condensed notes are an integral part of these
combined unaudited financial statements.
-23-
GEODYNE INSTITUTIONAL/PENSION ENERGY INCOME P-4 LIMITED PARTNERSHIP
GEODYNE NPI PARTNERSHIP P-4
COMBINED STATEMENTS OF OPERATIONS
(GOING CONCERN BASIS)
(Unaudited)
PERIOD FROM SIX MONTHS
JANUARY 1, TO ENDED
FEBRUARY 4, JUNE 30,
2007 2006
------------- -----------
REVENUES:
Net Profits $102,646 $813,553
Interest income 1,333 8,789
-------- --------
$103,979 $822,342
COSTS AND EXPENSES:
Depletion of Net Profits
Interests $ 2,504 $ 39,045
General and administrative
(Note 2) 13,840 94,719
-------- --------
$ 16,344 $133,764
-------- --------
INCOME FROM CONTINUING OPERATIONS $ 87,635 $688,578
DISCONTINUED OPERATIONS:
Income from discontinued operations
(Note 3) 2,076 28,369
-------- --------
NET INCOME $ 89,711 $716,947
======== ========
GENERAL PARTNER:
Net income from continuing
operations $ 8,856 $ 71,493
Net income from discontinued
operations 208 2,919
-------- --------
NET INCOME $ 9,064 $ 74,412
======== ========
-24-
LIMITED PARTNERS:
Net income from continuing
operations $ 78,779 $617,085
Net income from discontinued
operations 1,868 25,450
-------- --------
NET INCOME $ 80,647 $642,535
======== ========
NET INCOME FROM CONTINUING
OPERATIONS PER UNIT $ 0.62 $ 4.89
NET INCOME FROM DISCONTINUED
OPERATIONS PER UNIT 0.01 0.20
-------- --------
NET INCOME PER UNIT $ 0.63 $ 5.09
======== ========
UNITS OUTSTANDING 126,306 126,306
The accompanying condensed notes are an integral part of these
combined unaudited financial statements.
-25-
GEODYNE INSTITUTIONAL/PENSION ENERGY INCOME P-4 LIMITED PARTNERSHIP
GEODYNE NPI PARTNERSHIP P-4
COMBINED STATEMENTS OF CASH FLOWS
(GOING CONCERN BASIS)
(Unaudited)
PERIOD FROM SIX MONTHS
JANUARY 1, TO ENDED
FEBRUARY 4, JUNE 30,
2007 2006
------------ ------------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 89,711 $716,947
Adjustments to reconcile net
income to net cash provided
by operating activities:
Depletion of Net Profits
Interests 2,513 39,962
Net change in accounts receivable/
accounts payable - Net
Profits 13,996 134,722
-------- --------
Net cash provided by operating
activities $106,220 $891,631
-------- --------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures $ - ($ 6,246)
Proceeds from sale of oil and
gas properties 42 -
-------- --------
Net cash provided (used) by investing
activities $ 42 ($ 6,246)
-------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Cash distributions ($ 8,816) ($997,471)
-------- --------
Net cash used by financing
activities ($ 8,816) ($997,471)
-------- --------
NET INCREASE (DECREASE) IN CASH AND
CASH EQUIVALENTS $ 97,446 ($112,086)
CASH AND CASH EQUIVALENTS AT
BEGINNING OF PERIOD 697,647 599,645
-------- --------
CASH AND CASH EQUIVALENTS AT
END OF PERIOD $795,093 $487,559
======== ========
The accompanying condensed notes are an integral part of these
combined unaudited financial statements.
-26-
GEODYNE INSTITUTIONAL/PENSION ENERGY INCOME P-5 LIMITED PARTNERSHIP
GEODYNE NPI PARTNERSHIP P-5
COMBINED STATEMENT OF NET ASSETS OF PARTNERSHIP IN LIQUIDATION
(Unaudited)
JUNE 30,
2007
----------
NET ASSETS OF PARTNERSHIP IN LIQUIDATION,
at fair value $8,138,452
==========
PARTNERS' CAPITAL:
General Partner $ 728,693
Limited Partners, issued and
outstanding, 118,449 units 7,409,759
----------
Total Partners' capital $8,138,452
==========
The accompanying condensed notes are an integral part of these
combined unaudited financial statements.
-27-
GEODYNE INSTITUTIONAL/PENSION ENERGY INCOME P-5 LIMITED PARTNERSHIP
GEODYNE NPI PARTNERSIP P-5
COMBINED STATEMENT OF CHANGES IN NET ASSETS OF PARTNERSHIP
IN LIQUIDATION
(Unaudited)
PERIOD FROM
FEBRUARY 5,
TO JUNE 30,
2007
------------
Total Partners' capital at February 4, 2007 $1,576,511
Adjust assets to fair value, net of
estimated selling costs 6,308,496
Partners' distributions from February 5, 2007
to March 31, 2007 ( 423,772)
Revenues from February 5, 2007 to March 31, 2007 318,939
Operating expenses incurred from
February 5, 2007 to March 31, 2007 ( 50,408)
----------
Net assets of partnership in liquidation
at March 31, 2007 $7,729,766
Change in fair value of assets, net of
estimated selling costs 340,715
Partners' distributions from April 1, 2007
to June 30, 2007 ( 391,191)
Revenues from April 1, 2007 to June 30, 2007 502,792
Operating expenses incurred from April 1, 2007
to June 30, 2007 ( 43,630)
----------
Net assets of partnership in liquidation
at June 30, 2007 $8,138,452
==========
The accompanying condensed notes are an integral part of these
combined unaudited financial statements.
-28-
GEODYNE INSTITUTIONAL/PENSION ENERGY INCOME P-5 LIMITED PARTNERSHIP
GEODYNE NPI PARTNERSHIP P-5
COMBINED BALANCE SHEET
(GOING CONCERN BASIS)
(Unaudited)
ASSETS
DECEMBER 31,
2006
------------
CURRENT ASSETS:
Cash and cash equivalents $ 546,848
Accounts receivables:
Net Profits 205,280
Assets held for sale (Note 3) 8,219
----------
Total current assets $ 760,347
NET PROFITS INTERESTS, net, utilizing
the successful efforts method 701,700
----------
$1,462,047
==========
PARTNERS' CAPITAL (DEFICIT)
PARTNERS' CAPITAL (DEFICIT):
General Partner ($ 24,852)
Limited Partners, issued and
outstanding, 118,449 units 1,486,899
----------
Total Partners' capital $1,462,047
----------
$1,462,047
==========
The accompanying condensed notes are an integral part of these
combined unaudited financial statements.
-29-
GEODYNE INSTITUTIONAL/PENSION ENERGY INCOME P-5 LIMITED PARTNERSHIP
GEODYNE NPI PARTNERSHIP P-5
COMBINED STATEMENTS OF OPERATIONS
(GOING CONCERN BASIS)
(Unaudited)
THREE MONTHS
ENDED
JUNE 30,
2006
------------
REVENUES:
Net Profits $358,314
Interest income 3,636
--------
$361,950
COSTS AND EXPENSES:
Depletion of Net Profits
Interests $ 28,234
General and administrative
(Note 2) 33,499
--------
$ 61,733
--------
INCOME FROM CONTINUING OPERATIONS $300,217
DISCONTINUED OPERATIONS:
Income from discontinued operations
(Note 3) 9,788
--------
NET INCOME $310,005
========
GENERAL PARTNER:
Net income from continuing
operations $ 32,199
Net income from discontinued
operations 999
--------
NET INCOME $ 33,198
========
-30-
LIMITED PARTNERS:
Net income from continuing
operations $268,018
Net income from discontinued
operations 8,789
--------
NET INCOME $276,807
========
NET INCOME FROM CONTINUING
OPERATIONS PER UNIT $ 2.26
NET INCOME FROM DISCONTINUED
OPERATIONS PER UNIT 0.07
--------
NET INCOME PER UNIT $ 2.33
========
UNITS OUTSTANDING 118,449
The accompanying condensed notes are an integral part of these
combined unaudited financial statements.
