SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarter ended September 30, 1999
Commission File Number:
P-1: 0-17800 P-3: 0-18306 P-5: 0-18637
P-2: 0-17801 P-4: 0-18308 P-6: 0-18937
GEODYNE INSTITUTIONAL/PENSION ENERGY INCOME P-1 LIMITED PARTNERSHIP
GEODYNE INSTITUTIONAL/PENSION ENERGY INCOME P-2 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 Articles)
P-1 73-1330245
P-2 73-1330625
P-1 and P-2: P-3 73-1336573
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 Number)
organization)
Two West Second Street, Tulsa, Oklahoma 74103
------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code:(918) 583-1791
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes X No
------ ------
1
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
GEODYNE INSTITUTIONAL/PENSION ENERGY INCOME P-1 LIMITED PARTNERSHIP
GEODYNE NPI PARTNERSHIP P-1
COMBINED BALANCE SHEETS
(Unaudited)
ASSETS
September 30, December 31,
1999 1998
------------- ------------
CURRENT ASSETS:
Cash and cash equivalents $ 149,065 $ 99,454
Accounts receivable:
Net Profits 182,759 108,440
---------- ----------
Total current assets $ 331,824 $ 207,894
NET PROFITS INTERESTS, net, utilizing
the successful efforts method 1,012,869 1,164,893
---------- ----------
$1,344,693 $1,372,787
========== ==========
PARTNERS' CAPITAL (DEFICIT)
PARTNERS' CAPITAL (DEFICIT):
General Partner ($ 75,841) ($ 82,899)
Limited Partners, issued and
outstanding, 108,074 units 1,420,534 1,455,686
---------- ----------
Total Partners' capital $1,344,693 $1,372,787
---------- ----------
$1,344,693 $1,372,787
========== ==========
The accompanying condensed notes are an integral part of these
combined financial statements.
2
GEODYNE INSTITUTIONAL/PENSION ENERGY INCOME P-1 LIMITED PARTNERSHIP
GEODYNE NPI PARTNERSHIP P-1
COMBINED STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 1999 AND 1998
(Unaudited)
1999 1998
-------- --------
REVENUES:
Net Profits $229,741 $114,886
Interest income 1,119 4,241
Loss on sale of Net Profits
Interests - ( 1,791)
-------- --------
$230,860 $117,336
COSTS AND EXPENSES:
Depletion of Net Profits
Interests $ 43,410 $ 48,122
General and administrative
(Note 2) 29,901 30,953
-------- --------
$ 73,311 $ 79,075
-------- --------
NET INCOME $157,549 $ 38,261
======== ========
GENERAL PARTNER - NET INCOME $ 19,550 $ 7,733
======== ========
LIMITED PARTNERS - NET INCOME $137,999 $ 30,528
======== ========
NET INCOME per unit $ 1.28 $ .28
======== ========
UNITS OUTSTANDING 108,074 108,074
======== ========
The accompanying condensed notes are an integral part of these
combined financial statements.
3
GEODYNE INSTITUTIONAL/PENSION ENERGY INCOME P-1 LIMITED PARTNERSHIP
GEODYNE NPI PARTNERSHIP P-1
COMBINED STATEMENTS OF OPERATIONS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1999 AND 1998
(Unaudited)
1999 1998
-------- -----------
REVENUES:
Net Profits $585,395 $ 537,453
Interest income 3,063 10,466
Gain on sale of Net Profits
Interests 698 474,007
-------- ----------
$589,156 $1,021,926
COSTS AND EXPENSES:
Depletion of Net Profits
Interests $160,727 $ 161,970
General and administrative
(Note 2) 98,421 98,174
-------- ----------
$259,148 $ 260,144
-------- ----------
NET INCOME $330,008 $ 761,782
======== ==========
GENERAL PARTNER - NET INCOME $ 47,160 $ 48,152
======== ==========
LIMITED PARTNERS - NET INCOME $282,848 $ 713,630
======== ==========
NET INCOME per unit $ 2.62 $ 6.60
======== ==========
UNITS OUTSTANDING 108,074 108,074
======== ==========
The accompanying condensed notes are an integral part of these
combined financial statements.
4
GEODYNE INSTITUTIONAL/PENSION ENERGY INCOME P-1 LIMITED PARTNERSHIP
GEODYNE NPI PARTNERSHIP P-1
COMBINED STATEMENTS OF CASH FLOWS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1999 AND 1998
(Unaudited)
1999 1998
----------- -----------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $330,008 $ 761,782
Adjustments to reconcile net income
to net cash provided by operating
activities:
Depletion of Net Profits
Interests 160,727 161,970
Gain on sale of Net Profits
Interests ( 698) ( 474,007)
(Increase) decrease in accounts
receivable - Net Profits ( 74,319) 72,647
-------- ----------
Net cash provided by operating
activities $415,718 $ 522,392
-------- ----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures ($ 10,863) ($ 13,756)
Proceeds from sale of Net Profits
Interests 2,858 519,045
-------- ----------
Net cash provided (used) by
investing activities ($ 8,005) $ 505,289
-------- ----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Cash distributions ($358,102) ($1,396,984)
-------- ----------
Net cash used by financing activities ($358,102) ($1,396,984)
-------- ----------
NET INCREASE (DECREASE) IN CASH AND
CASH EQUIVALENTS $ 49,611 ($ 369,303)
CASH AND CASH EQUIVALENTS AT
BEGINNING OF PERIOD 99,454 503,622
-------- ----------
CASH AND CASH EQUIVALENTS AT
END OF PERIOD $149,065 $ 134,319
======== ==========
The accompanying condensed notes are an integral part of these
combined financial statements.
5
GEODYNE INSTITUTIONAL/PENSION ENERGY INCOME P-2 LIMITED PARTNERSHIP
GEODYNE NPI PARTNERSHIP P-2
COMBINED BALANCE SHEETS
(Unaudited)
ASSETS
September 30, December 31,
1999 1998
------------- ------------
CURRENT ASSETS:
Cash and cash equivalents $ 125,109 $ 78,435
Accounts receivable:
Net Profits 150,770 92,746
---------- ----------
Total current assets $ 275,879 $ 171,181
NET PROFITS INTERESTS, net, utilizing
the successful efforts method 876,962 1,001,498
---------- ----------
$1,152,841 $1,172,679
========== ==========
PARTNERS' CAPITAL (DEFICIT)
PARTNERS' CAPITAL (DEFICIT):
General Partner ($ 62,710) ($ 70,704)
Limited Partners, issued and
outstanding, 90,094 units 1,215,551 1,243,383
---------- ----------
Total Partners' capital $1,152,841 $1,172,679
---------- ----------
$1,152,841 $1,172,679
========== ==========
The accompanying condensed notes are an integral part of these
combined financial statements.
6
GEODYNE INSTITUTIONAL/PENSION ENERGY INCOME P-2 LIMITED PARTNERSHIP
GEODYNE NPI PARTNERSHIP P-2
COMBINED STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 1999 AND 1998
(Unaudited)
1999 1998
--------- ---------
REVENUES:
Net Profits $173,641 $89,003
Interest income 942 2,978
Loss on sale of Net Profits
Interests - ( 1,378)
-------- -------
$174,583 $90,603
COSTS AND EXPENSES:
Depletion of Net Profits
Interests $ 35,812 $37,598
General and administrative
(Note 2) 24,932 25,805
-------- -------
$ 60,744 $63,403
-------- -------
NET INCOME $113,839 $27,200
======== =======
GENERAL PARTNER - NET INCOME $ 7,078 $ 2,715
======== =======
LIMITED PARTNERS - NET INCOME $106,761 $24,485
======== =======
NET INCOME per unit $ 1.18 $ .27
======== =======
UNITS OUTSTANDING 90,094 90,094
======== =======
The accompanying condensed notes are an integral part of these
combined financial statements.
7
GEODYNE INSTITUTIONAL/PENSION ENERGY INCOME P-2 LIMITED PARTNERSHIP
GEODYNE NPI PARTNERSHIP P-2
COMBINED STATEMENTS OF OPERATIONS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1999 AND 1998
(Unaudited)
1999 1998
--------- ---------
REVENUES:
Net Profits $455,894 $410,191
Interest income 2,458 7,625
Gain on sale of Net Profits
Interests 652 253,637
-------- --------
$459,004 $671,453
COSTS AND EXPENSES:
Depletion of Net Profits
Interests $131,364 $125,373
General and administrative
(Note 2) 82,061 81,952
-------- --------
$213,425 $207,325
-------- --------
NET INCOME $245,579 $464,128
======== ========
GENERAL PARTNER - NET INCOME $ 17,411 $ 27,840
======== ========
LIMITED PARTNERS - NET INCOME $228,168 $436,288
======== ========
NET INCOME per unit $ 2.53 $ 4.84
======== ========
UNITS OUTSTANDING 90,094 90,094
======== ========
The accompanying condensed notes are an integral part of these
combined financial statements.
8
GEODYNE INSTITUTIONAL/PENSION ENERGY INCOME P-2 LIMITED PARTNERSHIP
GEODYNE NPI PARTNERSHIP P-2
COMBINED STATEMENTS OF CASH FLOWS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1999 AND 1998
(Unaudited)
1999 1998
-------- ----------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $245,579 $ 464,128
Adjustments to reconcile net income
to net cash provided by operating
activities:
Depletion of Net Profits
Interests 131,364 125,373
Gain on sale of Net Profits
Interests ( 652) ( 253,637)
(Increase) decrease in accounts
receivable - Net Profits ( 58,024) 62,728
-------- ----------
Net cash provided by operating
activities $318,267 $ 398,592
-------- ----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures ($ 8,846) ($ 17,394)
Proceeds from sale of Net Profits
Interests 2,670 359,875
-------- ----------
Net cash provided (used) by
investing activities ($ 6,176) $ 342,481
-------- ----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Cash distributions ($265,417) ($1,005,330)
-------- ----------
Net cash used by financing activities ($265,417) ($1,005,330)
-------- ----------
NET INCREASE (DECREASE) IN CASH AND
CASH EQUIVALENTS $ 46,674 ($ 264,257)
CASH AND CASH EQUIVALENTS AT
BEGINNING OF PERIOD 78,435 369,191
-------- ----------
CASH AND CASH EQUIVALENTS AT
END OF PERIOD $125,109 $ 104,934
======== ==========
The accompanying condensed notes are an integral part of these
combined financial statements.
