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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2001
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE TRANSITION PERIOD FROM TO .
-------------------- --------------------
Commission File Number 0-19279
EVERFLOW EASTERN PARTNERS, L.P.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWARE 34-1659910
----------------------------------- ----------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
585 West Main Street
P.O. Box 629
CANFIELD, OHIO 44406
- ------------------------------------------------- ------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (330)533-2692
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
--- ---
There were 5,888,662 Units of limited partnership interest of the
Registrant as of May 11, 2001. The Units generally do not have any voting
rights, but, in certain circumstances, the Units are entitled to one vote per
Unit.
Except as otherwise indicated, the information contained in this Report
is as of March 31, 2001.
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EVERFLOW EASTERN PARTNERS, L.P.
INDEX
DESCRIPTION PAGE NO.
----------- --------
Part I. Financial Information
Item 1. Financial Statements
Consolidated Balance Sheets
March 31, 2001 and December 31, 2000 F-1
Consolidated Statements of Income
Three Months Ended March 31, 2001 and 2000 F-3
Consolidated Statements of Partners' Equity
Three Months Ended March 31, 2001 and 2000 F-4
Consolidated Statements of Cash Flows
Three Months Ended March 31, 2001 and 2000 F-5
Notes to Unaudited Consolidated Financial Statements F-6
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 3
Part II. Other Information
Item 6. Exhibits and Reports on Form 8-K 6
Signature 7
2
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EVERFLOW EASTERN PARTNERS, L.P.
CONSOLIDATED BALANCE SHEETS
March 31, 2001 and December 31, 2000
------------------------------------
March 31, December 31,
2001 2000
(Unaudited) (Audited)
--------- -------
ASSETS
------
CURRENT ASSETS
Cash and equivalents $ 2,146,317 $ 1,997,978
Accounts receivable:
Production 2,462,019 3,078,235
Officers and employees 391,999 406,842
Joint venture partners 84,545 114,708
Short-term investments 5,683,947 3,623,374
Other 75,453 79,729
-------------- --------------
Total current assets 10,844,280 9,300,866
PROPERTY AND EQUIPMENT
Proved properties (successful efforts
accounting method) 112,965,061 112,341,851
Pipeline and support equipment 504,222 504,222
Corporate and other 1,547,003 1,539,824
-------------- --------------
115,016,286 114,385,897
Less accumulated depreciation, depletion,
amortization and write down (70,236,155) (68,746,486)
-------------- --------------
44,780,131 45,639,411
OTHER ASSETS 103,017 103,017
-------------- --------------
$ 55,727,428 $ 55,043,294
============== ==============
See notes to unaudited consolidated financial statements.
F-1
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EVERFLOW EASTERN PARTNERS, L.P.
CONSOLIDATED BALANCE SHEETS
March 31, 2001 and December 31, 2000
------------------------------------
March 31, December 31,
2001 2000
(Unaudited) (Audited)
--------- -------
LIABILITIES AND PARTNERS' EQUITY
CURRENT LIABILITIES
Current portion of long-term debt $ 59,740 $ 58,595
Accounts payable 967,926 1,018,959
Accrued expenses 287,450 292,684
-------------- --------------
Total current liabilities 1,315,116 1,370,238
LONG-TERM DEBT, NET OF CURRENT PORTION 563,649 579,227
DEFERRED INCOME TAXES 50,000 50,000
COMMITMENTS AND CONTINGENCIES - -
LIMITED PARTNERS' EQUITY, SUBJECT TO
REPURCHASE RIGHT
Authorized - 8,000,000 Units
Issued and outstanding - 5,888,662 Units 53,192,564 52,446,234
GENERAL PARTNER'S EQUITY 606,099 597,595
-------------- --------------
Total partners' equity 53,798,663 53,043,829
-------------- --------------
$ 55,727,428 $ 55,043,294
============== ==============
See notes to unaudited consolidated financial statements.
F-2
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EVERFLOW EASTERN PARTNERS, L.P.