-31-
GEODYNE INSTITUTIONAL/PENSION ENERGY INCOME P-5 LIMITED PARTNERSHIP
GEODYNE NPI PARTNERSHIP P-5
COMBINED STATEMENTS OF OPERATIONS
(GOING CONCERN BASIS)
(Unaudited)
PERIOD FROM SIX MONTHS
JANUARY 1, TO ENDED
FEBRUARY 4, JUNE 30,
2007 2006
------------- -----------
REVENUES:
Net Profits $143,654 $850,648
Interest income 1,521 7,149
-------- --------
$145,175 $857,797
COSTS AND EXPENSES:
Depletion of Net Profits
Interests $ 8,542 $ 52,312
General and administrative
(Note 2) 13,111 90,379
-------- --------
$ 21,653 $142,691
-------- --------
INCOME FROM CONTINUING OPERATIONS $123,522 $715,106
DISCONTINUED OPERATIONS:
Income from discontinued operations
(Note 3) 1,539 17,615
-------- --------
NET INCOME $125,061 $732,721
======== ========
GENERAL PARTNER:
Net income from continuing
operations $ 12,969 $ 75,504
Net income from discontinued
operations 154 1,901
-------- --------
NET INCOME $ 13,123 $ 77,405
======== ========
-32-
LIMITED PARTNERS:
Net income from continuing
operations $110,553 $639,602
Net income from discontinued
operations 1,385 15,714
-------- --------
NET INCOME $111,938 $655,316
======== ========
NET INCOME FROM CONTINUING
OPERATIONS PER UNIT $ 0.93 $ 5.40
NET INCOME FROM DISCONTINUED
OPERATIONS PER UNIT 0.01 0.13
-------- --------
NET INCOME PER UNIT $ 0.94 $ 5.53
======== ========
UNITS OUTSTANDING 118,449 118,449
The accompanying condensed notes are an integral part of these
combined unaudited financial statements.
-33-
GEODYNE INSTITUTIONAL/PENSION ENERGY INCOME P-5 LIMITED PARTNERSHIP
GEODYNE NPI PARTNERSHIP P-5
COMBINED STATEMENTS OF CASH FLOWS
(GOING CONCERN BASIS)
(Unaudited)
PERIOD FROM SIX MONTHS
JANUARY 1, TO ENDED
FEBRUARY 4, JUNE 30,
2007 2006
------------ ------------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $125,061 $732,721
Adjustments to reconcile net
income to net cash provided
by operating activities:
Depletion of Net Profits
Interests 8,542 53,857
Settlement of asset retirement
obligation - ( 91)
Net change in accounts receivable/
accounts payable - Net
Profits ( 4,077) 51,892
-------- --------
Net cash provided by operating
activities $129,526 $838,379
-------- --------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures ($ 1,882) ($211,020)
-------- --------
Net cash used by investing
activities ($ 1,882) ($211,020)
-------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Cash distributions ($ 10,597) ($677,496)
-------- --------
Net cash used by financing
activities ($ 10,597) ($677,496)
-------- --------
NET INCREASE (DECREASE) IN CASH
AND CASH EQUIVALENTS $117,047 ($ 50,137)
CASH AND CASH EQUIVALENTS AT
BEGINNING OF PERIOD 546,848 479,513
-------- --------
CASH AND CASH EQUIVALENTS AT
END OF PERIOD $663,895 $429,376
======== ========
The accompanying condensed notes are an integral part of these
combined unaudited financial statements.
-34-
GEODYNE INSTITUTIONAL/PENSION ENERGY INCOME P-6 LIMITED PARTNERSHIP
GEODYNE NPI PARTNERSHIP P-6
COMBINED STATEMENT OF NET ASSETS OF PARTNERSHIP IN LIQUIDATION
(Unaudited)
JUNE 30,
2007
-----------
NET ASSETS OF PARTNERSHIP IN LIQUIDATION,
at fair value $12,207,041
===========
PARTNERS' CAPITAL:
General Partner $ 1,106,855
Limited Partners, issued and
outstanding, 143,041 units 11,100,186
-----------
Total Partners' capital $12,207,041
===========
The accompanying condensed notes are an integral part of these
combined unaudited financial statements.
-35-
GEODYNE INSTITUTIONAL/PENSION ENERGY INCOME P-6 LIMITED PARTNERSHIP
GEODYNE NPI PARTNERSIP P-6
COMBINED STATEMENT OF CHANGES IN NET ASSETS OF PARTNERSHIP
IN LIQUIDATION
(Unaudited)
PERIOD FROM
FEBRUARY 5,
TO JUNE 30,
2007
-------------
Total Partners' capital at February 4, 2007 $ 1,994,310
Adjust assets to fair value, net of
estimated selling costs 9,523,231
Partners' distributions from February 5, 2007
to March 31, 2007 ( 487,148)
Revenues from February 5, 2007 to March 31, 2007 360,045
Operating expenses incurred from
February 5, 2007 to March 31, 2007 ( 57,451)
-----------
Net assets of partnership in liquidation
at March 31, 2007 $11,332,987
Change in fair value of assets, net of
estimated selling costs 966,502
Partners' distributions from April 1, 2007
to June 30, 2007 ( 510,499)
Revenues from April 1, 2007 to June 30, 2007 472,371
Operating expenses incurred from April 1, 2007
to June 30, 2007 ( 54,320)
-----------
Net assets of partnership in liquidation
at June 30, 2007 $12,207,041
===========
The accompanying condensed notes are an integral part of these
combined unaudited financial statements.
-36-
GEODYNE INSTITUTIONAL/PENSION ENERGY INCOME P-6 LIMITED PARTNERSHIP
GEODYNE NPI PARTNERSHIP P-6
COMBINED BALANCE SHEET
(GOING CONCERN BASIS)
(Unaudited)
ASSETS
DECEMBER 31,
2006
------------
CURRENT ASSETS:
Cash and cash equivalents $ 661,731
Accounts receivable:
Net Profits Interests 6,110
----------
Total current assets $ 667,841
NET PROFITS INTERESTS, net, utilizing
the successful efforts method 1,196,173
----------
$1,864,014
==========
LIABILITIES AND PARTNERS' CAPITAL (DEFICIT)
CURRENT LIABILITIES:
Liabilities of assets held
for sale (Note 3) $ 25,179
----------
Total current liabilities $ 25,179
PARTNERS' CAPITAL (DEFICIT):
General Partner ($ 34,262)
Limited Partners, issued and
outstanding, 143,041 units 1,873,097
----------
Total Partners' capital $1,838,835
----------
$1,864,014
==========
The accompanying condensed notes are an integral part of these
combined unaudited financial statements.
-37-
GEODYNE INSTITUTIONAL/PENSION ENERGY INCOME P-6 LIMITED PARTNERSHIP
GEODYNE NPI PARTNERSHIP P-6
COMBINED STATEMENTS OF OPERATIONS
(GOING CONCERN BASIS)
(Unaudited)
THREE MONTHS
ENDED
JUNE 30,
2006
------------
REVENUES:
Net Profits $618,559
Interest income 5,436
--------
$623,995
COSTS AND EXPENSES:
Depletion of Net Profits
Interests $ 27,378
General and administrative
(Note 2) 40,238
--------
$ 67,616
--------
INCOME FROM CONTINUING OPERATIONS $556,379
DISCONTINUED OPERATIONS:
Income from discontinued operations
(Note 3) 88,542
--------
NET INCOME $644,921
========
GENERAL PARTNER:
Net income from continuing
operations $ 57,558
Net income from discontinued
operations 8,470
--------
NET INCOME $ 66,028
========
-38-
LIMITED PARTNERS:
Net income from continuing
operations $498,821
Net income from discontinued
operations 80,072
--------
NET INCOME $578,893
========
NET INCOME FROM CONTINUING
OPERATIONS PER UNIT $ 3.49
NET INCOME FROM DISCONTINUED
OPERATIONS PER UNIT 0.56
--------
NET INCOME PER UNIT $ 4.05
========
UNITS OUTSTANDING 143,041
The accompanying condensed notes are an integral part of these
combined unaudited financial statements.
