ITEM 1......BUSINESS
General
The Geodyne Energy Income Limited Partnership III-A (the "III-A Partnership"), Geodyne Energy Income Limited Partnership III-B (the "III-B Partnership"), Geodyne Energy Income Limited Partnership III-C (the "III-C Partnership"), Geodyne Energy Income Limited Partnership III-D (the "III-D Partnership"), Geodyne Energy Income Limited Partnership III-E (the "III-E Partnership"), Geodyne Energy Income Limited Partnership III-F (the "III-F Partnership"), and Geodyne Energy Income Limited Partnership III-G (the "III-G Partnership") (collectively, the "Partnerships") are limited partnerships formed under the Oklahoma Revised Uniform Limited Partnership Act. Each Partnership is composed of Geodyne Resources, Inc., a Delaware corporation, as general partner ("Geodyne" or the "General Partner"), Geodyne Depositary Company, a Delaware corporation, as the sole initial limited partner, and public investors as substitute limited partners (the "Limited Partners"). The Partnerships commenced operations on the dates set forth below:
Date of Partnership Activation ----------- ------------------
III-A November 22, 1989 III-B January 24, 1990 III-C February 27, 1990 III-D September 5, 1990 III-E December 26, 1990 III-F March 7, 1991 III-G September 20, 1991
The General Partner currently serves as general partner of 26 limited partnerships and is a wholly-owned subsidiary of Samson Investment Company. Samson Investment Company and its various corporate subsidiaries, including the General Partner (collectively "Samson"), are primarily engaged in the production and development of and exploration for oil and gas reserves and the acquisition and operation of producing properties. At December 31, 2000, Samson owned interests in approximately 13,500 oil and gas wells located in 19 states of the United States and the countries of Canada, Venezuela, and Russia. At December 31, 2000, Samson operated approximately 2,700 oil and gas wells located in 14 states of the United States as well as Canada, Venezuela, and Russia.
The Partnerships are currently engaged in the business of owning interests in producing oil and gas properties located in
the continental United States. The Partnerships may also engage to a limited extent in development drilling on producing oil and gas properties as required for the prudent management of the Partnerships.
As limited partnerships, the Partnerships have no officers, directors, or employees. They rely instead on the personnel of the General Partner and Samson. As of February 15, 2001, Samson employed approximately 965 persons. No employees are covered by collective bargaining agreements, and management believes that Samson provides a sound employee relations environment. For information regarding the executive officers of the General Partner, see "Item 10. Directors and Executive Officers of the General Partner."
The General Partner's and the Partnerships' principal place of business is located at Samson Plaza, Two West Second Street, Tulsa, Oklahoma 74103, and their telephone number is (918) 583-1791 or (888) 436-3963 [(888) GEODYNE].
Pursuant to the terms of the partnership agreements for the Partnerships (the "Partnership Agreements") the Partnerships will terminate on the dates indicated in the "Initial Termination Date" column of the following chart. However, the Partnership Agreements provide that the General Partner may extend the term of each Partnership for up to five periods of two years each. As of the date of this Annual Report on Form 10-K405 ("Annual Report"), the General Partner has extended the terms of the III-A, III-B, III-C, III-D, III-E, and III-F Partnerships for the first two-year extension period. The General Partner has not determined whether it intends to (i) further extend the terms of such Partnerships or (ii) extend the term of the III-G Partnership. Therefore, the Partnerships are currently scheduled to terminate on the dates indicated in the "Current Termination Date" column of the following chart.
Initial Extensions Current Partnership Termination Date Exercised Termination Date ----------- ------------------ --------- ------------------ III-A November 22, 1999 1 November 22, 2001 III-B January 24, 2000 1 January 24, 2002 III-C February 28, 2000 1 February 28, 2002 III-D September 5, 2000 1 September 5, 2002 III-E December 26, 2000 1 December 26, 2002 III-F March 7, 2001 1 March 7, 2003 III-G September 20, 2001 - September 20, 2001
Funding
Although the Partnership Agreements permit the Partnerships to incur borrowings, operations and expenses are currently funded out of each Partnership's revenues from oil and gas sales. The General Partner may, but is not required to, advance funds to a Partnership for the same purposes for which Partnership borrowings are authorized.
Principal Products Produced and Services Rendered
The Partnerships' sole business is the production of, and related incidental development of, oil and gas. The Partnerships do not refine or otherwise process crude oil and condensate. The Partnerships do not hold any patents, trademarks, licenses, or concessions and are not a party to any government contracts. The Partnerships have no backlog of orders and do not participate in research and development activities. The Partnerships are not presently encountering shortages of oilfield tubular goods, compressors, production material, or other equipment.
Competition and Marketing
The Partnerships' revenues, net income or loss, cash flows, carrying value of oil and gas properties, and amount of oil and gas which can be economically produced depend substantially upon the prevailing prices for oil and gas. Oil and gas prices (and consequently the Partnerships' profitability) depend on a number of factors that are beyond the control of the Partnerships. These factors include worldwide political instability (especially in oil-producing regions), United Nations export embargoes, the supply and price of foreign imports of oil and gas, the level of consumer product demand (which can be heavily influenced by weather patterns), the level of domestic oil and gas production, government regulations and taxes, the price and availability of alternative fuels, the overall economic environment, and the availability and capacity of transportation and processing facilities. The effect of these factors on future oil and gas industry trends cannot be accurately predicted or anticipated. In addition, the domestic oil and gas industry is highly competitive, with a large number of companies and individuals engaged in the exploration and development of oil and gas properties. Predicting future prices is not possible. Concerning past trends, oil and gas prices in the United States have been highly volatile for many years.
Over the past ten years average yearly wellhead gas prices have generally been in the $1.40 to $2.40 per Mcf range. However, due to unusual supply and demand circumstances gas prices are currently substantially higher than the upper end of this range. Substantially all of the Partnerships' gas reserves are being sold on 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. In addition, such spot market sales are generally short-term in nature and are dependent upon the obtaining of transportation services provided by pipelines. Spot prices for the Partnerships' gas increased from approximately $2.24 per Mcf at December 31, 1999 to approximately $6.03 per Mcf at December 31, 2000. Such prices were on an MMBTU basis and differ from the prices actually received by the Partnerships due to transportation and marketing costs, BTU adjustments, and regional price and quality differences.
For the past ten years, average oil prices have generally been in the $16.00 to $24.00 per barrel range, but have been extremely volatile over the past three years. Due to global consumption and supply trends as well as a slowdown in Asian energy demand, oil prices in late 1997 and early 1998 reached historically low levels, dropping to as low as approximately $9.25 per barrel. However, production curtailment agreements among major oil producing nations and other supply and demand factors have caused recent oil prices to climb to over $30.00 per barrel in some markets. It is not known whether this trend will continue. Prices for the Partnerships' oil increased from approximately $22.75 per barrel at December 31, 1999 to approximately $27.52 per barrel at December 31, 2000.
Future prices for both oil and gas will likely be different from the prices in effect on December 31, 2000. While it is impossible to predict whether future oil and gas prices will (i) stabilize, (ii) increase, or (iii) decrease, management believes it is possible that average oil and gas prices for the near future may be somewhat higher than the prices experienced over the past 10 years.
Significant Customers
The following customers accounted for ten percent or more of the Partnerships' oil and gas sales during the year ended December 31, 2000:
Partnership Purchaser Percentage ----------- ------------------------ ----------
III-A Valero Industrial Gas L.P. ("Valero") 24.8% El Paso Energy Marketing Company ("El Paso") 24.1% Phibro Energy, Inc. ("Phibro") 23.9%
III-B Phibro 25.6% Valero 18.8% El Paso 18.1% Sun Refining & Marketing Company 14.2%
III-C El Paso 58.2%
III-D El Paso 56.6% Eaglwing Trading, Inc. ("Eaglwing") 21.8%
III-E Eaglwing 43.8% El Paso 16.3%
III-F El Paso 37.8% Eaglwing 13.5% Amoco Production Co. 11.1%
III-G El Paso 31.6% Eaglwing 14.9% Amoco Production Co. 12.2%
In the event of interruption of purchases by one or more of the Partnerships' significant customers or the cessation or material change in availability of open access transportation by the Partnerships' pipeline transporters, the Partnerships may encounter difficulty in marketing their gas and in maintaining historic sales levels. Management does not expect any of its open access transporters to seek authorization to terminate their transportation services. Even if the services were terminated, management believes that alternatives would be available whereby the Partnerships would be able to continue to market their gas.
The Partnerships' principal customers for crude oil production are refiners and other companies which have pipeline facilities near the producing properties of the Partnerships. In
the event pipeline facilities are not conveniently available to production areas, crude oil is usually trucked by purchasers to storage facilities.
Oil, Gas, and Environmental Control Regulations
Regulation of Production Operations -- The production of oil and gas is subject to extensive federal and state laws and regulations governing a wide variety of matters, including the drilling and spacing of wells, allowable rates of production, prevention of waste and pollution, and protection of the environment. In addition to the direct costs borne in complying with such regulations, operations and revenues may be impacted to the extent that certain regulations limit oil and gas production to below economic levels.
Regulation of Sales and Transportation of Oil and Gas -- Sales of crude oil and condensate are made by the Partnerships at market prices and are not subject to price controls. The sale of gas may be subject to both federal and state laws and regulations. The provisions of these laws and regulations are complex and affect all who produce, resell, transport, or purchase gas, including the Partnerships. Although virtually all of the Partnerships' gas production is not subject to price regulation, other regulations affect the availability of gas transportation services and the ability of gas consumers to continue to purchase or use gas at current levels. Accordingly, such regulations may have a material effect on the Partnerships' operations and projections of future oil and gas production and revenues.
Future Legislation -- Legislation affecting the oil and gas industry is under constant review for amendment or expansion. Because such laws and regulations are frequently amended or reinterpreted, management is unable to predict what additional energy legislation may be proposed or enacted or the future cost and impact of complying with existing or future regulations.
Regulation of the Environment -- The Partnerships' operations are subject to numerous laws and regulations governing the discharge of materials into the environment or otherwise relating to environmental protection. Compliance with such laws and regulations, together with any penalties resulting from noncompliance, may increase the cost of the Partnerships' operations or may affect the Partnerships' ability to timely complete existing or future activities. Management anticipates that various local, state, and federal environmental control agencies will have an increasing impact on oil and gas operations.
Insurance Coverage
The Partnerships are subject to all of the risks inherent in the exploration for and production of oil and gas including blowouts, pollution, fires, and other casualties. The Partnerships maintain insurance coverage as is customary for
entities of a similar size engaged in operations similar to that of the Partnerships, but losses can occur from uninsurable risks or in amounts in excess of existing insurance coverage. The occurrence of an event which is not fully covered by insurance could have a material adverse effect on the Partnerships' financial condition and results of operations.
ITEM 2.
ITEM 2. PROPERTIES
Well Statistics
The following table sets forth the number of productive wells of the Partnerships as of December 31, 2000.
Well Statistics(1) As of December 31, 2000
Number of Gross Wells(2) Number of Net Wells(3) -------------------------- --------------------------- P/ship Total Oil Gas Total Oil Gas - -------- ----- ----- --- ----- ----- ----- III-A 169 79 90 10.24 2.39 7.85 III-B 142 70 72 6.74 3.09 3.65 III-C 168 66 102 20.24 11.74 8.50 III-D 172 117 55 11.27 6.36 4.91 III-E 223 93 130 24.73 6.89 17.84 III-F 384 288 96 18.82 10.43 8.39 III-G 1,402 1,023 379 12.33 7.79 4.54 - ---------- (1) The designation of a well as an oil well or gas well is made by the General Partner based on the relative amount of oil and gas reserves for the well. Regardless of a well's oil or gas designation, it may produce oil, gas, or both oil and gas. (2) As used in this Annual Report, "gross well" refers to a well in which a working interest is owned; accordingly, the number of gross wells is the total number of wells in which a working interest is owned. (3) As used in this Annual Report, "net well" refers to the sum of the fractional working interests owned in gross wells. For example, a 15% working interest in a well represents one gross well, but 0.15 net well.
Drilling Activities
During the year ended December 31, 2000, the Partnerships participated in the developmental drilling activities described below.
Working P/ship Well Name County St. Interest Type Status - ------ --------- ------ --- -------- ---- ---------
III-A DD Hachar No. 36 Webb TX .05992 Gas Producing
III-B DD Hachar No. 36 Webb TX .02790 Gas Producing
III-C DD Hachar No. 36 Webb TX .01162 Gas Producing
During the year ended December 31, 2000, the Partnerships indirectly participated in the developmental drilling activities described below. The Partnerships do not own working interests in these wells; therefore, they did not incur any costs associated with the drilling activity:
Revenue P/ship Well Name County St. Interest Type Status - ------ --------- ------- --- -------- ---- --------- III-A Clark-Hereford No. 7 Webb TX .00749 Gas Producing McKendrick-Akin Unit No. 2 Webb TX .00749 Gas Producing
III-B Clark-Hereford No. 7 Webb TX .00349 Gas Producing McKendrick-Akin Unit No. 2 Webb TX .00349 Gas Producing
III-C Smith-Newton No. 2-26 Pittsburg TX .00185 Gas Producing Clark-Hereford No. 7 Webb TX .00145 Gas Producing McKendrick-Akin Unit No. 2 Webb TX .00145 Gas Producing
III-D Smith-Newton No. 2-26 Pittsburg OK .00027 Gas Producing
The III-E, III-F, and III-G Partnerships did not participate in any drilling activities during the year ended December 31, 2000.
Oil and Gas Production, Revenue, and Price History
The following tables set forth certain historical information concerning the oil (including condensates) and gas production, net of all royalties, overriding royalties, and other third party interests, of the Partnerships, revenues attributable to such production, and certain price and cost information. As used in the following tables, direct operating expenses include lease operating expenses and production taxes. In addition, gas production is converted to oil equivalents at the rate of six Mcf per barrel, representing the estimated relative energy content of gas and oil, which rate is not necessarily indicative of the relationship of oil and gas prices. The respective prices of oil and gas are affected by market and other factors in addition to relative energy content.
Net Production Data
III-A Partnership -----------------
Year Ended December 31, ------------------------------------- 2000 1999 1998 ---------- ---------- ---------- Production: Oil (Bbls) 49,908 35,784 34,689 Gas (Mcf) 678,985 665,717 741,990 Oil and gas sales: Oil $1,454,983 $ 605,903 $ 434,592 Gas 2,656,278 1,466,078 1,595,205 --------- --------- --------- Total $4,111,261 $2,071,981 $2,029,797 ========= ========= ========= Total direct operating expenses $ 853,211 $ 585,757 $ 576,112 ========= ========= ========= Direct operating expenses as a percentage of oil and gas sales 20.8% 28.3% 28.4%
Average sales price: Per barrel of oil $29.15 $16.93 $12.53 Per Mcf of gas 3.91 2.20 2.15
Direct operating expenses per equivalent Bbl of oil $ 5.23 $ 3.99 $ 3.64
Net Production Data
III-B Partnership -----------------
Year Ended December 31, ------------------------------------- 2000 1999 1998 ---------- ---------- ---------- Production: Oil (Bbls) 40,544 33,676 34,221 Gas (Mcf) 326,603 299,745 355,197 Oil and gas sales: Oil $1,185,213 $ 598,881 $ 441,820 Gas 1,277,225 660,854 759,598 --------- --------- --------- Total $2,462,438 $1,259,735 $1,201,418 ========= ========= ========= Total direct operating expenses $ 525,281 $ 346,919 $ 330,107 ========= ========= ========= Direct operating expenses as a percentage of oil and gas sales 21.3% 27.5% 27.5%
Average sales price: Per barrel of oil $29.23 $17.78 $12.91 Per Mcf of gas 3.91 2.20 2.14
Direct operating expenses per equivalent Bbl of oil $ 5.53 $ 4.15 $ 3.53
Net Production Data
III-C Partnership -----------------
Year Ended December 31, ------------------------------------- 2000 1999 1998 ---------- ---------- ---------- Production: Oil (Bbls) 19,431 23,931 22,980 Gas (Mcf) 994,305 997,209 1,156,387 Oil and gas sales: Oil $ 572,001 $ 428,466 $ 312,050 Gas 3,578,430 2,018,358 2,134,955 --------- --------- --------- Total $4,150,431 $2,446,824 $2,447,005 ========= ========= ========= Total direct operating expenses $ 978,824 $ 551,030 $ 712,038 ========= ========= ========= Direct operating expenses as a percentage of oil and gas sales 23.6% 22.5% 29.1%
Average sales price: Per barrel of oil $29.44 $17.90 $13.58 Per Mcf of gas 3.60 2.02 1.85
Direct operating expenses per equivalent Bbl of oil $ 5.29 $ 2.90 $ 3.30
Net Production Data
III-D Partnership -----------------
Year Ended December 31, ------------------------------------- 2000 1999 1998 ---------- ---------- ---------- Production: Oil (Bbls) 31,388 36,148 35,908 Gas (Mcf) 629,117 716,804 767,089 Oil and gas sales: Oil $ 837,978 $ 562,513 $ 413,658 Gas 2,257,213 1,444,730 1,375,913 --------- --------- --------- Total $3,095,191 $2,007,243 $1,789,571 ========= ========= ========= Total direct operating expenses $ 895,563 $ 704,051 $ 718,656 ========= ========= ========= Direct operating expenses as a percentage of oil and gas sales 28.9% 35.1% 40.2%
Average sales price: Per barrel of oil $26.70 $15.56 $11.52 Per Mcf of gas 3.59 2.02 1.79
Direct operating expenses per equivalent Bbl of oil $ 6.57 $ 4.52 $ 4.39
Net Production Data
III-E Partnership -----------------
Year Ended December 31, ------------------------------------- 2000 1999 1998 ---------- ---------- ---------- Production: Oil (Bbls) 183,876 205,197 223,936 Gas (Mcf) 1,526,586 1,856,697 1,974,917 Oil and gas sales: Oil $ 4,822,734 $3,146,395 $2,542,259 Gas 5,654,292 3,900,054 3,858,330 ---------- --------- --------- Total $10,477,026 $7,046,449 $6,400,589 ========== ========= ========= Total direct operating expenses $ 3,652,507 $3,957,399 $3,695,174 ========== ========= ========= Direct operating expenses as a percentage of oil and gas sales 34.9% 56.2% 57.7%
Average sales price: Per barrel of oil $26.23 $15.33 $11.35 Per Mcf of gas 3.70 2.10 1.95
Direct operating expenses per equivalent Bbl of oil $ 8.33 $ 7.69 $ 6.68
Net Production Data
III-F Partnership -----------------
Year Ended December 31, ------------------------------------- 2000 1999 1998 ---------- ---------- ---------- Production: Oil (Bbls) 43,620 55,619 54,002 Gas (Mcf) 654,833 732,832 787,609 Oil and gas sales: Oil $1,242,912 $ 916,715 $ 678,439 Gas 2,194,409 1,397,731 1,470,754 --------- --------- --------- Total $3,437,321 $2,314,446 $2,149,193 ========= ========= ========= Total direct operating expenses $ 867,235 $ 926,110 $1,185,467 ========= ========= ========= Direct operating expenses as a percentage of oil and gas sales 25.2% 40.0% 55.2%
Average sales price: Per barrel of oil $28.49 $16.48 $12.56 Per Mcf of gas 3.35 1.91 1.87
Direct operating expenses per equivalent Bbl of oil $ 5.68 $ 5.21 $ 6.40
Net Production Data
III-G Partnership -----------------
Year Ended December 31, ------------------------------------- 2000 1999 1998 ---------- ---------- ---------- Production: Oil (Bbls) 32,013 40,292 38,858 Gas (Mcf) 333,031 409,664 419,813 Oil and gas sales: Oil $ 912,320 $ 661,957 $ 487,855 Gas 1,138,070 777,743 784,720 --------- --------- --------- Total $2,050,390 $1,439,700 $1,272,575 ========= ========= ========= Total direct operating expenses $ 552,240 $ 593,911 $ 744,443 ========= ========= ========= Direct operating expenses as a percentage of oil and gas sales 26.9% 41.3% 58.5%
Average sales price: Per barrel of oil $28.50 $16.43 $12.55 Per Mcf of gas 3.42 1.90 1.87
Direct operating expenses per equivalent Bbl of oil $ 6.31 $ 5.47 $ 6.84
Proved Reserves and Net Present Value
The following table sets forth each Partnership's estimated proved oil and gas reserves and net present value therefrom as of December 31, 2000. The schedule of quantities of proved oil and gas reserves was prepared by the General Partner in accordance with the rules prescribed by the Securities and Exchange Commission (the "SEC"). Certain reserve information was reviewed by Ryder Scott Company, L.P. ("Ryder Scott"), an independent petroleum engineering firm. As used throughout this Annual Report, "proved reserves" refers to those estimated quantities of crude oil, gas, and gas liquids which geological and engineering data demonstrate with reasonable certainty to be recoverable in future years from known oil and gas reservoirs under existing economic and operating conditions.
Net present value represents estimated future gross cash flow from the production and sale of proved reserves, net of estimated oil and gas production costs (including production taxes, ad valorem taxes, and operating expenses) and estimated future
development costs, discounted at 10% per annum. Net present value attributable to the Partnerships' proved reserves was calculated on the basis of current costs and prices at December 31, 2000. Such prices were not escalated except in certain circumstances where escalations were fixed and readily determinable in accordance with applicable contract provisions. The oil and gas prices at December 31, 2000 have caused the estimates of remaining economically recoverable reserves, as well as the value placed on such reserves, to be substantially higher than in the past several years, particularly considering the impact of depletion from production over the years. Any decrease in these prices would result in a corresponding reduction in the estimate of remaining reserves. The prices used in calculating the net present value attributable to the Partnerships' proved reserves do not necessarily reflect market prices for oil and gas production subsequent to December 31, 2000. There can be no assurance that the prices used in calculating the net present value of the Partnerships' proved reserves at December 31, 2000 will actually be realized for such production. The General Partner believes that it is unlikely that prices will remain at their current high levels.