9
GEODYNE INSTITUTIONAL/PENSION ENERGY INCOME LIMITED PARTNERSHIP P-3
GEODYNE NPI PARTNERSHIP P-3
COMBINED BALANCE SHEETS
(Unaudited)
ASSETS
September 30, December 31,
1999 1998
------------- ------------
CURRENT ASSETS:
Cash and cash equivalents $ 234,108 $ 146,246
Accounts receivable:
Net Profits 279,911 170,389
---------- ----------
Total current assets $ 514,019 $ 316,635
NET PROFITS INTERESTS, net, utilizing
the successful efforts method 1,633,861 1,866,716
---------- ----------
$2,147,880 $2,183,351
========== ==========
PARTNERS' CAPITAL (DEFICIT)
PARTNERS' CAPITAL (DEFICIT):
General Partner ($ 118,098) ($ 132,995)
Limited Partners, issued and
outstanding, 169,637 units 2,265,978 2,316,346
---------- ----------
Total Partners' capital $2,147,880 $2,183,351
---------- ----------
$2,147,880 $2,183,351
========== ==========
The accompanying condensed notes are an integral part of these
combined financial statements.
10
GEODYNE INSTITUTIONAL/PENSION ENERGY INCOME LIMITED PARTNERSHIP P-3
GEODYNE NPI PARTNERSHIP P-3
COMBINED STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 1999 AND 1998
(Unaudited)
1999 1998
-------- ---------
REVENUES:
Net Profits $322,339 $166,755
Interest income 1,866 5,626
Loss on sale of Net Profits
Interests - ( 2,558)
-------- --------
$324,205 $169,823
COSTS AND EXPENSES:
Depletion of Net Profits
Interests $ 66,778 $ 70,090
General and administrative
(Note 2) 46,938 48,580
-------- --------
$113,716 $118,670
-------- --------
NET INCOME $210,489 $ 51,153
======== ========
GENERAL PARTNER - NET INCOME $ 13,103 $ 5,080
======== ========
LIMITED PARTNERS - NET INCOME $197,386 $ 46,073
======== ========
NET INCOME per unit $ 1.16 $ .27
======== ========
UNITS OUTSTANDING 169,637 169,637
======== ========
The accompanying condensed notes are an integral part of these
combined financial statements.
11
GEODYNE INSTITUTIONAL/PENSION ENERGY INCOME LIMITED PARTNERSHIP P-3
GEODYNE NPI PARTNERSHIP P-3
COMBINED STATEMENTS OF OPERATIONS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1999 AND 1998
(Unaudited)
1999 1998
-------- -----------
REVENUES:
Net Profits $852,103 $ 764,416
Interest income 4,856 14,498
Gain on sale of Net Profits
Interests 1,252 603,091
-------- ----------
$858,211 $1,382,005
COSTS AND EXPENSES:
Depletion of Net Profits
Interests $245,727 $ 232,939
General and administrative
(Note 2) 154,359 154,282
-------- ----------
$400,086 $ 387,221
-------- ----------
NET INCOME $458,125 $ 994,784
======== ==========
GENERAL PARTNER - NET INCOME $ 32,493 $ 58,332
======== ==========
LIMITED PARTNERS - NET INCOME $425,632 $ 936,452
======== ==========
NET INCOME per unit $ 2.51 $ 5.52
======== ==========
UNITS OUTSTANDING 169,637 169,637
======== ==========
The accompanying condensed notes are an integral part of these
combined financial statements.
12
GEODYNE INSTITUTIONAL/PENSION ENERGY INCOME LIMITED PARTNERSHIP P-3
GEODYNE NPI PARTNERSHIP P-3
COMBINED STATEMENTS OF CASH FLOWS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1999 AND 1998
(Unaudited)
1999 1998
--------- ----------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $458,125 $ 994,784
Adjustments to reconcile net income
to net cash provided by operating
activities:
Depletion of Net Profits
Interests 245,727 232,939
Gain on sale of Net Profits
Interests ( 1,252) ( 603,091)
(Increase) decrease in accounts
receivable - Net Profits ( 109,522) 116,566
-------- ----------
Net cash provided by operating
activities $593,078 $ 741,198
-------- ----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures ($ 16,469) ($ 33,084)
Proceeds from sale of Net Profits
Interests 4,849 664,645
-------- ----------
Net cash provided (used) by
investing activities ($ 11,620) $ 631,561
-------- ----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Cash distributions ($493,596) ($1,862,281)
-------- ----------
Net cash used by financing activities ($493,596) ($1,862,281)
-------- ----------
NET INCREASE (DECREASE) IN CASH AND
CASH EQUIVALENTS $ 87,862 ($ 489,522)
CASH AND CASH EQUIVALENTS AT
BEGINNING OF PERIOD 146,246 685,628
-------- ----------
CASH AND CASH EQUIVALENTS AT
END OF PERIOD $234,108 $ 196,106
======== ==========
The accompanying condensed notes are an integral part of these
combined financial statements.
13
GEODYNE INSTITUTIONAL/PENSION ENERGY INCOME LIMITED PARTNERSHIP P-4
GEODYNE NPI PARTNERSHIP P-4
COMBINED BALANCE SHEETS
(Unaudited)
ASSETS
September 30, December 31,
1999 1998
------------ ------------
CURRENT ASSETS:
Cash and cash equivalents $ 170,976 $ 101,652
Accounts receivable:
Net Profits 271,963 209,218
---------- ----------
Total current assets $ 442,939 $ 310,870
NET PROFITS INTERESTS, net, utilizing
the successful efforts method 929,123 1,092,574
---------- ----------
$1,372,062 $1,403,444
========== ==========
PARTNERS' CAPITAL (DEFICIT)
PARTNERS' CAPITAL (DEFICIT):
General Partner ($ 84,564) ($ 93,853)
Limited Partners, issued and
outstanding, 126,306 units 1,456,626 1,497,297
---------- ----------
Total Partners' capital $1,372,062 $1,403,444
---------- ----------
$1,372,062 $1,403,444
========== ==========
The accompanying condensed notes are an integral part of these
combined financial statements.
14
GEODYNE INSTITUTIONAL/PENSION ENERGY INCOME LIMITED PARTNERSHIP P-4
GEODYNE NPI PARTNERSHIP P-4
COMBINED STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 1999 AND 1998
(Unaudited)
1999 1998
--------- --------
REVENUES:
Net Profits $215,501 $138,857
Interest income 1,321 1,714
Loss on sale of Net Profits
Interests - ( 238)
-------- --------
$216,822 $140,333
COSTS AND EXPENSES:
Depletion of Net Profits
Interests $ 50,628 $ 54,446
General and administrative
(Note 2) 34,958 36,110
-------- --------
$ 85,586 $ 90,556
-------- --------
NET INCOME $131,236 $ 49,777
======== ========
GENERAL PARTNER - NET INCOME $ 8,521 $ 4,581
======== ========
LIMITED PARTNERS - NET INCOME $122,715 $ 45,196
======== ========
NET INCOME per unit $ .97 $ .36
======== ========
UNITS OUTSTANDING 126,306 126,306
======== ========
The accompanying condensed notes are an integral part of these
combined financial statements.
15
GEODYNE INSTITUTIONAL/PENSION ENERGY INCOME LIMITED PARTNERSHIP P-4
GEODYNE NPI PARTNERSHIP P-4
COMBINED STATEMENTS OF OPERATIONS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1999 AND 1998
(Unaudited)
1999 1998
--------- --------
REVENUES:
Net Profits $546,129 $557,503
Interest income 3,190 6,871
Gain on sale of Net
Profits Interests 410 12,014
-------- --------
$549,729 $576,388
COSTS AND EXPENSES:
Depletion of Net Profits
Interests $164,883 $185,990
General and administrative
(Note 2) 114,567 114,784
-------- --------
$279,450 $300,774
-------- --------
NET INCOME $270,279 $275,614
======== ========
GENERAL PARTNER - NET INCOME $ 19,950 $ 20,877
======== ========
LIMITED PARTNERS - NET INCOME $250,329 $254,737
======== ========
NET INCOME per unit $ 1.98 $ 2.02
======== ========
UNITS OUTSTANDING 126,306 126,306
======== ========
The accompanying condensed notes are an integral part of these
combined financial statements.
16
GEODYNE INSTITUTIONAL/PENSION ENERGY INCOME LIMITED PARTNERSHIP P-4
GEODYNE NPI PARTNERSHIP P-4
COMBINED STATEMENTS OF CASH FLOWS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1999 AND 1998
(Unaudited)
1999 1998
--------- ---------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $270,279 $275,614
Adjustments to reconcile net income
to net cash provided by operating
activities:
Depletion of Net Profits
Interests 164,883 185,990
Gain on sale of Net Profits
Interests ( 410) ( 12,014)
(Increase) decrease in accounts
receivable - Net Profits ( 62,745) 127,613
-------- --------
Net cash provided by operating
activities $372,007 $577,203
-------- --------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures ($ 6,102) ($ 4,726)
Proceeds from sale of Net Profits
Interests 5,080 14,895
-------- --------
Net cash provided (used) by investing
activities ($ 1,022) $ 10,169
-------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Cash distributions ($301,661) ($666,902)
-------- --------
Net cash used by financing activities ($301,661) ($666,902)
-------- --------
NET INCREASE (DECREASE) IN CASH AND
CASH EQUIVALENTS $ 69,324 ($ 79,530)
CASH AND CASH EQUIVALENTS AT
BEGINNING OF PERIOD 101,652 243,903
-------- --------
CASH AND CASH EQUIVALENTS AT
END OF PERIOD $170,976 $164,373
======== ========
The accompanying condensed notes are an integral part of these
combined financial statements.