-39-
GEODYNE INSTITUTIONAL/PENSION ENERGY INCOME P-6 LIMITED PARTNERSHIP
GEODYNE NPI PARTNERSHIP P-6
COMBINED STATEMENTS OF OPERATIONS
(GOING CONCERN BASIS)
(Unaudited)
PERIOD FROM SIX MONTHS
JANUARY 1, TO ENDED
FEBRUARY 4, JUNE 30,
2007 2006
------------- -----------
REVENUES:
Net Profits $191,836 $1,275,521
Interest income 1,632 10,823
-------- ----------
$193,468 $1,286,344
COSTS AND EXPENSES:
Depletion of Net Profits
Interests $ 12,860 $ 81,090
General and administrative
(Note 2) 15,392 103,961
-------- ----------
$ 28,252 $ 185,051
-------- ----------
INCOME FROM CONTINUING OPERATIONS $165,216 $1,101,293
DISCONTINUED OPERATIONS:
Income from discontinued operations
(Note 3) 5,932 93,753
-------- ----------
NET INCOME $171,148 $1,195,046
======== ==========
GENERAL PARTNER:
Net income from continuing
operations $ 17,516 $ 116,345
Net income from discontinued
operations 603 10,350
-------- ----------
NET INCOME $ 18,119 $ 126,695
======== ==========
-40-
LIMITED PARTNERS:
Net income from continuing
operations $147,700 $ 984,948
Net income from discontinued
operations 5,329 83,403
-------- ----------
NET INCOME $153,029 $1,068,351
======== ==========
NET INCOME FROM CONTINUING
OPERATIONS PER UNIT $ 1.03 $ 6.89
NET INCOME FROM DISCONTINUED
OPERATIONS PER UNIT 0.04 0.58
-------- ----------
NET INCOME PER UNIT $ 1.07 $ 7.47
======== ==========
UNITS OUTSTANDING 143,041 143,041
The accompanying condensed notes are an integral part of these
combined unaudited financial statements.
-41-
GEODYNE INSTITUTIONAL/PENSION ENERGY INCOME P-6 LIMITED PARTNERSHIP
GEODYNE NPI PARTNERSHIP P-6
COMBINED STATEMENTS OF CASH FLOWS
(GOING CONCERN BASIS)
(Unaudited)
PERIOD FROM SIX MONTHS
JANUARY 1, TO ENDED
FEBRUARY 4, JUNE 30,
2007 2006
------------ ------------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $171,148 $1,195,046
Adjustments to reconcile net
income to net cash provided
by operating activities:
Depletion of Net Profits
Interests 12,969 91,925
Settlement of asset retirement
obligation - ( 2,312)
Net change in accounts receivable/
accounts payable - Net
Profits ( 7,883) 138,421
-------- ----------
Net cash provided by operating
activities $176,234 $1,423,080
-------- ----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures ($ 2,534) ($ 336,882)
-------- ----------
Net cash used by investing
activities ($ 2,534) ($ 336,882)
-------- ----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Cash distributions ($ 15,673) ($1,156,250)
-------- ----------
Net cash used by financing
activities ($ 15,673) ($1,156,250)
-------- ----------
NET INCREASE (DECREASE) IN CASH AND
CASH EQUIVALENTS $158,027 ($ 70,052)
CASH AND CASH EQUIVALENTS AT
BEGINNING OF PERIOD 661,731 770,659
-------- ----------
CASH AND CASH EQUIVALENTS AT
END OF PERIOD $819,758 $ 700,607
======== ==========
The accompanying condensed notes are an integral part of these
combined unaudited financial statements.
-42-
GEODYNE INSTITUTIONAL/PENSION PROGRAM
CONDENSED NOTES TO THE COMBINED UNAUDITED FINANCIAL STATEMENTS
JUNE 30, 2007
(Unaudited)
1. BASIS OF PRESENTATION
---------------------
These unaudited financial statements reflect the combined accounts of each
Geodyne Institutional/Pension Energy Income Limited Partnership and the
related Geodyne NPI Partnership after the elimination of all
inter-partnership transactions and balances. Each limited partnership is a
general partner in the related Geodyne Institutional/Pension Energy Income
Limited Partnership in which Geodyne Resources, Inc. serves as the
managing partner. Unless the context indicates otherwise, all references
to a "Partnership" or the "Partnerships" are references to the limited
partnership and its related NPI partnership, collectively, and all
references to the "General Partner" are references to the general partner
of the limited partnerships (Geodyne Resources, Inc.) and the managing
partner of the NPI partnerships, collectively. These unaudited combined
financial statements are presented on a going concern basis as of December
31, 2006 and for the period January 1, 2007 through February 4, 2007 and
the three and six months ended June 30, 2006. On February 5, 2007, the
General Partner mailed a notice to the limited partners announcing that
the Partnerships will terminate at the end of their current term, December
31, 2007. Consequently, the Partnerships adopted the liquidation basis of
accounting effective February 5, 2007. The liquidation basis of accounting
reports the net assets of the Partnerships at their net realizable value.
Adjustments were 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 were valued at their historical
cost, which approximates fair value. Oil and gas properties were valued at
their estimated net sales price, which was estimated utilizing discounted
cash flows based on strip pricing as of June 30, 2007 at a discount rate
of 10% for proved developed producing reserves, 18% for proved developed
non-producing reserves and 20% for proved undeveloped reserves. An
adjustment was made to the discounted cash flows for the effects of gas
balancing and asset retirement obligations. A provision was also made to
account for expenses that will be incurred directly related to the sale of
the oil and gas properties. The allocation of the net assets of
Partnership in liquidation to the General Partner and limited partners was
calculated using the current allocation of income and expenses, which may
change if a Partnership's distributions from the commencement of the
property investment period reach a yearly average equal to at least 12% of
the limited partners subscriptions.
-43-
As used in these unaudited financial statements, the Partnerships' net
profits and royalty interests in oil and gas sales are referred to as "Net
Profits" and the Partnerships' net profits and royalty interests in oil
and gas properties are referred to as "Net Profits Interests". The working
interests from which the Partnerships' Net Profits Interests are carved
out are referred to as "Working Interests".
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 the Partnerships' Net
Profits Interests 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 fair value of the net
assets of Partnership in liquidation 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 Combined Unaudited Statements of
Changes in Net Assets of Partnership in Liquidation at June 30, 2007.
General Limited
Partnership Partner Partners Total
----------- --------- ---------- ----------
P-1 $129,000 $ 733,000 $ 862,000
P-3 133,000 1,201,000 1,334,000
P-4 74,000 665,000 739,000
P-5 101,000 905,000 1,006,000
P-6 170,000 1,532,000 1,702,000
ACCOUNTING POLICIES
-------------------
The Combined Unaudited Statements of Net Assets of Partnership in
Liquidation as of June 30, 2007, Combined Unaudited Statements of Changes
in Net Assets of Partnership in Liquidation as of June 30, 2007, Combined
Unaudited Statements of Operations for the period from January 1, 2007 to
February 4, 2007 and the three and six months ended June 30, 2006, and
Combined Unaudited Statements of Cash Flows for the period from January 1,
2007 to February 4, 2007 and the six months ended June 30, 2006 have been
prepared by the General Partner. In the opinion of management the
financial statements referred to above include all necessary adjustments,
consisting of normal recurring adjustments, to present fairly the combined
fair value of net assets of Partnership in liquidation at June 30, 2007,
the combined unaudited results of operations for the period from January
-44-
1, 2007 to February 4, 2007 and the three and six months ended June 30,
2006, the combined unaudited results of changes in net assets of
Partnership in liquidation from February 5, 2007 to June 30, 2007, and the
combined unaudited cash flows for the period from January 1, 2007 to
February 4, 2007 and the six months ended June 30, 2006.