The process of estimating oil and gas reserves is complex, requiring significant subjective decisions in the evaluation of available geological, engineering, and economic data for each reservoir. The data for a given reservoir may change substantially over time as a result of, among other things, additional development activity, production history, and viability of production under varying economic conditions; consequently, it is reasonably possible that material revisions to existing reserve estimates may occur in the near future. Although every reasonable effort has been made to ensure that these reserve estimates represent the most accurate assessment possible, the significance of the subjective decisions required and variances in available data for various reservoirs make these estimates generally less precise than other estimates presented in connection with financial statement disclosures.
Proved Reserves and Net Present Values From Proved Reserves
As of December 31, 2000(1)
III-A Partnership: ----------------- Estimated proved reserves: Gas (Mcf) 4,627,887 Oil and liquids (Bbls) 134,841
Net present value (discounted at 10% per annum) $17,895,582
III-B Partnership: ----------------- Estimated proved reserves: Gas (Mcf) 2,081,540 Oil and liquids (Bbls) 128,777
Net present value (discounted at 10% per annum) $ 9,198,654
III-C Partnership: ----------------- Estimated proved reserves: Gas (Mcf) 5,412,690 Oil and liquids (Bbls) 127,243
Net present value (discounted at 10% per annum) $17,950,312
III-D Partnership: ----------------- Estimated proved reserves: Gas (Mcf) 2,955,669 Oil and liquids (Bbls) 359,321
Net present value (discounted at 10% per annum) $12,049,647
III-E Partnership: ----------------- Estimated proved reserves: Gas (Mcf) 8,951,531 Oil and liquids (Bbls) 2,216,123
Net present value (discounted at 10% per annum) $40,652,197
III-F Partnership: ----------------- Estimated proved reserves: Gas (Mcf) 5,532,849 Oil and liquids (Bbls) 352,584
Net present value (discounted at 10% per annum) $17,812,158
III-G Partnership: ----------------- Estimated proved reserves: Gas (Mcf) 2,947,046 Oil and liquids (Bbls) 266,027
Net present value (discounted at 10% per annum) $10,101,087
- ---------- (1) Includes certain gas balancing adjustments which cause the gas volumes and net present values to differ from the reserve reports which were prepared by the General Partner and reviewed by Ryder Scott.
No estimates of the proved reserves of the Partnerships comparable to those included herein have been included in reports to any federal agency other than the SEC. Additional information relating to the Partnerships' proved reserves is contained in Note 4 to the Partnerships' financial statements, included in Item 8 of this Annual Report.
Significant Properties
The following table sets forth the number and percent of each Partnership's total wells which are operated by affiliates of the Partnerships as of December 31, 2000:
Operated Wells ------------------------------------------- Partnership Number Percent ----------- ------ -------
III-A 15 7% III-B 4 2% III-C 99 24% III-D 91 24% III-E 38 16% III-F 32 8% III-G 52 4%
The following tables set forth certain well and reserve information as of December 31, 2000 for the basins in which the Partnerships own a significant amount of oil and gas properties. The tables contain the following information for each significant basin: (i) the number of gross wells and net wells, (ii) the number of wells in which only a non-working interest is owned, (iii) the Partnership's total number of wells, (iv) the number of wells operated by the Partnership's affiliates, (v) estimated proved oil reserves, (vi) estimated proved gas reserves, and (vii)
the present value (discounted at 10% per annum) of estimated future net cash flow.
The Anadarko Basin is located in western Oklahoma and the Texas panhandle. The Gulf Coast Basin is located in southern Louisiana and southeast Texas, while the Permian Basin straddles west Texas and southeast New Mexico. Southern Oklahoma contains the Southern Oklahoma Folded Belt Basin. The Jay-Little Escambia Creek Field Unit is located in Santa Rosa County, Florida, while the Green River Basin is located in southern Wyoming and Northwest Colorado.
- --------------------- (1) Wells in which only a non-working (e.g. royalty) interest is owned. (2) Percentage of wells in the applicable basin which are operated by affiliates of the Partnerships.
- -------------------- (1) Wells in which only a non-working (e.g. royalty) interest is owned. (2) Percentage of wells in the applicable basin which are operated by affiliates of the Partnerships.
Title to Oil and Gas Properties
Management believes that the Partnerships have satisfactory title to their oil and gas properties. Record title to all of the Partnerships' properties is held by either the Partnerships or Geodyne Nominee Corporation, an affiliate of the General Partner.
Title to the Partnerships' properties is subject to customary royalty, overriding royalty, carried, working, and other similar interests and contractual arrangements customary in the oil and gas industry, to liens for current taxes not yet due, and to other encumbrances. Management believes that such burdens do not materially detract from the value of such properties or from the Partnerships' interest therein or materially interfere with their use in the operation of the Partnerships' business.
ITEM 3.
ITEM 3. LEGAL PROCEEDINGS
To the knowledge of the General Partner, neither the General Partner nor the Partnerships or their properties are subject to any litigation, the results of which would have a material effect on the Partnerships' or the General Partner's financial condition or operations.
ITEM 4.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF LIMITED PARTNERS
There were no matters submitted to a vote of the Limited Partners of any Partnership during 2000.
PART II
ITEM 5.
ITEM 5. MARKET FOR UNITS AND RELATED LIMITED PARTNER MATTERS
As of February 1, 2001, the number of Units outstanding and the approximate number of Limited Partners of record in the Partnerships were as follows:
Number of Number of Partnership Units Limited Partners ----------- --------- ----------------
III-A 263,976 1,268 III-B 138,336 724 III-C 244,536 1,193 III-D 131,008 626 III-E 418,266 2,001 III-F 221,484 1,062 III-G 121,925 555
Units were initially sold for a price of $100. Units are not traded on any exchange and there is no public trading market for them. The General Partner is aware of certain transfers of Units between unrelated parties, some of which are facilitated by secondary trading firms and matching services. In addition, as further described below, the General Partner is aware of certain "4.9% Tender Offers" which have been made for the Units. The General Partner believes that the transfers between unrelated parties have been limited and sporadic in number and volume. Other than trades facilitated by certain secondary trading firms and matching services, no organized trading market for Units exists and none is expected to develop. Due to the nature of these transactions, the General Partner has no verifiable information regarding prices at which Units have been transferred. Further, a transferee may not become a substitute Limited Partner without the consent of the General Partner.
Pursuant to the terms of the Partnership Agreements, the General Partner is obligated to annually issue a repurchase offer which is based on the estimated future net revenues from the Partnerships' reserves and is calculated pursuant to the terms of the Partnership Agreements. Such repurchase offer is recalculated monthly in order to reflect cash distributions to the Limited Partners and extraordinary events. The following table sets forth the General Partner's repurchase offer per Unit as of the periods indicated. For purpose of this Annual Report, a Unit represents an initial subscription of $100 to a Partnership.
Repurchase Offer Prices -----------------------
1999 2000 2001 ------------------------- ------------------------- ---- 1st 2nd 3rd 4th 1st 2nd 3rd 4th 1st P/ship Qtr. Qtr. Qtr. Qtr. Qtr. Qtr. Qtr. Qtr. Qtr. - ------ ---- ---- ---- ---- ---- ---- ---- ---- ---- III-A $14 $13 $13 $12 $11 $10 $16 $13 $10 III-B 12 12 13 12 10 9 15 13 9 III-C 15 14 16 14 12 11 19 16 12 III-D 21 20 18 16 13 11 22 18 14 III-E 27 27 21 20 17 14 23 19 15 III-F 18 18 16 16 13 11 19 17 14 III-G 20 20 18 17 13 11 21 18 15
In addition to this repurchase offer, some of the Partnerships have been subject to "4.9% tender offers" from several third parties. The General Partner does not know the terms of these offers or the prices received by the Limited Partners who accepted these offers.
Cash Distributions
Cash distributions are primarily dependent upon a Partnership's cash receipts from the sale of oil and gas production and cash requirements of the Partnership. Distributable cash is determined by the General Partner at the end of each calendar quarter and distributed to the Limited Partners within 45 days after the end of the quarter. Distributions are restricted to cash on hand less amounts required to be retained out of such cash as determined in the sole judgment of the General Partner to pay costs, expenses, or other Partnership obligations whether accrued or anticipated to accrue. In certain instances, the General Partner may not distribute the full amount of cash receipts which might otherwise be available for distribution in an effort to equalize or stabilize the amounts of quarterly distributions. Any available amounts not distributed are invested and the interest or income thereon is for the accounts of the Limited Partners.
The following is a summary of cash distributions paid to the Limited Partners during 1999, 2000, and 2001:
Cash Distributions ------------------
------------------------------------------ 1st 2nd 3rd 4th P/ship Qtr. Qtr. Qtr. Qtr. ------ ------ ------- ------- -------
III-A $ .69 $ .68 $ .80 $1.13 III-B .73 .61 .76 1.17 III-C 1.29 1.02 1.17 1.50 III-D 1.28 1.17 1.47 1.95 III-E .64 .07 .82 1.09 III-F .65 .46 .18 .94 III-G .70 .21 .37 1.22
2000 2001 ------------------------------------------ ------ 1st 2nd 3rd 4th 1st P/ship Qtr. Qtr. Qtr. Qtr. Qtr. ------ ------ ------- ------- ------- ------
III-A $1.01 $1.38 $1.57 $2.46 $3.33 III-B 1.32 1.59 1.78 2.65 3.48 III-C 1.74 1.73 2.04 2.94 3.62 III-D 2.56 2.34 4.18 4.13 4.26 III-E 3.04 2.81 6.13 3.75 3.78 III-F 2.87 1.95 2.53 2.24 3.31 III-G 3.37 2.03 2.94 2.59 3.47
ITEM 6.
ITEM 6. SELECTED FINANCIAL DATA
The following tables present selected financial data for the Partnerships. This data should be read in conjunction with the financial statements of the Partnerships and the respective notes thereto, included elsewhere in this Annual Report. See "Item 8. Financial Statements and Supplementary Data."
ITEM 7.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Use of Forward-Looking Statements and Estimates
This Annual Report contains certain forward-looking statements. The words "anticipate," "believe," "expect," "plan," "intend," "estimate," "project," "could," "may," and similar expressions are intended to identify forward-looking statements. Such statements reflect management's current views with respect to future events and financial performance. This Annual Report also includes certain information which is, or is based upon, estimates and assumptions. Such estimates and assumptions are management's efforts to accurately reflect the condition and operation of the Partnerships.
Use of forward-looking statements and estimates and assumptions involve risks and uncertainties which include, but are not limited to, the volatility of oil and gas prices, the uncertainty of reserve information, the operating risk associated with oil and gas properties (including the risk of personal injury, death, property damage, damage to the well or producing reservoir, environmental contamination, and other operating risks), the prospect of changing tax and regulatory laws, the availability and capacity of processing and transportation facilities, the general economic climate, the supply and price of foreign imports of oil and gas, the level of consumer product demand, and the price and availability of alternative fuels. Should one or more of these risks or uncertainties occur or should estimates or underlying assumptions prove incorrect, actual conditions or results may vary materially and adversely from those stated, anticipated, believed, estimated, or otherwise indicated.
General Discussion
The following general discussion should be read in conjunction with the analysis of results of operations provided below. The Partnerships' revenues, net income or loss, cash flows, carrying value of oil and gas properties, and amount of oil and gas which can be economically produced depend substantially upon the prevailing prices for oil and gas. Oil and gas prices (and consequently the Partnerships' profitability) depend on a number of factors that are beyond the control of the Partnerships. These factors include worldwide political instability (especially in oil-producing regions), United Nations export embargoes, the supply and price of foreign imports of oil and gas, the level of consumer product demand (which can be heavily influenced by weather patterns), the level of domestic oil and gas production, government regulations and taxes, the price and availability of alternative fuels, the overall economic environment, and the availability and capacity of transportation and processing facilities. The effect of these factors on future
oil and gas industry trends cannot be accurately predicted or anticipated. In addition, the domestic oil and gas industry is highly competitive, with a large number of companies and individuals engaged in the exploration and development of oil and gas properties. Predicting future prices is not possible. Concerning past trends, oil and gas prices in the United States have been highly volatile for many years.
Over the past ten years average yearly wellhead gas prices have generally been in the $1.40 to $2.40 per Mcf range. However, due to unusual supply and demand circumstances gas prices are currently substantially higher than the upper end of this range. Substantially all of the Partnerships' gas reserves are being sold on 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. In addition, such spot market sales are generally short-term in nature and are dependent upon the obtaining of transportation services provided by pipelines. Spot prices for the Partnerships' gas increased from approximately $2.24 per Mcf at December 31, 1999 to approximately $6.03 per Mcf at December 31, 2000. Such prices were on an MMBTU basis and differ from the prices actually received by the Partnerships due to transportation and marketing costs, BTU adjustments, and regional price and quality differences.
For the past ten years, average oil prices have generally been in the $16.00 to $24.00 per barrel range, but have been extremely volatile over the past three years. Due to global consumption and supply trends as well as a slowdown in Asian energy demand, oil prices in late 1997 and early 1998 reached historically low levels, dropping to as low as approximately $9.25 per barrel. However, production curtailment agreements among major oil producing nations and other supply and demand factors have caused recent oil prices to climb to over $30.00 per barrel in some markets. It is not known whether this trend will continue. Prices for the Partnerships' oil increased from approximately $22.75 per barrel at December 31, 1999 to approximately $27.52 per barrel at December 31, 2000.
Future prices for both oil and gas will likely be different from the prices in effect on December 31, 2000. While it is impossible to predict whether future oil and gas prices will (i) stabilize, (ii) increase, or (iii) decrease, management believes it is possible that average oil and gas prices for the near future may be somewhat higher than the prices experienced over the past 10 years.
As discussed in the "Results of Operations" section below, volumes of oil and gas sold also significantly affect the Partnerships' revenues. Oil and gas wells generally produce the most oil or gas in the earlier years of their lives and, as production continues, the rate of production naturally declines. At some point, production physically ceases or becomes no longer
economic. The Partnerships are not acquiring additional oil and gas properties, and the existing properties are not experiencing significant additional production through drilling or other capital projects. Therefore, volumes of oil and gas produced naturally decline from year to year. While it is difficult for management to predict future production from these properties, it is likely that this general trend of declining production will continue.
Despite this general trend of declining production, several factors can cause the volumes of oil and gas sold to increase or decrease at an even greater rate over a given period. These factors include, but are not limited to, (i) geophysical conditions which cause an acceleration of the decline in production, (ii) the shutting in of wells (or the opening of previously shut-in wells) due to low oil and gas prices, mechanical difficulties, loss of a market or transportation, or performance of workovers, recompletions, or other operations in the well, (iii) prior period volume adjustments (either positive or negative) made by the operator or purchasers of the production, (iv) ownership adjustments in accordance with agreements governing the operation or ownership of the well (such as adjustments that occur at payout), and (v) completion of enhanced recovery projects which increase production for the well. Many of these factors are very significant as related to a single well or as related to many wells over a short period of time. However, due to the large number of wells owned by the Partnerships, these factors are generally not material as compared to the normal decline in production experienced on all remaining wells.
Results of Operations
An analysis of the change in net oil and gas operations (oil and gas sales, less lease operating expenses and production taxes), is presented in the tables following "Results of Operations" under the heading "Average Sales Prices, Production Volumes, and Average Production Costs." Following is a discussion of each Partnerships' results of operations for the year ended December 31, 2000 as compared to the year ended December 31, 1999, and for the year ended December 31, 1999 as compared to the year ended December 31, 1998.
III-A Partnership -----------------
Year Ended December 31, 2000 Compared to Year Ended December 31, 1999 -------------------------------------
Total oil and gas sales increased $2,039,280 (98.4%) in 2000 as compared to 1999. Of this increase, approximately $610,000
and $1,161,000, respectively, were related to increases in the average prices of oil and gas sold and approximately $239,000 was related to an increase in volumes of oil sold. Volumes of oil and gas sold increased 14,124 barrels and 13,268 Mcf, respectively, in 2000 as compared to 1999. The increase in volumes of oil sold was primarily due to increased production in 2000 on three significant wells due to successful workovers. Average oil and gas prices increased to $29.15 per barrel and $3.91 per Mcf, respectively, in 2000 from $16.93 per barrel and $2.20 per Mcf, respectively, in 1999.
Oil and gas production expenses (including lease operating expenses and production taxes) increased $267,454 (45.7%) in 2000 as compared to 1999. This increase was primarily due to (i) an increase in production taxes associated with the increase in oil and gas sales and (ii) workover expenses incurred on three significant wells during 2000. As a percentage of oil and gas sales, these expenses decreased to 20.8% in 2000 from 28.3% in 1999. This percentage decrease was primarily due to the increases in the average prices of oil and gas sold.
Depreciation, depletion, and amortization of oil and gas properties decreased $136,279 (32.9%) in 2000 as compared to 1999. This decrease was primarily due to significant upward revisions in estimates of remaining oil and gas reserves at December 31, 2000, which decrease was partially offset by the increases in volumes of oil and gas sold. As a percentage of oil and gas sales, this expense decreased to 6.8% in 2000 from 20.0% in 1999. This percentage decrease was primarily due to the increases in the average prices of oil and gas sold and the dollar decrease in depreciation, depletion and amortization.
General and administrative expenses remained relatively constant in 2000 as compared to 1999. As a percentage of oil and gas sales, these expenses decreased to 7.6% in 2000 from 15.0% in 1999. This percentage decrease was primarily due to the increase in oil and gas sales.
The III-A Partnership achieved payout during the second quarter of 2000. After payout, operations and revenues for the III-A Partnership are allocated using after payout percentages. After payout percentages allocate operating income and expenses 10% to the General Partner and 90% to the Limited Partners. Before payout, operating income and expenses were allocated 5% to the General Partner and 95% to the Limited Partners.
The Limited Partners have received cash distributions through December 31, 2000 totaling $27,732,701 or 105.06% of Limited Partners' capital contributions.
Year Ended December 31, 1999 Compared to Year Ended December 31, 1998 -------------------------------------
Total oil and gas sales increased $42,184 (2.1%) in 1999 as compared to 1998. Of this increase, approximately $158,000 and $35,000, respectively, were related to increases in the average prices of oil and gas sold and approximately $14,000 was related to an increase in volumes of oil sold. These increases were partially offset by a decrease of approximately $164,000 related to a decrease in volumes of gas sold. Volumes of oil sold increased 1,095 barrels, while volumes of gas sold decreased 76,273 Mcf in 1999 as compared to 1998. The decrease in volumes of gas sold was primarily due to (i) normal declines in production and (ii) the receipt of a reduced percentage of sales on one significant well during 1999 due to the III-A Partnership's overproduced gas balancing position in that well. Average oil and gas prices increased to $16.93 per barrel and $2.20 per Mcf, respectively, in 1999 from $12.53 per barrel and $2.15 per Mcf, respectively, in 1998.
Oil and gas production expenses (including lease operating expenses and production taxes) increased $9,645 (1.7%) in 1999 as compared to 1998. As a percentage of oil and gas sales, these expenses remained relatively constant at 28.3% in 1999 and 28.4% in 1998.
Depreciation, depletion, and amortization of oil and gas properties decreased $84,570 (17.0%) in 1999 as compared to 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 economically recoverable reserves. These decreases were partially offset by two significant wells being fully depleted in 1999 due to the lack of remaining economically recoverable reserves. As a percentage of oil and gas sales, this expense decreased to 20.0% in 1999 from 24.6% in 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 in 1999 as compared to 1998. As a percentage of oil and gas sales, these expenses decreased to 15.0% in 1999 from 15.3% in 1998.
III-B Partnership -----------------
Year Ended December 31, 2000 Compared to Year Ended December 31, 1999 -------------------------------------
Total oil and gas sales increased $1,202,703 (95.5%) in 2000 as compared to 1999. Of this increase, approximately $464,000 and $557,000, respectively, were related to increases in the
average prices of oil and gas sold and approximately $122,000 was related to an increase in volumes of oil sold. Volumes of oil and gas sold increased 6,868 barrels and 26,858 Mcf, respectively, in 2000 as compared to 1999. The increase in volumes of oil sold was primarily due to increased production in 2000 on three significant wells due to successful workovers. Average oil and gas prices increased to $29.23 per barrel and $3.91 per Mcf, respectively, in 2000 from $17.78 per barrel and $2.20 per Mcf, respectively, in 1999.
Oil and gas production expenses (including lease operating expenses and production taxes) increased $178,362 (51.4%) in 2000 as compared to 1999. This increase was primarily due to (i) an increase in production taxes associated with the increase in oil and gas sales and (ii) workover expenses incurred on three significant wells during 2000. As a percentage of oil and gas sales, these expenses decreased to 21.3% in 2000 from 27.5% in 1999. This percentage decrease was primarily due to the increases in the average prices of oil and gas sold.
Depreciation, depletion, and amortization of oil and gas properties decreased $69,877 (30.8%) in 2000 as compared to 1999. This decrease was primarily due to significant upward revisions in estimates of remaining oil and gas reserves at December 31, 2000, which decrease was partially offset by the increases in volumes of oil and gas sold. As a percentage of oil and gas sales, this expense decreased to 6.4% in 2000 from 18.0% in 1999. This percentage decrease was primarily due to the increases in the average prices of oil and gas sold and the dollar decrease in depreciation, depletion and amortization.
General and administrative expenses increased $2,292 (1.4%) in 2000 as compared to 1999. As a percentage of oil and gas sales, these expenses decreased to 6.7% in 2000 from 13.0% in 1999. This percentage decrease was primarily due to the increase in oil and gas sales.