17
GEODYNE INSTITUTIONAL/PENSION ENERGY INCOME LIMITED PARTNERSHIP P-5
GEODYNE NPI PARTNERSHIP P-5
COMBINED BALANCE SHEETS
(Unaudited)
ASSETS
September 30, December 31,
1999 1998
------------- ------------
CURRENT ASSETS:
Cash and cash equivalents $ 187,309 $ 166,487
Accounts receivable:
Net Profits 140,090 99,823
---------- ----------
Total current assets $ 327,399 $ 266,310
NET PROFITS INTERESTS, net, utilizing
the successful efforts method 847,189 991,179
---------- ----------
$1,174,588 $1,257,489
========== ==========
PARTNERS' CAPITAL (DEFICIT)
PARTNERS' CAPITAL (DEFICIT):
General Partner ($ 70,578) ($ 79,248)
Limited Partners, issued and
outstanding, 118,449 units 1,245,166 1,336,737
---------- ----------
Total Partners' capital $1,174,588 $1,257,489
---------- ----------
$1,174,588 $1,257,489
========== ==========
The accompanying condensed notes are an integral part of these
combined financial statements.
18
GEODYNE INSTITUTIONAL/PENSION ENERGY INCOME LIMITED PARTNERSHIP P-5
GEODYNE NPI PARTNERSHIP P-5
COMBINED STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 1999 AND 1998
(Unaudited)
1999 1998
--------- ---------
REVENUES:
Net Profits $230,347 $189,220
Interest income 1,554 3,102
Gain on sale of Net Profits
Interests - 803
-------- --------
$231,901 $193,125
COSTS AND EXPENSES:
Depletion of Net Profits
Interests $ 49,457 $ 65,403
General and administrative
(Note 2) 32,777 33,873
-------- --------
$ 82,234 $ 99,276
-------- --------
NET INCOME $149,667 $ 93,849
======== ========
GENERAL PARTNER - NET INCOME $ 9,384 $ 7,154
======== ========
LIMITED PARTNERS - NET INCOME $140,283 $ 86,695
======== ========
NET INCOME per unit $ 1.19 $ .73
======== ========
UNITS OUTSTANDING 118,449 118,449
======== ========
The accompanying condensed notes are an integral part of these
combined financial statements.
19
GEODYNE INSTITUTIONAL/PENSION ENERGY INCOME LIMITED PARTNERSHIP P-5
GEODYNE NPI PARTNERSHIP P-5
COMBINED STATEMENTS OF OPERATIONS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1999 AND 1998
(Unaudited)
1999 1998
--------- ---------
REVENUES:
Net Profits $574,192 $619,716
Interest income 4,167 8,301
Gain on sale of Net Profits
Interests - 340,817
-------- --------
$578,359 $968,834
COSTS AND EXPENSES:
Depletion of Net Profits
Interests $154,448 $185,027
General and administrative
(Note 2) 107,702 107,554
-------- --------
$262,150 $292,581
-------- --------
NET INCOME $316,209 $676,253
======== ========
GENERAL PARTNER - NET INCOME $ 21,780 $ 40,799
======== ========
LIMITED PARTNERS - NET INCOME $294,429 $635,454
======== ========
NET INCOME per unit $ 2.49 $ 5.36
======== ========
UNITS OUTSTANDING 118,449 118,449
======== ========
The accompanying condensed notes are an integral part of these
combined financial statements.
20
GEODYNE INSTITUTIONAL/PENSION ENERGY INCOME LIMITED PARTNERSHIP P-5
GEODYNE NPI PARTNERSHIP P-5
COMBINED STATEMENTS OF CASH FLOWS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1999 AND 1998
(Unaudited)
1999 1998
--------- ---------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $316,209 $676,253
Adjustments to reconcile net income
to net cash provided by operating
activities:
Depletion of Net Profits
Interests 154,448 185,027
Gain on sale of Net Profits
Interests - ( 340,817)
(Increase) decrease in accounts
receivable - Net Profits ( 40,267) 57,895
-------- --------
Net cash provided by operating
activities $430,390 $578,358
-------- --------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures ($ 10,458) ($ 37,045)
Proceeds from sale of Net Profits
Interests - 368,485
-------- --------
Net cash provided (used) by investing
activities ($ 10,458) $331,440
-------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Cash distributions ($399,110) ($934,742)
-------- --------
Net cash used by financing activities ($399,110) ($934,742)
-------- --------
NET INCREASE (DECREASE) IN CASH AND
CASH EQUIVALENTS $ 20,822 ($ 24,944)
CASH AND CASH EQUIVALENTS AT
BEGINNING OF PERIOD 166,487 228,750
-------- --------
CASH AND CASH EQUIVALENTS AT
END OF PERIOD $187,309 $203,806
======== ========
The accompanying condensed notes are an integral part of these
combined financial statements.
21
GEODYNE INSTITUTIONAL/PENSION ENERGY INCOME LIMITED PARTNERSHIP P-6
GEODYNE NPI PARTNERSHIP P-6
COMBINED BALANCE SHEETS
(Unaudited)
ASSETS
September 30, December 31,
1999 1998
------------- ------------
CURRENT ASSETS:
Cash and cash equivalents $ 311,145 $ 300,324
Accounts receivable:
Net Profits 268,559 145,612
---------- ----------
Total current assets $ 579,704 $ 445,936
NET PROFITS INTERESTS, net, utilizing
the successful efforts method 1,769,587 2,065,846
---------- ----------
$2,349,291 $2,511,782
========== ==========
PARTNERS' CAPITAL (DEFICIT)
PARTNERS' CAPITAL (DEFICIT):
General Partner ($ 88,204) ($ 106,642)
Limited Partners, issued and
outstanding, 143,041 units 2,437,495 2,618,424
---------- ----------
Total Partners' capital $2,349,291 $2,511,782
---------- ----------
$2,349,291 $2,511,782
========== ==========
The accompanying condensed notes are an integral part of these
combined financial statements.
22
GEODYNE INSTITUTIONAL/PENSION ENERGY INCOME LIMITED PARTNERSHIP P-6
GEODYNE NPI PARTNERSHIP P-6
COMBINED STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 1999 AND 1998
(Unaudited)
1999 1998
-------- ---------
REVENUES:
Net Profits $440,245 $256,471
Interest income 2,362 2,925
Loss on sale of Net Profits
Interests - ( 1,421)
-------- --------
$442,607 $257,975
COSTS AND EXPENSES:
Depletion of Net Profits
Interests $101,854 $110,826
General and administrative
(Note 2) 39,578 40,901
-------- --------
$141,432 $151,727
-------- --------
NET INCOME $301,175 $106,248
======== ========
GENERAL PARTNER - NET INCOME $ 19,015 $ 9,600
======== ========
LIMITED PARTNERS - NET INCOME $282,160 $ 96,648
======== ========
NET INCOME per unit $ 1.97 $ .67
======== ========
UNITS OUTSTANDING 143,041 143,041
======== ========
The accompanying condensed notes are an integral part of these
combined financial statements.
23
GEODYNE INSTITUTIONAL/PENSION ENERGY INCOME LIMITED PARTNERSHIP P-6
GEODYNE NPI PARTNERSHIP P-6
COMBINED STATEMENTS OF OPERATIONS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1999 AND 1998
(Unaudited)
1999 1998
---------- -----------
REVENUES:
Net Profits $ 996,224 $ 873,844
Interest income 6,497 10,360
Gain on sale of Net Profits
Interests - 133,104
---------- ----------
$1,002,721 $1,017,308
COSTS AND EXPENSES:
Depletion of Net Profits
Interests $ 306,049 $ 309,288
General and administrative
(Note 2) 130,369 130,159
---------- ----------
$ 436,418 $ 439,447
---------- ----------
NET INCOME $ 566,303 $ 577,861
========== ==========
GENERAL PARTNER - NET INCOME $ 40,232 $ 40,747
========== ==========
LIMITED PARTNERS - NET INCOME $ 526,071 $ 537,114
========== ==========
NET INCOME per unit $ 3.68 $ 3.75
========== ==========
UNITS OUTSTANDING 143,041 143,041
========== ==========
The accompanying condensed notes are an integral part of these
combined financial statements.
24
GEODYNE INSTITUTIONAL/PENSION ENERGY INCOME LIMITED PARTNERSHIP P-6
GEODYNE NPI PARTNERSHIP P-6
COMBINED STATEMENTS OF CASH FLOWS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1999 AND 1998
(Unaudited)
1999 1998
--------- -----------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $566,303 $ 577,861
Adjustments to reconcile net income
to net cash provided by operating
activities:
Depletion of Net Profits
Interests 306,049 309,288
Gain on sale of Net Profits
Interests - ( 133,104)
(Increase) decrease in accounts
receivable - Net Profits ( 122,947) 163,102
-------- ----------
Net cash provided by operating
activities $749,405 $ 917,147
-------- ----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures ($ 11,281) ($ 41,351)
Proceeds from sale of Net Profits
Interests 1,491 147,747
-------- ----------
Net cash provided (used) by
investing activities ($ 9,790) $ 106,396
-------- ----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Cash distributions ($728,794) ($1,132,755)
-------- ----------
Net cash used by financing activities ($728,794) ($1,132,755)
-------- ----------
NET INCREASE (DECREASE) IN CASH AND
CASH EQUIVALENTS $ 10,821 ($ 109,212)
CASH AND CASH EQUIVALENTS AT
BEGINNING OF PERIOD 300,324 362,957
-------- ----------
CASH AND CASH EQUIVALENTS AT
END OF PERIOD $311,145 $ 253,745
======== ==========
The accompanying condensed notes are an integral part of these
combined financial statements.