Information and footnote disclosures normally included in financial
statements prepared in accordance with generally accepted accounting
principles were condensed or omitted. The accompanying unaudited interim
financial statements should be read in conjunction with the Partnerships'
Annual Report on Form 10-K filed for the year ended December 31, 2006. The
results of operations for the period ending February 4, 2007 and the
changes in fair value of net assets of Partnership in liquidation for the
period ending June 30, 2007 are not necessarily indicative of the results
to be expected for the full year.
The Limited Partners' net income or loss per unit is based upon each $100
initial capital contribution.
STATEMENTS OF CASH FLOWS
------------------------
Cash flows from operating, investing and financing activities presented in
the Combined Unaudited Statements of Cash Flows include cash flows
attributable to discontinued operations and assets held for sale for all
periods presented.
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 15, 2007. The Partnerships are currently
assessing the impact of FAS No. 157 on its fair value of net assets of
Partnership in liquidation and its changes in net assets of Partnership in
liquidation.
-45-
PARTNERSHIP TERMINATION
-----------------------
Pursuant to the terms of the partnership agreements for the Partnerships
(the "Partnership Agreements"), the Partnerships would have terminated on
December 31, 2005. However, the Partnership Agreements provide that the
General Partner may extend the term of each Partnership for up to five
periods of two years each. The General Partner has extended the terms of
the Partnerships for their first two-year extension period to December 31,
2007. On February 5, 2007, the General Partner mailed a notice to the
limited partners announcing that the Partnerships will terminate at the
end of their current term, December 31, 2007. The reader should refer to
Note 4 - Partnership Termination to the combined unaudited financial
statements for additional information regarding this matter.
RECLASSIFICATION
----------------
Certain prior year balances were reclassified to conform with current year
presentation.
NET PROFITS INTERESTS
---------------------
Before implementation of the liquidation basis of accounting, the
Partnerships followed the successful efforts method of accounting for
their Net Profits Interests. Under the successful efforts method, the
Partnerships capitalized all acquisition costs. Property acquisition costs
included costs incurred by the Partnerships or the General Partner to
acquire a Net Profits Interest or other non-operating interest in
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 Net Profits Interests acquired by the General Partner
was adjusted to reflect the net cash results of operations, including
interest incurred to finance the acquisition, for the period of time the
properties were held by the General Partner prior to their transfer to the
Partnerships.
Depletion of the cost of Net Profits Interests was computed on the
unit-of-production method through February 4, 2007. The Partnerships'
calculation of depletion of its Net Profits Interests included estimated
dismantlement and abandonment costs and estimated salvage value of the
equipment. When complete units of depreciable property were retired or
sold, the asset cost and related accumulated
-46-
depreciation were eliminated with any gain or loss (including the
elimination of the asset retirement obligation) reflected in income. On
February 5, 2007, the Partnerships adopted the liquidation basis of
accounting and no longer calculate deprecation, depletion, and
amortization.
The Partnerships do not directly bear capital costs. However, the
Partnerships indirectly bear certain capital costs incurred by the owners
of the Working Interests to the extent such capital costs are charged
against the applicable oil and gas revenues in calculating the Net Profits
payable to the Partnerships. For financial reporting purposes only, such
capital costs are reported as capital expenditures in the Partnerships'
Combined Unaudited Statements of Cash Flows.
ASSET RETIREMENT OBLIGATIONS
----------------------------
The Partnerships' wells must be properly plugged and abandoned after their
oil and gas reserves are exhausted. The Partnerships follow FAS No. 143,
"Accounting for Asset Retirement Obligations" in accounting for the future
expenditures that will be necessary to plug and abandon these wells. FAS
No. 143 requires the estimated plugging and abandonment obligations to be
(i) 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 (ii) capitalized as part of the carrying amount of the well.
Estimated abandonment dates will be revised 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. Cash flows will 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.
2. TRANSACTIONS WITH RELATED PARTIES
---------------------------------
The Partnership Agreements provide for reimbursement to the General
Partner for all direct general and administrative expenses and for the
general and administrative overhead applicable to the Partnerships based
on an allocation of actual costs incurred. The general and administrative
expenses are included as a component of the net assets of Partnership in
liquidation. The reader should refer to Note 1 - Basis of Presentation to
the combined unaudited financial statements included in Part I, Item 1 of
this Quarterly Report on Form 10-Q for additional information regarding
this matter. During the three months ended June
-47-
30, 2007, the following payments were made to the General Partner or its
affiliates by the Partnerships:
Direct General Administrative
Partnership and Administrative Overhead
----------- ------------------- ---------------
P-1 $12,340 $28,440
P-3 15,171 44,640
P-4 11,054 33,240
P-5 10,703 31,170
P-6 11,831 37,641
During the six months ended June 30, 2007, the following payments were
made to the General Partner or its affiliates by the Partnerships:
Direct General Administrative
Partnership and Administrative Overhead
----------- ------------------- ---------------
P-1 $50,856 $56,880
P-3 55,712 89,280
P-4 47,008 66,480
P-5 41,869 62,340
P-6 43,783 75,282
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 following approximate dollar amounts of
compensation were paid by the Partnerships to the affiliates:
Three Months Ended Six Months Ended
Partnership June 30, 2007 June 30, 2007
----------- ------------------- -------------------
P-1 $ 2,000 $ 4,000
P-3 8,000 15,000
P-4 2,000 4,000
P-5 10,000 20,000
P-6 33,000 65,000
3. DISCONTINUED OPERATIONS
-----------------------
During August 2006, the General Partner approved a plan to sell an
increased amount of the Partnerships' properties as a result of the
generally favorable current environment for oil and gas properties. These
properties were classified as assets held for sale. On February 1, 2007
the P-1 and P-3 Partnerships sold their interests in a number of producing
properties at a large public oil and gas
-48-
auction which resulted in proceeds of approximately $441,000 and $556,000,
respectively (net of fees). The sale resulted in a gain on disposal of
discontinued operations of approximately $443,000 and $557,000 for the P-1
and P-3 Partnerships, respectively.
The properties sold in the February 2007 auction and remaining properties
classified as assets held for sale 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 for the period of January 1, 2007 through February 4,
2007 for these properties were classified as discontinued operations, and
prior periods were restated. Once properties are classified as assets held
for sale, they no longer incur any depreciation, depletion, and
amortization expense. In conjunction with the planned sales, the
Partnerships will retain all assets and liabilities through the effective
date of the sale and purchasers will assume the asset retirement
obligations associated with the sold interests. On February 5, 2007, the
Partnerships adopted the liquidation basis of accounting. The reader
should refer to Note 1 - Basis of Presentation to the combined unaudited
financial statements for additional information regarding this matter.