The Limited Partners have received cash distributions through December 31, 2000 totaling $16,128,353 or 116.59% of Limited Partners' capital contributions.
Year Ended December 31, 1999 Compared to Year Ended December 31, 1998 -------------------------------------
Total oil and gas sales increased $58,317 (4.9%) in 1999 as compared to 1998. Of this increase, approximately $164,000 and $20,000, respectively, were related to increases in the average prices of oil and gas sold. These increases were partially offset by decreases of approximately $7,000 and $119,000, respectively, related to decreases in volumes of oil and gas sold. Volumes of oil and gas sold decreased 545 barrels and 55,452 Mcf, respectively, in 1999 as compared to 1998. The
decrease in volumes of gas sold was primarily due to (i) normal declines in production and (ii) the receipt of a reduced percentage of sales on one significant well during 1999 due to the III-B Partnership's overproduced gas balancing position in that well. Average oil and gas prices increased to $17.78 per barrel and $2.20 per Mcf, respectively, in 1999 from $12.91 per barrel and $2.14 per Mcf, respectively, in 1998.
Oil and gas production expenses (including lease operating expenses and production taxes) increased $16,812 (5.1%) in 1999 as compared to 1998. As a percentage of oil and gas sales, these expenses remained constant at 27.5% in 1999 and 1998.
Depreciation, depletion, and amortization of oil and gas properties decreased $40,548 (15.2%) in 1999 as compared to 1998. This decrease was primarily due to the decreases in volumes of oil and gas sold. These decreases were partially offset by two significant wells being fully depleted in 1999 due to the lack of remaining economically recoverable reserves. As a percentage of oil and gas sales, this expense decreased to 18.0% in 1999 from 22.2% in 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 in 1999 as compared to 1998. As a percentage of oil and gas sales, these expenses decreased to 13.0% in 1999 from 13.6% in 1998.
III-C Partnership -----------------
Year Ended December 31, 2000 Compared to Year Ended December 31, 1999 -------------------------------------
Total oil and gas sales increased $1,703,607 (69.6%) in 2000 as compared to 1999. Of this increase, approximately $224,000 and $1,566,000, respectively, were related to increases in the average prices of oil and gas sold. Volumes of oil and gas sold decreased 4,500 barrels and 2,904 Mcf, respectively, in 2000 as compared to 1999. The decrease in volumes of oil sold was primarily due to normal declines in production. The decrease in volumes of gas sold was primarily due to normal declines in production, which decrease was substantially offset by (i) positive prior period volume adjustments made by the purchasers on two significant wells in 2000 and (ii) increased production on another significant well during 2000 due to a successful workover. Average oil and gas prices increased to $29.44 per barrel and $3.60 per Mcf, respectively, in 2000 from $17.90 per barrel and $2.02 per Mcf, respectively, in 1999.
Oil and gas production expenses (including lease operating expenses and production taxes) increased $427,794 (77.6%) in 2000 as compared to 1999. This increase was primarily due to (i) a
positive prior period lease operating expense adjustment on one significant well during 2000, (ii) an increase in production taxes associated with the increase in oil and gas sales, and (iii) a negative prior period lease operating expense adjustment on one significant well during 1999. As a percentage of oil and gas sales, these expenses increased to 23.6% in 2000 from 22.5% in 1999.
Depreciation, depletion, and amortization of oil and gas properties decreased $206,746 (42.0%) in 2000 as compared to 1999. This decrease was primarily due to significant upward revisions in estimates of remaining gas reserves at December 31, 2000. As a percentage of oil and gas sales, this expense decreased to 6.9% in 2000 from 20.1% in 1999. This percentage decrease was primarily due to the increases in the average prices of oil and gas sold and the dollar decrease in depreciation, depletion, and amortization.
General and administrative expenses remained relatively constant in 2000 as compared to 1999. As a percentage of oil and gas sales, these expenses decreased to 7.0% in 2000 from 11.8% in 1999. This percentage decrease was primarily due to the increase in oil and gas sales.
The Limited Partners have received cash distributions through December 31, 2000 totaling $20,504,795 or 83.85% of Limited Partners' capital contributions.
Year Ended December 31, 1999 Compared to Year Ended December 31, 1998 -------------------------------------
Total oil and gas sales remained relatively constant in 1999 as compared to 1998. A decrease in oil and gas sales of approximately $294,000 related to a decrease in volumes of gas sold was substantially offset by increases of approximately $104,000 and $177,000, respectively, related to increases in the average prices of oil and gas sold and approximately $13,000 related to an increase in volumes of oil sold. Volumes of oil sold increased 951 barrels, while volumes of gas sold decreased 159,178 Mcf in 1999 as compared to 1998. The decrease in volumes of gas sold was primarily due to (i) normal declines in production, (ii) positive prior period volume adjustments made by the purchasers on two significant wells during 1998, and (iii) a negative prior period volume adjustment made by the purchaser on another significant well during 1999. Average oil and gas prices increased to $17.90 per barrel and $2.02 per Mcf, respectively, in 1999 from $13.58 per barrel and $1.85 per Mcf, respectively, in 1998.
The III-C Partnership sold certain oil and gas properties in 1998 and recognized a $459,040 gain on such sales. No such gains were recognized in 1999.
Oil and gas production expenses (including lease operating expenses and production taxes) decreased $161,008 (22.6%) in 1999 as compared to 1998. This decrease was primarily due to a negative prior period lease operating expense adjustment made by the operator on one significant well during 1999. As a percentage of oil and gas sales, these expenses decreased to 22.5% in 1999 from 29.1% in 1998. This percentage decrease was primarily due to the increases in the average prices of oil and gas sold and the dollar decrease in oil and gas production expenses.
Depreciation, depletion, and amortization of oil and gas properties decreased $251,294 (33.8%) in 1999 as compared to 1998. This decrease was primarily due to two significant wells being fully depleted in 1998 due to the lack of remaining economically recoverable reserves. This decrease was partially offset by several other wells being fully depleted in 1999 due to a lack of remaining economically recoverable reserves. As a percentage of oil and gas sales, this expense decreased to 20.1% in 1999 from 30.4% in 1998. This percentage decrease was primarily due to the increases in average prices of oil and gas sold and the dollar decrease in depreciation, depletion, and amortization.
General and administrative expenses remained relatively constant in 1999 as compared to 1998. As a percentage of oil and gas sales, these expenses remained constant at 11.8% in 1999 and 1998.
III-D Partnership -----------------
Year Ended December 31, 2000 Compared to Year Ended December 31, 1999 -------------------------------------
Total oil and gas sales increased $1,087,948 (54.2%) in 2000 as compared to 1999. Of this increase, approximately $350,000 and $989,000, respectively, were related to increases in the average prices of oil and gas sold. These increases were partially offset by a decrease of approximately $177,000 related to a decrease in volumes of gas sold. Volumes of oil and gas sold decreased 4,760 barrels and 87,687 Mcf, respectively, in 2000 as compared to 1999. The decreases in volumes of oil and gas sold were primarily due to (i) normal declines in production and (ii) the sale of several wells during early 2000. Average oil and gas prices increased to $26.70 per barrel and $3.59 per Mcf, respectively, in 2000 from $15.56 per barrel and $2.02 per Mcf, respectively, in 1999.
The III-D Partnership sold certain oil and gas properties during 2000 and recognized a $203,942 gain on such sales. Sales
of oil and gas properties during 1999 resulted in the III-D Partnership recognizing a loss of $16.
Oil and gas production expenses (including lease operating expenses and production taxes) increased $191,512 (27.2%) in 2000 as compared to 1999. This increase was primarily due to (i) an increase in production taxes associated with the increase in oil and gas sales, (ii) workover expenses incurred on two significant wells during 2000, and (iii) a positive prior period lease operating expense adjustment on another significant well during 2000. As a percentage of oil and gas sales, these expenses decreased to 28.9% in 2000 from 35.1% in 1999. This percentage decrease was primarily due to the increases in the average prices of oil and gas sold.
Depreciation, depletion, and amortization of oil and gas properties increased $35,335 (15.3%) in 2000 as compared to 1999. This increase was primarily due to one significant well being fully depleted in 2000 due to the lack of remaining economically recoverable reserves, which increase was partially offset by the decreases in volumes of oil and gas sold. As a percentage of oil and gas sales, this expense decreased to 8.6% in 2000 from 11.5% in 1999. This percentage decrease was primarily due to the increases in the average prices of oil and gas sold.
General and administrative expenses increased $2,029 (1.3%) in 2000 as compared to 1999. As a percentage of oil and gas sales, these expenses decreased to 5.1% in 2000 from 7.8% in 1999. This percentage decrease was primarily due to the increase in oil and gas sales.
The Limited Partners have received cash distributions through December 31, 2000 totaling $11,031,669 or 84.21% of Limited Partners' capital contributions.
Year Ended December 31, 1999 Compared to Year Ended December 31, 1998 -------------------------------------
Total oil and gas sales increased $217,672 (12.2%) in 1999 as compared to 1998. Of this increase, approximately $146,000 and $159,000, respectively, were related to increases in the average prices of oil and gas sold. These increases were partially offset by a decrease of approximately $90,000 related to a decrease in volumes of gas sold. Volumes of oil sold increased 240 barrels, while volumes of gas sold decreased 50,285 Mcf in 1999 as compared to 1998. Average oil and gas prices increased to $15.56 per barrel and $2.02 per Mcf, respectively, in 1999 from $11.52 per barrel and $1.79 per Mcf, respectively, in 1998.
Oil and gas production expenses (including lease operating expenses and production taxes) decreased $14,605 (2.0%) in 1999
as compared to 1998. As a percentage of oil and gas sales, these expenses decreased to 35.1% in 1999 from 40.2% in 1998. This percentage decrease was primarily due to the increases in the average prices of oil and gas sold.
Depreciation, depletion, and amortization of oil and gas properties decreased $293,426 (56.0%) in 1999 as compared to 1998. This decrease was primarily due to (i) a reduction in the depletable base of oil and gas properties due to an impairment provision recorded during the fourth quarter of 1998 and (ii) one significant well being fully depleted in 1998 due to the lack of remaining economically recoverable reserves. As a percentage of oil and gas sales, this expense decreased to 11.5% in 1999 from 29.3% in 1998. This percentage decrease was primarily due to the dollar decrease in depreciation, depletion, and amortization and the increases in the average prices of oil and gas sold.
The III-D Partnership recognized a non-cash charge against earnings of $506,636 in the fourth quarter of 1998. This charge was related to the decline in oil and gas prices used to determine recoverability of proved oil and gas reserves at December 31, 1998. No similar charge was necessary in 1999.
General and administrative expenses remained relatively constant in 1999 as compared to 1998. As a percentage of oil and gas sales, these expenses decreased to 7.8% in 1999 from 8.7% in 1998. This percentage decrease was primarily due to the increase in oil and gas sales.
III-E Partnership -----------------
Year Ended December 31, 2000 Compared to Year Ended December 31, 1999 -------------------------------------
Total oil and gas sales increased $3,430,577 (48.7%) in 2000 as compared to 1999. Of this increase, approximately $2,003,000 and $2,448,000, respectively, were related to increases in the average prices of oil and gas sold. These increases were partially offset by a decrease of approximately $693,000 related to a decrease in volumes of gas sold. Volumes of oil and gas sold decreased 21,321 barrels and 330,111 Mcf, respectively, in 2000 as compared to 1999. The decrease in volumes of oil sold was primarily due to (i) the sale of several wells during early 2000 and (ii) normal declines in production. The decrease in volumes of gas sold was primarily due to (i) the sale of several wells in early 2000, (ii) a positive prior period volume adjustment made on one well in 1999, and (iii) normal declines in production. Average oil and gas prices increased to $26.23 per barrel and $3.70 per Mcf, respectively, in 2000 from $15.33 per barrel and $2.10 per Mcf, respectively, in 1999.
As discussed in "Liquidity and Capital Resources" below, the III-E Partnership sold certain oil and gas properties during 2000 and recognized a $1,324,494 gain on such sales. No such gains were recognized during 1999.
Oil and gas production expenses (including lease operating expenses and production taxes) decreased $304,892 (7.7%) in 2000 as compared to 1999. This decrease was primarily due to (i) the sale of several wells in early 2000 and (ii) positive prior period lease operating expense adjustments made on two significant wells during 1999. These decreases were partially offset by (i) an increase in production taxes associated with the increase in oil and gas sales and (ii) workover expenses incurred on one significant well during 2000 in order to improve the recovery of reserves. As a percentage of oil and gas sales, these expenses decreased to 34.9% in 2000 from 56.2% in 1999. This percentage decrease was primarily due to the increases in the average prices of oil and gas sold.
Depreciation, depletion, and amortization of oil and gas properties decreased $71,688 (15.0%) in 2000 as compared to 1999. This decrease was primarily due to upward revisions in the estimates of remaining oil and gas reserves at December 31, 2000. This decrease was partially offset by one significant well being fully depleted in 2000 due to the lack of remaining economically recoverable reserves. As a percentage of oil and gas sales, this expense decreased to 3.9% in 2000 from 6.8% in 1999. 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 in 2000 as compared to 1999. As a percentage of oil and gas sales, these expenses decreased to 4.8% in 2000 from 7.0% in 1999. This percentage decrease was primarily due to the increase in oil and gas sales.
The Limited Partners have received cash distributions through December 31, 2000 totaling $37,896,016 or 90.60% of Limited Partners' capital contributions.
Year Ended December 31, 1999 Compared to Year Ended December 31, 1998 -------------------------------------
Total oil and gas sales increased $645,860 (10.1%) in 1999 as compared to 1998. Of this increase, approximately $817,000 and $273,000, respectively, were related to increases in the average prices of oil and gas sold. These increases were partially offset by decreases of approximately $213,000 and $231,000, respectively, related to decreases in volumes of oil and gas sold. Volumes of oil and gas sold decreased 18,739 barrels and 118,220 Mcf, respectively, in 1999 as compared to 1998. Average oil and gas prices increased to $15.33 per barrel and $2.10 per Mcf,
respectively, in 1999 from $11.35 per barrel and $1.95 per Mcf, respectively, in 1998.
Oil and gas production expenses (including lease operating expenses and production taxes) increased $262,225 (7.1%) in 1999 as compared to 1998. This increase was primarily due to positive prior period lease operating expense adjustments made by the operators on two significant wells during 1999. This increase was partially offset by a decrease in lease operating expenses associated with the decreases in volumes of oil and gas sold. As a percentage of oil and gas sales, these expenses decreased to 56.2% in 1999 from 57.7% in 1998.
Depreciation, depletion, and amortization of oil and gas properties decreased $1,505,062 (75.8%) in 1999 as compared to 1998. This decrease was primarily due to (i) a reduction in the depletable base of oil and gas properties due to an impairment provision recorded during the fourth quarter of 1998 and (ii) significant upward revisions in estimates of remaining oil and gas reserves at December 31, 1999. As a percentage of oil and gas sales, this expense decreased to 6.8% in 1999 from 31.0% in 1998. This percentage decrease was primarily due to the dollar decrease in depreciation, depletion, and amortization.
The III-E Partnership recognized a non-cash charge against earnings of $3,503,400 in the fourth quarter of 1998. This charge was related to the decline in oil and gas prices used to determine the recoverability of proved oil and gas reserves at December 31, 1998. No similar charge was necessary in 1999.
General and administrative expenses remained relatively constant in 1999 as compared to 1998. As a percentage of oil and gas sales, these expenses decreased to 7.0% in 1999 from 7.8% in 1998, primarily due to the increase in oil and gas sales.
III-F Partnership -----------------
Year Ended December 31, 2000 Compared to Year Ended December 31, 1999 -------------------------------------
Total oil and gas sales increased $1,122,875 (48.5%) in 2000 as compared to 1999. Of this increase, approximately $524,000 and $945,000, respectively, were related to increases in the average prices of oil and gas sold. These increases were partially offset by decreases of approximately $198,000 and $149,000, respectively, related to decreases in volumes of oil and gas sold. Volumes of oil and gas sold decreased 11,999 barrels and 77,999 Mcf, respectively, in 2000 as compared to 1999. The decrease in volumes of oil sold was primarily due to (i) the sale of several wells during late 1999 and early 2000 and (ii) normal declines in production. The decrease in volumes of
gas sold was primarily due to (i) a negative prior period volume adjustment made by the purchaser on one significant well during 2000 and (ii) normal declines in production. Average oil and gas prices increased to $28.49 per barrel and $3.35 per Mcf, respectively, in 2000 from $16.48 per barrel and $1.91 per Mcf, respectively, in 1999.
As discussed in "Liquidity and Capital Resources" below, the III-F Partnership sold certain oil and gas properties during 2000 and recognized a $277,211 gain on such sales. Sales of oil and gas properties during 1999 resulted in the III-F Partnership recognizing similar gains of $139,094.
Oil and gas production expenses (including lease operating expenses and production taxes) decreased $58,875 (6.4%) in 2000 as compared to 1999. As a percentage of oil and gas sales, these expenses decreased to 25.2% in 2000 from 40.0% in 1999. This percentage decrease was primarily due to the increases in the average prices of oil and gas sold.
Depreciation, depletion, and amortization of oil and gas properties decreased $74,555 (17.8%) in 2000 as compared to 1999. This decrease was primarily due to (i) the decreases in volumes of oil and gas sold and (ii) upward revisions in the estimates of remaining oil and gas reserves at December 31, 2000. These decreases were partially offset by one significant well being fully depleted in 2000 due to the lack of remaining economically recoverable reserves. As a percentage of oil and gas sales, this expense decreased to 10.0% in 2000 from 18.1% in 1999. 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 in 2000 as compared to 1999. As a percentage of oil and gas sales, these expenses decreased to 7.7% in 2000 from 11.3% in 1999. This percentage decrease was primarily due to the increase in oil and gas sales.
The Limited Partners have received cash distributions through December 31, 2000 totaling $13,747,904 or 62.07% of Limited Partners' capital contributions.
Year Ended December 31, 1999 Compared to Year Ended December 31, 1998 -------------------------------------
Total oil and gas sales increased $165,253 (7.7%) in 1999 as compared to 1998. Of this increase, approximately $218,000 and $29,000, respectively, were related to increases in the average prices of oil and gas sold and approximately $20,000 was related to an increase in volumes of oil sold. These increases were partially offset by a decrease of approximately $102,000 related to a decrease in volumes of gas sold. Volumes of oil sold
increased 1,617 barrels, while volumes of gas sold decreased 54,777 Mcf in 1999 as compared to 1998. Average oil and gas prices increased to $16.48 per barrel and $1.91 per Mcf, respectively, in 1999 from $12.56 per barrel and $1.87 per Mcf, respectively, in 1998.
The III-F Partnership sold certain oil and gas properties during 1999 and recognized a $139,094 gain on such sales. Sales of oil and gas properties during 1998 resulted in the III-F Partnership recognizing similar gains of $22,073.
Oil and gas production expenses (including lease operating expenses and production taxes) decreased $259,357 (21.9%) in 1999 as compared to 1998. This decrease was primarily due to (i) a negative prior period lease operating expense adjustment made by the operator on one significant well during 1999, (ii) a decrease in lease operating expenses due to the reversal of a litigation accrual, and (iii) workover expenses and repair and maintenance expenses incurred on several wells during 1998. As a percentage of oil and gas sales, these expenses decreased to 40.0% in 1999 from 55.2% in 1998. This percentage decrease was primarily due to the dollar decrease in oil and gas production expenses and the increases in the average prices of oil and gas sold.
Depreciation, depletion, and amortization of oil and gas properties decreased $301,804 (41.8%) in 1999 as compared to 1998. This decrease was primarily due to several wells being substantially depleted in 1998 due to the lack of remaining economically recoverable reserves. As a percentage of oil and gas sales, this expense decreased to 18.1% in 1999 from 33.6% in 1998. This percentage decrease was primarily due to the dollar decrease in depreciation, depletion, and amortization.
General and administrative expenses remained relatively constant in 1999 as compared to 1998. As a percentage of oil and gas sales, these expenses decreased to 11.3% in 1999 from 12.1% in 1998.
III-G Partnership -----------------
Year Ended December 31, 2000 Compared to Year Ended December 31, 1999 -------------------------------------
Total oil and gas sales increased $610,690 (42.4%) in 2000 as compared to 1999. Of this increase, approximately $386,000 and $506,000, respectively, were related to increases in the average prices of oil and gas sold. These increases were partially offset by decreases of approximately $136,000 and $145,000, respectively, related to decreases in volumes of oil and gas sold. Volumes of oil and gas sold decreased 8,279 barrels and 76,633 Mcf, respectively, in 2000 as compared to 1999. The decrease in volumes
of oil sold was primarily due to (i) the sale of several wells during late 1999 and early 2000 and (ii) normal declines in production. The decrease in volumes of gas sold was primarily due to (i) a positive prior period volume adjustment made by the purchaser on one significant well during 1999 and (ii) normal declines in production. Average oil and gas prices increased to $28.50 per barrel and $3.42 per Mcf, respectively, in 2000 from $16.43 per barrel and $1.90 per Mcf, respectively, in 1999.
As discussed in "Liquidity and Capital Resources" below, the III-G Partnership sold certain oil and gas properties during 2000 and recognized a $241,256 gain on such sales. Sales of oil and gas properties during 1999 resulted in the III-G Partnership recognizing similar gains of $124,908.
Oil and gas production expenses (including lease operating expenses and production taxes) decreased $41,671 (7.0%) in 2000 as compared to 1999. As a percentage of oil and gas sales, these expenses decreased to 26.9% in 2000 from 41.3% in 1999. This percentage decrease was primarily due to the increases in the average prices of oil and gas sold.