CONSOLIDATED STATEMENTS OF INCOME
Three Months Ended March 31, 2001 and 2000
------------------------------------------
(Unaudited)
-----------
2001 2000
---- ----
REVENUES
Oil and gas sales $ 4,743,994 $ 4,451,767
Well management and operating 131,588 132,368
Other 1,520 696
----------- -----------
4,877,102 4,584,831
DIRECT COST OF REVENUES
Production costs 767,617 835,202
Well management and operating 34,032 33,544
Depreciation, depletion and amortization 1,474,798 1,516,833
Abandonment and write down of
oil and gas properties 50,000 75,000
----------- -----------
Total direct cost of revenues 2,326,447 2,460,579
GENERAL AND ADMINISTRATIVE EXPENSE 369,760 341,724
----------- -----------
Total cost of revenues 2,696,207 2,802,303
----------- -----------
INCOME FROM OPERATIONS 2,180,895 1,782,528
OTHER INCOME (EXPENSE)
Interest income 74,660 57,733
Interest expense (11,781) (14,145)
----------- -----------
62,879 43,588
----------- -----------
INCOME BEFORE INCOME TAXES 2,243,774 1,826,116
PROVISION FOR INCOME TAXES
Current - -
Deferred - -
----------- -----------
NET INCOME $ 2,243,774 $ 1,826,116
=========== ===========
Allocation of Partnership Net Income
Limited Partners 2,218,495 1,806,232
General Partner 25,279 19,884
----------- -----------
$ 2,243,774 $ 1,826,116
=========== ===========
Net income per unit $ .38 $ .30
=========== ===========
See notes to unaudited consolidated financial statements.
F-3
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EVERFLOW EASTERN PARTNERS, L.P.
CONSOLIDATED STATEMENTS OF PARTNERS' EQUITY
Three Months Ended March 31, 2001 and 2000
------------------------------------------
(Unaudited)
2001 2000
------------ ------------
PARTNERS' EQUITY - JANUARY 1 $ 53,043,829 $ 53,288,759
Net income 2,243,774 1,826,116
Cash distributions (1,488,940) (1,540,574)
------------ ------------
PARTNERS' EQUITY - MARCH 31 $ 53,798,663 $ 53,574,301
============ ============
See notes to unaudited consolidated financial statements.
F-4
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EVERFLOW EASTERN PARTNERS, L.P.
CONSOLIDATED STATEMENTS OF CASH FLOWS
Three Months Ended March 31, 2001 and 2000
------------------------------------------
(Unaudited)
2001 2000
---- ----
CASH FLOWS FROM OPERATING ACTIVITIES
Net income $ 2,243,774 $ 1,826,116
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation, depletion and amortization 1,489,669 1,529,852
Abandonment and write down of
oil and gas properties 50,000 75,000
Changes in assets and liabilities:
Accounts receivable 646,379 601,192
Short-term investments (2,060,573) (2,538,798)
Other current assets 4,276 3,231
Other assets - 674
Accounts payable (51,033) (53,931)
Accrued expenses (5,234) 4,055
----------- -----------
Total adjustments 73,484 (378,725)
----------- -----------
Net cash provided by operating activities 2,317,258 1,447,391
CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds received on receivables from officers and
employees 58,592 112,269
Advances disbursed to officers and employees (43,749) (38,232)
Purchase of property and equipment (680,389) (497,478)
----------- -----------
Net cash used by investing activities (665,546) (423,441)
CASH FLOWS FROM FINANCING ACTIVITIES
Distributions (1,488,940) (1,540,574)
Payments on debt, including revolver activity (14,433) (13,313)
----------- -----------
Net cash used by financing activities (1,503,373) (1,553,887)
----------- -----------
NET INCREASE (DECREASE) IN CASH AND
EQUIVALENTS 148,339 (529,937)
CASH AND EQUIVALENTS AT BEGINNING
OF YEAR 1,997,978 2,684,605
----------- -----------
CASH AND EQUIVALENTS AT END OF
FIRST QUARTER $ 2,146,317 $ 2,154,668
=========== ===========
Supplemental disclosures of cash flow information:
Cash paid during the period for:
Interest $ 12,097 $ 13,391
Income taxes - -
See notes to unaudited consolidated financial statements.
F-5
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EVERFLOW EASTERN PARTNERS, L.P.