Net income from discontinued operations is as follows:
P-1 Partnership
---------------
Three Months
Ended
June 30,
2006
------------
Net Profits $372,536
Accretion and depletion
of Net Profits Interests ( 8,133)
--------
Income from discontinued
operations $364,403
========
-49-
Period from Six Months
January 1, to Ended
February 4, June 30,
2007 2006
------------- ------------
Net Profits $65,491 $700,212
Accretion and depletion
of Net Profits Interests ( 304) ( 17,486)
------- --------
Income from discontinued
operations $65,187 $682,726
======= ========
P-3 Partnership
---------------
Three Months
Ended
June 30,
2006
------------
Net Profits $478,551
Accretion and depletion
of Net Profits Interests ( 10,548)
--------
Income from discontinued
operations $468,003
========
Period from Six Months
January 1, to Ended
February 4, June 30,
2007 2006
------------- -----------
Net Profits $85,478 $897,769
Accretion and depletion
of Net Profits Interests ( 355) ( 22,631)
------- --------
Income from discontinued
operations $85,123 $875,138
======= ========
-50-
P-4 Partnership
---------------
Three Months
Ended
June 30,
2006
------------
Net Profits $ 16,149
Accretion and depletion
of Net Profits Interests ( 556)
--------
Income from discontinued
operations $ 15,593
========
Period from Six Months
January 1, to Ended
February 4, June 30,
2007 2006
------------- -----------
Net Profits $2,085 $ 29,286
Accretion and depletion
of Net Profits Interests ( 9) ( 917)
------ --------
Income from discontinued
operations $2,076 $ 28,369
====== ========
P-5 Partnership
---------------
Three Months
Ended
June 30,
2006
------------
Net Profits $ 10,005
Accretion and depletion
of Net Profits Interests ( 217)
--------
Income from discontinued
operations $ 9,788
========
-51-
Period from Six Months
January 1, to Ended
February 4, June 30,
2007 2006
------------- -----------
Net Profits $1,539 $ 19,160
Accretion and depletion
of Net Profits Interests - ( 1,545)
------ --------
Income from discontinued
operations $1,539 $ 17,615
====== ========
P-6 Partnership
---------------
Three Months
Ended
June 30,
2006
------------
Net Profits $ 84,276
Accretion and depletion
of Net Profits Interests 4,266
--------
Income from discontinued
operations $ 88,542
========
Period from Six Months
January 1, to Ended
February 4, June 30,
2007 2006
------------- -----------
Net Profits $6,041 $104,588
Accretion and depletion
of Net Profits Interests ( 109) ( 10,835)
------ --------
Income from discontinued
operations $5,932 $ 93,753
====== ========
-52-
Assets (liabilities) of the discontinued operations as of December 31, 2006 were
as follows:
P-1
Partnership
------------
Accounts receivable - Net Profits $ 103,142
Net Profits Interests 1,968,201
Accumulated depreciation, depletion,
and amortization of Net Profits
Interests and valuation allowance ( 1,759,794)
----------
Net assets held for sale $ 311,549
==========
P-3
Partnership
------------
Accounts receivable - Net Profits $ 139,365
Net Profits Interests 2,489,494
Accumulated depreciation, depletion,
and amortization of Net Profits
Interests and valuation allowance ( 2,224,272)
----------
Net assets held for sale $ 404,587
==========
P-4
Partnership
------------
Accounts receivable - Net Profits $ 9,348
Net Profits Interests 46,525
Accumulated depreciation, depletion,
and amortization of Net Profits
Interests and valuation allowance ( 43,084)
----------
Net assets held for sale $ 12,789
==========
P-5
Partnership
------------
Accounts receivable - Net Profits $ 6,955
Net Profits Interests 44,972
Accumulated depreciation, depletion,
and amortization of Net Profits
Interests and valuation allowance ( 43,708)
----------
Net assets held for sale $ 8,219
==========
-53-
P-6
Partnership
------------
Accounts payable - Net Profits ($ 25,179)
Net Profits Interests 560,299
Accumulated depreciation, depletion,
and amortization of Net Profits
Interests and valuation allowance ( 560,299)
--------
Net liabilities held for sale ($ 25,179)
========
4. PARTNERSHIP TERMINATION
-----------------------
The Partnerships would have terminated on December 31, 2005 in accordance
with the Partnership Agreements. However, the Partnership Agreements
provide that the General Partner may extend the term of each Partnership
for up to five periods of two years each. The General Partner has extended
the terms of the Partnerships for their first two-year extension, thereby
extending the termination date to December 31, 2007. On February 5, 2007
the General Partner mailed a notice to the limited partners announcing
that (i) the Partnerships will terminate on December 31, 2007 and (ii) the
General Partner will liquidate the Partnerships' assets and satisfy their
liabilities as part of the winding-up process required by the Partnership
Agreements and state law.
The General Partner commenced 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 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.
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
-54-
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.
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
ceased processing transfers among third parties which were not postmarked
on or before June 30, 2007 and received by the General Partner on or
before July 13, 2007. The General Partner will not impose these deadlines
on transfers between family members, their trusts, IRA accounts, or
similar related entities and transfers due to death or divorce.
5. SUBSEQUENT EVENT
----------------
On July 11, 2007, the P-4 and P-6 Partnerships sold their interests in a
number of producing properties to independent third parties and Samson
Resources Company, an affiliate of the General Partner, at a large public
oil and gas auction which resulted in proceeds of the following
approximate dollar amounts:
Proceeds (net of Fees)
Samson
Independent Resources
Partnership Third Parties Company Total
----------- ------------- ---------- ----------
P-4 $1,308,000 $4,000 $1,312,000
P-6 3,368,000 - 3,368,000
The sale resulted in a gain of approximately $194,000 and $922,000 for the
P-4 and the P-6 Partnerships, respectively.
-55-
On August 8, 2007, the P-1, P-3, P-5 and P-6 Partnerships sold their
interests in a number of producing properties to independent third
parties, Samson Lone Star, LLC and Samson Resources Company, affiliates of
the General Partner, at a large public oil and gas auction which resulted
in proceeds of the following approximate dollar amounts:
Proceeds (net of Fees)
Affiliates
Of the
Independent General
Partnership Third Parties Partner Total
----------- ------------- ----------- ----------
P-1 $2,450,000 $628,000 $3,078,000
P-3 2,993,000 696,000 3,689,000
P-5 54,000 427,000 481,000
P-6 48,000 531,000 579,000
The sale resulted in a gain of the following approximate dollar amounts:
Partnership Gain
----------- ----------
P-1 $ 754,000
P-3 909,000
P-5 159,000
P-6 96,000
-56-
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
USE OF FORWARD-LOOKING STATEMENTS AND ESTIMATES
- -----------------------------------------------
This Quarterly Report contains certain forward-looking statements. The
words "anticipate", "believe", "expect", "plan", "intend", "estimate",
"project", "could", "may" and similar expressions are intended to identify
forward-looking statements. Such statements reflect management's current
views with respect to future events and financial performance. This
Quarterly Report also includes certain information, which is, or is based
upon, estimates and assumptions. Such estimates and assumptions are
management's efforts to accurately reflect the condition and operation of
the Partnerships.
Use of forward-looking statements and estimates and assumptions involve
risks and uncertainties which include, but are not limited to, the
volatility of oil and gas prices, the uncertainty of reserve information,
the operating risk associated with oil and gas properties (including the
risk of personal injury, death, property damage, damage to the well or
producing reservoir, environmental contamination, and other operating
risks), the prospect of changing tax and regulatory laws, the availability
and capacity of processing and transportation facilities, the general
economic climate, the supply and price of foreign imports of oil and gas,
the level of consumer product demand, and the price and availability of
alternative fuels. Should one or more of these risks or uncertainties
occur or should estimates or underlying assumptions prove incorrect,
actual conditions or results may vary materially and adversely from those
stated, anticipated, believed, estimated, and otherwise indicated.
PARTNERSHIP TERMINATION
- -----------------------
Pursuant to the terms of the partnership agreements for the Partnerships
(the "Partnership Agreements"), the Partnerships would have terminated on
December 31, 2005. However, the Partnership Agreements provide that the
General Partner may extend the term of each Partnership for up to five
periods of two years each. The General Partner has extended the terms of
the Partnerships for their first two-year extension period to December 31,
2007. On February 5, 2007, the General Partner mailed a notice to the
limited partners announcing that the Partnerships will terminate at the
end of their current term, December 31, 2007. The reader should refer to
Note 4 - Partnership Termination to the combined unaudited financial
statements included in Part I, Item 1 of this Quarterly Report on Form
10-Q for additional information regarding this matter.
-57-
GENERAL
- -------
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.
LIQUIDITY AND CAPITAL RESOURCES
- -------------------------------
The Partnerships began operations and investors were assigned their rights
as limited partners, having made capital contributions in the amounts and
on the dates set forth below:
Limited
Date of Partner Capital
Partnership Activation Contributions
----------- ----------------- ---------------
P-1 October 25, 1988 $10,807,400
P-3 May 10, 1989 16,963,700
P-4 November 21, 1989 12,630,600
P-5 February 27, 1990 11,844,900
P-6 September 5, 1990 14,304,100
In general, the amount of funds available for acquisition of producing
properties was equal to the capital contributions of the limited partners,
less 15% for sales commissions and organization and management fees. All
of the Partnerships have fully invested their capital contributions.