25
GEODYNE INSTITUTIONAL/PENSION ENERGY INCOME LIMITED PARTNERSHIPS
CONDENSED NOTES TO THE COMBINED FINANCIAL STATEMENTS
SEPTEMBER 30, 1999
(Unaudited)
1. ACCOUNTING POLICIES
-------------------
The combined balance sheets as of September 30, 1999, combined statements
of operations for the three and nine months ended September 30, 1999 and
1998, and combined statements of cash flows for the nine months ended
September 30, 1999 and 1998 have been prepared by Geodyne Resources, Inc.,
the General Partner of the Geodyne Institutional/Pension Energy Income
Limited Partnerships, without audit. Each limited partnership is a general
partner in the related Geodyne NPI Partnership (the "NPI Partnerships") in
which Geodyne Resources, Inc. serves as the managing partner. For the
purposes of these financial statements, the general partner and managing
partner are collectively referred to as the "General Partner" and the
limited partnerships and NPI Partnerships are collectively referred to as
the "Partnerships". 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 financial position
at September 30, 1999, the combined results of operations for the three
and nine months ended September 30, 1999 and 1998, and the combined cash
flows for the nine months ended September 30, 1999 and 1998.
Information and footnote disclosures normally included in financial
statements prepared in accordance with generally accepted accounting
principles have been condensed or omitted. The accompanying interim
financial statements should be read in conjunction with the Partnerships'
Annual Report on Form 10-K filed for the year ended December 31, 1998. The
results of operations for the period ended September 30, 1999 are not
necessarily indicative of the results to be expected for the full year.
As used in these financial statements, the Partnerships' net profits and
royalty interests in oil and gas sales are referred to as "Net Profits"
and the Partnerships' net profits and royalty interests in oil and gas
properties are referred to as "Net Profits Interests". The working
interests from which the Partnerships' Net Profits Interests are carved
are referred to as "Working Interests".
The Limited Partners' net income or loss per unit is based upon each $100
initial capital contribution.
26
NET PROFITS INTERESTS
---------------------
The Partnerships follow the successful efforts method of accounting for
their Net Profits Interests. Under the successful efforts method, the NPI
Partnerships capitalize all acquisition costs. Property acquisition costs
include costs incurred by the Partnerships or the General Partner to
acquire producing properties, including related title insurance or
examination costs, commissions, engineering, legal and accounting fees,
and similar costs directly related to the acquisitions, plus an allocated
portion, of the General Partner's property screening costs. The
acquisition cost to the NPI Partnership of Net Profits Interests acquired
by the General Partner is adjusted to reflect the net cash results of
operations, including interest incurred to finance the acquisition, for
the period of time the properties are held by the General Partner prior to
their transfer to the Partnerships. Impairment of Net Profits Interests is
recognized based upon an individual property assessment.
Depletion of the costs of Net Profits Interests is computed on the
unit-of-production method. The Partnerships' calculation of depletion of
its Net Profits Interests includes estimated dismantlement and abandonment
costs, net of estimated salvage value.
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'
Statements of Cash Flows.
2. TRANSACTIONS WITH RELATED PARTIES
---------------------------------
The Partnerships' partnership agreements provide for reimbursement to the
General Partner for all direct general and administrative expenses and for
the general and administrative overhead applicable to the Partnerships
based on an allocation of actual costs incurred. During the three months
ended September 30, 1999 the following payments were made to the General
Partner or its affiliates by the Partnerships:
27
Direct General Administrative
Partnership and Administrative Overhead
----------- ------------------- ---------------
P-1 $1,461 $28,440
P-2 1,223 23,709
P-3 2,298 44,640
P-4 1,718 33,240
P-5 1,607 31,170
P-6 1,937 37,641
During the nine months ended September 30, 1999 the following payments
were made to the General Partner or its affiliates by the Partnerships:
Direct General Administrative
Partnership and Administrative Overhead
----------- ------------------- ---------------
P-1 $13,101 $ 85,320
P-2 10,934 71,127
P-3 20,439 133,920
P-4 14,847 99,720
P-5 14,192 93,510
P-6 17,446 112,923
Affiliates of the Partnerships operate certain of the Partnerships'
properties and their policy is to bill the Partnerships for all customary
charges and cost reimbursements associated with their activities.
28
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
USE OF FORWARD-LOOKING STATEMENTS AND ESTIMATES
- -----------------------------------------------
This Quarterly Report contains certain forward-looking statements. The
words "anticipate", "believe", "expect", "plan", "intend", "estimate",
"project", "could", "may" and similar expressions are intended to identify
forward-looking statements. Such statements reflect management's current
views with respect to future events and financial performance. This
Quarterly Report also includes certain information, which is, or is based
upon, estimates and assumptions. Such estimates and assumptions are
management's efforts to accurately reflect the condition and operation of
the Partnerships.
Use of forward-looking statements and estimates and assumptions involve
risks and uncertainties which include, but are not limited to, the
volatility of oil and gas prices, the uncertainty of reserve information,
the operating risk associated with oil and gas properties (including the
risk of personal injury, death, property damage, damage to the well or
producing reservoir, environmental contamination, and other operating
risks), the prospect of changing tax and regulatory laws, the availability
and capacity of processing and transportation facilities, the general
economic climate, the supply and price of foreign imports of oil and gas,
the level of consumer product demand, and the price and availability of
alternative fuels. Should one or more of these risks or uncertainties
occur or should estimates or underlying assumptions prove incorrect,
actual conditions or results may vary materially and adversely from those
stated, anticipated, believed, estimated, and otherwise indicated.
GENERAL
- -------
The Partnerships are engaged in the business of acquiring Net Profits
Interests in producing oil and gas properties located in the continental
United States. In general, a Partnership acquired passive interests in
producing properties and does not directly engage in development drilling
or enhanced recovery projects. Therefore, the economic life of each
limited partnership, and its related NPI Partnership, is limited to the
period of time required to fully produce its acquired oil and gas
reserves. A Net Profits Interest entitles the Partnerships to a portion of
the oil and gas sales less operating and production expenses and
development costs generated by the owner of the
29
underlying Working Interests. The net proceeds from the oil and gas
operations are distributed to the Limited Partners and the General
Partner in accordance with the terms of the Partnerships' partnership
agreements.
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-2 February 9, 1989 9,009,400
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.
Net proceeds from the Partnerships' Net Profits Interests less necessary
operating capital are distributed to the Limited Partners on a quarterly
basis. Revenues and net proceeds of a Partnership are largely dependent
upon the volumes of oil and gas sold and the prices received for such oil
and gas. While the General Partner cannot predict future pricing trends,
it believes the working capital available as of September 30, 1999 and the
net revenue generated from future operations will provide sufficient
working capital to meet current and future obligations.
30
RESULTS OF OPERATIONS
- ---------------------
GENERAL DISCUSSION
The following general discussion should be read in conjunction with the
analysis of results of operations provided below. The most important
variable affecting the Partnerships' revenues is the prices received for
the sale of oil and gas. Due to the volatility of oil and gas prices,
forecasting future prices is subject to great uncertainty and inaccuracy.
Substantially all of the Partnerships' gas reserves are being sold in the
"spot market". Prices on the spot market are subject to wide seasonal and
regional pricing fluctuations due to the highly competitive nature of the
spot market. Such spot market sales are generally short-term in nature and
are dependent upon the obtaining of transportation services provided by
pipelines. In addition, crude oil prices in 1998 and early 1999 were at or
near their lowest level in the past decade due primarily to the global
surplus of crude oil. Oil prices have since rebounded primarily due to a
decrease in the global oil surplus as a result of production curtailments
by several major oil producing nations. Management is unable to predict
whether future oil and gas prices will (i) stabilize, (ii) increase, or
(iii) decrease.
P-1 PARTNERSHIP
THREE MONTHS ENDED SEPTEMBER 30, 1999 COMPARED TO THE THREE MONTHS ENDED
SEPTEMBER 30, 1998.
Three Months Ended September 30,
--------------------------------
1999 1998
-------- --------
Net Profits $229,741 $114,886
Barrels produced 5,492 5,573
Mcf produced 72,924 73,501
Average price/Bbl $ 21.48 $ 11.14
Average price/Mcf $ 2.30 $ 1.46
As shown in the table above, total Net Profits increased $114,855 (100%)
for the three months ended September 30, 1999 as compared to the three
months ended September 30, 1998. Of this increase, approximately $57,000
and $61,000, respectively, were related to increases in the average prices
of oil and gas sold. Volumes of oil and gas sold decreased 81 barrels and
577 Mcf, respectively, for the three months ended September 30, 1999 as
compared to the three months ended September 30, 1998. Average oil and gas
prices increased to $21.48 per barrel and $2.30 per Mcf, respectively, for
the three months ended September 30, 1999 from $11.14 per barrel and $1.46
per Mcf, respectively, for the three months ended September 30, 1998.
Depletion of Net Profits Interests decreased $4,712 (9.8%) for the three
months ended September 30, 1999 as compared to the three months ended
September 30, 1998. As a percentage of Net Profits, this expense decreased
to 18.9% for the three months ended September 30, 1999 from 41.9% for the
three months ended September 30, 1998. This percentage decrease was
primarily due to the increases in the average prices of oil and gas sold.
General and administrative expenses decreased $1,052 (3.4%) for the three
months ended September 30, 1999 as compared to the three months ended
September 30, 1998. As a percentage of Net Profits, these expenses
decreased to 13.0% for the three months ended September 30, 1999 from
26.9% for the three months ended September 30, 1998. This percentage
decrease was primarily due to the increase in Net Profits.