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
Note 1. Organization and Summary of Significant Accounting Policies
A. Interim Financial Statements - The interim
consolidated financial statements included herein
have been prepared by the management of Everflow
Eastern Partners, L.P., without audit. In the opinion
of management, all adjustments (which include only
normal recurring adjustments) necessary to present
fairly the financial position and results of
operations have been made.
Information and footnote disclosures normally
included in financial statements prepared in
accordance with generally accepted accounting
principles have been condensed or omitted. It is
suggested that these financial statements be read in
conjunction with the financial statements and notes
thereto which are incorporated in Everflow Eastern
Partners, L.P.'s report on Form 10-K filed with the
Securities and Exchange Commission on March 30, 2001.
The results of operations for the interim periods may
not necessarily be indicative of the results to be
expected for the full year.
Use of Estimates - The preparation of financial
statements in conformity with generally accepted
accounting principles requires management to make
estimates and assumptions that affect the reported
amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the
financial statements and the reported amounts of
revenues and expenses during the reporting period.
Actual results could differ from those estimates.
B. Organization - Everflow Eastern Partners, L.P.
("Everflow") is a Delaware limited partnership which
was organized in September 1990 to engage in the
business of oil and gas exploration and development.
Everflow was formed to consolidate the business and
oil and gas properties of Everflow Eastern, Inc.
("EEI") and Subsidiaries and the oil and gas
properties owned by certain limited partnership and
working interest programs managed or sponsored by EEI
("EEI Programs" or "the Programs").
F-6
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EVERFLOW EASTERN PARTNERS, L.P.
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
Note 1. Organization and Summary of Significant Accounting Policies
(Continued)
B. Organization (Continued)
Everflow Management Limited, LLC, an Ohio limited
liability company, is the general partner of
Everflow, and, as such, is authorized to perform all
acts necessary or desirable to carry out the purposes
and conduct of the business of Everflow. The members
of Everflow Management Limited, LLC are Everflow
Management Corporation ("EMC"), two individuals who
are Officers and Directors of EEI, and Sykes
Associates, a limited partnership controlled by
Robert F. Sykes, the Chairman of the Board of EEI.
EMC is an Ohio corporation formed in September 1990
and is the managing member of Everflow Management
Limited, LLC.
C. Principles of Consolidation - The consolidated
financial statements include the accounts of
Everflow, its wholly-owned subsidiaries, including
EEI and EEI's wholly owned subsidiaries, and
investments in oil and gas drilling and income
partnerships (collectively, "the Company") which are
accounted for under the proportional consolidation
method. All significant accounts and transactions
between the consolidated entities have been
eliminated.
D. Allocation of Income and Per Unit Data - Under the
terms of the limited partnership agreement,
initially, 99% of revenues and costs were allocated
to the Unitholders (the limited partners) and 1% of
revenues and costs were allocated to the General
Partner. Such allocation has changed and will change
in the future due to Unitholders electing to exercise
the Repurchase Right (see Note 4).
Earnings per limited partner Unit have been computed
based on the weighted average number of Units
outstanding, during the period for each period
presented. Average outstanding Units for earnings per
Unit calculations amounted to 5,888,662 and 6,095,193
for the three months ended March 31, 2001 and 2000,
respectively.
E. New Accounting Standards - In June 1998, SFAS 133,
"Accounting for Derivative Instruments and Hedging
Activities," was issued. SFAS 133 establishes
accounting and reporting standards for derivative
instruments and hedging activities. SFAS 133, as
amended
F-7
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EVERFLOW EASTERN PARTNERS, L.P.
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
Note 1. Organization and Summary of Significant Accounting Policies
(Continued)
E. New Accounting Standards (Continued)
by SFAS 137, is effective for all fiscal quarters of
all fiscal years beginning after June 15, 2000. The
effect of adoption of the standard on January 1, 2000
had no material effect on the Company's financial
statements.
Note 2. Short-Term Investments
Short-term investments consist of marketable corporate debt
securities which are classified as trading. The fair values of
the investments approximate cost.