Depreciation, depletion, and amortization of oil and gas properties decreased $34,228 (16.5%) in 2000 as compared to 1999. This decrease was primarily due to (i) the decreases in volumes of oil and gas sold and (ii) upward revisions in the estimates of remaining oil and gas reserves at December 31, 2000. These decreases were partially offset by one significant well being fully depleted in 2000 due to the lack of remaining economically recoverable reserves. As a percentage of oil and gas sales, this expense decreased to 8.4% in 2000 from 14.4% in 1999. This percentage decrease was primarily due to the increases in the average prices of oil and gas sold.
General and administrative expenses increased (1.4%) in 2000 as compared to 1999. As a percentage of oil and gas sales, these expenses decreased to 7.1% in 2000 from 10.0% in 1999. This percentage decrease was primarily due to the increase in oil and gas sales.
The Limited Partners have received cash distributions through December 31, 2000 totaling $7,484,287 or 61.38% of Limited Partners' capital contributions.
Year Ended December 31, 1999 Compared to Year Ended December 31, 1998 -------------------------------------
Total oil and gas sales increased $167,125 (13.1%) in 1999 as compared to 1998. Of this increase, approximately $156,000 and $12,000, respectively, were related to increases in the average prices of oil and gas sold and approximately $18,000 was related to an increase in volumes of oil sold. These increases
were partially offset by a decrease of approximately $19,000 related to a decrease in volumes of gas sold. Volumes of oil sold increased 1,434 barrels, while volumes of gas sold decreased 10,149 Mcf in 1999 as compared to 1998. Average oil and gas prices increased to $16.43 per barrel and $1.90 per Mcf, respectively, in 1999 from $12.55 per barrel and $1.87 per Mcf, respectively, in 1998.
The III-G Partnership sold certain oil and gas properties during 1999 and recognized a $124,908 gain on such sales. Sales of oil and gas properties during 1998 resulted in the III-G Partnership recognizing similar gains of $19,340.
Oil and gas production expenses (including lease operating expenses and production taxes) decreased $150,532 (20.2%) in 1999 as compared to 1998. This decrease was primarily due to (i) a negative prior period lease operating expense adjustment made by the operator on one significant well during 1999, (ii) a decrease in lease operating expenses due to the reversal of a litigation accrual, and (iii) workover expenses and repair and maintenance expenses incurred on several wells during 1998. As a percentage of oil and gas sales, these expenses decreased to 41.3% in 1999 from 58.5% in 1998. This percentage decrease was primarily due to the dollar decrease in oil and gas production expenses and the increases in the average prices of oil and gas sold.
Depreciation, depletion, and amortization of oil and gas properties decreased $193,387 (48.3%) in 1999 as compared to 1998. This decrease was primarily due to (i) a reduction in the depletable base of oil and gas properties due to an impairment provision recorded during the fourth quarter of 1998 and (ii) several wells being substantially depleted in 1998 due to the lack of remaining economically recoverable reserves. As a percentage of oil and gas sales, this expense decreased to 14.4% in 1999 from 31.5% in 1998. This percentage decrease was primarily due to the dollar decrease in depreciation, depletion, and amortization.
The III-G Partnership recognized a non-cash charge against earnings of $310,413 in the fourth quarter of 1998. This charge was related to the decline in oil and gas prices used to determine the recoverability of proved oil and gas reserves at December 31, 1998. No similar charge was necessary in 1999.
General and administrative expenses remained relatively constant in 1999 as compared to 1998. As a percentage of oil and gas sales, these expenses decreased to 10.0% in 1999 from 11.3% in 1998. This percentage decrease was primarily due to the increase in oil and gas sales.
Average Sale Prices, Production Volumes, and Average Production Costs
The following tables are comparisons of annual average oil and gas sales prices, production volumes, and average production costs (lease operating expenses and production taxes) per equivalent unit (one barrel or 6 Mcf of gas) for 2000, 1999, and 1998.
2000 Compared to 1999 ---------------------
Average Sales Prices - ----------------------------------------------------------------------------- P/ship 2000 1999 % Change - ------ ------------------- ----------------- -------------- Oil Gas Oil Gas ($/Bbl) ($/Mcf) ($/Bbl) ($/Mcf) Oil Gas ------- ------- ------- ------- ----- ---- III-A $29.15 $3.91 $16.93 $2.20 72% 78% III-B 29.23 3.91 17.78 2.20 64% 78% III-C 29.44 3.60 17.90 2.02 64% 78% III-D 26.70 3.59 15.56 2.02 72% 78% III-E 26.23 3.70 15.33 2.10 71% 76% III-F 28.49 3.35 16.48 1.91 73% 75% III-G 28.50 3.42 16.43 1.90 73% 80%
Production Volumes - ----------------------------------------------------------------------------- P/ship 2000 1999 % Change - ------ --------------------- ------------------- -------------- Oil Gas Oil Gas Oil Gas (Bbls) (Mcf) (Bbls) (Mcf) (Bbls) (Mcf) ------- --------- ------- --------- ------ ----- III-A 49,908 678,985 35,784 665,717 39% 2% III-B 40,544 326,603 33,676 299,745 20% 9% III-C 19,431 994,305 23,931 997,209 (19%) - III-D 31,388 629,117 36,148 716,804 (13%) (12%) III-E 183,876 1,526,586 205,197 1,856,697 (10%) (18%) III-F 43,620 654,833 55,619 732,832 (22%) (11%) III-G 32,013 333,031 40,292 409,664 (21%) (19%)
Average Production Costs per Equivalent Barrel of Oil ---------------------------------------- P/ship 2000 1999 % Change ------ ----- ----- -------- III-A $5.23 $3.99 31% III-B 5.53 4.15 33% III-C 5.29 2.90 82% III-D 6.57 4.52 45% III-E 8.33 7.69 8% III-F 5.68 5.21 9% III-G 6.31 5.47 15%
1999 Compared to 1998 ---------------------
Average Sales Prices - ---------------------------------------------------------------------------- P/ship 1999 1998 % Change - ------ ------------------- ----------------- ------------- Oil Gas Oil Gas ($/Bbl) ($/Mcf) ($/Bbl) ($/Mcf) Oil Gas ------- ------- ------- ------- ----- ---- III-A $16.93 $2.20 $12.53 $2.15 35% 2% III-B 17.78 2.20 12.91 2.14 38% 3% III-C 17.90 2.02 13.58 1.85 32% 9% III-D 15.56 2.02 11.52 1.79 35% 13% III-E 15.33 2.10 11.35 1.95 35% 8% III-F 16.48 1.91 12.56 1.87 31% 2% III-G 16.43 1.90 12.55 1.87 31% 2%
Production Volumes - ----------------------------------------------------------------------------- P/ship 1999 1998 % Change - ------ --------------------- ------------------- -------------- Oil Gas Oil Gas Oil Gas (Bbls) (Mcf) (Bbls) (Mcf) (Bbls) (Mcf) ------- --------- ------- --------- ------ ----- III-A 35,784 665,717 34,689 741,990 3% (10%) III-B 33,676 299,745 34,221 355,197 (2%) (16%) III-C 23,931 997,209 22,980 1,156,387 4% (14%) III-D 36,148 716,804 35,908 767,089 1% ( 7%) III-E 205,197 1,856,697 223,936 1,974,917 (8%) ( 6%) III-F 55,619 732,832 54,002 787,609 3% ( 7%) III-G 40,292 409,664 38,858 419,813 4% ( 2%)
Average Production Costs per Equivalent Barrel of Oil ---------------------------------------- P/ship 1999 1998 % Change ------ ----- ----- -------- III-A $3.99 $3.64 10% III-B 4.15 3.53 18% III-C 2.90 3.30 12% III-D 4.52 4.39 3% III-E 7.69 6.68 15% III-F 5.21 6.40 19% III-G 5.47 6.84 20%
Liquidity and Capital Resources
Net proceeds from operations less necessary operating capital are distributed to the Limited Partners on a quarterly basis. See "Item 5. Market for Units and Related Limited Partner Matters." The net proceeds from production are not reinvested in productive assets, except to the extent that producing wells are improved, or where methods are employed to permit more efficient recovery of reserves, thereby resulting in a positive economic impact. Assuming 2000 production levels for future years, the Partnerships' proved reserve quantities at December 31, 2000 would have the following remaining lives:
Partnership Gas-Years Oil-Years ----------- --------- ---------
III-A 6.8 2.7 III-B 6.4 3.2 III-C 5.4 6.5 III-D 4.7 11.4 III-E 5.9 12.1 III-F 8.5 8.1 III-G 8.8 8.3
These life of reserves estimates are based on the current estimates of remaining oil and gas reserves. See "Item 2. Properties" for a discussion of these reserve estimates. Any decrease from the high oil and gas prices at December 31, 2000 may cause a decrease in the estimated life of said reserves.
The Partnerships' available capital from the Limited Partners' subscriptions has been spent on oil and gas properties and there should be no further material capital resource commitments in the future. Occasional expenditures by the Partnerships for new wells or well completions or workovers, however, may reduce or eliminate cash available for a particular quarterly cash distribution. The Partnerships have no debt commitments. Cash for operational purposes will be provided by current oil and gas production.
The Partnerships sold certain oil and gas properties during 2000, 1999, and 1998. The sale of the Partnerships' properties was made by the General Partner after giving due consideration to both the offer price and the General Partner's estimate of the property's remaining proved reserves and future operating costs. Net proceeds from the sale of such properties were included in the calculation of the Partnerships' cash distributions for the quarter immediately following the Partnerships' receipt of the proceeds. The amount of such proceeds from the sale of oil and gas properties during 2000, 1999, and 1998, were as follows:
Partnership 2000 1999 1998 ----------- --------- -------- -------- III-A $ 38,743 $ 9,479 $ 25,815 III-B 13,342 515 35,047 III-C 71,917 9,048 501,935 III-D 206,940 - 67,181 III-E 1,352,609 13,825 77,860 III-F 349,431 232,143 56,560 III-G 247,866 153,574 33,830
The General Partner believes that the sale of these properties will be beneficial to the Partnerships in the long-term since the properties sold generally had a higher ratio of future operating expenses as compared to reserves than the properties not sold.
There can be no assurance as to the amount of the Partnerships' future cash distributions. The Partnerships' ability to make cash distributions depends primarily upon the level of available cash flow generated by the Partnerships' operating activities, which will be affected (either positively or negatively) by many factors beyond the control of the Partnerships, including the price of and demand for oil and gas and other market and economic conditions. Even if prices and costs remain stable, the amount of cash available for distributions will decline over time (as the volume of production from producing properties declines) since the Partnerships are not replacing production through acquisitions of producing properties and drilling. The Partnerships' quantity of proved reserves has been reduced by the sale of oil and gas properties as described above; therefore, it is possible that the Partnerships' future cash distributions will decline as a result of a reduction of the Partnerships' reserve base.
Pursuant to the terms of the partnership agreements for the Partnerships (the "Partnership Agreements") the Partnerships will terminate on the dates indicated in the "Initial Termination Date" column of the following chart. However, the Partnership Agreements provide that the General Partner may extend the term of each Partnership for up to five periods of two years each. As of the date of this Annual Report on Form 10-K405 ("Annual Report"), the General Partner has extended the terms of the III-A, III-B, III-C, III-D, III-E, and III-F Partnerships for the first two-year extension period. The General Partner has not determined whether it intends to (i) further extend the terms of such Partnerships or (ii) extend the term of III-G Partnership. Therefore, the Partnerships are currently scheduled to terminate on the dates indicated in the "Current Termination Date" column of the following chart.
Initial Extensions Current Partnership Termination Date Exercised Termination Date ----------- ------------------ --------- ----------------- III-A November 22, 1999 1 November 22, 2001 III-B January 24, 2000 1 January 24, 2002 III-C February 28, 2000 1 February 28, 2002 III-D September 5, 2000 1 September 5, 2002 III-E December 26, 2000 1 December 26, 2002 III-F March 7, 2001 1 March 7, 2003 III-G September 20, 2001 - September 20, 2001
Inflation and Changing Prices
Prices obtained for oil and gas production depend upon numerous factors, including the extent of domestic and foreign production, foreign imports of oil, market demand, domestic and foreign economic conditions in general, and governmental regulations and tax laws. The general level of inflation in the economy did not have a material effect on the operations of the Partnerships in 2000. Oil and gas prices have fluctuated during recent years and generally have not followed the same pattern as inflation. See "Item 2. Properties - Oil and Gas Production, Revenue, and Price History."
ITEM 7A.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
The Partnerships do not hold any market risk sensitive instruments.
ITEM 8.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The financial statements and supplementary data are indexed in Item 14 hereof.
ITEM 9.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
None.
PART III
ITEM 10.
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE GENERAL PARTNER
The Partnerships have no directors or executive officers. The following individuals are directors and executive officers of the General Partner. The business address of such director and executive officers is Two West Second Street, Tulsa, Oklahoma 74103.
Name Age Position with Geodyne ---------------- --- -------------------------------- Dennis R. Neill 48 President and Director
Judy K. Fox 49 Secretary
The director will hold office until the next annual meeting of shareholders of Geodyne or until his successor has been duly elected and qualified. All executive officers serve at the discretion of the Board of Directors.
Dennis R. Neill joined Samson in 1981, was named Senior Vice President and Director of Geodyne on March 3, 1993, and was named President of Geodyne and its subsidiaries on June 30, 1996. Prior to joining Samson, he was associated with a Tulsa law firm, Conner and Winters, where his principal practice was in the securities area. He received a Bachelor of Arts degree in political science from Oklahoma State University and a Juris Doctorate degree from the University of Texas. Mr. Neill also serves as Senior Vice President of Samson Investment Company and as President and Director of Samson Properties Incorporated, Samson Hydrocarbons Company, Dyco Petroleum Corporation, Berry Gas Company, Circle L Drilling Company, Snyder Exploration Company, and Compression, Inc.
Judy K. Fox joined Samson in 1990 and was named Secretary of Geodyne and its subsidiaries on June 30, 1996. Prior to joining Samson, she served as Gas Contract Manager for Ely Energy Company. Ms. Fox is also Secretary of Berry Gas Company, Circle L Drilling Company, Compression, Inc., Dyco Petroleum Corporation, Samson Hydrocarbons Company, Snyder Exploration Company, and Samson Properties Incorporated.
Section 16(a) Beneficial Ownership Reporting Compliance
To the best knowledge of the Partnerships and the General Partner, there were no officers, directors, or ten percent owners who were delinquent filers during 2000 of reports required under Section 16 of the Securities Exchange Act of 1934.
ITEM 11.
ITEM 11. EXECUTIVE COMPENSATION
The General Partner and its affiliates are reimbursed for actual general and administrative costs and operating costs incurred and attributable to the conduct of the business affairs and operations of the Partnerships, computed on a cost basis, determined in accordance with generally accepted accounting principles. Such reimbursed costs and expenses allocated to the Partnerships include office rent, secretarial, employee compensation and benefits, travel and communication costs, fees for professional services, and other items generally classified as general or administrative expense. When actual costs incurred benefit other Partnerships and affiliates, the allocation of costs is based on the relationship of the Partnerships' reserves to the total reserves owned by all Partnerships and affiliates. The amount of general and administrative expense allocated to the General Partner and its affiliates which was charged to each Partnership during 2000, 1999, and 1998, is set forth in the table below. Although the actual costs incurred by the General Partner and its affiliates have fluctuated during the three years presented, the amounts charged to the Partnerships have not fluctuated due to expense limitations imposed by the Partnership Agreements.
Partnership 2000 1999 1998 ----------- -------- -------- --------
III-A $277,872 277,872 $277,872 III-B 145,620 145,620 145,620 III-C 257,412 257,412 257,412 III-D 137,904 137,904 137,904 III-E 440,280 440,280 440,280 III-F 233,136 233,136 233,136 III-G 128,340 128,340 128,340
None of the officers or directors of the General Partner receive compensation directly from the Partnerships. The Partnerships reimburse the General Partner or its affiliates for that portion of such officers' and directors' salaries and expenses attributable to time devoted by such individuals to the Partnerships' activities based on the allocation method described above. The following tables indicate the approximate amount of general and administrative expense reimbursement attributable to the salaries of the directors, officers, and employees of the General Partner and its affiliates during 2000, 1999, and 1998:
- ---------- (1) The general and administrative expenses paid by the III-A Partnership and attributable to salary reimbursements do not include any salary or other compensation attributable to Mr. Neill. (2) No officer or director of Geodyne or its affiliates provides full-time services to the III-A Partnership and no individual's salary or other compensation reimbursement from the III-A Partnership equals or exceeds $100,000 per annum.
- ---------- (1) The general and administrative expenses paid by the III-B Partnership and attributable to salary reimbursements do not include any salary or other compensation attributable to Mr. Neill. (2) No officer or director of Geodyne or its affiliates provides full-time services to the III-B Partnership and no individual's salary or other compensation reimbursement from the III-B Partnership equals or exceeds $100,000 per annum.
- ---------- (1) The general and administrative expenses paid by the III-C Partnership and attributable to salary reimbursements do not include any salary or other compensation attributable to Mr. Neill. (2) No officer or director of Geodyne or its affiliates provides full-time services to the III-C Partnership and no individual's salary or other compensation reimbursement from the III-C Partnership equals or exceeds $100,000 per annum.
- ---------- (1) The general and administrative expenses paid by the III-D Partnership and attributable to salary reimbursements do not include any salary or other compensation attributable to Mr. Neill. (2) No officer or director of Geodyne or its affiliates provides full-time services to the III-D Partnership and no individual's salary or other compensation reimbursement from the III-D Partnership equals or exceeds $100,000 per annum.
- ---------- (1) The general and administrative expenses paid by the III-E Partnership and attributable to salary reimbursements do not include any salary or other compensation attributable to Mr. Neill. (2) No officer or director of Geodyne or its affiliates provides full-time services to the III-E Partnership and no individual's salary or other compensation reimbursement from the III-E Partnership equals or exceeds $100,000 per annum.
- ---------- (1) The general and administrative expenses paid by the III-F Partnership and attributable to salary reimbursements do not include any salary or other compensation attributable to Mr. Neill. (2) No officer or director of Geodyne or its affiliates provides full-time services to the III-F Partnership and no individual's salary or other compensation reimbursement from the III-F Partnership equals or exceeds $100,000 per annum.
- ---------- (1) The general and administrative expenses paid by the III-G Partnership and attributable to salary reimbursements do not include any salary or other compensation attributable to Mr. Neill. (2) No officer or director of Geodyne or its affiliates provides full-time services to the III-G Partnership and no individual's salary or other compensation reimbursement from the III-G Partnership equals or exceeds $100,000 per annum.
Affiliates of the Partnerships serve as operator of some of the Partnerships' wells. The General Partner contracts with such affiliates for services as operator of the wells. As operator, such affiliates are compensated at rates provided in the operating agreements in effect and charged to all parties to such agreement. Such compensation may occur both prior and subsequent to the commencement of commercial marketing of production of oil or gas. The dollar amount of such compensation paid by the Partnerships to the affiliates is impossible to quantify as of the date of this Annual Report.
Samson maintains necessary inventories of new and used field equipment. Samson may have provided some of this equipment for wells in which the Partnerships have an interest. This equipment was provided at prices or rates equal to or less than those normally charged in the same or comparable geographic area by unaffiliated persons or companies dealing at arm's length. The operators of these wells billed the Partnerships for a portion of such costs based upon the Partnerships' interest in the well.
ITEM 12.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table provides information as to the beneficial ownership of the Units as of February 1, 2001 by (i) each beneficial owner of more than five percent of the issued and outstanding Units, (ii) the directors and officers of the General Partner, and (iii) the General Partner and its affiliates. The address of each of such persons is Samson Plaza, Two West Second Street, Tulsa, Oklahoma 74103.
Number of Units Beneficially Owned (Percent Beneficial Owner of Outstanding) - ------------------------------------ ------------------
III-A Partnership: - ----------------- Samson Resources Company 46,864 (17.8%)
All affiliates, directors, and officers of the General Partner as a group and the General Partner (4 persons) 46,864 (17.8%)
III-B Partnership: - ----------------- Samson Resources Company 25,852 (18.7%)
All affiliates, directors, and officers of the General Partner as a group and the General Partner (4 persons) 25,852 (18.7%)
III-C Partnership: - ----------------- Samson Resources Company 50,452 (20.6%)
All affiliates, directors, and officers of the General Partner as a group and the General Partner (4 persons) 50,452 (20.6%)
III-D Partnership: - ----------------- Samson Resources Company 28,943 (22.1%)
All affiliates, directors, and officers of the General Partner as a group and the General Partner (4 persons) 28,943 (22.1%)
III-E Partnership: - ----------------- Samson Resources Company 94,970 (22.7%)
All affiliates, directors, and officers of the General Partner as a group and the General Partner (4 persons) 94,970 (22.7%)
III-F Partnership: - ----------------- Samson Resources Company 50,540 (22.8%)
All affiliates, directors, and officers of the General Partner as a group and the General Partner (4 persons) 50,540 (22.8%)
III-G Partnership: - ----------------- Samson Resources Company 27,202 (22.3%)
All affiliates, directors, and officers of the General Partner as a group and the General Partner (4 persons) 27,202 (22.3%)
ITEM 13.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The General Partner and certain of its affiliates engage in oil and gas activities independently of the Partnerships which result in conflicts of interest that cannot be totally eliminated. The allocation of acquisition and drilling opportunities and the nature of the compensation arrangements between the Partnerships and the General Partner also create potential conflicts of interest. An affiliate of the Partnerships owns some of the Partnerships' Units and therefore has an identity of interest with other Limited Partners with respect to the operations of the Partnerships.