NINE MONTHS ENDED SEPTEMBER 30, 1999 COMPARED TO THE NINE MONTHS ENDED
SEPTEMBER 30, 1998.
Nine Months Ended September 30,
-------------------------------
1999 1998
-------- --------
Net Profits $585,395 $537,453
Barrels produced 19,288 20,530
Mcf produced 276,290 236,755
Average price/Bbl $ 15.00 $ 14.01
Average price/Mcf $ 1.81 $ 1.80
As shown in the table above, total Net Profits increased $47,942 (8.9%)
for the nine months ended September 30, 1999 as compared to the nine
months ended September 30, 1998. Of this increase, approximately $71,000
was related to an increase in volumes of gas sold and approximately
$19,000 was related to an increase in the average price of oil sold. These
increases were partially offset by decreases of (i) approximately $17,000
related to a decrease in volumes of oil sold and (ii) approximately
$27,000 related to an increase in production expenses incurred by the
owners of the Working Interests. Volumes of oil sold decreased 1,242
barrels while volumes of gas sold increased 39,535 Mcf for the nine months
ended September 30, 1999 as compared to the nine months ended September
30, 1998. The increase in volumes of gas sold was primarily due to (i) a
positive prior period volume adjustment made by the operator during the
nine months ended September 30, 1999 due to the payout of one significant
well and (ii) the successful recompletion of one well during the fourth
quarter of 1998. The increase in production expenses was primarily due to
(i) a change in the timing of payment of ad valorem taxes, (ii) workover
31
expenses incurred on two significant wells during the nine months ended
September 30, 1999 in order to improve the recovery of reserves, and (iii)
lease operating expenses paid during the nine months ended September 30,
1999 related to prior periods on the well which reached payout. Average
oil and gas prices increased to $15.00 per barrel and $1.81 per Mcf,
respectively, for the nine months ended September 30, 1999 from $14.01 per
barrel and $1.80 per Mcf, respectively, for the nine months ended
September 30, 1998.
The P-1 Partnership sold certain Net Profits Interests during the nine
months ended September 30, 1999 and recognized a $698 gain on such sales.
Sales of Net Profits Interests during the nine months ended September 30,
1998 resulted in the P-1 Partnership recognizing similar gains of
$474,007.
Depletion of Net Profits Interests decreased $1,243 (0.8%) for the nine
months ended September 30, 1999 as compared to the nine months ended
September 30, 1998. As a percentage of Net Profits, this expense decreased
to 27.5% for the nine months ended September 30, 1999 from 30.1% for the
nine months ended September 30, 1998.
General and administrative expenses remained relatively constant for the
nine months ended September 30, 1999 as compared to the nine months ended
September 30, 1998. As a percentage of Net Profits, these expenses
decreased to 16.8% for the nine months ended September 30, 1999 from 18.3%
for the nine months ended September 30, 1998.
Cumulative cash distributions to the Limited Partners through September
30, 1999 were $11,800,558 or 109.19% of the Limited Partners' capital
contributions.
P-2 PARTNERSHIP
THREE MONTHS ENDED SEPTEMBER 30, 1999 COMPARED TO THE THREE MONTHS ENDED
SEPTEMBER 30, 1998.
Three Months Ended September 30,
-------------------------------
1999 1998
-------- -------
Net Profits $173,641 $89,003
Barrels produced 3,869 3,862
Mcf produced 60,719 61,006
Average price/Bbl $ 21.55 $ 11.00
Average price/Mcf $ 2.29 $ 1.52
As shown in the table above, total Net Profits increased $84,638 (95.1%)
for the three months ended September 30, 1999 as compared to the three
months ended September 30, 1998. Of this increase, approximately $41,000
and $47,000,
32
respectively, were related to increases in the average prices of oil and
gas sold. Volumes of oil sold increased 7 barrels while volumes of gas
sold decreased 287 Mcf for the three months ended September 30, 1999 as
compared to the three months ended September 30, 1998. Average oil and gas
prices increased to $21.55 per barrel and $2.29 per Mcf, respectively, for
the three months ended September 30, 1999 from $11.00 per barrel and $1.52
per Mcf, respectively, for the three months ended September 30, 1998.
Depletion of Net Profits Interests decreased $1,786 (4.8%) for the three
months ended September 30, 1999 as compared to the three months ended
September 30, 1998. As a percentage of Net Profits, this expense decreased
to 20.6% for the three months ended September 30, 1999 from 42.2% for the
three months ended September 30, 1998. This percentage decrease was
primarily due to the increases in the average prices of oil and gas sold.
General and administrative expenses decreased $873 (3.4%) for the three
months ended September 30, 1999 as compared to the three months ended
September 30, 1998. As a percentage of Net Profits, these expenses
decreased to 14.4% for the three months ended September 30, 1999 from
29.0% for the three months ended September 30, 1998. This percentage
decrease was primarily due to the increase in Net Profits.
NINE MONTHS ENDED SEPTEMBER 30, 1999 COMPARED TO THE NINE MONTHS ENDED
SEPTEMBER 30, 1998.
Nine Months Ended September 30,
-------------------------------
1999 1998
-------- --------
Net Profits $455,894 $410,191
Barrels produced 13,756 14,384
Mcf produced 225,347 194,383
Average price/Bbl $ 14.99 $ 13.95
Average price/Mcf $ 1.86 $ 1.83
As shown in the table above, total Net Profits increased $45,703 (11.1%)
for the nine months ended September 30, 1999 as compared to the nine
months ended September 30, 1998. Of this increase, approximately $57,000
was related to an increase in volumes of gas sold and approximately
$14,000 and $7,000, respectively, were related to increases in the average
prices of oil and gas sold. These increases were partially offset by
decreases of (i) approximately $9,000 related to a decrease in volumes of
oil sold and (ii) approximately $24,000 related to an increase in
production expenses incurred by the owners of the Working Interests.
Volumes of oil sold decreased 628 barrels while volumes of gas sold
increased 30,964 Mcf for the nine months ended September 30, 1999 as
compared to the nine months ended
33
September 30, 1998. The increase in volumes of gas sold was primarily due
to (i) a positive prior period volume adjustment made by the operator
during the nine months ended September 30, 1999 due to the payout of one
significant well and (ii) the successful recompletion of one well during
the fourth quarter of 1998. The increase in production expenses was
primarily due to (i) a change in the timing of payment of ad valorem
taxes, (ii) workover expenses incurred on two significant wells during the
nine months ended September 30, 1999 in order to improve the recovery of
reserves, and (iii) lease operating expenses paid during the nine months
ended September 30, 1999 related to prior periods on the well which
reached payout. Average oil and gas prices increased to $14.99 per barrel
and $1.86 per Mcf, respectively, for the nine months ended September 30,
1999 from $13.95 per barrel and $1.83 per Mcf, respectively, for the nine
months ended September 30, 1998.
The P-2 Partnership sold certain Net Profits Interests during the nine
months ended September 30, 1999 and recognized a $652 gain on such sales.
Sales of Net Profits Interests during the nine months ended September 30,
1998 resulted in the P-2 Partnership recognizing similar gains of
$253,637.
Depletion of Net Profits Interests increased $5,991 (4.8%) for the nine
months ended September 30, 1999 as compared to the nine months ended
September 30, 1998. As a percentage of Net Profits, this expense decreased
to 28.8% for the nine months ended September 30, 1999 from 30.6% for the
nine months ended September 30, 1998.
General and administrative expenses remained relatively constant for the
nine months ended September 30, 1999 as compared to the nine months ended
September 30, 1998. As a percentage of Net Profits, these expenses
decreased to 18.0% for the nine months ended September 30, 1999 from 20.0%
for the nine months ended September 30, 1998. This percentage decrease was
primarily due to the increase in Net Profits.
The P-2 Partnership should achieve payout during the three months ended
December 31, 1999. After payout, operations and revenues for the P-2
Partnership will be allocated using after payout percentages. After payout
percentages allocate operating income and expenses 10% to the General
Partner and 90% to the Limited Partners. Before payout, operating income
and expenses are allocated 5% to the General Partner and 95% to the
Limited Partners. See the Partnerships' Annual Report on Form 10-K for the
year ended December 31, 1998 for a further discussion of pre and post
payout allocations of income and expense.
34
Cumulative cash distributions to the Limited Partners through September
30, 1999 were $8,979,561 or 99.67% of the Limited Partners' capital
contributions.
P-3 PARTNERSHIP
THREE MONTHS ENDED SEPTEMBER 30, 1999 COMPARED TO THE THREE MONTHS ENDED
SEPTEMBER 30, 1998.
Three Months Ended September 30,
--------------------------------
1999 1998
-------- --------
Net Profits $322,339 $166,755
Barrels produced 7,152 7,192
Mcf produced 113,597 114,354
Average price/Bbl $ 21.57 $ 11.05
Average price/Mcf $ 2.29 $ 1.52
As shown in the table above, total Net Profits increased $155,584 (93.3%)
for the three months ended September 30, 1999 as compared to the three
months ended September 30, 1998. Of this increase, approximately $75,000
and $87,000, respectively, were related to increases in the average prices
of oil and gas sold. Volumes of oil and gas sold decreased 40 barrels and
757 Mcf, respectively, for the three months ended September 30, 1999 as
compared to the three months ended September 30, 1998. Average oil and gas
prices increased to $21.57 per barrel and $2.29 per Mcf, respectively, for
the three months ended September 30, 1999 from $11.05 per barrel and $1.52
per Mcf, respectively, for the three months ended September 30, 1998.
Depletion of Net Profits Interests decreased $3,312 (4.7%) for the three
months ended September 30, 1999 as compared to the three months ended
September 30, 1998. As a percentage of Net Profits, this expense decreased
to 20.7% for the three months ended September 30, 1999 from 42.0% for the
three months ended September 30, 1998. This percentage decrease was
primarily due to the increases in the average prices of oil and gas sold.