Note 3. Credit Facilities and Long-Term Debt
In September 2000, the Company entered into an agreement that
modified the prior credit agreements. The agreement provides
for a revolving line of credit in the amount of $4,000,000,
all of which is available. The revolving line of credit
provides for interest payable quarterly at LIBOR plus 150
basis points with the principal due at maturity, May 31, 2002.
The Company anticipates renewing the facility every other year
to minimize debt origination, carrying and interest costs
associated with long-term bank commitments. Borrowings under
the facility are unsecured; however, the Company has agreed,
if requested by the bank, to execute any supplements to the
agreement including security and mortgage agreements on the
Company's assets. The agreement contains restrictive covenants
requiring the Company to maintain the following: (i) loan
balance not to exceed the borrowing base of $4,000,000; (ii)
tangible net worth of at least $40,000,000; and (iii) a total
debt to tangible net worth ratio of not more than 0.5 to 1.0.
In addition, there are restrictions on mergers, sales and
acquisitions, the incurrence of additional debt and the pledge
or mortgage of the Company's assets.
The Company purchased a building and funded its cost,
including improvements, in part, through mortgage notes. The
notes have an aggregate balance of $623,389 and $637,822 at
March 31, 2001 and December 31, 2000, respectively, and at
March 31, 2001 bear interest at fixed (converting in certain
subsequent years to variable) rates ranging from 6.51% - 8.65%
and a weighted average rate of 7.27%. The notes at March 31,
2001 require aggregate payments of principal and interest of
$8,647 per month.
F-8
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EVERFLOW EASTERN PARTNERS, L.P.
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
Note 3. Credit Facilities and Long-Term Debt (Continued)
The Company is exposed to market risk from changes in interest
rates since it, at times, funds its operations through
long-term and short-term borrowings. The Company's primary
interest rate risk exposure results from floating rate debt
with respect to the Company's revolving credit.
Note 4. Partners' Equity
Units represent limited partnership interests in Everflow. The
Units are transferable subject only to the approval of any
transfer by Everflow Management Limited, LLC and to the laws
governing the transfer of securities. The Units are not listed
for trading on any securities exchange nor are they quoted in
the automated quotation system of a registered securities
association. However, Unitholders have an opportunity to
require Everflow to repurchase their Units pursuant to the
Repurchase Right.
Under the terms of the limited partnership agreement,
initially, 99% of revenues and costs are allocated to the
Unitholders (the limited partners) and 1% of revenues and
costs are allocated to the General Partner. Such allocation
has changed and will change in the future due to Unitholders
electing to exercise the Repurchase Right.
The partnership agreement provides that Everflow will
repurchase for cash up to 10% of the then outstanding Units,
to the extent Unitholders offer Units to Everflow for
repurchase pursuant to the Repurchase Right. The Repurchase
Right entitles any Unitholder, between May 1 and June 30 of
each year, to notify Everflow that he elects to exercise the
Repurchase Right and have Everflow acquire certain or all of
his Units. The price to be paid for any such Units is
calculated based upon the audited financial statements of the
Company as of December 31 of the year prior to the year in
which the Repurchase Right is to be effective and
independently prepared reserve reports. The price per Unit
equals 66% of the adjusted book value of the Company allocable
to the Units, divided by the number of Units outstanding at
the beginning of the year in which the applicable Repurchase
Right is to be effective less all Interim Cash Distributions
received by a Unitholder. The adjusted book value is
calculated by adding partners' equity, the Standardized
Measure of Discounted Future Net Cash Flows and the tax effect
included in the Standardized Measure and subtracting from that
sum the carrying value of oil and gas properties (net of
undeveloped lease costs). If
F-9
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EVERFLOW EASTERN PARTNERS, L.P.
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
Note 4. Partners' Equity (Continued)
more than 10% of the then outstanding Units are tendered
during any period during which the Repurchase Right is to be
effective, the Investors' Units tendered shall be prorated for
purposes of calculating the actual number of Units to be
acquired during any such period. The price associated with the
Repurchase Right, based upon the December 31, 2000
calculation, is $9.73 per Unit, net of the distributions
($.625 per Unit in total) made in January and April 2001.