In order to attempt to assure limited liability for Limited Partners as well as an orderly conduct of business, management of the Partnerships is exercised solely by the General Partner. The Partnership Agreements grant the General Partner broad discretionary authority with respect to the Partnerships' participation in drilling prospects and expenditure and control of funds, including borrowings. These provisions are similar to those contained in prospectuses and partnership agreements for other public oil and gas partnerships. Broad discretion as to general management of the Partnerships involves circumstances where the General Partner has conflicts of interest and where it must allocate costs and expenses, or opportunities, among the Partnerships and other competing interests.
The General Partner does not devote all of its time, efforts, and personnel exclusively to the Partnerships. Furthermore, the Partnerships do not have any employees, but instead rely on the personnel of Samson. The Partnerships thus compete with Samson (including other oil and gas partnerships) for the time and resources of such personnel. Samson devotes such time and personnel to the management of the Partnerships as are indicated by the circumstances and as are consistent with the General Partner's fiduciary duties.
Affiliates of the Partnerships are solely responsible for the negotiation, administration, and enforcement of oil and gas sales agreements covering the Partnerships' leasehold interests. Because affiliates of the Partnerships who provide services to the Partnerships have fiduciary or other duties to other members of Samson, contract amendments and negotiating positions taken by them in their effort to enforce contracts with purchasers may not necessarily represent the positions that the Partnerships would take if they were to administer their own contracts without involvement with other members of Samson. On the other hand, management believes that the Partnerships' negotiating strength and contractual positions have been enhanced by virtue of their affiliation with Samson.
PART IV
ITEM 14.
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K
(a) Financial Statements, Financial Statement Schedules, and Exhibits.
(1) Financial Statements: The following financial statements for the
Geodyne Energy Income Limited Partnership III-A Geodyne Energy Income Limited Partnership III-B Geodyne Energy Income Limited Partnership III-C Geodyne Energy Income Limited Partnership III-D Geodyne Energy Income Limited Partnership III-E Geodyne Energy Income Limited Partnership III-F Geodyne Energy Income Limited Partnership III-G
as of December 31, 2000 and 1999 and for each of the three years in the period ended December 31, 2000 are filed as part of this report:
Report of Independent Accountants Balance Sheets Statements of Operations Statements of Changes in Partners' Capital (Deficit) Statements of Cash Flows Notes to Financial Statements
(2) Financial Statement Schedules:
None.
(3) Exhibits:
4.1 Agreement of Limited Partnership dated November 17, 1989 for Geodyne Energy Income Limited Partnership III-A filed as Exhibit 4.1 to Registrant's Annual Report on Form 10-K for the year ended December 31, 1999, filed with the SEC on February 25, 2000, and is hereby incorporated by reference.
4.2 Agreement of Limited Partnership dated January 24, 1990 for Geodyne Energy Income Limited Partnership III-B filed as Exhibit 4.2 to Registrant's Annual Report on Form 10-K for the year ended December 31, 1999, filed with the SEC on February 25, 2000, and is hereby incorporated by reference.
4.3 Agreement of Limited Partnership dated February 26, 1990 for Geodyne Energy Income Limited Partnership III-C filed as Exhibit 4.3 to Registrant's Annual Report on Form 10-K for the year ended December 31, 1999, filed with the SEC on February 25, 2000, and is hereby incorporated by reference.
* 4.4 Agreement of Limited Partnership dated September 5, 1990 for Geodyne Energy Income Limited Partnership III-D.
* 4.5 Agreement of Limited Partnership dated December 26, 1990 for Geodyne Energy Income Limited Partnership III-E.
* 4.6 Agreement of Limited Partnership dated March 7, 1991 for Geodyne Energy Income Limited Partnership III-F.
* 4.7 Agreement of Limited Partnership dated September 20, 1991 for Geodyne Energy Income Limited Partnership III-G.
4.8 First Amendment to Certificate of Limited Partnership and First Amendment to Agreement of Limited Partnership dated February 24, 1993 for Geodyne Energy Income Limited Partnership III-A filed as Exhibit 4.5 to Registrant's Annual Report on Form 10-K for the year ended December 31, 1999, filed with the SEC on February 25, 2000, and is hereby incorporated by reference.
4.9 First Amendment to Certificate of Limited Partnership and First Amendment to Agreement of Limited Partnership dated February 24, 1993 for Geodyne Energy Income Limited Partnership III-B filed as Exhibit 4.6 to Registrant's Annual Report on Form 10-K for the year ended December 31, 1999, filed with the SEC on February 25, 2000, and is hereby incorporated by reference.
4.10 First Amendment to Certificate of Limited Partnership and First Amendment to Agreement of Limited Partnership dated February 24, 1993 for Geodyne Energy Income Limited Partnership III-C filed as Exhibit 4.7 to Registrant's Annual Report on Form 10-K for the year ended December 31, 1999, filed with the SEC on February 25, 2000, and is hereby incorporated by reference.
* 4.11 First Amendment to Certificate of Limited Partnership and First Amendment to Agreement of Limited Partnership dated February 24, 1993 for Geodyne Energy Income Limited Partnership III-D.
* 4.12 First Amendment to Certificate of Limited Partnership and First Amendment to Agreement of Limited Partnership dated February 24, 1993 for Geodyne Energy Income Limited Partnership III-E.
* 4.13 First Amendment to Certificate of Limited Partnership and First Amendment to Agreement of Limited Partnership dated February 24, 1993 for Geodyne Energy Income Limited Partnership III-F.
* 4.14 First Amendment to Certificate of Limited Partnership and First Amendment to Agreement of Limited Partnership dated February 24, 1993 for Geodyne Energy Income Limited Partnership III-G.
4.15 Second Amendment to Agreement of Limited Partnership dated August 4, 1993 for Geodyne Energy Income Limited Partnership III-A filed as Exhibit 4.8 to Registrant's Annual Report on Form 10-K for the year ended December 31, 1999, filed with the SEC on February 25, 2000, and is hereby incorporated by reference.
4.16 Second Amendment to Agreement of Limited Partnership dated August 4, 1993 for Geodyne Energy Income Limited Partnership III-B filed as Exhibit 4.9 to Registrant's Annual Report on Form 10-K for the year ended December 31, 1999, filed with the SEC on February 25, 2000, and is hereby incorporated by reference.
4.17 Second Amendment to Agreement of Limited Partnership dated August 4, 1993 for Geodyne Energy Income Limited Partnership III-C filed as Exhibit 4.19 to Registrant's Annual Report on Form 10-K for the year ended December 31, 1999, filed with the SEC on February 25, 2000, and is hereby incorporated by reference.
* 4.18 Second Amendment to Agreement of Limited Partnership dated August 4, 1993 for Geodyne Energy Income Limited Partnership III-D.
* 4.19 Second Amendment to Agreement of Limited Partnership dated August 4, 1993 for Geodyne Energy Income Limited Partnership III-E.
* 4.20 Second Amendment to Agreement of Limited Partnership dated August 4, 1993 for Geodyne Energy Income Limited Partnership III-F.
* 4.21 Second Amendment to Agreement of Limited Partnership dated August 4, 1993 for Geodyne Energy Income Limited Partnership III-G.
4.22 Third Amendment to Agreement of Limited Partnership dated August 31, 1995 for Geodyne Energy Income Limited Partnership III-A filed as Exhibit 4.15 to Registrant's Annual Report on Form 10-K for the year ended December 31, 1999, filed with the SEC on February 25, 2000, and is hereby incorporated by reference.
4.23 Third Amendment to Agreement of Limited Partnership dated August 31, 1995 for Geodyne Energy Income Limited Partnership III-B filed as Exhibit 4.16 to Registrant's Annual Report on Form 10-K for the year ended December 31, 1999, filed with the SEC on February 25, 2000, and is hereby incorporated by reference.
4.24 Third Amendment to Agreement of Limited Partnership dated August 31, 1995 for Geodyne Energy Income Limited Partnership III-C filed as Exhibit 4.17 to Registrant's Annual Report on Form 10-K for the year ended December 31, 1999, filed with the SEC on February 25, 2000, and is hereby incorporated by reference.
* 4.25 Third Amendment to Agreement of Limited Partnership dated August 31, 1995 for Geodyne Energy Income Limited Partnership III-D.
* 4.26 Third Amendment to Agreement of Limited Partnership dated August 31, 1995 for Geodyne Energy Income Limited Partnership III-E.
* 4.27 Third Amendment to Agreement of Limited Partnership dated August 31, 1995 for Geodyne Energy Income Limited Partnership III-F.
* 4.28 Third Amendment to Agreement of Limited Partnership dated August 31, 1995 for Geodyne Energy Income Limited Partnership III-G.
4.29 Fourth Amendment to Agreement of Limited Partnership dated July 1, 1996 for Geodyne Energy Income Limited Partnership III-A filed as Exhibit 4.22 to Registrant's Annual Report on Form 10-K for the year ended December 31, 1999, filed with the SEC on February 25, 2000, and is hereby incorporated by reference.
4.30 Fourth Amendment to Agreement of Limited Partnership dated July 1, 1996 for Geodyne Energy Income Limited Partnership III-B filed as Exhibit 4.23 to Registrant's Annual Report on Form 10-K for the year ended December 31, 1999, filed with the SEC on February 25, 2000, and is hereby incorporated by reference.
4.31 Fourth Amendment to Agreement of Limited Partnership dated July 1, 1996 for Geodyne Energy Income Limited Partnership III-C filed as Exhibit 4.24 to Registrant's Annual Report on Form 10-K for the year ended December 31, 1999, filed with the SEC on February 25, 2000, and is hereby incorporated by reference.
* 4.32 Fourth Amendment to Agreement of Limited Partnership dated July 1, 1996 for the Geodyne Energy Income Limited Partnership III-D.
* 4.33 Fourth Amendment to Agreement of Limited Partnership dated July 1, 1996 for the Geodyne Energy Income Limited Partnership III-E.
* 4.34 Fourth Amendment to Agreement of Limited Partnership dated July 1, 1996 for the Geodyne Energy Income Limited Partnership III-F.
* 4.35 Fourth Amendment to Agreement of Limited Partnership dated July 1, 1996 for the Geodyne Energy Income Limited Partnership III-G.
4.36 Fifth Amendment to Agreement of Limited Partnership dated November 15, 1999 for
Geodyne Energy Income Limited Partnership III-A filed as Exhibit 4.25 to Registrant's Annual Report on Form 10-K for the year ended December 31, 1999, filed with the SEC on February 25, 2000, and is hereby incorporated by reference.
4.37 Fifth Amendment to Agreement of Limited Partnership dated December 30, 1999 for Geodyne Energy Income Limited Partnership III-B filed as Exhibit 4.26 to Registrant's Annual Report on Form 10-K for the year ended December 31, 1999, filed with the SEC on February 25, 2000, and is hereby incorporated by reference.
4.38 Fifth Amendment to Agreement of Limited Partnership dated December 30, 1999 for Geodyne Energy Income Limited Partnership III-C filed as Exhibit 4.27 to Registrant's Annual Report on Form 10-K for the year ended December 31, 1999, filed with the SEC on February 25, 2000, and is hereby incorporated by reference.
* 4.39 Fifth Amendment to Agreement of Limited Partnership dated August 23, 2000 for the Geodyne Energy Income Limited Partnership III-D.
* 4.40 Fifth Amendment to Agreement of Limited Partnership dated November 15, 2000 for the Geodyne Energy Income Limited Partnership III-E.
* 4.41 Fifth Amendment to Agreement of Limited Partnership dated February 5, 2001 for the Geodyne Energy Income Limited Partnership III-F.
* 23.1 Consent of Ryder Scott Company, L.P. for Geodyne Energy Income Limited Partnership III-A.
* 23.2 Consent of Ryder Scott Company, L.P. for Geodyne Energy Income Limited Partnership III-B.
* 23.3 Consent of Ryder Scott Company, L.P. for Geodyne Energy Income Limited Partnership III-C.
* 23.4 Consent of Ryder Scott Company, L.P. for Geodyne Energy Income Limited Partnership III-D.
* 23.5 Consent of Ryder Scott Company, L.P. for Geodyne Energy Income Limited Partnership III-E.
* 23.6 Consent of Ryder Scott Company, L.P. for Geodyne Energy Income Limited Partnership III-F.
* 23.7 Consent of Ryder Scott Company, L.P. for Geodyne Energy Income Limited Partnership III-G.
All other Exhibits are omitted as inapplicable.
---------- *Filed herewith.
(b) Reports on Form 8-K filed during the fourth quarter of 2000:
None.
SIGNATURES
Pursuant to the requirements of Sections 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly organized.
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-A GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-B GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-C GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-D GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-E GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-F GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-G
By: GEODYNE RESOURCES, INC. General Partner
March 5, 2001
By: /s/ Dennis R. Neill ------------------------------ Dennis R. Neill President
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities on the dates indicated.
By: /s/ Dennis R. Neill President and March 5, 2001 ------------------- Director (Principal Dennis R. Neill Executive Officer)
/s/ Patrick M. Hall (Principal March 5, 2001 ------------------- Financial and Patrick M. Hall Accounting Officer)
/s/ Judy K. Fox Secretary March 5, 2001 ------------------- Judy K. Fox
Item 8: Financial Statements and Supplementary Data
REPORT OF INDEPENDENT ACCOUNTANTS
TO THE PARTNERS
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-A
In our opinion, the accompanying balance sheets and the related statements of operations, changes in partners' capital (deficit) and cash flows present fairly, in all material respects, the financial position of the Geodyne Energy Income Limited Partnership III-A, an Oklahoma limited partnership, at December 31, 2000 and 1999, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2000, in conformity with accounting principles generally accepted in the United States of America. These financial statements are the responsibility of the Partnership's management; our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these financial statements in accordance with auditing standards generally accepted in the United States of America, which require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
PricewaterhouseCoopers LLP
Tulsa, Oklahoma February 22, 2001
-F1-
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-A Balance Sheets December 31, 2000 and 1999
ASSETS ------ 2000 1999 ------------ ------------ CURRENT ASSETS: Cash and cash equivalents $ 910,878 $ 379,613 Accounts receivable: Oil and gas sales 813,549 325,691 --------- --------- Total current assets $1,724,427 $ 705,304
NET OIL AND GAS PROPERTIES, utilizing the successful efforts method 1,513,421 1,808,851
DEFERRED CHARGE 347,775 279,651 --------- --------- $3,585,623 $2,793,806 ========= =========
LIABILITIES AND PARTNERS' CAPITAL (DEFICIT) -------------------------------------------
CURRENT LIABILITIES: Accounts payable $ 42,504 $ 49,195 Gas imbalance payable 34,470 31,659 --------- ---------
Total current liabilities $ 76,974 $ 80,854
ACCRUED LIABILITY $ 53,630 $ 50,052
PARTNERS' CAPITAL (DEFICIT): General Partner ($ 132,196) ($ 194,823) Limited Partners, issued and outstanding, 263,976 Units 3,587,215 2,857,723 --------- --------- Total Partners' capital $3,455,019 $2,662,900 --------- --------- $3,585,623 $2,793,806 ========= =========
The accompanying notes are an integral part of these financial statements.
-F2-
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-A Statements of Operations For the Years Ended December 31, 2000, 1999, and 1998
2000 1999 1998 ------------ ------------ ------------ REVENUES: Oil and gas sales $4,111,261 $2,071,981 $2,029,797 Interest income 26,015 10,120 16,726 Gain on sale of oil and gas properties 7,670 883 21,281 --------- --------- --------- $4,144,946 $2,082,984 $2,067,804
COSTS AND EXPENSES: Lease operating $ 525,707 $ 426,510 $412,509 Production tax 327,504 159,247 163,603 Depreciation, deple- tion, and amorti- zation of oil and gas properties 277,866 414,145 498,715 General and administrative 314,077 311,283 311,430 --------- --------- --------- $1,445,154 $1,311,185 $1,386,257 --------- --------- ---------
NET INCOME $2,699,792 $ 771,799 $681,547 ========= ========= =========
GENERAL PARTNER - NET INCOME $ 275,300 $ 54,650 $53,190 ========= ========= =========
LIMITED PARTNERS - NET INCOME $2,424,492 $ 717,149 $628,357 ========= ========= ========= NET INCOME per Unit $ 9.18 $ 2.72 $2.38 ========= ========= ========= UNITS OUTSTANDING 263,976 263,976 263,976 ========= ========= =========
The accompanying notes are an integral part of these financial statements.
-F3-
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-A Statements of Partners' Capital (Deficit) For the Years Ended December 31, 2000, 1999, and 1998
Limited General Partners Partner Total ------------- ---------- ------------
Balance, Dec. 31, 1997 $3,985,217 ($198,271) $3,786,946 Net income 628,357 53,190 681,547 Cash distributions ( 1,602,000) ( 52,244) ( 1,654,244) --------- ------- ---------
Balance, Dec. 31, 1998 $3,011,574 ($197,325) $2,814,249 Net income 717,149 54,650 771,799 Cash distributions ( 871,000) ( 52,148) ( 923,148) --------- ------- ---------
Balance, Dec. 31, 1999 $2,857,723 ($194,823) $2,662,900 Net income 2,424,492 275,300 2,699,792 Cash distributions ( 1,695,000) ( 212,673) ( 1,907,673) --------- ------- ---------
Balance, Dec. 31, 2000 $3,587,215 ($132,196) $3,455,019 ========= ======= =========
The accompanying notes are an integral part of these financial statements.
-F4-
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-A Statements of Cash Flows For the Years Ended December 31, 2000, 1999, and 1998
2000 1999 1998 ------------ ------------ ------------ CASH FLOWS FROM OPERATING ACTIVITIES: Net income $2,699,792 $ 771,799 $ 681,547 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation, deple- tion, and amortiza- tion of oil and gas properties 277,866 414,145 498,715 Gain on sale of oil and gas properties ( 7,670) ( 883) ( 21,281) (Increase) decrease in accounts receivable - oil and gas sales ( 487,858) ( 43,583) 242,433 Decrease in accounts receivable - other - - 308 Increase in deferred charge ( 68,124) ( 13,119) ( 66,810) Increase (decrease) in accounts payable ( 6,691) ( 12,816) 22,389 Increase (decrease) in gas imbalance payable 2,811 756 ( 7,515) Increase (decrease) in accrued liability 3,578 ( 26,793) 24,940 --------- --------- ---------
Net cash provided by operating activities $2,413,704 $1,089,506 $1,374,726 --------- --------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES: Capital expenditures ($ 13,509) ($ 8,919) ($ 55,973) Proceeds from sale of oil and gas properties 38,743 9,479 25,815 --------- --------- ---------
Net cash provided (used) by investing activities $ 25,234 $ 560 ($ 30,158) --------- --------- --------- CASH FLOWS FROM FINANCING ACTIVITIES: Cash distributions ($1,907,673) ($ 923,148) ($1,654,244) --------- --------- ---------
-F5-
Net cash used by financing activities ($1,907,673) ($ 923,148) ($1,654,244) --------- --------- --------- NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS $ 531,265 $ 166,918 ($ 309,676)
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 379,613 212,695 522,371 --------- --------- --------- CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 910,878 $ 379,613 $ 212,695 ========= ========= =========
The accompanying notes are an integral part of these financial statements.
-F6-
REPORT OF INDEPENDENT ACCOUNTANTS
TO THE PARTNERS
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-B
In our opinion, the accompanying balance sheets and the related statements of operations, changes in partners' capital (deficit) and cash flows present fairly, in all material respects, the financial position of the Geodyne Energy Income Limited Partnership III-B, an Oklahoma limited partnership, at December 31, 2000 and 1999, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2000, in conformity with accounting principles generally accepted in the United States of America. These financial statements are the responsibility of the Partnership's management; our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these financial statements in accordance with auditing standards generally accepted in the United States of America, which require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
PricewaterhouseCoopers LLP
Tulsa, Oklahoma February 22, 2001
-F7-
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-B Balance Sheets December 31, 2000 and 1999
ASSETS ------ 2000 1999 ------------ ------------ CURRENT ASSETS: Cash and cash equivalents $ 496,576 $ 227,298 Accounts receivable: Oil and gas sales 456,541 214,859 --------- --------- Total current assets $ 953,117 $ 442,157
NET OIL AND GAS PROPERTIES, utilizing the successful efforts method 857,340 1,018,525
DEFERRED CHARGE 259,291 229,634 --------- --------- $2,069,748 $1,690,316 ========= =========
LIABILITIES AND PARTNERS' CAPITAL (DEFICIT) -------------------------------------------
CURRENT LIABILITIES: Accounts payable $ 24,984 $ 32,585 Gas imbalance payable 16,493 16,517 --------- ---------
Total current liabilities $ 41,477 $ 49,102
ACCRUED LIABILITY $ 29,080 $ 33,458
PARTNERS' CAPITAL (DEFICIT): General Partner ($ 38,756) ($ 79,362) Limited Partners, issued and outstanding, 138,336 Units 2,037,947 1,687,118 --------- --------- Total Partners' capital $1,999,191 $1,607,756 --------- ---------
$2,069,748 $1,690,316 ========= =========
The accompanying notes are an integral part of these financial statements.
-F8-
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-B Statements of Operations For the Years Ended December 31, 2000, 1999, and 1998
2000 1999 1998 ------------ ------------ ------------ REVENUES: Oil and gas sales $2,462,438 $1,259,735 $1,201,418 Interest income 14,670 5,200 8,819 Gain on sale of oil and gas properties - 372 33,787 --------- --------- --------- $2,477,108 $1,265,307 $1,244,024
COSTS AND EXPENSES: Lease operating $ 327,214 $ 252,191 $233,081 Production tax 198,067 94,728 97,026 Depreciation, deple- tion, and amorti- zation of oil and gas properties 156,750 226,627 267,175 General and administrative 166,167 163,875 163,659 --------- --------- --------- $ 848,198 $ 737,421 $760,941 --------- --------- ---------
NET INCOME $1,628,910 $ 527,886 $483,083 ========= ========= ========= GENERAL PARTNER - NET INCOME $ 264,081 $ 110,131 $108,544 ========= ========= ========= LIMITED PARTNERS - NET INCOME $1,364,829 $ 417,755 $374,539 ========= ========= =========
NET INCOME per Unit $ 9.87 $ 3.02 $ 2.71 ========= ========= =========
UNITS OUTSTANDING 138,336 138,336 138,336 ========= ========= =========
The accompanying notes are an integral part of these financial statements.