General and administrative expenses decreased $1,642 (3.4%) for the three
months ended September 30, 1999 as compared to the three months ended
September 30, 1998. As a percentage of Net Profits, these expenses
decreased to 14.6% for the three months ended September 30, 1999 from
29.1% for the three months ended September 30, 1998. This percentage
decrease was primarily due to the increase in Net Profits.
35
NINE MONTHS ENDED SEPTEMBER 30, 1999 COMPARED TO THE NINE MONTHS ENDED
SEPTEMBER 30, 1998.
Nine Months Ended September 30,
-------------------------------
1999 1998
-------- --------
Net Profits $852,103 $764,416
Barrels produced 25,502 26,651
Mcf produced 422,909 363,554
Average price/Bbl $ 14.98 $ 13.96
Average price/Mcf $ 1.87 $ 1.84
As shown in the table above, total Net Profits increased $87,687 (11.5%)
for the nine months ended September 30, 1999 as compared to the nine
months ended September 30, 1998. Of this increase, approximately $109,000
was related to an increase in volumes of gas sold and approximately
$26,000 and $13,000, respectively, were related to increases in the
average prices of oil and gas sold. These increases were partially offset
by decreases of (i) approximately $16,000 related to a decrease in volumes
of oil sold and (ii) approximately $44,000 related to an increase in
production expenses incurred by the owners of the Working Interests.
Volumes of oil sold decreased 1,149 barrels while volumes of gas sold
increased 59,355 Mcf for the nine months ended September 30, 1999 as
compared to the nine months ended September 30, 1998. The increase in
volumes of gas sold was primarily due to (i) a positive prior period
volume adjustment made by the operator during the nine months ended
September 30, 1999 due to the payout of one significant well and (ii) the
successful recompletion of one well during the fourth quarter of 1998. The
increase in production expenses was primarily due to (i) a change in the
timing of payment of ad valorem taxes, (ii) workover expenses incurred on
two significant wells during the nine months ended September 30, 1999 in
order to improve the recovery of reserves, and (iii) lease operating
expenses paid during the nine months ended September 30, 1999 related to
prior periods on the well which reached payout. Average oil and gas prices
increased to $14.98 per barrel and $1.87 per Mcf, respectively, for the
nine months ended September 30, 1999 from $13.96 per barrel and $1.84 per
Mcf, respectively, for the nine months ended September 30, 1998.
The P-3 Partnership sold certain Net Profits Interests during the nine
months ended September 30, 1999 and recognized a $1,252 gain on such
sales. Sales of Net Profits Interests during the nine months ended
September 30, 1998 resulted in the P-3 Partnership recognizing similar
gains of $603,091.
36
Depletion of Net Profits Interests increased $12,788 (5.5%) for the nine
months ended September 30, 1999 as compared to the nine months ended
September 30, 1998. As a percentage of Net Profits, this expense decreased
to 28.8% for the nine months ended September 30, 1999 from 30.5% for the
nine months ended September 30, 1998.
General and administrative expenses remained relatively constant for the
nine months ended September 30, 1999 as compared to the nine months ended
September 30, 1998. As a percentage of Net Profits, these expenses
decreased to 18.1% for the nine months ended September 30, 1999 from 20.2%
for the nine months ended September 30, 1998. This percentage decrease was
primarily due to the increase in Net Profits.
Cumulative cash distributions to the Limited Partners through September
30, 1999 were $16,235,401 or 95.71% of the Limited Partners' capital
contributions.
P-4 PARTNERSHIP
THREE MONTHS ENDED SEPTEMBER 30, 1999 COMPARED TO THE THREE MONTHS ENDED
SEPTEMBER 30, 1998.
Three Months Ended September 30,
--------------------------------
1999 1998
-------- --------
Net Profits $215,501 $138,857
Barrels produced 4,416 3,835
Mcf produced 81,223 82,033
Average price/Bbl $ 20.10 $ 11.96
Average price/Mcf $ 2.51 $ 1.99
As shown in the table above, total Net Profits increased $76,644 (55.2%)
for the three months ended September 30, 1999 as compared to the three
months ended September 30, 1998. Of this increase, approximately $36,000
and $42,000, respectively, were related to increases in the average prices
of oil and gas sold. Volumes of oil sold increased 581 barrels, while
volumes of gas sold decreased 810 Mcf for the three months ended September
30, 1999 as compared to the three months ended September 30, 1998. The
increase in volumes of oil sold was primarily due to increased production
on one significant well during the three months ended September 30, 1999
following a successful workover. Average oil and gas prices increased to
$20.10 per barrel and $2.51 per Mcf for the three months ended September
30, 1999 from $11.96 per barrel and $1.99 per Mcf for the three months
ended September 30, 1998.
37
Depletion of Net Profits Interests decreased $3,818 (7.0%) for the three
months ended September 30, 1999 as compared to the three months ended
September 30, 1998. As a percentage of Net Profits, this expense decreased
to 23.5% for the three months ended September 30, 1999 from 39.2% for the
three months ended September 30, 1998. This percentage decrease was
primarily due to the increases in the average prices of oil and gas sold.
General and administrative expenses decreased $1,152 (3.2%) for the three
months ended September 30, 1999 as compared to the three months ended
September 30, 1998. As a percentage of Net Profits, these expenses
decreased to 16.2% for the three months ended September 30, 1999 from
26.0% for the three months ended September 30, 1998. This percentage
decrease was primarily due to the increase in Net Profits.
NINE MONTHS ENDED SEPTEMBER 30, 1999 COMPARED TO THE NINE MONTHS ENDED
SEPTEMBER 30, 1998.
Nine Months Ended September 30,
-------------------------------
1999 1998
-------- --------
Net Profits $546,129 $557,503
Barrels produced 13,493 13,111
Mcf produced 269,857 280,161
Average price/Bbl $ 15.28 $ 13.03
Average price/Mcf $ 2.10 $ 2.16
As shown in the table above, total Net Profits decreased $11,374 (2.0%)
for the nine months ended September 30, 1999 as compared to the nine
months ended September 30, 1998. Of this decrease, approximately $22,000
was related to a decrease in volumes of gas sold, approximately $17,000
was related to a decrease in the average price of gas sold, and
approximately $8,000 was related to an increase in production expenses
incurred by the owners of the Working Interests. These decreases were
partially offset by increases of (i) approximately $30,000 related to an
increase in the average price of oil sold and (ii) approximately $5,000
related to an increase in volumes of oil sold. Volumes of oil sold
increased 382 barrels while volumes of gas sold decreased 10,304 Mcf for
the nine months ended September 30, 1999 as compared to the nine months
ended September 30, 1998. The increase in production expenses was
primarily due to workover expenses incurred on one significant well during
the nine months ended September 30, 1999. Average oil prices increased to
$15.28 per barrel for the nine months ended September 30, 1999 from $13.03
per barrel for the nine months ended September 30, 1998. Average gas
prices decreased to $2.10 per Mcf for the nine
38
months ended September 30, 1999 from $2.16 per Mcf for the nine months
ended September 30, 1998. Depletion of Net Profits Interests decreased
$21,107 (11.3%) for the nine months ended September 30, 1999 as compared
to the nine months ended September 30, 1998. This decrease was primarily
due to (i) the decrease in volumes of gas sold and (ii) upward revisions
in the estimates of remaining oil and gas reserves at December 31, 1998.
As a percentage of Net Profits, this expense decreased to 30.2% for the
nine months ended September 30, 1999 from 33.4% for the nine months ended
September 30, 1998.
General and administrative expenses remained relatively constant for the
nine months ended September 30, 1999 as compared to the nine months ended
September 30, 1998. As a percentage of Net Profits, these expenses
remained relatively constant at 21.0% for the nine months ended September
30, 1999 and 20.6% for the nine months ended September 30, 1998.
The P-4 Partnership should achieve payout during the three months ended
December 31, 1999. After payout, operations and revenues for the P-4
Partnership will be allocated using after payout percentages. After payout
percentages allocate operating income and expenses 10% to the General
Partner and 90% to the Limited Partners. Before payout, operating income
and expenses are allocated 5% to the General Partner and 95% to the
Limited Partners. See the Partnerships' Annual Report on Form 10-K for the
year ended December 31, 1998 for a further discussion of pre and post
payout allocations of income and expense.
Cumulative cash distributions to the Limited Partners through September
30, 1999 were $12,478,945 or 98.80% of the Limited Partners' capital
contributions.
P-5 PARTNERSHIP
THREE MONTHS ENDED SEPTEMBER 30, 1999 COMPARED TO THE THREE MONTHS ENDED
SEPTEMBER 30, 1998.
Three Months Ended September 30,
--------------------------------
1999 1998
-------- --------
Net Profits $230,347 $189,220
Barrels produced 1,417 1,771
Mcf produced 116,176 141,478
Average price/Bbl $ 21.56 $ 15.53
Average price/Mcf $ 2.32 $ 1.64
As shown in the table above, total Net Profits increased $41,127 (21.7%)
for the three months ended September 30, 1999 as compared to the three
months ended September 30,
39
1998. Of this increase, approximately $9,000 and $79,000, respectively,
were related to increases in the average prices of oil and gas sold. These
increases were partially offset by decreases of approximately $5,000 and
$41,000, respectively, related to decreases in volumes of oil and gas
sold. Volumes of oil and gas sold decreased 354 barrels and 25,302 Mcf,
respectively, for the three months ended September 30, 1999 as compared to
the three months ended September 30, 1998. The decrease in volumes of oil
sold was primarily due to positive prior period volume adjustments made by
the operators on two significant wells during the three months ended
September 30, 1998. The decrease in volumes of gas sold was primarily due
to (i) normal declines in production and (ii) positive prior period volume
adjustments made by the purchasers on several wells during the three
months ended September 30, 1998. Average oil and gas prices increased to
$21.56 per barrel and $2.32 per Mcf, respectively, for the three months
ended September 30, 1999 from $15.53 per barrel and $1.64 per Mcf,
respectively, for the three months ended September 30, 1998.