Units repurchased pursuant to the Repurchase Right for each of
the last five years are as follows:
Calculated Units
Price for Less # of Out-standing
Repurchase Premium Interim Net Units Following
Year Right Offered Distributions Price Paid Repurchased Repurchase
---- ----------- --------- ------------- ---------- ----------- ----------
1996 $4.48 $.27 $.250 $4.50 53,103 6,379,941
1997 $5.46 $ - $.250 $5.21 172,290 6,207,651
1998 $5.24 $ - $.250 $4.99 35,114 6,172,537
1999 $6.16 $ - $.375 $5.79 77,344 6,095,193
2000 $6.73 $ - $.625 $6.11 206,531 5,888,662
Note 5. Commitments and Contingencies
Everflow paid a quarterly dividend in April 2001 of $.375 per
Unit to Unitholders of record on March 31, 2001. The
distribution amounted to approximately $2,230,000.
EEI is the general partner in certain oil and gas
partnerships. As general partner, EEI shares in unlimited
liability to third parties with respect to the operations of
the partnerships and may be liable to limited partners for
losses attributable to breach of fiduciary obligations.
The Company operates exclusively in the United States, almost
entirely in Ohio and Pennsylvania, in the exploration,
development and production of oil and gas.
The Company operates in an environment with many financial
risks, including, but not limited to, the ability to acquire
additional economically recoverable oil and gas reserves, the
inherent risks of the search for,
F-10
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EVERFLOW EASTERN PARTNERS, L.P.
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
Note 5. Commitments and Contingencies (Continued)
development of and production of oil and gas, the ability to
sell oil and gas at prices which will provide attractive rates
of return, the volatility and seasonality of oil and gas
production and prices, and the highly competitive nature of
the industry and worldwide economic conditions. The Company's
ability to expand its reserve base and diversify its
operations is also dependent upon the Company's ability to
obtain the necessary capital through operating cash flow,
additional borrowings or additional equity funds. Various
federal, state and governmental agencies are considering, and
some have adopted, laws and regulations regarding
environmental protection which could adversely affect the
proposed business activities of the Company. The Company
cannot predict what effect, if any, current and future
regulations may have on the operations of the Company.
F-11
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Part I: Financial Information
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
LIQUIDITY AND CAPITAL RESOURCES
The following table summarizes the Company's financial position at
March 31, 2001 and December 31, 2000:
MARCH 31, 2001 DECEMBER 31, 2000
------------------------ --------------------
(Amounts in Thousands) Amount % Amount %
---------- --- ---------- ---
Working capital $ 9,529 18% $ 7,931 15%
Property and equipment (net) 44,780 82 45,639 85
Other 103 - 103 -
---------- --- ---------- ---
Total $ 54,412 100% $ 53,673 100%
========== === ========== ===
Long-term debt $ 563 1% 579 1%
Deferred income taxes 50 - 50 -
Partners' equity 53,799 99 53,044 99
---------- --- ---------- ---
Total $ 54,412 100% $ 53,673 100%
========== === ========== ===
Working capital surplus of $9.5 million as of March 31, 2001
represented an increase of $1.6 million from December 31, 2000 due primarily to
an increase in short-term investments. The increase was partially offset by a
reduction in accounts receivable.
In September 2000, the Company modified its revolving credit facility.
The facility provides for a revolving line of credit in the amount of $4.0
million, all of which is available. The revolving line of credit provides for
interest payable quarterly at LIBOR plus 150 basis points with principal due at
maturity, May 31, 2002. The Company anticipates renewing the facility every
other year to minimize debt origination, carrying and interest costs associated
with long-term bank commitments. Management of the Company believes this
revolving credit facility is sufficient to allow the Company to continue to fund
the development of oil and gas properties, repurchase Units pursuant to the
Repurchase Right and make quarterly cash distributions.
The Company's cash flow from operations before the change in working
capital increased $352 thousand, or 10%, during the three months ended March 31,
2001 as compared to the same period in 2000. Changes in working capital other
than cash and cash equivalents decreased cash by $1.5 million during the three
months ended March 31, 2001. The increase in short-term investments of $2.1
million at March 31, 2001 from December 31,
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2000 is primarily the result of higher investments in marketable corporate debt
securities at March 31, 2001.