On February 1, 2007, the P-1 and P-3 Partnerships sold their interests in
a number of producing properties to independent third parties at a large
public oil and gas auction which resulted in proceeds of the following
approximate dollar amounts:
Proceeds
Partnership (net of fees)
----------- -------------
P-1 $441,000
P-3 556,000
-58-
On May 9, 2007, the P-1 and P-3 Partnerships sold their interests in a
number of producing properties to independent third parties at a large
public oil and gas auction which resulted in proceeds and gain of the
following approximate dollar amounts:
Proceeds
Partnership (Net of Fees) Gain
----------- ------------- ---------
P-1 $442,000 $269,000
P-3 557,000 340,000
No such material sales occurred during the six months ended June 30, 2007
for the P-4, P-5 and P-6 Partnerships. No such sales occurred during the
six months ended June 30, 2006 for the P-1, P-3, P-4, P-5 and P-6
Partnerships.
Net proceeds from operations less necessary operating capital are
distributed to the limited partners on a quarterly basis. The
Partnerships' ability to make cash distributions depends primarily upon
the level of available cash flow generated by the Partnerships' 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. While the General Partner cannot
predict future pricing trends, it believes the working capital available
as of June 30, 2007 and the net revenue generated from future operations
and property sales will provide sufficient working capital to meet current
and future obligations.
Occasional expenditures for new wells or well recompletions, or workovers
may reduce or eliminate cash available for a particular quarterly cash
distribution.
The reader should refer to the discussion above under the heading
"Partnership Termination" for information regarding termination of the
Partnerships as of December 31, 2007.
CRITICAL ACCOUNTING POLICIES
- ----------------------------
These unaudited financial statements reflect the combined accounts of each
Geodyne Institutional/Pension Energy Income Limited Partnership and the
related Geodyne NPI Partnership after the elimination of all
inter-partnership transactions and balances. These unaudited financial
statements are presented on a going concern basis as of December 31, 2006
and for the period January 1, 2007 through February 4, 2007 and the three
and six months ended June 30, 2006. On February 5, 2007, the General
Partner mailed a notice to the limited partners announcing that the
Partnerships will terminate at the end of their current term, December 31,
-59-
2007. Consequently, the Partnerships adopted the liquidation basis of
accounting effective February 5, 2007. The liquidation basis of accounting
reports the net assets of the Partnerships at their net realizable value.
Adjustments were 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 were valued at their historical
cost, which approximates fair value. Net Profits Interests were valued at
their estimated net sales price, which was estimated utilizing discounted
cash flows based on strip pricing as of June 30, 2007 at a discount rate
of 10% for proved developed producing reserves, 18% for proved developed
non-producing reserves and 20% for proved undeveloped reserves. An
adjustment was made to the discounted cash flows for the effects of gas
balancing and asset retirement obligations. A provision was also made to
account for expenses that will be incurred directly related to the sale of
the Net Profits Interests. The allocation of the net assets of Partnership
in liquidation to the General Partner and limited partners was calculated
using the current allocation of income and expenses, which may change if a
Partnership's distributions from the commencement of the property
investment period reach a yearly average equal to at least 12% of the
limited partners subscriptions.
Prior to the adoption of the liquidation basis of accounting, the
Partnerships followed the successful efforts method of accounting for
their Net Profits Interests. Under the successful efforts method, the
Partnerships capitalized all property acquisition costs and development
costs incurred in connection with the further development of oil and gas
reserves. Property acquisition costs included costs incurred by the
Partnerships or the General Partner to acquire producing properties,
including related title insurance or examination costs, commissions,
engineering, legal and accounting fees, and similar costs directly related
to the acquisitions plus an allocated portion of the General Partner's
property screening costs. The acquisition cost to the Partnerships of the
Net Profits Interests acquired by the General Partner was adjusted to
reflect the net cash results of operations, including interest incurred to
finance the acquisition, for the period of time the properties were held
by the General Partner.
Depletion of the cost of Net Profits Interests was computed on the
unit-of-production method through February 4, 2007. The Partnerships'
calculation of depletion of its Net Profits Interests included estimated
dismantlement and abandonment costs and estimated salvage value of the
equipment. When complete units of depreciable property were retired or
sold, the asset cost and related accumulated depreciation were eliminated
with any gain or loss (including the elimination of the asset retirement
obligation) reflected in income. On February 5, 2007, the
-60-
Partnerships adopted the liquidation basis of accounting and no longer
calculate deprecation, depletion, and amortization.
Accounts Receivable (Accounts Payable) - Net Profits
Revenues from a Net Profits Interest consist of a share of the oil and gas
sales of the property, less operating and production expenses. The
Partnerships accrue for oil and gas revenues less expenses from the Net
Profits Interests. Sales of gas applicable to the Net Profits Interests
are recorded as revenue when the gas is metered and title transferred
pursuant to the gas sales contracts. During such times as sales of gas
exceed a Partnership's pro rata Net Profits Interest in a well, such sales
are recorded as revenue unless total sales from the well have exceeded the
Partnership's share of estimated total gas reserves attributable to the
underlying property, at which time such excess is recorded as a liability.
The rates per Mcf used to calculate this liability are based on the
average gas price for which the Partnerships are currently settling this
liability. This liability is recorded as a reduction of accounts
receivable.
Also included in accounts receivable (payable) - Net Profits are amounts
which represent costs deferred or accrued for Net Profits relating to
lease operating expenses incurred in connection with the net underproduced
or overproduced gas imbalance positions. The rate used in calculating the
deferred charge or accrued liability is the annual average production
costs per Mcf.
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
(i) 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 (ii) capitalized as part of the carrying amount of the well. The
asset retirement obligations are included as a component of the net assets
of Partnership in liquidation. The reader should refer to Note 1 - Basis
of Presentation to the combined unaudited financial statements included in
Part I, Item 1 of this Quarterly Report on Form 10-Q for additional
information regarding this matter.
-61-
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 15, 2007. The Partnerships are currently
assessing the impact of FAS No. 157 on its fair value of net assets of
Partnership in liquidation and its changes in net assets of Partnership in
liquidation.
PROVED RESERVES AND NET PRESENT VALUE
- -------------------------------------
The process of estimating oil and gas reserves is complex, requiring
significant subjective decisions in the evaluation of available
geological, engineering, and economic data for each reservoir. The data
for a given reservoir may change substantially over time as a result of,
among other things, additional development activity, production history,
and viability of production under varying economic conditions;
consequently, it is reasonably possible that material revisions to
existing reserve estimates may occur in the future. Although every
reasonable effort is 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 net present values
of the Partnerships' reserves are included as a component of the net
assets of Partnership in liquidation. The reader should refer to Note 1 -
Basis of Presentation to the combined unaudited financial statements
included in Part I, Item 1 of this Quarterly Report on Form 10-Q for
additional information regarding this matter.
The net present value of the Partnerships' reserves was estimated
utilizing discounted cash flows based on strip pricing as of June 30, 2007
at a discount rate of 10% for proved developed producing reserves, 18% for
proved developed non-producing reserves and 20% for proved undeveloped
reserves. An adjustment has been made to the discounted cash flows for the
effects of gas balancing and asset retirement obligations. A provision has
also been made to account for expenses that will be incurred directly
related to the sale of the oil and gas properties.
-62-
RESULTS OF OPERATIONS
- ---------------------
GENERAL DISCUSSION
The following general discussion should be read in conjunction with the
analysis of results of operations provided below.
The primary source of liquidity and Partnership cash distributions comes
from the net revenues generated from the sale of oil and gas produced from
the Partnerships' oil and gas properties. Recently, the sale of oil and
gas properties is a significant source of net revenues. The level of net
revenues is highly dependent upon the prices received for oil and gas
sales, which prices have historically been very volatile and may continue
to be so. Additionally, lower oil and natural gas prices may reduce the
amount of oil and gas that is economic to produce and reduce the
Partnerships' revenues and cash flow. Various factors beyond the
Partnerships' control will affect prices for oil and natural gas, such as:
* Worldwide and domestic supplies of oil and natural gas;
* The ability of the members of the Organization of Petroleum
Exporting Countries ("OPEC") to agree to and maintain oil
prices and production quotas;
* Political instability or armed conflict in oil-producing
regions or around major shipping areas;
* The level of consumer demand and overall economic activity;
* The competitiveness of alternative fuels;
* Weather conditions and the impact of weather- related events;
* The availability of pipelines for transportation;
* Domestic and foreign government regulations and taxes;
* 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 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.