Depletion of Net Profits Interests decreased $15,946 (24.4%) for the three
months ended September 30, 1999 as compared to the three months ended
September 30, 1998. This decrease was primarily due to (i) the decreases
in volumes of oil and gas sold and (ii) one significant well being fully
depleted in 1998 due to the lack of remaining reserves. As a percentage of
Net Profits, this expense decreased to 21.5% for the three months ended
September 30, 1999 from 34.6% for the three months ended September 30,
1998. This percentage decrease was primarily due to the increases in the
average prices of oil and gas sold.
General and administrative expenses decreased $1,096 (3.2%) for the three
months ended September 30, 1999 as compared to the three months ended
September 30, 1998. As a percentage of Net Profits, these expenses
decreased to 14.2% for the three months ended September 30, 1999 from
17.9% for the three months ended September 30, 1998. This percentage
decrease was primarily due to the increase in Net Profits.
NINE MONTHS ENDED SEPTEMBER 30, 1999 COMPARED TO THE NINE MONTHS ENDED
SEPTEMBER 30, 1998.
Nine Months Ended September 30,
-------------------------------
1999 1998
-------- --------
Net Profits $574,192 $619,716
Barrels produced 5,378 5,171
Mcf produced 357,095 399,271
Average price/Bbl $ 15.84 $ 15.17
Average price/Mcf $ 1.89 $ 1.87
40
As shown in the table above, total Net Profits decreased $45,524 (7.3%)
for the nine months ended September 30, 1999 as compared to the nine
months ended September 30, 1998. Of this decrease, approximately $79,000
was related to a decrease in volumes of gas sold, which decrease was
partially offset by increases of (i) approximately $6,000 related to an
increase in the average price of gas sold and (ii) approximately $20,000
related to a decrease in production expenses incurred by the owners of the
Working Interests. Volumes of oil sold increased 207 barrels while volumes
of gas sold decreased 42,176 Mcf for the nine months ended September 30,
1999 as compared to the nine months ended September 30, 1998. The decrease
in volumes of gas sold was primarily due to (i) normal declines in
production and (ii) positive prior period volume adjustments made by the
purchasers on several wells during the nine months ended September 30,
1998. Average oil and gas prices increased to $15.84 per barrel and $1.89
per Mcf, respectively, for the nine months ended September 30, 1999 from
$15.17 per barrel and $1.87 per Mcf, respectively, for the nine months
ended September 30, 1998.
The P-5 Partnership sold certain Net Profits Interests during the nine
months ended September 30, 1998 and recognized a $340,817 gain on such
sales. No such gains were recognized on sales of Net Profits Interests
during the nine months ended September 30, 1999.
Depletion of Net Profits Interests decreased $30,579 (16.5%) for the nine
months ended September 30, 1999 as compared to the nine months ended
September 30, 1998. This decrease was primarily due to (i) the decrease in
volumes of gas sold and (ii) one significant well being fully depleted in
1998 due to the lack of remaining reserves. As a percentage of Net
Profits, this expense decreased to 26.9% for the nine months ended
September 30, 1999 from 29.9% for the nine months ended September 30,
1998. This percentage decrease was primarily due to the increases in the
average prices of oil and gas sold and the dollar decrease in depletion of
Net Profits Interests.
General and administrative expenses remained relatively constant for the
nine months ended September 30, 1999 as compared to the nine months ended
September 30, 1998. As a percentage of Net Profits, these expenses
increased to 18.8% for the nine months ended September 30, 1999 from 17.4%
for the nine months ended September 30, 1998.
Cumulative cash distributions to the Limited Partners through September
30, 1999 were $7,811,759 or 65.95% of the Limited Partners' capital
contributions.
P-6 PARTNERSHIP
THREE MONTHS ENDED SEPTEMBER 30, 1999 COMPARED TO THE THREE MONTHS ENDED
SEPTEMBER 30, 1998.
Three Months Ended September 30,
--------------------------------
1999 1998
-------- --------
Net Profits $440,245 $256,471
Barrels produced 5,560 3,172
Mcf produced 215,064 249,092
Average price/Bbl $ 19.42 $ 14.45
Average price/Mcf $ 2.36 $ 1.61
As shown in the table above, total Net Profits increased $183,774 (71.7%)
for the three months ended September 30, 1999 as compared to the three
months ended September 30, 1998. Of this increase, approximately $28,000
and $160,000, respectively, were related to increases in the average
prices of oil and gas sold and approximately $35,000 was related to an
increase in volumes of oil sold. These increases were partially offset by
a decrease of approximately $55,000 related to a decrease in volumes of
gas sold. Volumes of oil sold increased 2,388 barrels while volumes of gas
sold decreased 34,028 Mcf for the three months ended September 30, 1999 as
compared to the three months ended September 30, 1998. The increase in
volumes of oil sold was primarily due to positive prior period volume
adjustments made by the purchasers on several wells during the three
months ended September 30, 1999. The decrease in volumes of gas sold was
primarily due to (i) normal declines in production and (ii) positive prior
period volume adjustments made by the purchaser on one significant well
during the three months ended September 30, 1998. Average oil and gas
prices increased to $19.42 per barrel and $2.36 per Mcf, respectively, for
the three months ended September 30, 1999 from $14.45 per barrel and $1.61
per Mcf, respectively, for the three months ended September 30, 1998.
Depletion of Net Profits Interests decreased $8,972 (8.1%) for the three
months ended September 30, 1999 as compared to the three months ended
September 30, 1998. As a percentage of Net Profits, this expense decreased
to 23.1% for the three months ended September 30, 1999 from 43.2% for the
three months ended September 30, 1998. This percentage decrease was
primarily due to the increases in the average prices of oil and gas sold.
41
General and administrative expenses decreased $1,323 (3.2%) for the three
months ended September 30, 1999 as compared to the three months ended
September 30, 1998. As a percentage of Net Profits, these expenses
decreased to 9.0% for the three months ended September 30, 1999 from 15.9%
for the three months ended September 30, 1998. This percentage decrease
was primarily due to the increase in Net Profits.
NINE MONTHS ENDED SEPTEMBER 30, 1999 COMPARED TO THE NINE MONTHS ENDED
SEPTEMBER 30, 1998.
Nine Months Ended September 30,
-------------------------------
1999 1998
-------- --------
Net Profits $996,224 $873,844
Barrels produced 14,798 10,069
Mcf produced 657,672 687,862
Average price/Bbl $ 15.27 $ 14.21
Average price/Mcf $ 1.88 $ 1.81
As shown in the table above, total Net Profits increased $122,380 (14.0%)
for the nine months ended September 30, 1999 as compared to the nine
months ended September 30, 1998. Of this increase, approximately $67,000
was related to an increase in volumes of oil sold, approximately $16,000
and $49,000, respectively, were related to increases in the average prices
of oil and gas sold, and approximately $45,000 was related to a decrease
in production expenses incurred by the owners of the Working Interests.
These increases were partially offset by a decrease of approximately
$55,000 related to a decrease in volumes of gas sold. Volumes of oil sold
increased 4,729 barrels while volumes of gas sold decreased 30,190 Mcf for
the nine months ended September 30, 1999 as compared to the nine months
ended September 30, 1998. The increase in volumes of oil sold was
primarily due to (i) positive prior period volume adjustments made by the
purchasers on several wells during the nine months ended September 30,
1999 and (ii) the receipt of revenues on a well which paid out in late
1998. The decrease in production expenses was primarily due to a decrease
in repair and maintenance expenses on several wells during the nine months
ended September 30, 1999. Average oil and gas prices increased to $15.27
per barrel and $1.88 per Mcf, respectively, for the nine months ended
September 30, 1999 from $14.21 per barrel and $1.81 per Mcf, respectively,
for the nine months ended September 30, 1998.
The P-6 Partnership sold certain Net Profits Interests during the nine
months ended September 30, 1998 and recognized a $133,104 gain on such
sales. No such gains were recognized on sales of Net Profits Interest
during the nine months ended September 30, 1999.
42
Depletion of Net Profits Interests decreased $3,239 (1.0%) for the nine
months ended September 30, 1999 as compared to the nine months ended
September 30, 1998. As a percentage of Net Profits, this expense decreased
to 30.7% for the nine months ended September 30, 1999 from 35.4% for the
nine months ended September 30, 1998. This percentage decrease was
primarily due to the increases in the average prices of oil and gas sold.
General and administrative expenses remained relatively constant for the
nine months ended September 30, 1999 as compared to the nine months ended
September 30, 1998. As a percentage of Net Profits, these expenses
decreased to 13.1% for the nine months ended September 30, 1999 from 14.9%
for the nine months ended September 30, 1998. This percentage decrease was
primarily due to the increase in Net Profits.
Cumulative cash distributions to the Limited Partners through September
30, 1999 were $10,485,248 or 73.30% of the Limited Partners' capital
contributions.
YEAR 2000 COMPUTER ISSUES
- -------------------------
IN GENERAL
The Year 2000 Issue ("Y2K") refers to the inability of computer and other
information technology systems to properly process date and time
information, stemming from the earlier programming practice of using two
digits rather than four to represent the year in a date. For example,
computer programs and imbedded chips that are date sensitive may recognize
a date using (00) as the year 1900 rather than the year 2000. The
consequence of Y2K is that computer and imbedded processing systems may be
at risk of malfunctioning, particularly during the transition from 1999 to
2000.