Cash flows provided by operating activities was $2.3 million for the
three months ended March 31, 2001. Cash was primarily used in investing and
financing activities to purchase property and equipment and pay a quarterly
distribution, respectively.
Borrowings for operations may be required during the summer months due
to the seasonal nature of the gas purchase agreements with The East Ohio Gas
Company entered into beginning in 1991. Seasonal price reductions and production
restrictions during the summer months reduce operating revenues and consequently
cash flows from operations during such periods.
In the fall of 2000, the Company received an increase in the price
received for natural gas pursuant to the pricing adjustment contained in the
Company's Intermediate Term Adjustable Price Gas Purchase Agreement with The
East Ohio Gas Company. The Company anticipates this pricing adjustment should
increase cash flow from gas production during 2001, assuming similar production
levels. Recent natural gas prices have increased and will increase the Company's
cash flows from gas production should pricing remain at such levels.
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RESULTS OF OPERATIONS
The following table and discussion is a review of the results of
operations of the Company for the three months ended March 31, 2001 and 2000.
All items in the table are calculated as a percentage of total revenues. This
table should be read in conjunction with the discussions of each item below:
Three Months
Ended March 31,
---------------
2001 2000
---- ----
Revenues:
Oil and gas sales 97% 97%
Well management and operating 3 3
----- ----
Total Revenues 100 100
Expenses:
Production costs 16 18
Well management and operating 1 1
Depreciation, depletion and amortization 30 33
Abandonment and write down of
oil and gas properties 1 2
General and administrative 7 7
Other (1) (1)
---- ---
Total Expenses 54 60
----- ----
Net income 46% 40%
===== ====
Revenues for the three months ended March 31, 2001 increased $292
thousand, or 6%, compared to the same period in 2000. This increase was due to
an increase in oil and gas sales during the first three months of 2001, as
compared to the same period in 2000.
Oil and gas sales increased $292 thousand, or 7%, during the three
months ended March 31, 2001 compared to the same period in 2000. Higher natural
gas prices during the first quarter of 2001 were responsible for this increase
compared to this same period in 2000. This increase was mitigated by lower
production volumes.
Production costs decreased $68 thousand, or 8%, during the three months
ended March 31, 2001 compared to the same period in 2000. Lower production
volumes and operating costs were responsible for this decrease between 2000 and
2001.
Depreciation, depletion and amortization decreased $42 thousand, or 3%,
during the three months ended March 31, 2001 compared to the same period in
2000. The decrease in
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17
depreciation, depletion and amortization is the result of reduced production
from producing oil and gas properties.
General and administrative expenses increased $28 thousand, or 8%,
during the first quarter of 2001 compared to the first quarter of 2000. The
primary reason for this increase is due to higher personnel costs and overhead
expenses associated with ongoing administration.
The Company reported net income of $2.2 million, an increase of $418
thousand, or 23%, during the three months ended March 31, 2001 compared to the
same period in 2000. The increase in oil and gas sales and decreases in
production costs and depreciation, depletion and amortization were primarily
responsible for this increase in net income. Net income represented 46% and 40%
of total revenue during the three months ended March 31, 2001 and 2000,
respectively.
Except for historical financial information contained in this Form
10-Q, the statements made in this report are forward-looking statements. Factors
that may cause actual results to differ materially from those in the forward
looking statement include price fluctuations in the natural gas and crude oil
markets in the Appalachian Basin, the weather in the Northeast Ohio area, the
number of Units tendered pursuant to the Repurchase Right and the ability to
locate economically productive oil and gas prospects for development by the
Company.
Part II. Other Information
Item 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
None
(b) No reports on Form 8-K were filed with the
Commission during the Company's first quarter.
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SIGNATURE
Pursuant to the requirement 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.
EVERFLOW EASTERN PARTNERS, L.P.
By: EVERFLOW MANAGEMENT LIMITED, LLC
General Partner
By: EVERFLOW MANAGEMENT CORPORATION
Managing Member
May 11, 2001 By: /s/William A. Siskovic
------------------------
William A. Siskovic
Vice President and Principal Financial and
Accounting Officer
(Duly Authorized Officer)
7