-63-
In addition to pricing, 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. Despite this general
trend of declining production, several factors can cause volumes sold to
increase, remain relatively constant, or decrease at an even greater rate
over a given period. These factors include, but are not limited to:
* Geophysical conditions which cause an acceleration of the
decline in production;
* The shutting-in of wells due to low oil and gas prices (or the
opening of previously shut-in wells due to high oil and gas
prices), mechanical difficulties, loss of a
market/transportation, or performance of workovers,
recompletions, or other operations in the well;
* Prior period volume adjustments (either positive or negative)
made by the operators of the properties;
* Adjustments in ownership or rights to production in accordance
with agreements governing the operation or ownership of the
well (such as adjustments that occur at payout or due to gas
balancing);
* Completion of enhanced recovery projects which increase
production for the well; and
* Sales of properties.
Many of these factors can be very significant for a single well or for
many wells over a short period of time. Due to the large number of wells
owned by the Partnerships, these factors are generally not material as
compared to the normal declines in production experienced on all remaining
wells.
P-1 PARTNERSHIP
THE PERIOD FROM JANUARY 1, 2007 TO FEBRUARY 4, 2007
Period from
January 1, to
February 4,
2007
-------------
Net Profits $ 43,565
Barrels produced 177
Mcf produced 10,774
Average price/Bbl $ 49.26
Average price/Mcf $ 4.85
Income and expenses for the P-1 Partnership for the period from January 1
to February 4, 2007 are not comparable to the three and six months ended
June 30, 2006.
-64-
THE PERIOD FROM FEBRUARY 5, 2007 TO MARCH 31, 2007
Barrels produced 2,185
Mcf produced 32,910
Average price/Bbl $ 52.84
Average price/Mcf $ 6.21
Revenues from February 5, 2007 to March 31, 2007 were as follows:
Net Profits $232,069
Interest income 3,220
--------
$235,289
========
Operating expenses from February 5, 2007 to March 31, 2007 were as
follows:
Accretion expenses $ 867
General and administrative 54,807
--------
$ 55,674
========
THE PERIOD FROM APRIL 1, 2007 TO JUNE 30, 2007
Barrels produced 1,971
Mcf produced 44,912
Average price/Bbl $ 60.59
Average price/Mcf $ 6.33
Revenues from April 1, 2007 to June 30, 2007 were as follows:
Net Profits $361,595
Interest income 4,807
Other income 1,169
--------
$367,571
========
Operating expenses from April 1, 2007 to June 30, 2007 were as follows:
Accretion expenses $ 1,313
General and administrative 40,780
--------
$ 42,093
========
-65-
P-3 PARTNERSHIP
THE PERIOD FROM JANUARY 1, 2007 TO FEBRUARY 4, 2007
Period from
January 1, to
February 4,
2007
-------------
Net Profits $ 74,689
Barrels produced 237
Mcf produced 17,198
Average price/Bbl $ 49.02
Average price/Mcf $ 5.14
Income and expenses for the P-3 Partnership for the period from January 1
to February 4, 2007 are not comparable to the three and six months ended
June 30, 2006.
THE PERIOD FROM FEBRUARY 5, 2007 TO MARCH 31, 2007
Barrels produced 2,776
Mcf produced 49,886
Average price/Bbl $ 52.93
Average price/Mcf $ 6.40
Revenues from February 5, 2007 to March 31, 2007 were as follows:
Net Profits $339,241
Interest income 5,475
--------
$344,716
========
Operating expenses from February 5, 2007 to March 31, 2007 were as
follows:
Accretion expenses $ 1,407
General and administrative 67,321
--------
$ 68,728
========
THE PERIOD FROM APRIL 1, 2007 TO JUNE 30, 2007
Barrels produced 2,837
Mcf produced 69,088
Average price/Bbl $ 60.64
Average price/Mcf $ 6.46
-66-
Revenues from April 1, 2007 to June 30, 2007 were as follows:
Net Profits $544,433
Interest income 7,097
Other income 1,473
--------
$553,003
========
Operating expenses from April 1, 2007 to June 30, 2007 were as follows:
Accretion expenses $ 2,095
General and administrative 59,811
--------
$ 61,906
========
P-4 PARTNERSHIP
THE PERIOD FROM JANUARY 1, 2007 TO FEBRUARY 4, 2007
Period from
January 1, to
February 4,
2007
-------------
Net Profits $102,646
Barrels produced 1,173
Mcf produced 11,890
Average price/Bbl $ 54.94
Average price/Mcf $ 5.85
Income and expenses for the P-4 Partnership for the period from January 1
to February 4, 2007 are not comparable to the three and six months ended
June 30, 2006.
THE PERIOD FROM FEBRUARY 5, 2007 TO MARCH 31, 2007
Barrels produced 2,361
Mcf produced 26,118
Average price/Bbl $ 61.08
Average price/Mcf $ 7.05
Revenues from February 5, 2007 to March 31, 2007 were as follows:
Net Profits $261,187
Interest income 4,353
--------
$265,540
========
-67-
Operating expenses from February 5, 2007 to March 31, 2007 were as
follows:
Accretion expenses $ 1,126
General and administrative 55,354
--------
$ 56,480
========
THE PERIOD FROM APRIL 1, 2007 TO JUNE 30, 2007
Barrels produced 3,855
Mcf produced 37,280
Average price/Bbl $ 64.34
Average price/Mcf $ 7.05
Revenues from April 1, 2007 to June 30, 2007 were as follows:
Net Profits $402,801
Interest income 3,419
--------
$406,220
========
Operating expenses from April 1, 2007 to June 30, 2007 were as follows:
Accretion expenses $ 1,670
General and administrative 44,294
--------
$ 45,964
========
P-5 PARTNERSHIP
THE PERIOD FROM JANUARY 1, 2007 TO FEBRUARY 4, 2007
Period from
January 1, to
February 4,
2007
-------------
Net Profits $143,654
Barrels produced 437
Mcf produced 25,187
Average price/Bbl $ 52.49
Average price/Mcf $ 5.47
Income and expenses for the P-5 Partnership for the period from January 1
to February 4, 2007 are not comparable to the three and six months ended
June 30, 2006.
-68-
THE PERIOD FROM FEBRUARY 5, 2007 TO MARCH 31, 2007
Barrels produced 919
Mcf produced 52,177
Average price/Bbl $ 57.06
Average price/Mcf $ 6.50
Revenues from February 5, 2007 to March 31, 2007 were as follows:
Net Profits $314,691
Interest income 3,477
Other income 771
--------
$318,939
========
Operating expenses from February 5, 2007 to March 31, 2007 were as
follows:
Accretion expenses $ 1,183
General and administrative 49,225
--------
$ 50,408
========
THE PERIOD FROM APRIL 1, 2007 TO JUNE 30, 2007
Barrels produced 1,342
Mcf produced 79,404
Average price/Bbl $ 63.20
Average price/Mcf $ 6.69
Revenues from April 1, 2007 to June 30, 2007 were as follows:
Net Profits $497,978
Interest income 4,214
Other income 600
--------
$502,792
========
Operating expenses from April 1, 2007 to June 30, 2007 were as follows:
Accretion expenses $ 1,757
General and administrative 41,873
--------
$ 43,630
========
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P-6 PARTNERSHIP
THE PERIOD FROM JANUARY 1, 2007 TO FEBRUARY 4, 2007
Period from
January 1, to
February 4,
2007
-------------
Net Profits $191,836
Barrels produced 861
Mcf produced 36,819
Average price/Bbl $ 52.95
Average price/Mcf $ 5.23
Income and expenses for the P-6 Partnership for the period from January 1
to February 4, 2007 are not comparable to the three and six months ended
June 30, 2006.