-F9-
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-B Statements of Partners' Capital (Deficit) For the Years Ended December 31, 2000, 1999, and 1998
Limited General Partners Partner Total ------------ ---------- ------------
Balance, Dec. 31, 1997 $2,291,824 ($ 97,840) $2,193,984 Net income 374,539 108,544 483,083 Cash distributions ( 945,000) ( 95,720) ( 1,040,720) --------- ------- ---------
Balance, Dec. 31, 1998 $1,721,363 ($ 85,016) $1,636,347 Net income 417,755 110,131 527,886 Cash distributions ( 452,000) ( 104,477) ( 556,477) --------- ------- ---------
Balance, Dec. 31, 1999 $1,687,118 ($ 79,362) $1,607,756 Net income 1,364,829 264,081 1,628,910 Cash distributions ( 1,014,000) ( 223,475) ( 1,237,475) --------- ------- ---------
Balance, Dec. 31, 2000 $2,037,947 ($ 38,756) $1,999,191 ========= ======= =========
The accompanying notes are an integral part of these financial statements.
-F10-
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-B Statements of Cash Flows For the Years Ended December 31, 2000, 1999, and 1998
2000 1999 1998 ------------ ------------ ------------ CASH FLOWS FROM OPERATING ACTIVITIES: Net income $1,628,910 $527,886 $ 483,083 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation, deple- tion, and amortiza- tion of oil and gas properties 156,750 226,627 267,175 Gain on sale of oil and gas properties - ( 372) ( 33,787) (Increase) decrease in accounts receivable - oil and gas sales ( 241,682) ( 50,041) 142,906 Decrease in accounts receivable - other - - 130 Increase in deferred charge ( 29,657) ( 36,324) ( 57,014) Increase (decrease) in accounts payable ( 7,601) 10,927 2,226 Increase (decrease) in gas imbalance payable ( 24) ( 1,905) 11,746 Increase (decrease) in accrued liability ( 4,378) ( 7,978) 12,942 --------- ------- ---------
Net cash provided by operating activities $1,502,318 $668,820 $ 829,407 --------- ------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES: Capital expenditures ($ 8,907) ($ 2,915) ($ 11,667) Proceeds from sale of oil and gas properties 13,342 515 35,047 --------- ------- ---------
Net cash provided (used) by investing activities $ 4,435 ($ 2,400) $ 23,380 --------- ------- ---------
-F11-
CASH FLOWS FROM FINANCING ACTIVITIES: Cash distributions ($1,237,475) ($556,477) ($1,040,720) --------- ------- --------- Net cash used by financing activities ($1,237,475) ($556,477) ($1,040,720) --------- ------- --------- NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS $ 269,278 $109,943 ($ 187,933)
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 227,298 117,355 305,288 --------- ------- --------- CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 496,576 $227,298 $ 117,355 ========= ======= =========
The accompanying notes are an integral part of these financial statements.
-F12-
REPORT OF INDEPENDENT ACCOUNTANTS
TO THE PARTNERS
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-C
In our opinion, the accompanying balance sheets and the related statements of operations, changes in partners' capital (deficit) and cash flows present fairly, in all material respects, the financial position of the Geodyne Energy Income Limited Partnership III-C, an Oklahoma limited partnership, at December 31, 2000 and 1999, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2000, in conformity with accounting principles generally accepted in the United States of America These financial statements are the responsibility of the Partnership's management; our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these financial statements in accordance with auditing standards generally accepted in the United States of America, which require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
PricewaterhouseCoopers LLP
Tulsa, Oklahoma February 22, 2001
-F13-
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-C Balance Sheets December 31, 2000 and 1999
ASSETS ------
2000 1999 ------------ ------------ CURRENT ASSETS: Cash and cash equivalents $ 903,268 $ 482,914 Accounts receivable: Oil and gas sales 892,011 444,436 --------- --------- Total current assets $1,795,279 $ 927,350
NET OIL AND GAS PROPERTIES, utilizing the successful efforts method 2,063,939 2,323,346
DEFERRED CHARGE 90,048 197,269 --------- --------- $3,949,266 $3,447,965 ========= =========
LIABILITIES AND PARTNERS' CAPITAL (DEFICIT) -------------------------------------------
CURRENT LIABILITIES: Accounts payable $ 71,731 $ 50,407 Gas imbalance payable 16,667 44,727 --------- ---------
Total current liabilities $ 88,398 $ 95,134
ACCRUED LIABILITY $ 158,958 $ 156,396
PARTNERS' CAPITAL (DEFICIT): General Partner ($ 152,824) ($ 168,448) Limited Partners, issued and outstanding, 244,536 Units 3,854,734 3,364,883 --------- --------- Total Partners' capital $3,701,910 $3,196,435 --------- --------- $3,949,266 $3,447,965 ========= =========
The accompanying notes are an integral part of these financial statements.
-F14-
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-C Statements of Operations For the Years Ended December 31, 2000, 1999, and 1998
2000 1999 1998 ------------ ------------ ------------ REVENUES: Oil and gas sales $4,150,431 $2,446,824 $2,447,005 Interest income 30,221 13,260 19,716 Gain (loss) on sale of oil and gas properties 71,916 ( 281) 459,040 --------- --------- --------- $4,252,568 $2,459,803 $2,925,761 COSTS AND EXPENSES: Lease operating $ 694,315 $ 379,785 $532,167 Production tax 284,509 171,245 179,871 Depreciation, deple- tion, and amorti- zation of oil and gas properties 284,946 491,692 742,986 General and administrative 290,696 288,580 288,053 --------- --------- --------- $1,554,466 $1,331,302 $1,743,077 --------- --------- ---------
NET INCOME $2,698,102 $1,128,501 $1,182,684 ========= ========= ========= GENERAL PARTNER - NET INCOME $ 143,251 $ 75,430 $ 87,868 ========= ========= =========
LIMITED PARTNERS - NET INCOME $2,554,851 $1,053,071 $1,094,816 ========= ========= =========
NET INCOME per Unit $ 10.45 $ 4.31 $ 4.48 ========= ========= =========
UNITS OUTSTANDING 244,536 244,536 244,536 ========= ========= =========
The accompanying notes are an integral part of these financial statements.
-F15-
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-C Statements of Partners' Capital (Deficit) For the Years Ended December 31, 2000, 1999, and 1998
Limited General Partners Partner Total ------------ ---------- ------------
Balance, Dec. 31, 1997 $4,512,996 ($171,438) $4,341,558 Net income 1,094,816 87,868 1,182,684 Cash distributions ( 2,076,000) ( 95,715) ( 2,171,715) --------- ------- ---------
Balance, Dec. 31, 1998 $3,531,812 ($179,285) $3,352,527 Net income 1,053,071 75,430 1,128,501 Cash distributions ( 1,220,000) ( 64,593) ( 1,284,593) --------- ------- ---------
Balance, Dec. 31, 1999 $3,364,883 ($168,448) $3,196,435 Net income 2,554,851 143,251 2,698,102 Cash distributions ( 2,065,000) ( 127,627) ( 2,192,627) --------- ------- ---------
Balance, Dec. 31, 2000 $3,854,734 ($152,824) $3,701,910 ========= ======= =========
The accompanying notes are an integral part of these financial statements.
-F16-
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-C Statements of Cash Flows For the Years Ended December 31, 2000, 1999, and 1998
2000 1999 1998 ------------ ------------ ------------ CASH FLOWS FROM OPERATING ACTIVITIES: Net income $2,698,102 $1,128,501 $1,182,684 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation, deple- tion, and amortiza- tion of oil and gas properties 284,946 491,692 742,986 (Gain) loss on sale of oil and gas properties ( 71,916) 281 ( 459,040) (Increase) decrease in accounts receivable - oil and gas sales ( 447,575) ( 63,461) 116,708 Decrease in accounts receivable - other - - 54 (Increase) decrease in deferred charge 107,221 ( 126,420) 15,800 Increase (decrease) in accounts payable 21,324 7,695 ( 10,337) Increase (decrease) in gas imbalance payable ( 28,060) 19,248 ( 5,014) Increase in accrued liability 2,562 4,725 8,843 --------- --------- --------- Net cash provided by operating activities $2,566,604 $1,462,261 $1,592,684 --------- --------- --------- CASH FLOWS FROM INVESTING ACTIVITIES: Capital expenditures ($ 25,540) ($ 44,522) ($ 123,095) Proceeds from sale of oil and gas properties 71,917 9,048 501,935 --------- --------- --------- Net cash provided (used) by investing activities $ 46,377 ($ 35,474) $ 378,840 --------- --------- --------- CASH FLOWS FROM FINANCING ACTIVITIES: Cash distributions ($2,192,627) ($1,284,593) ($2,171,715) --------- --------- --------- Net cash used by financing activities ($2,192,627) ($1,284,593) ($2,171,715) --------- --------- ---------
-F17-
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS $ 420,354 $ 142,194 ($ 200,191)
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 482,914 340,720 540,911 --------- --------- --------- CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 903,268 $ 482,914 $ 340,720 ========= ========= =========
The accompanying notes are an integral part of these financial statements.
-F18-
REPORT OF INDEPENDENT ACCOUNTANTS
TO THE PARTNERS
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-D
In our opinion, the accompanying balance sheets and the related statements of operations, changes in partners' capital (deficit) and cash flows present fairly, in all material respects, the financial position of the Geodyne Energy Income Limited Partnership III-D, an Oklahoma limited partnership, at December 31, 2000 and 1999, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2000, in conformity with accounting principles generally accepted in the United States of America These financial statements are the responsibility of the Partnership's management; our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these financial statements in accordance with auditing standards generally accepted in the United States of America, which require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
PricewaterhouseCoopers LLP
Tulsa, Oklahoma February 22, 2001
-F19-
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-D Balance Sheets December 31, 2000 and 1999
ASSETS ------
2000 1999 ------------ ------------ CURRENT ASSETS: Cash and cash equivalents $ 561,839 $ 338,669 Accounts receivable: Oil and gas sales 606,226 371,197 --------- --------- Total current assets $1,168,065 $ 709,866
NET OIL AND GAS PROPERTIES, utilizing the successful efforts method 803,342 1,047,894
DEFERRED CHARGE 15,855 52,412 --------- --------- $1,987,262 $1,810,172 ========= =========
LIABILITIES AND PARTNERS' CAPITAL (DEFICIT) -------------------------------------------
CURRENT LIABILITIES: Accounts payable $ 70,538 $ 74,391 Gas imbalance payable 3,555 2,361 --------- ---------
Total current liabilities $ 74,093 $ 76,752
ACCRUED LIABILITY $ 192,229 $ 181,185
PARTNERS' CAPITAL (DEFICIT): General Partner ($ 58,871) ($ 66,221) Limited Partners, issued and outstanding, 131,008 Units 1,779,811 1,618,456 --------- --------- Total Partners' capital $1,720,940 $1,552,235 --------- --------- $1,987,262 $1,810,172 ========= =========
The accompanying notes are an integral part of these financial statements.
-F20-
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-D Statements of Operations For the Years Ended December 31, 2000, 1999, and 1998
2000 1999 1998 ------------ ------------ ------------ REVENUES: Oil and gas sales $3,095,191 $2,007,243 $1,789,571 Interest income 22,906 8,459 9,293 Gain (loss) on sale of oil and gas properties 203,942 ( 16) 59,491 --------- --------- --------- $3,322,039 $2,015,686 $1,858,355 COSTS AND EXPENSES: Lease operating $ 689,575 $ 566,376 $ 596,143 Production tax 205,988 137,675 122,513 Depreciation, deple- tion, and amorti- zation of oil and gas properties 265,983 230,648 524,074 Impairment provision - - 506,636 General and administrative 157,727 155,698 155,025 --------- --------- --------- $1,319,273 $1,090,397 $1,904,391 --------- --------- ---------
NET INCOME (LOSS) $2,002,766 $ 925,289 ($ 46,036) ========= ========= ========= GENERAL PARTNER - NET INCOME $ 109,411 $ 55,068 38,462 ========= ========= =========
LIMITED PARTNERS - NET INCOME (LOSS) $1,893,355 $ 870,221 ($ 84,498) ========= ========= =========
NET INCOME (LOSS) per Unit $ 14.45 $ 6.64 ($ .64) ========= ========= =========
UNITS OUTSTANDING 131,008 131,008 131,008 ========= ========= =========
The accompanying notes are an integral part of these financial statements.
-F21-
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-D Statements of Partners' Capital (Deficit) For the Years Ended December 31, 2000, 1999, and 1998
Limited General Partners Partner Total ------------ ---------- ------------
Balance, Dec. 31, 1997 $2,636,733 ($ 62,091) $2,574,642 Net income (loss) ( 84,498) 38,462 ( 46,036) Cash distributions ( 1,034,000) ( 49,872) ( 1,083,872) --------- ------- ---------
Balance, Dec. 31, 1998 $1,518,235 ( 73,501) $1,444,734 Net income 870,221 55,068 925,289 Cash distributions ( 770,000) ( 47,788) ( 817,788) --------- ------- ---------
Balance, Dec. 31, 1999 $1,618,456 ($ 66,221) $1,552,235 Net income 1,893,355 109,411 2,002,766 Cash distributions ( 1,732,000) ( 102,061) ( 1,834,061) --------- ------- ---------
Balance, Dec. 31, 2000 $1,779,811 ($ 58,871) $1,720,940 ========= ======= =========
The accompanying notes are an integral part of these financial statements.
-F22-
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-D Statements of Cash Flows For the Years Ended December 31, 2000, 1999, and 1998
2000 1999 1998 ------------ ------------ ------------ CASH FLOWS FROM OPERATING ACTIVITIES: Net income (loss) $2,002,766 $ 925,289 ($ 46,036) Adjustments to reconcile net income (loss) to net cash provided by operating activities: Depreciation, deple- tion, and amortiza- tion of oil and gas properties 265,983 230,648 524,074 Impairment provision - - 506,636 (Gain) loss on sale of oil and gas properties ( 203,942) 16 ( 59,491) (Increase) decrease in accounts receivable - oil and gas sales ( 235,029) ( 102,494) 93,072 (Increase) decrease in deferred charge 36,557 ( 42,950) 9,413 Increase (decrease) in accounts payable ( 3,853) 18,395 ( 58,290) Increase (decrease) in gas imbalance payable 1,194 ( 2,093) 4,454 Increase (decrease) in accrued liability 11,044 ( 1,454) ( 19,295) --------- --------- --------- Net cash provided by operating activities $1,874,720 $1,025,357 $ 954,537 --------- --------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES: Capital expenditures ($ 24,429) ($ 41,676) ($ 64,034) Proceeds from sale of oil and gas properties 206,940 - 67,181 --------- --------- ---------
Net cash provided (used) by investing activities $ 182,511 ($ 41,676) $ 3,147 --------- --------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES: Cash distributions ($1,834,061) ($ 817,788) ($1,083,872) --------- --------- --------- Net cash used by financing activities ($1,834,061) ($ 817,788) ($1,083,872) --------- --------- ---------
-F23-
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS $ 223,170 $ 165,893 ($ 126,188)
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 338,669 172,776 298,964 --------- --------- --------- CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 561,839 $ 338,669 $ 172,776 ========= ========= =========
The accompanying notes are an integral part of these financial statements.
-F24-
REPORT OF INDEPENDENT ACCOUNTANTS
TO THE PARTNERS
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-E
In our opinion, the accompanying balance sheets and the related statements of operations, changes in partners' capital (deficit) and cash flows present fairly, in all material respects, the financial position of the Geodyne Energy Income Limited Partnership III-E, an Oklahoma limited partnership, at December 31, 2000 and 1999, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2000, in conformity with accounting principles generally accepted in the United States of America. These financial statements are the responsibility of the Partnership's management; our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these financial statements in accordance with auditing standards generally accepted in the United States of America, which require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
PricewaterhouseCoopers LLP
Tulsa, Oklahoma February 22, 2001
-F25-
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-E Balance Sheets December 31, 2000 and 1999
ASSETS ------
2000 1999 ------------- ------------- CURRENT ASSETS: Cash and cash equivalents $1,627,830 $1,445,029 Accounts receivable: Oil and gas sales 1,815,573 1,403,065 --------- --------- Total current assets $3,443,403 $2,848,094
NET OIL AND GAS PROPERTIES, utilizing the successful efforts method 2,565,859 2,776,902
DEFERRED CHARGE 129,472 117,235 --------- --------- $6,138,734 $5,742,231 ========= =========
LIABILITIES AND PARTNERS' CAPITAL (DEFICIT) -------------------------------------------
CURRENT LIABILITIES: Accounts payable $ 407,887 $ 398,764 Gas imbalance payable 48,446 34,902 --------- --------- Total current liabilities $ 456,333 $ 433,666
ACCRUED LIABILITY $ 512,557 $ 530,662
PARTNERS' CAPITAL (DEFICIT): General Partner ($ 240,721) ($ 259,526) Limited Partners, issued and outstanding, 418,266 Units 5,410,565 5,037,429 --------- --------- Total Partners' capital $5,169,844 $4,777,903 --------- --------- $6,138,734 $5,742,231 ========= =========
The accompanying notes are an integral part of these financial statements.
-F26-
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-E Statements of Operations For the Years Ended December 31, 2000, 1999, and 1998
2000 1999 1998 ------------- ------------ ------------ REVENUES: Oil and gas sales $10,477,026 $7,046,449 $6,400,589 Interest income 87,675 27,474 41,408 Gain (loss) on sale of oil and gas properties 1,324,494 - 36,219 ---------- --------- --------- $11,889,195 $7,073,923 $6,478,216
COSTS AND EXPENSES: Lease operating $ 2,978,697 $3,504,062 $3,253,691 Production tax 673,810 453,337 441,483 Depreciation, deple- tion, and amorti- zation of oil and gas properties 407,584 479,272 1,984,334 Impairment provision - - 3,503,400 General and administrative 498,519 496,279 498,977 ---------- --------- --------- $ 4,558,610 $4,932,950 $9,681,885 ---------- --------- ---------
NET INCOME (LOSS) $ 7,330,585 $2,140,973 ($3,203,669) ========== ========= ========= GENERAL PARTNER - NET INCOME $ 378,449 $ 124,846 $ 57,256 ========== ========= ========= LIMITED PARTNERS - NET INCOME (LOSS) $ 6,952,136 $2,016,127 ($3,260,925) ========== ========= =========
NET INCOME (LOSS) per Unit $ 16.62 $ 4.82 ($ 7.80) ========== ========= =========
UNITS OUTSTANDING 418,266 418,266 418,266 ========== ========= =========
The accompanying notes are an integral part of these financial statements.
-F27-
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-E Statements of Partners' Capital (Deficit) For the Years Ended December 31, 2000, 1999, and 1998
Limited General Partners Partner Total ------------- ---------- -------------
Balance, Dec. 31, 1997 $10,449,227 ($209,050) $10,240,177 Net income (loss) ( 3,260,925) 57,256 ( 3,203,669) Cash distributions ( 3,071,000) ( 123,989) ( 3,194,989) ---------- ------- ----------
Balance, Dec. 31, 1998 $ 4,117,302 ($275,783) $ 3,841,519 Net income 2,016,127 124,846 2,140,973 Cash distributions ( 1,096,000) ( 108,589) ( 1,204,589) ---------- ------- ----------
Balance, Dec. 31, 1999 $ 5,037,429 ($259,526) $ 4,777,903 Net income 6,952,136 378,449 7,330,585 Cash distributions ( 6,579,000) ( 359,644) ( 6,938,644) ---------- ------- ----------
Balance, Dec. 31, 2000 $ 5,410,565 ($240,721) $ 5,169,844 ========== ======= ==========
The accompanying notes are an integral part of these financial statements.
-F28-
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-E Statements of Cash Flows For the Years Ended December 31, 2000, 1999, and 1998
2000 1999 1998 ------------ ------------ ------------ CASH FLOWS FROM OPERATING ACTIVITIES: Net income (loss) $7,330,585 $2,140,973 ($3,203,669) Adjustments to reconcile net income (loss) to net cash provided by operating activities: Depreciation, deple- tion, and amortiza- tion of oil and gas properties 407,584 479,272 1,984,334 Impairment provision - - 3,503,400 Gain on sale of oil and gas properties ( 1,324,494) - ( 36,219) (Increase) decrease in accounts receivable - oil and gas sales ( 412,508) ( 582,987) 541,719 (Increase)Decrease in deferred charge ( 12,237) 10,422 76,430 Increase (decrease) in accounts payable 9,123 95,875 ( 390,629) Increase (decrease) in gas imbalance payable 13,544 ( 143,616) 35,769 Increase (decrease) in accrued liability ( 18,105) 232,176 ( 22,457) --------- --------- ---------
Net cash provided by operating activities $5,993,492 $2,232,115 $2,488,678 --------- --------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES: Capital expenditures ($ 224,656) ($ 79,519) ($ 2,926) Proceeds from sale of oil and gas properties 1,352,609 13,825 77,860 --------- --------- --------- Net cash provided (used) by investing activities $1,127,953 ($ 65,694) $ 74,934 --------- --------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES: Cash distributions ($6,938,644) ($1,204,589) ($3,194,989) --------- --------- --------- Net cash used by financing activities ($6,938,644) ($1,204,589) ($3,194,989) --------- --------- ---------
-F29-
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS $ 182,801 $ 961,832 ($ 631,377)
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 1,445,029 483,197 1,114,574 --------- --------- --------- CASH AND CASH EQUIVALENTS AT END OF PERIOD $1,627,830 $1,445,029 $ 483,197 ========= ========= =========
The accompanying notes are an integral part of these financial statements.