The effects of Y2K are exacerbated by the interdependence of computer and
telecommunication systems throughout the world. This interdependence also
exists among the Partnerships, Samson Investment Company and its
affiliates ("Samson"), and their vendors, customers, and business
partners, as well as with regulators. The potential risks associated with
Y2K for an oil and gas production company fall into three general areas:
(i) financial, leasehold and administrative computer systems, (ii)
imbedded systems in field process control units, and (iii) third party
exposures. As discussed below, General Partner does not believe that these
risks will be material to the Partnerships' operations.
43
The Partnerships' business is producing oil and gas. The day-to-day
production of the Partnerships' oil and gas is not dependent on computers
or equipment with imbedded chips. As further discussed below, management
anticipates that the Partnerships' daily business activities will not be
materially affected by Y2K.
The Partnerships rely on Samson to provide all of their operational and
administrative services on either a direct or indirect basis. Samson has
addressed each of the three Y2K areas discussed above through a readiness
process that:
1. increased the awareness of the issue among key employees;
2. identified areas of potential risk;
3. assessed the relative impact of these risks and Samson's ability
to manage them; and
4. remediated the risks on a priority basis wherever possible.
One of Samson Investment Company's Executive Vice Presidents is
responsible for communicating to its Board of Directors Y2K actions and
for the ultimate implementation of its Y2K plan. He has delegated to
Samson Investment Company's Senior Vice President-Technology and
Administrative Services principal responsibility for ensuring Y2K
compliance within Samson.
Samson has been planning for the impact of Y2K on its information
technology systems since 1993. As of November 1, 1999, Samson is in the
final stages of implementation of a Y2K plan, as summarized below:
FINANCIAL AND ADMINISTRATIVE SYSTEMS
1. Awareness. Samson has alerted its officers, managers and supervisors of
Y2K issues and asked them to have their employees participate in the
identification of potential Y2K risks which might otherwise go unnoticed
by higher level employees and officers. As a result, awareness of the
issue is considered high.
2. Risk Identification. Samson's most significant financial and
administrative systems exposure is the Y2K status of the accounting and
land administration system used to collect and manage data for internal
management decision making and for external revenue and accounts payable
purposes. Other concerns include network hardware and software, desktop
computing hardware and software, telecommunications, and office space
readiness.
44
3. Risk Assessment. The failure to identify and correct a material Y2K
problem could result in inaccurate or untimely financial information for
management decision-making or cash flow and payment purposes, including
maintaining oil and gas leases.
4. Remediation. Since 1993, Samson has been upgrading its accounting and
land administration software. All of the Y2K upgrades have been completed.
In addition, in 1997 and 1998 Samson replaced or applied software patches
to substantially all of its network and desktop software applications and
believes them to be currently Y2K compliant. The costs of all such risk
assessments and remediation were not material to the Partnerships.
5. Contingency Planning. Notwithstanding the foregoing, should there be
significant unanticipated disruptions in Samson's financial and
administrative systems, all of the accounting processes that are currently
automated will need to be performed manually. Samson has communicated to
its management team the importance of having adequate staff available to
manually perform necessary functions to minimize disruptions.
IMBEDDED SYSTEMS
1. Awareness. Samson's Y2K program has involved all levels of field
personnel from production foremen and higher. Employees at all levels of
the organization have been asked to participate in the identification of
potential Y2K risks, which might otherwise go unnoticed by higher level
employees and officers of Samson, and as a result, awareness of the issue
is considered high.
2. Risk Identification. Samson has inventoried all possible exposures to
imbedded chips and systems. Such exposures can be classified as either (i)
oil and gas production and processing equipment or (ii) office machines
such as faxes, copiers, phones, etc.
With respect to oil and gas production and processing equipment, neither
Samson nor the Partnerships operate offshore wells, significant processing
plants, or wells with older electronic monitoring systems. As a result,
Samson's inventory identified less than 10 applications using imbedded
chips. All of these have been tested by the respective vendors and have
been found to be Y2K compliant or have been upgraded or replaced.
45
Office machines have been tested by Samson and vendors and are believed to
be compliant.
3. Risk Assessment and Remediation. The failure to identify and correct a
material Y2K problem in an imbedded system could result in outcomes
ranging from errors in data reporting to curtailments or shutdowns in
production. As noted above, Samson has identified less than 10 imbedded
system applications all of which have been made compliant or replaced.
None of these applications are believed to be material to Samson or the
Partnerships. Samson believes that sufficient manual processes are
available to minimize any field level risk and that there will be no
material impact on the Partnerships with respect to these applications.
4. Contingency Planning. Should material production disruptions occur as a
result of Y2K failures in field operations, Samson will utilize its
existing field personnel in an attempt to avoid any material impact on
operating cash flow. Samson is not able to quantify any potential exposure
in the event of systems failure or inadequate manual alternatives.
THIRD PARTY EXPOSURES
1. Awareness. Samson has advised management to consider Y2K implications
with its outside vendors, customers, and business partners. Management has
been asked to participate in the identification of potential third party
Y2K risks and, as a result, awareness of the issue is considered high.
2. Risk Identification. Samson's most significant third party Y2K exposure
is its dependence on third parties for the receipt of revenues from oil
and gas sales. However, virtually all of these purchasers are very large
and sophisticated companies. Other Y2K concerns include the availability
of electric power to Samson's field operations, the integrity of
telecommunication systems, and the readiness of commercial banks to
execute electronic fund transfers.
3. Risk Assessment. Because of the high awareness of the Y2K problem in
the U.S., Samson has not undertaken and does not plan to undertake a
formal company wide plan to make inquiries of third parties on the subject
of Y2K readiness. If it did so, Samson has no ability to require responses
to such inquiries or to independently verify their accuracy. Samson has,
however, received oral assurances from its significant oil and gas
purchasers of Y2K compliance. If significant disruptions from major
purchasers were to occur, however, there could be a material and adverse
impact on the
46
Partnerships' results of operations, liquidity, and financial conditions.
It is important to note that third party oil and gas purchasers have
significant incentives to avoid disruptions arising from a Y2K failure.
For example, most of these parties are under contractual obligations to
purchase oil and gas or disperse revenues to Samson. The failure to do so
will result in contractual and statutory penalties. Therefore, Samson
believes that it is unlikely that there will be material third party
non-compliance with purchase and remittance obligations as a result of Y2K
issues.
4. Remediation. Where Samson perceived a significant risk of Y2K
non-compliance by banks and other significant vendors that would have had
a material impact on Samson's business, Samson undertook joint testing
during 1999, and any identified problems have been resolved.
5. Contingency Planning. In the unlikely event that material production
disruptions occur as a result of Y2K failures of third parties, the
Partnerships' operating cash flow could be impacted. This contingency will
be factored into deliberations on the level of quarterly cash
distributions paid out during any such period of cash flow disruption.
47
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET
RISK.
The Partnerships do not hold any market risk sensitive instruments.
48
PART II. OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
27.1 Financial Data Schedule containing summary financial
information extracted from the P-1 Partnership's
financial statements as of September 30, 1999 and for
the nine months ended September 30, 1999, filed
herewith.
27.2 Financial Data Schedule containing summary financial
information extracted from the P-2 Partnership's
financial statements as of September 30, 1999 and for
the nine months ended September 30, 1999, filed
herewith.
27.3 Financial Data Schedule containing summary financial
information extracted from the P-3 Partnership's
financial statements as of September 30, 1999 and for
the nine months ended September 30, 1999, filed
herewith.
27.4 Financial Data Schedule containing summary financial
information extracted from the P-4 Partnership's
financial statements as of September 30, 1999 and for
the nine months ended September 30, 1999, filed
herewith.
27.5 Financial Data Schedule containing summary financial
information extracted from the P-5 Partnership's
financial statements as of September 30, 1999 and for
the nine months ended September 30, 1999, filed
herewith.
27.6 Financial Data Schedule containing summary financial
information extracted from the P-6 Partnership's
financial statements as of September 30, 1999 and for
the nine months ended September 30, 1999, filed
herewith.
All other exhibits are omitted as inapplicable.
(b) Reports on Form 8-K.
None.
49
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 P-2
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: November 3, 1999 By: /s/Dennis R. Neill
--------------------------------
(Signature)
Dennis R. Neill
President
Date: November 3, 1999 By: /s/Patrick M. Hall
--------------------------------
(Signature)
Patrick M. Hall
Principal Accounting Officer
50
INDEX TO EXHIBITS
NUMBER DESCRIPTION
- ------ -----------
27.1 Financial Data Schedule containing summary financial information
extracted from the Geodyne Institutional/Pension Energy Income P-1
Limited Partnership's financial statements as of September 30, 1999
and for the nine months ended September 30, 1999, filed herewith.
27.2 Financial Data Schedule containing summary financial information
extracted from the Geodyne Institutional/Pension Energy Income P-2
Limited Partnership's financial statements as of September 30, 1999
and for the nine months ended September 30, 1999, filed herewith.
27.3 Financial Data Schedule containing summary financial information
extracted from the Geodyne Institutional/Pension Energy Income
Limited Partnership P-3's financial statements as of September 30,
1999 and for the nine months ended September 30, 1999, filed
herewith.
27.4 Financial Data Schedule containing summary financial information
extracted from the Geodyne Institutional/Pension Energy Income
Limited Partnership P-4's financial statements as of September 30,
1999 and for the nine months ended September 30, 1999, filed
herewith.
27.5 Financial Data Schedule containing summary financial information
extracted from the Geodyne Institutional/Pension Energy Income
Limited Partnership P-5's financial statements as of September 30,
1999 and for the nine months ended September 30, 1999, filed
herewith.
27.6 Financial Data Schedule containing summary financial information
extracted from the Geodyne Institutional/Pension Energy Income
Limited Partnership P-6's financial statements as of September 30,
1999 and for the nine months ended September 30, 1999, filed
herewith.
All other exhibits are omitted as inapplicable.
51