THE PERIOD FROM FEBRUARY 5, 2007 TO MARCH 31, 2007
Barrels produced 1,496
Mcf produced 73,292
Average price/Bbl $ 57.18
Average price/Mcf $ 6.30
Revenues from February 5, 2007 to March 31, 2007 were as follows:
Net Profits $355,777
Interest income 4,003
Other income 265
--------
$360,045
========
Operating expenses from February 5, 2007 to March 31, 2007 were as
follows:
Accretion expenses $ 3,250
General and administrative 54,201
--------
$ 57,451
========
THE PERIOD FROM APRIL 1, 2007 TO JUNE 30, 2007
Barrels produced 2,564
Mcf produced 109,659
Average price/Bbl $ 57.75
Average price/Mcf $ 6.58
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Revenues from April 1, 2007 to June 30, 2007 were as follows:
Net Profits $466,840
Interest income 5,325
Other income 206
--------
$472,371
========
Operating expenses from April 1, 2007 to June 30, 2007 were as follows:
Accretion expenses $ 4,848
General and administrative 49,472
--------
$ 54,320
========
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ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET
RISK
The Partnerships do not hold any market risk sensitive instruments.
ITEM 4T. CONTROLS AND PROCEDURES
As of the end of this period covered by this report, the principal
executive officer and principal financial officer conducted an
evaluation of the Partnerships' disclosure controls and procedures
(as defined in Rules 13a-15(e) and 15d-15(e) under the Securities
and Exchange Act of 1934). Based on this evaluation, such officers
concluded that the Partnerships' disclosure controls and procedures
are effective to ensure that information required to be disclosed by
the Partnerships in reports filed under the Exchange Act is
recorded, processed, summarized, and reported accurately and within
the time periods specified in the Securities and Exchange Commission
rules and forms.
During the period covered by this Form 10-Q, there were no changes
in our internal control over financial reporting that have
materially affected, or are reasonably likely to materially affect,
our internal control over financial reporting.
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PART II. OTHER INFORMATION
ITEM 1. 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 P-4 and P-6 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. On April 20, 2007 Samson executed a formal Settlement Agreement
with plaintiffs which calls for an additional royalty payment of
$1,000,000. The Settlement Agreement has been preliminarily approved by
the Court, but is still subject to final Court approval. A hearing for
final Court approval is currently scheduled for September 10, 2007.
Plaintiffs' counsel, subject to Court approval, has allocated the
$1,000,000 among the various class members after deduction of litigation
costs and attorneys' fees. Following is the P-4 and P-6 Partnerships'
share of this total settlement amount:
Partnership Amount
----------- --------
P-4 $ 2,594
P-6 197,003
These amounts have been accrued for the period February 5 through June 30,
2007, and will be paid by these Partnerships within approximately ninety
days following the Court's final approval of the Settlement Agreement.
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ITEM 6. EXHIBITS
31.1 Certification by Dennis R. Neill required by Rule
13a-14(a)/15d-14(a) for the P-1 Partnership.
31.2 Certification by Craig D. Loseke required by Rule
13a-14(a)/15d-14(a) for the P-1 Partnership.
31.3 Certification by Dennis R. Neill required by Rule
13a-14(a)/15d-14(a) for the P-3 Partnership.
31.4 Certification by Craig D. Loseke required by Rule
13a-14(a)/15d-14(a) for the P-3 Partnership.
31.5 Certification by Dennis R. Neill required by Rule
13a-14(a)/15d-14(a) for the P-4 Partnership.
31.6 Certification by Craig D. Loseke required by Rule
13a-14(a)/15d-14(a) for the P-4 Partnership.
31.7 Certification by Dennis R. Neill required by Rule
13a-14(a)/15d-14(a) for the P-5 Partnership.
31.8 Certification by Craig D. Loseke required by Rule
13a-14(a)/15d-14(a) for the P-5 Partnership.
31.9 Certification by Dennis R. Neill required by Rule
13a-14(a)/15d-14(a) for the P-6 Partnership.
31.10 Certification by Craig D. Loseke required by Rule
13a-14(a)/15d-14(a) for the P-6 Partnership.
32.1 Certification pursuant to 18 U.S.C. Section 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 for
the P-1 Partnership.
32.2 Certification pursuant to 18 U.S.C. Section 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 for
the P-3 Partnership.
32.3 Certification pursuant to 18 U.S.C. Section 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 for
the P-4 Partnership.
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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 P-5 Partnership.
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 P-6 Partnership.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
GEODYNE INSTITUTIONAL/PENSION ENERGY INCOME P-1
LIMITED PARTNERSHIP
GEODYNE INSTITUTIONAL/PENSION ENERGY INCOME
LIMITED PARTNERSHIP P-3
GEODYNE INSTITUTIONAL/PENSION ENERGY INCOME
LIMITED PARTNERSHIP P-4
GEODYNE INSTITUTIONAL/PENSION ENERGY INCOME
LIMITED PARTNERSHIP P-5
GEODYNE INSTITUTIONAL/PENSION ENERGY INCOME
LIMITED PARTNERSHIP P-6
(Registrant)
BY: GEODYNE RESOURCES, INC.
General Partner
Date: August 20, 2007 By: /s/Dennis R. Neill
--------------------------------
(Signature)
Dennis R. Neill
President
Date: August 20, 2007 By: /s/Craig D. Loseke
--------------------------------
(Signature)
Craig D. Loseke
Chief Accounting Officer
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INDEX TO EXHIBITS
-----------------
Exh.
No. Exhibit
- ---- -------
31.1 Certification by Dennis R. Neill required by Rule 13a-14(a)/15d-14(a) for
the Geodyne Institutional/Pension Energy Income P-1 Limited Partnership.
31.2 Certification by Craig D. Loseke required by Rule 13a-14(a)/15d-14(a) for
the Geodyne Institutional/Pension Energy Income P-1 Limited Partnership.
31.3 Certification by Dennis R. Neill required by Rule 13a-14(a)/15d-14(a) for
the Geodyne Institutional/Pension Energy Income P-3 Limited Partnership.
31.4 Certification by Craig D. Loseke required by Rule 13a-14(a)/15d-14(a) for
the Geodyne Institutional/Pension Energy Income P-3 Limited Partnership.
31.5 Certification by Dennis R. Neill required by Rule 13a-14(a)/15d-14(a) for
the Geodyne Institutional/Pension Energy Income P-4 Limited Partnership.
31.6 Certification by Craig D. Loseke required by Rule 13a-14(a)/15d-14(a) for
the Geodyne Institutional/Pension Energy Income P-4 Limited Partnership.
31.7 Certification by Dennis R. Neill required by Rule 13a-14(a)/15d-14(a) for
the Geodyne Institutional/Pension Energy Income P-5 Limited Partnership.
31.8 Certification by Craig D. Loseke required by Rule 13a-14(a)/15d-14(a) for
the Geodyne Institutional/Pension Energy Income P-5 Limited Partnership.
31.9 Certification by Dennis R. Neill required by Rule 13a-14(a)/15d-14(a) for
the Geodyne Institutional/Pension Energy Income P-6 Limited Partnership.
31.10 Certification by Craig D. Loseke required by Rule 13a-14(a)/15d-14(a) for
the Geodyne Institutional/Pension Energy Income P-6 Limited Partnership.
32.1 Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002 for the Geodyne
Institutional/Pension Energy Income P-1 Limited Partnership.
-77-
32.2 Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002 for the Geodyne
Institutional/Pension Energy Income Limited Partnership P-3.
32.3 Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002 for the Geodyne
Institutional/Pension Energy Income Limited Partnership P-4.
32.4 Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002 for the Geodyne
Institutional/Pension Energy Income Limited Partnership P-5.
32.5 Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002 for the Geodyne
Institutional/Pension Energy Income Limited Partnership P-6.
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