-F30-
REPORT OF INDEPENDENT ACCOUNTANTS
TO THE PARTNERS
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-F
In our opinion, the accompanying balance sheets and the related statements of operations, changes in partners' capital (deficit) and cash flows present fairly, in all material respects, the financial position of the Geodyne Energy Income Limited Partnership III-F, an Oklahoma limited partnership, at December 31, 2000 and 1999, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2000, in conformity with accounting principles generally accepted in the United States of America. These financial statements are the responsibility of the Partnership's management; our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these financial statements in accordance with auditing standards generally accepted in the United States of America, which require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
PricewaterhouseCoopers LLP
Tulsa, Oklahoma February 22, 2001
-F31-
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-F Balance Sheets December 31, 2000 and 1999
ASSETS ------ 2000 1999 ------------ ------------- CURRENT ASSETS: Cash and cash equivalents $ 754,880 $ 803,913 Accounts receivable: Oil and gas sales 667,613 424,488 --------- --------- Total current assets $1,422,493 $1,228,401
NET OIL AND GAS PROPERTIES, utilizing the successful efforts method 2,163,648 2,405,074
DEFERRED CHARGE 52,414 56,227 --------- --------- $3,638,555 $3,689,702 ========= =========
LIABILITIES AND PARTNERS' CAPITAL (DEFICIT) -------------------------------------------
CURRENT LIABILITIES: Accounts payable $ 58,215 $ 77,807 Gas imbalance payable 15,251 55,092 --------- ---------
Total current liabilities $ 73,466 $ 132,899
ACCRUED LIABILITY $ 107,023 $ 135,208
PARTNERS' CAPITAL (DEFICIT): General Partner ($ 135,914) ($ 154,318) Limited Partners, issued and outstanding, 221,484 Units 3,593,980 3,575,913 --------- --------- Total Partners' capital $3,458,066 $3,421,595 --------- ---------
$3,638,555 $3,689,702 ========= =========
The accompanying notes are an integral part of these financial statements.
-F32-
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-F Statements of Operations For the Years Ended December 31, 2000, 1999, and 1998
2000 1999 1998 ------------ ------------- ------------- REVENUES: Oil and gas sales $3,437,321 $2,314,446 $2,149,193 Interest income 29,160 13,888 20,060 Gain on sale of oil and gas properties 277,211 139,094 22,073 --------- --------- --------- $3,743,692 $2,467,428 $2,191,326
COSTS AND EXPENSES: Lease operating $ 699,072 $ 818,404 $1,036,153 Production tax 168,163 107,706 149,314 Depreciation, deple- tion, and amorti- zation of oil and gas properties 345,084 419,639 721,443 General and administrative 263,571 261,483 260,699 --------- --------- --------- $1,475,890 $1,607,232 $2,167,609 --------- --------- ---------
NET INCOME $2,267,802 $ 860,196 $ 23,717 ========= ========= ========= GENERAL PARTNER - NET INCOME $ 125,735 $ 59,101 $ 29,041 ========= ========= ========= LIMITED PARTNERS - NET INCOME (LOSS) $2,142,067 $ 801,095 ($ 5,324) ========= ========= =========
NET INCOME (LOSS) per Unit $ 9.67 $ 3.62 ($ .02) ========= ========= =========
UNITS OUTSTANDING 221,484 221,484 221,484 ========= ========= =========
The accompanying notes are an integral part of these financial statements.
-F33-
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-F Statements of Partners' Capital (Deficit) For the Years Ended December 31, 2000, 1999, and 1998
Limited General Partners Partner Total ------------ ---------- ------------
Balance, Dec. 31, 1997 $4,454,142 ($146,427) $4,307,715 Net income (loss) ( 5,324) 29,041 23,717 Cash distributions ( 1,180,000) ( 46,835) ( 1,226,835) --------- ------- ---------
Balance, Dec. 31, 1998 $3,268,818 ($164,221) $3,104,597 Net income 801,095 59,101 860,196 Cash distributions ( 494,000) ( 49,198) ( 543,198) --------- ------- ---------
Balance, Dec. 31, 1999 $3,575,913 ($154,318) $3,421,595 Net income 2,142,067 125,735 2,267,802 Cash distributions ( 2,124,000) ( 107,331) ( 2,231,331) --------- ------- ---------
Balance, Dec. 31, 2000 $3,593,980 ($135,914) $3,458,066 ========= ======= =========
The accompanying notes are an integral part of these financial statements.
-F34-
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-F Statements of Cash Flows For the Years Ended December 31, 2000, 1999, and 1998
2000 1999 1998 ------------ ---------- ------------ CASH FLOWS FROM OPERATING ACTIVITIES: Net income $2,267,802 $860,196 $ 23,717 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation, deple- tion, and amortiza- tion of oil and gas properties 345,084 419,639 721,443 Gain on sale of oil and gas properties ( 277,211) ( 139,094) ( 22,073) (Increase) decrease in accounts receivable - oil and gas sales ( 243,125) ( 144,898) 193,156 Decrease in accounts receivable - other - 9,631 - Decrease in deferred charge 3,813 22,870 45,296 Decrease in accounts payable ( 19,592) ( 56,034) ( 32,122) Increase (decrease) in gas imbalance payable ( 39,841) ( 68,549) 3,777 Increase (decrease) in accrued liability ( 28,185) ( 36,527) 12,460 --------- ------- ---------
Net cash provided by operating activities $2,008,745 $867,234 $ 945,654 --------- ------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES: Capital expenditures ($ 175,878) ($ 69,027) - Proceeds from sale of oil and gas properties 349,431 232,143 56,560 --------- ------- ---------
Net cash provided by investing activities $ 173,553 $163,116 $ 56,560 --------- ------- ---------
-F35-
CASH FLOWS FROM FINANCING ACTIVITIES: Cash distributions ($2,231,331) ($543,198) ($1,226,835) --------- ------- --------- Net cash used by financing activities ($2,231,331) ($543,198) ($1,226,835) --------- ------- --------- NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS ($ 49,033) $487,152 ($ 224,621)
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 803,913 316,761 541,382 --------- ------- --------- CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 754,880 $803,913 $ 316,761 ========= ======= =========
The accompanying notes are an integral part of these financial statements.
-F36-
REPORT OF INDEPENDENT ACCOUNTANTS
TO THE PARTNERS
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-G
In our opinion, the accompanying balance sheets and the related statements of operations, changes in partners' capital (deficit) and cash flows present fairly, in all material respects, the financial position of the Geodyne Energy Income Limited Partnership III-G, an Oklahoma limited partnership, at December 31, 2000 and 1999, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2000, in conformity with accounting principles generally accepted in the United States of America. These financial statements are the responsibility of the Partnership's management; our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these financial statements in accordance with auditing standards generally accepted in the United States of America, which require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
PricewaterhouseCoopers LLP
Tulsa, Oklahoma February 22, 2001
-F37-
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-G Balance Sheets December 31, 2000 and 1999
ASSETS ------ 2000 1999 ------------ ------------- CURRENT ASSETS: Cash and cash equivalents $ 434,158 $ 475,226 Accounts receivable: Oil and gas sales 393,688 259,524 --------- --------- Total current assets $ 827,846 $ 734,750
NET OIL AND GAS PROPERTIES, utilizing the successful efforts method 1,154,241 1,230,211
DEFERRED CHARGE 35,238 36,477 --------- --------- $2,017,325 $2,001,438 ========= =========
LIABILITIES AND PARTNERS' CAPITAL (DEFICIT) -------------------------------------------
CURRENT LIABILITIES: Accounts payable $ 35,944 $ 48,611 Gas imbalance payable 6,446 7,548 --------- ---------
Total current liabilities $ 42,390 $ 56,159
ACCRUED LIABILITY $ 71,912 $ 80,069
PARTNERS' CAPITAL (DEFICIT): General Partner ( 79,337) ($ 91,045) Limited Partners, issued and outstanding, 121,925 Units 1,982,360 1,956,255 --------- --------- Total Partners' capital $1,903,023 $1,865,210 --------- ---------
$2,017,325 $2,001,438 ========= =========
The accompanying notes are an integral part of these financial statements.
-F38-
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-G Statements of Operations For the Years Ended December 31, 2000, 1999, and 1998
2000 1999 1998 ------------ ------------ ------------ REVENUES: Oil and gas sales $2,050,390 $1,439,700 $1,272,575 Interest income 16,417 7,733 11,090 Gain on sale of oil and gas properties 241,256 124,908 19,340 --------- --------- --------- $2,308,063 $1,572,341 $1,303,005
COSTS AND EXPENSES: Lease operating $ 452,963 $ 529,060 $660,066 Production tax 99,277 64,851 84,377 Depreciation, deple- tion, and amorti- zation of oil and gas properties 172,725 206,953 400,340 Impairment provision - - 310,413 General and administrative 146,053 144,031 143,465 --------- --------- --------- $ 871,018 $ 944,895 $1,598,661 --------- --------- ---------
NET INCOME (LOSS) $1,437,045 $ 627,446 ($295,656) ========= ========= ========= GENERAL PARTNER - NET INCOME $ 77,940 $ 39,264 $ 13,093 ========= ========= ========= LIMITED PARTNERS - NET INCOME (LOSS) $1,359,105 $ 588,182 ($308,749) ========= ========= =========
NET INCOME (LOSS) per Unit $ 11.15 $ 4.82 ($ 2.53) ========= ========= =========
UNITS OUTSTANDING 121,925 121,925 121,925 ========= ========= =========
The accompanying notes are an integral part of these financial statements.
-F39-
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-G Statements of Partners' Capital (Deficit) For the Years Ended December 31, 2000, 1999, and 1998
Limited General Partners Partner Total ------------ --------- ------------
Balance, Dec. 31, 1997 $2,707,822 ($85,608) $2,622,214 Net income (loss) ( 308,749) 13,093 ( 295,656) Cash distributions ( 727,000) ( 27,459) ( 754,459) --------- ------ ---------
Balance, Dec. 31, 1998 $1,672,073 ($99,974) $1,572,099 Net income 588,182 39,264 627,446 Cash distributions ( 304,000) ( 30,335) ( 334,335) --------- ------ ---------
Balance, Dec. 31, 1999 $1,956,255 ($91,045) $1,865,210 Net income 1,359,105 77,940 1,437,045 Cash distributions ( 1,333,000) ( 66,232) ( 1,399,232) --------- ------ ---------
Balance, Dec. 31, 2000 $1,982,360 ($79,337) $1,903,023 ========= ====== =========
The accompanying notes are an integral part of these financial statements.
-F40-
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-G Statements of Cash Flows For the Years Ended December 31, 2000, 1999, and 1998
2000 1999 1998 ------------ ---------- ---------- CASH FLOWS FROM OPERATING ACTIVITIES: Net income (loss) $1,437,045 $627,446 ($295,656) Adjustments to reconcile net income (loss) to net cash provided by operating activities: Depreciation, deple- tion, and amortiza- tion of oil and gas properties 172,725 206,953 400,340 Impairment provision - - 310,413 Gain on sale of oil and gas properties ( 241,256) ( 124,908) (19,340) (Increase) decrease in accounts receivable - oil and gas sales ( 134,164) ( 95,723) 121,888 Decrease in accounts receivable - General Partner - - 13,140 Decrease in accounts receivable - other - 6,369 - Decrease in deferred charge 1,239 13,903 25,026 Decrease in accounts payable ( 12,667) ( 25,224) (28,090) Increase (decrease) in gas imbalance payable ( 1,102) ( 52,767) 708 Increase (decrease) in accrued liability ( 8,157) ( 31,152) 21,911 --------- ------- -------
Net cash provided by operating activities $1,213,663 $524,897 $550,340 --------- ------- -------
CASH FLOWS FROM INVESTING ACTIVITIES: Capital expenditures ($ 103,365) ($ 38,468) ($11,316) Proceeds from sale of oil and gas properties 247,866 153,574 33,830 --------- ------- -------
Net cash provided by investing activities $ 144,501 $115,106 $22,514 --------- ------- -------
-F41-
CASH FLOWS FROM FINANCING ACTIVITIES: Cash distributions ($1,399,232) ($334,335) ($754,459) --------- ------- ------- Net cash used by financing activities ($1,399,232) ($334,335) ($754,459) --------- ------- -------
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS ($ 41,068) $305,668 ($181,605)
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 475,226 169,558 351,163 --------- ------- ------- CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 434,158 $475,226 $169,558 ========= ======= =======
The accompanying notes are an integral part of these financial statements.
-F42-
GEODYNE ENERGY INCOME PROGRAM III LIMITED PARTNERSHIPS Notes to Financial Statements For the Years Ended December 31, 2000, 1999, and 1998
1. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Organization and Nature of Operations
The Geodyne Energy Income Limited Partnerships (the "Partnerships") were formed pursuant to a public offering of depositary units ("Units"). Upon formation, investors became limited partners (the "Limited Partners") and held Units issued by each Partnership. Geodyne Resources, Inc. (the "General Partner") is the general partner of each Partnership. Limited Partner capital contributions were invested in producing oil and gas properties. The Partnerships were activated on the following dates with the following Limited Partner capital contributions.
Limited Partner Date of Capital Partnership Activation Contributions ----------- ------------------ ---------------
III-A November 22, 1989 $26,397,600 III-B January 24, 1990 13,833,600 III-C February 27, 1990 24,453,600 III-D September 5, 1990 13,100,800 III-E December 26, 1990 41,826,600 III-F March 7, 1991 22,148,400 III-G September 20, 1991 12,192,500
Pursuant to the terms of the partnership agreements for the Partnerships, the Partnerships would have terminated or will terminate on the dates indicated in the "Initial Termination Date" column of the following chart. However, the General Partner may extend the term of each Partnership for up to five periods of two years each. As of the date of these financial statements, the General Partner has extended the terms of the III-A, III-B, III-C, III-D, III-E, and III-F Partnerships for the first two-year extension period. The General Partner has not determined whether it intends to (i) further extend the terms of such Partnerships or (ii) extend the term of the III-G Partnership. Therefore, the Partnerships are currently scheduled to terminate on the dates indicated in the "Current Termination Date" column of the following chart.
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Initial Extensions Current Partnership Termination Date Exercised Termination Date ----------- ----------------- ---------- ----------------
III-A November 22, 1999 1 November 22, 2001 III-B January 24, 2000 1 January 24, 2002 III-C February 28, 2000 1 February 28, 2002 III-D September 5, 2000 1 September 5, 2002 III-E December 26, 2000 1 December 26, 2002 III-F March 7, 2001 1 March 7, 2003 III-G September 20, 2001 - September 20, 2001
An affiliate of the General Partner owned the following Units at December 31, 2000:
Number of Percent of Partnership Units Owned Outstanding ----------- ----------- -----------
III-A 46,864 17.8% III-B 25,852 18.7% III-C 50,452 20.6% III-D 28,943 22.1% III-E 94,970 22.7% III-F 50,540 22.8% III-G 27,202 22.3%
The Partnerships' sole business is the development and production of oil and gas. Substantially all of the Partnerships' gas reserves are being sold regionally on the "spot market." Due to the highly competitive nature of the spot market, prices on the spot market are subject to wide seasonal and regional pricing fluctuations. In addition, such spot market sales are generally short term in nature and are dependent upon obtaining transportation services provided by pipelines. The Partnerships' oil is sold at or near the Partnerships' wells under short-term purchase contracts at prevailing arrangements which are customary in the oil industry. The prices received for the Partnerships' oil and gas are subject to influences such as global consumption and supply trends.
Allocation of Costs and Revenues
The terms of each Partnership's Limited Partnership Agreement (the "Partnership Agreement") allocate costs and income between the Limited Partners and the General Partner as follows:
-F44-
Before Payout (1) After Payout(1) -------------------- -------------------- General Limited General Limited Partner Partners Partner Partners -------- -------- -------- -------- Costs(2) - ------------------------ Sales commissions, pay- ment for organization and offering costs and management fee 1% 99% - - Property acquisition costs 1% 99% 1% 99% Identified development drilling 1% 99% 1% 99% Development drilling(2) 5% 95% 15% 85% General and administra- tive costs, direct administrative costs and operating costs(2) 5% 95% 15% 85%
Income(2) - ------------------------ Temporary investments of Limited Partners' subscriptions 1% 99% 1% 99% Income from oil and gas production(2) 5% 95% 15% 85% Gain on sale of producing properties(2) 5% 95% 15% 85% All other income(2) 5% 95% 15% 85%
- ---------- (1) Payout occurs when total distributions to Limited Partners equal total original Limited Partner subscriptions. (2) If at payout the Limited Partners have received distributions at an annual rate less than 12% of their subscriptions, the percentage of income and costs allocated to the General Partner will increase to only 10% and the Limited Partners will be allocated 90%. Thereafter, if the distribution to Limited Partners reaches an average annual rate of 12% the allocation will change to 15% to the General Partner and 85% to the Limited Partners.
The III-A and III-B Partnerships achieved payout during the second quarter of 2000 and first quarter of 1998, respectively. After payout, operations for the III-A Partnership were allocated using the 10%/90% after payout percentages described in Footnote 2 to the table above. Operations for the III-B Partnership were allocated using the 15%/85% after payout percentages described in such footnote.
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Cash and Cash Equivalents
The Partnerships consider all highly liquid investments with a maturity of three months or less when purchased to be cash equivalents. Cash equivalents are not insured, which cause the Partnerships to be subject to risk.
Credit Risks
Accrued oil and gas sales which are due from a variety of oil and gas purchasers subject the Partnerships to a concentration of credit risk. Some of these purchasers are discussed in Note 3 - Major Customers.
Oil and Gas Properties
The Partnerships follow the successful efforts method of accounting for their oil and gas properties. Under the successful efforts method, the Partnerships capitalize all property acquisition costs and development costs incurred in connection with the further development of oil and gas reserves. Property acquisition costs include costs incurred by the Partnerships or the General Partner to acquire producing properties, including related title insurance or examination costs, commissions, engineering, legal and accounting fees, and similar costs directly related to the acquisitions, plus an allocated portion of the General Partner's property screening costs. The acquisition cost to the Partnerships of properties acquired by the General Partner is adjusted to reflect the net cash results of operations, including interest incurred to finance the acquisition, for the period of time the properties are held by the General Partner. Leasehold impairment of unproved properties is recognized based upon an individual property assessment and exploratory experience. Upon discovery of commercial reserves, leasehold costs are transferred to producing properties.
Depletion of the costs of producing oil and gas properties, amortization of related intangible drilling and development costs, and depreciation of tangible lease and well equipment are computed on the units-of-production method. The Partnerships' calculation of depreciation, depletion, and amortization includes estimated dismantlement and abandonment costs, net of estimated salvage values. The depreciation, depletion, and amortization rates per equivalent barrel of oil produced during the years ended December 31, 2000, 1999, and 1998 were as follows:
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Partnership 2000 1999 1998 ----------- ----- ----- -----
III-A $1.70 $2.82 $3.15 III-B 1.65 2.71 2.86 III-C 1.54 2.59 3.44 III-D 1.95 1.48 3.20 III-E .93 .93 3.59 III-F 2.26 2.36 3.89 III-G 1.97 1.91 3.68
When complete units of depreciable property are retired or sold, the asset cost and related accumulated depreciation are eliminated with any gain or loss reflected in income. When less than complete units of depreciable property are retired or sold, the proceeds are credited to oil and gas properties.
The Partnerships evaluate the recoverability of the carrying costs of their proved oil and gas properties at the field level. If the unamortized costs of oil and gas properties within a field exceed the expected undiscounted future cash flows from such properties, the cost of the properties is written down to fair value, which is determined by using the discounted future cash flows from the properties. During 1998, the III-D, III-E and III-G Partnerships recorded non-cash charges against earnings (impairment provisions) of $506,636, $3,503,400 and $310,413 respectively. No other impairment provisions were recorded by the Partnerships during the three years ended December 31, 2000. The risk that the Partnerships will be required to record similar impairment provisions in the future increases as oil and gas prices decrease.
Deferred Charge
Deferred Charge represents costs deferred for lease operating expenses incurred in connection with the Partnerships' underproduced gas imbalance positions. The rate used in calculating the deferred charge is the average of the annual production costs per Mcf. At December 31, 2000 and 1999, cumulative total gas sales volumes for underproduced wells were less than the Partnerships' pro-rata share of total gas production from these wells by the following amounts:
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2000 1999 -------------------- -------------------- Partnership Mcf Amount Mcf Amount ----------- ------- -------- ------- --------
III-A 400,063 $347,775 399,160 $279,651 III-B 234,419 259,291 232,141 229,634 III-C 153,169 90,048 392,263 197,269 III-D 15,538 15,855 61,509 52,412 III-E 65,685 129,472 66,740 117,235 III-F 47,422 52,414 49,522 56,227 III-G 25,518 35,238 27,352 36,477
Accrued Liability
Accrued liability represents charges accrued for lease operating expenses incurred in connection with the Partnerships' overproduced gas imbalance positions. The rate used in calculating the accrued liability is the average of the annual production costs per Mcf. At December 31, 2000 and 1999, cumulative total gas sales volumes for overproduced wells exceeded the Partnerships' pro-rata share of total gas production from these wells by the following amounts:
2000 1999 -------------------- -------------------- Partnership Mcf Amount Mcf Amount ----------- ------- -------- ------- --------
III-A 61,693 $ 53,630 71,441 $ 50,052 III-B 26,291 29,080 33,823 33,458 III-C 270,383 158,958 310,989 156,396 III-D 188,386 192,229 212,633 181,185 III-E 260,036 512,557 302,096 530,662 III-F 96,871 107,023 119,084 135,208 III-G 52,076 71,912 60,040 80,069
Oil and Gas Sales and Gas Imbalance Payable
The Partnerships' oil and condensate production is sold, title passed, and revenue recognized at or near the Partnerships' wells under short-term purchase contracts at prevailing prices in accordance with arrangements which are customary in the oil and gas industry. Sales of gas applicable to the Partnerships' interest in producing oil and gas leases are recorded as revenue when the gas is metered and title transferred pursuant to the gas sales contracts covering the Partnerships' interest in gas reserves. During such times as a Partnership's sales of gas exceed its pro rata ownership in a well, such sales are recorded as revenue unless total sales from the well have exceeded the Partnership's share of estimated total gas reserves underlying the property, at which time such excess is recorded as a liability. The rates per Mcf used to calculate this liability
-F48-
are based on the average gas prices received for the volumes at the time the overproduction occurred. This also approximates the price for which the Partnerships are currently settling this liability. At December 31, 2000 and 1999 total sales exceeded the Partnerships' share of estimated total gas reserves as follows:
2000 1999 -------------------- -------------------- Partnership Mcf Amount Mcf Amount ----------- ------- -------- ------- --------
III-A 22,980 $34,470 21,106 $31,659 III-B 10,995 16,493 11,011 16,517 III-C 11,111 16,667 29,818 44,727 III-D 2,370 3,555 1,574 2,361 III-E 32,297 48,446 23,268 34,902 III-F 10,167 15,251 36,728 55,092 III-G 4,297 6,446 5,032 7,548
These amounts were recorded as gas imbalance payables in accordance with the sales method. These gas imbalance payables will be settled by either gas production by the underproduced party in excess of the current estimates of total gas reserves for the well or by a negotiated or contractual payment to the underproduced party.
The Partnerships have not entered into any hedging or derivative contracts in connection with their production and sale of oil and gas.
General and Administrative Overhead
The General Partner and its affiliates are reimbursed for actual general and administrative costs incurred and attributable to the conduct of the business affairs and operations of the Partnerships.
Use of Estimates in Financial Statements
The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Further, the deferred charge, the gas imbalance payable, and the accrued liability all involve estimates which could materially differ from the actual amounts ultimately realized or incurred in the near term. Oil and gas reserves (see Note 4) also involve
-F49-
significant estimates which could materially differ from the actual amounts ultimately realized.
Income Taxes
Income or loss for income tax purposes is includable in the income tax returns of the partners. Accordingly, no recognition has been given to income taxes in these financial statements.
2. TRANSACTIONS WITH RELATED PARTIES
The Partnerships reimburse the General Partner for the general and administrative overhead applicable to the Partnerships, based on an allocation of actual costs incurred by the General Partner. When actual costs incurred benefit other Partnerships and affiliates, the allocation of costs is based on the relationship of the Partnerships' reserves to the total reserves owned by all Partnerships and affiliates. The General Partner believes this allocation method is reasonable. Although the actual costs incurred by the General Partner and its affiliates have fluctuated during the three years presented, the amounts charged to the Partnerships have not fluctuated due to the expense limitations imposed by the Partnership Agreement. The following is a summary of payments made to the General Partner or its affiliates by the Partnerships for general and administrative overhead costs for the years ended December 31, 2000, 1999, and 1998:
Partnership 2000 1999 1998 ----------- -------- -------- --------
III-A $277,872 $277,872 $277,872 III-B 145,620 145,620 145,620 III-C 257,412 257,412 257,412 III-D 137,904 137,904 137,904 III-E 440,280 440,280 440,280 III-F 233,136 233,136 233,136 III-G 128,340 128,340 128,340
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 these activities, together with any compressor rentals, consulting, or other services provided. Such charges are comparable to third party charges in the area where the wells are located and are the same as charged to other working interest owners in the wells.
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3. MAJOR CUSTOMERS
The following table sets forth purchasers who individually accounted for ten percent or more of each Partnership's combined oil and gas sales during 2000, 1999, and 1998:
Partnership Purchaser Percentage ----------- ------------------------ -------------------------- 2000 1999 1998 ----- ----- -----
III-A Valero Industrial Gas L.P. ("Valero") 24.8% 27.2% 30.8% El Paso Energy Marketing Company ("El Paso") 24.1% 26.7% 33.9% Phibro Energy, Inc. ("Phibro") 23.9% 22.8% 17.0%
III-B Phibro 25.6% 25.4% 18.7% Valero 18.8% 21.4% 23.9% El Paso 18.1% 20.2% 26.7% Sun Refining & Marketing Company 14.2% 17.0% 14.4%
III-C El Paso 58.2% 59.0% 55.5%
III-D El Paso 56.6% 58.5% 54.9% Eaglwing Trading, Inc. ("Eaglwing") 21.8% 15.8% 15.3%
III-E Eaglwing 43.8% 35.4% 30.1% El Paso 16.3% 12.1% 12.6%
III-F El Paso 37.8% 28.2% 28.3% Eaglwing 13.5% - - Amoco Production Co. 11.1% 10.6% -
III-G El Paso 31.6% 23.7% 24.5% Eaglwing 14.9% - - Amoco Production Co. 12.2% 11.5% -
In the event of interruption of purchases by one or more of these significant customers or the cessation or material change in availability of open access transportation by the Partnerships' pipeline transporters, the Partnerships may encounter difficulty in marketing their gas and in maintaining historic sales levels. Alternative purchasers or transporters may not be readily available.
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4. SUPPLEMENTAL OIL AND GAS INFORMATION
The following supplemental information regarding the oil and gas activities of the Partnerships is presented pursuant to the disclosure requirements promulgated by the SEC.
Capitalized Costs
Capitalized costs and accumulated depreciation, depletion, amortization, and valuation allowance at December 31, 2000 and 1999 were as follows:
III-A Partnership -----------------
2000 1999 ------------- -------------
Proved properties $15,563,951 $15,787,198
Less accumulated depreciation, depletion, amorti- zation, and valua- tion allowance ( 14,050,530) ( 13,978,347) ---------- ---------- Net oil and gas Properties $ 1,513,421 $ 1,808,851 ========== ==========
III-B Partnership -----------------
2000 1999 ------------- ------------- Proved properties $ 9,323,727 $ 9,328,173
Less accumulated depreciation, depletion, amorti- zation, and valua- tion allowance ( 8,466,387) ( 8,309,648) ---------- ---------- Net oil and gas Properties $ 857,340 $ 1,018,525 ========== ==========
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III-C Partnership -----------------
2000 1999 ------------- ------------- Proved properties $17,983,626 $19,173,840
Less accumulated depreciation, depletion, amorti- zation, and valua- tion allowance ( 15,919,687) ( 16,850,494) ---------- ----------
Net oil and gas Properties $ 2,063,939 $ 2,323,346 ========== ==========
III-D Partnership -----------------
2000 1999 ------------- ------------- Proved properties $10,778,960 $12,080,692
Less accumulated depreciation, depletion, amorti- zation, and valua- tion allowance ( 9,975,618) ( 11,032,798) ---------- ----------
Net oil and gas Properties $ 803,342 $ 1,047,894 ========== ==========
III-E Partnership -----------------
2000 1999 ------------- ------------- Proved properties $32,150,380 $34,158,149
Less accumulated depreciation, depletion, amorti- zation, and valua- tion allowance ( 29,584,521) ( 31,381,247) ---------- ----------
Net oil and gas Properties $ 2,565,859 $ 2,776,902 ========== ==========
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III-F Partnership -----------------
2000 1999 ------------- ------------- Proved properties $15,201,085 $15,578,299
Less accumulated depreciation, depletion, amorti- zation, and valua- tion allowance ( 13,037,437) ( 13,173,225) ---------- ----------
Net oil and gas Properties $ 2,163,648 $ 2,405,074 ========== ==========
III-G Partnership -----------------
2000 1999 ------------- ------------- Proved properties $ 8,618,076 $ 8,905,525
Less accumulated depreciation, depletion, amorti- zation, and valua- tion allowance ( 7,463,835) ( 7,675,314) ---------- ----------
Net oil and gas Properties $ 1,154,241 $ 1,230,211 ========== ==========
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Costs Incurred
The Partnerships incurred no costs in connection with oil and gas acquisition or exploration activities during the years ended December 31, 2000, 1999, and 1998. Costs incurred by the Partnerships in connection with oil and gas property development activities for the years ended December 31, 2000, 1999, and 1998 were as follows:
Partnership 2000 1999 1998 ----------- -------- -------- --------
III-A $ 13,509 $ 8,919 $ 55,973 III-B 8,907 2,915 11,667 III-C 25,540 44,522 123,095 III-D 24,429 41,676 64,034 III-E 224,656 79,519 2,926 III-F 175,878 69,027 - III-G 103,365 38,468 11,316
Quantities of Proved Oil and Gas Reserves - Unaudited
The following tables summarize changes in net quantities of the Partnerships' proved reserves, all of which are located in the United States of America, for the periods indicated. The proved reserves at December 31, 2000, 1999, and 1998 were estimated by petroleum engineers employed by affiliates of the Partnerships. Certain reserve information was reviewed by Ryder Scott Company, L.P., an independent petroleum engineering firm. The following information includes certain gas balancing adjustments which cause the gas volumes to differ from the reserve reports prepared by the General Partner and reviewed by Ryder Scott.
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III-A Partnership -----------------
Crude Natural Oil Gas (Barrels) (Mcf) --------- -----------
Proved reserves, Dec. 31, 1997 112,863 5,231,840 Production ( 34,689) ( 741,990) Sale of minerals in place ( 170) ( 37,253) Extensions and discoveries 7,433 175,973 Revision of previous estimates 6,687 100,845 ------- ---------
Proved reserves, Dec. 31, 1998 92,124 4,729,415 Production ( 35,784) ( 665,717) Revision of previous estimates 65,715 59,622 ------- ---------
Proved reserves, Dec. 31, 1999 122,055 4,123,320 Production ( 49,908) ( 678,985) Sale of minerals in place ( 2,217) ( 1,198) Extensions and discoveries 3,244 413,970 Revision of previous estimates 61,667 770,780 ------- ---------
Proved reserves, Dec. 31, 2000 134,841 4,627,887 ======= =========
PROVED DEVELOPED RESERVES: December 31, 1998 86,204 4,604,490 ======= ========= December 31, 1999 116,761 4,061,061 ======= ========= December 31, 2000 129,658 4,576,603 ======= =========
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III-B Partnership -----------------
Crude Natural Oil Gas (Barrels) (Mcf) --------- ------------
Proved reserves, Dec. 31, 1997 93,543 2,533,853 Production ( 34,221) ( 355,197) Sale of minerals in place ( 98) ( 46,674) Revision of previous estimates 31,939 42,054 ------- ---------
Proved reserves, Dec. 31, 1998 91,163 2,174,036 Production ( 33,676) ( 299,745) Revision of previous estimates 65,332 36,674 ------- ---------
Proved reserves, Dec. 31, 1999 122,819 1,910,965 Production ( 40,544) ( 326,603) Extensions and discoveries 1,339 78,049 Revision of previous estimates 45,163 419,129 ------- ---------
Proved reserves, Dec. 31, 2000 128,777 2,081,540 ======= =========
PROVED DEVELOPED RESERVES: December 31, 1998 87,403 2,105,919 ======= ========= December 31, 1999 119,351 1,872,029 ======= ========= December 31, 2000 125,359 2,047,715 ======= =========
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III-C Partnership -----------------
Crude Natural Oil Gas (Barrels) (Mcf) --------- ------------
Proved reserves, Dec. 31, 1997 153,312 7,179,593 Production ( 22,980) (1,156,387) Sale of minerals in place ( 5,849) ( 322,985) Extensions and discoveries 444 443,959 Revision of previous estimates 9,742 ( 375,699) ------- ---------
Proved reserves, Dec. 31, 1998 134,669 5,768,481 Production ( 23,931) ( 997,209) Sale of minerals in place ( 491) ( 4,139) Revision of previous estimates 38,601 606,130 ------- ---------
Proved reserves, Dec. 31, 1999 148,848 5,373,263 Production ( 19,431) ( 994,305) Sale of minerals in place ( 495) ( 262) Extensions and discoveries 561 29,368 Revision of previous estimates ( 2,240) 1,004,626 ------- ---------
Proved reserves, Dec. 31, 2000 127,243 5,412,690 ======= =========
PROVED DEVELOPED RESERVES: December 31, 1998 134,527 5,754,200 ======= ========= December 31, 1999 148,826 5,371,134 ======= ========= December 31, 2000 127,243 5,412,690 ======= =========
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III-D Partnership -----------------
Crude Natural Oil Gas (Barrels) (Mcf) --------- ------------
Proved reserves, Dec. 31, 1997 478,395 3,804,550 Production ( 35,908) ( 767,089) Sale of minerals in place ( 1,822) ( 48,776) Extensions and discoveries 370 361,916 Revision of previous estimates (315,169) ( 511,711) ------- ---------
Proved reserves, Dec. 31, 1998 125,866 2,838,890 Production ( 36,148) ( 716,804) Extensions and discoveries 2,478 18,856 Revision of previous estimates 283,892 659,001 ------- ---------
Proved reserves, Dec. 31, 1999 376,088 2,799,943 Production ( 31,388) ( 629,117) Sale of minerals in place ( 4,343) ( 124,420) Revision of previous estimates 18,964 909,263 ------- ---------
Proved reserves, Dec. 31, 2000 359,321 2,955,669 ======= =========
PROVED DEVELOPED RESERVES: December 31, 1998 125,866 2,838,890 ======= ========= December 31, 1999 376,088 2,799,943 ======= ========= December 31, 2000 359,321 2,955,669 ======= =========
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III-E Partnership -----------------
Crude Natural Oil Gas (Barrels) (Mcf) ----------- ------------
Proved reserves, Dec. 31, 1997 3,011,540 10,133,149 Production ( 223,936) ( 1,974,917) Sale of minerals in place ( 669) ( 57,652) Revision of previous estimates (2,185,625) ( 84,105) --------- ----------
Proved reserves, Dec. 31, 1998 601,310 8,016,475 Production ( 205,197) ( 1,856,697) Extensions and discoveries 2,322 92,291 Revision of previous estimates 1,945,590 1,828,696 --------- ----------
Proved reserves, Dec. 31, 1999 2,344,025 8,080,765 Production ( 183,876) ( 1,526,586) Sale of minerals in place ( 31,281) ( 930,134) Extensions and discoveries 4,225 1,879,168 Revision of previous estimates 83,030 1,448,318 --------- ----------
Proved reserves, Dec. 31, 2000 2,216,123 8,951,531 ========= ==========
PROVED DEVELOPED RESERVES: December 31, 1998 601,310 8,016,475 ========= ========== December 31, 1999 2,344,025 8,080,765 ========= ========== December 31, 2000 2,216,123 8,951,531 ========= ==========
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III-F Partnership -----------------
Crude Natural Oil Gas (Barrels) (Mcf) --------- ------------
Proved reserves, Dec. 31, 1997 399,746 5,603,809 Production ( 54,002) ( 787,609) Sale of minerals in place ( 854) ( 49,751) Revision of previous estimates (113,008) ( 39,496) ------- ---------
Proved reserves, Dec. 31, 1998 231,882 4,726,953 Production ( 55,619) ( 732,832) Sale of minerals in place ( 17,463) ( 42,191) Extensions and discoveries 1,948 77,500 Revision of previous estimates 229,061 135,100 ------- ---------
Proved reserves, Dec. 31, 1999 389,809 4,164,530 Production ( 43,620) ( 654,833) Sale of minerals in place ( 47,792) ( 35,496) Extensions and discoveries 3,553 1,577,994 Revision of previous estimates 50,634 480,654 ------- ---------
Proved reserves, Dec. 31, 2000 352,584 5,532,849 ======= =========
PROVED DEVELOPED RESERVES: December 31, 1998 231,882 4,726,953 ======= ========= December 31, 1999 389,809 4,164,530 ======= ========= December 31, 2000 352,584 5,532,849 ======= =========
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III-G Partnership -----------------
Crude Natural Oil Gas (Barrels) (Mcf) --------- ------------
Proved reserves, Dec. 31, 1997 302,928 2,996,317 Production ( 38,858) ( 419,813) Sale of minerals in place ( 489) ( 29,446) Extensions and discoveries 693 19,866 Revision of previous estimates ( 92,484) ( 41,204) ------- ---------
Proved reserves, Dec. 31, 1998 171,790 2,525,720 Production ( 40,292) ( 409,664) Sale of minerals in place ( 11,547) ( 27,863) Extensions and discoveries 1,135 38,608 Revision of previous estimates 171,902 141,982 ------- ---------
Proved reserves, Dec. 31, 1999 292,988 2,268,783 Production ( 32,013) ( 333,031) Sale of minerals in place ( 32,702) ( 18,518) Extensions and discoveries 2,229 785,422 Revision of previous estimates 35,525 244,390 ------- ---------
Proved reserves, Dec. 31, 2000 266,027 2,947,046 ======= =========
PROVED DEVELOPED RESERVES: December 31, 1998 171,790 2,525,720 ======= ========= December 31, 1999 292,988 2,268,783 ======= ========= December 31, 2000 266,027 2,947,046 ======= =========
Standardized Measure of Discounted Future Net Cash Flows of Proved Oil and Gas Reserves - Unaudited
The following tables set forth each of the Partnerships' estimated future net cash flows as of December 31, 2000 relating to proved oil and gas reserves based on the standardized measure as prescribed in SFAS No. 69:
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Partnership --------------------------------- III-A III-B ------------- ------------- Future cash inflows $32,266,699 $16,411,922 Future production and development costs ( 5,604,845) ( 3,100,277) ---------- ----------
Future net cash flows $26,661,854 $13,311,645
10% discount to reflect timing of cash flows ( 8,766,272) ( 4,112,991) ---------- ----------
Standardized measure of discounted future net cash flows $17,895,582 $ 9,198,654 ========== ==========
Partnership --------------------------------- III-C III-D ------------- ------------- Future cash inflows $35,986,895 $27,898,756 Future production and development costs ( 7,660,860) ( 9,517,691) ---------- ----------
Future net cash flows $28,326,035 $18,381,065
10% discount to reflect timing of cash flows ( 10,375,723) ( 6,331,418) ---------- ----------
Standardized measure of discounted future net cash flows $17,950,312 $12,049,647 ========== ==========
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Partnership --------------------------------- III-E III-F ------------- ------------- Future cash inflows $122,991,267 $45,176,464 Future production and development costs ( 51,536,671) ( 12,864,799) ----------- ----------
Future net cash flows $ 71,454,596 $32,311,665
10% discount to reflect timing of cash flows ( 30,802,399) ( 14,499,507) ----------- ----------
Standardized measure of discounted future net cash flows $ 40,652,197 $17,812,158 =========== ==========
Partnership ------------- III-G ------------- Future cash inflows $ 26,264,926 Future production and development costs ( 7,930,768) -----------
Future net cash flows $ 18,334,158
10% discount to reflect timing of cash flows ( 8,233,071) -----------
Standardized measure of discounted future net cash flows $ 10,101,087 ===========
The process of estimating oil and gas reserves is complex, requiring significant subjective decisions in the evaluation of available geological, engineering, and economic data for each reservoir. The data for a given reservoir may change substantially over time as a result of, among other things, additional development activity, production history, and viability of production under varying economic conditions;
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consequently, it is reasonably possible that material revisions to existing reserve estimates may occur in the near future. Although every reasonable effort has been made to ensure that the reserve estimates reported herein represent the most accurate assessment possible, the significance of the subjective decisions required and variances in available data for various reservoirs make these estimates generally less precise than other estimates presented in connection with financial statement disclosures. The Partnerships' estimated future cash inflows as of December 31, 2000 were determined using the following year end prices:
Partnership Oil (per BBL) Gas (per Mcf) ----------- ------------- -------------
III-A $29.35 $6.12 III-B 29.22 6.08 III-C 29.47 5.96 III-D 28.34 5.72 III-E 28.16 6.08 III-F 30.07 6.22 III-G 30.17 6.15
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5. QUARTERLY FINANCIAL DATA (Unaudited)
Summarized unaudited quarterly financial data for 2000 and 1999 are as follows:
III-A Partnership -----------------
-------------------------------------------------------- First Second Third Fourth Quarter Quarter Quarter Quarter --------- --------- ---------- --------
Total Revenues $659,856 $898,662 $1,116,537 $1,469,891 Gross Profit (1) 440,708 665,684 874,985 1,310,358 Net Income 248,632 497,207 693,305 1,260,648 Limited Partners' Net Income Per Unit .88 1.67 2.26 4.37
--------------------------------------------------------- First Second Third Fourth Quarter Quarter Quarter Quarter --------- --------- ---------- --------
Total Revenues $422,681 $515,829 $597,142 $547,332 Gross Profit (1) 271,183 400,350 444,239 381,455 Net Income 57,205 215,604 264,407 234,583 Limited Partners' Net Income Per Unit .19 .76 .93 .84
- ------------------ (1) Total revenues less oil and gas production expenses.
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III-B Partnership -----------------
------------------------------------------------------ First Second Third Fourth Quarter Quarter Quarter Quarter --------- --------- --------- --------
Total Revenues $455,515 $531,702 $675,453 $814,438 Gross Profit (1) 320,227 391,599 519,487 720,514 Net Income 214,011 300,566 418,714 695,619 Limited Partners' Net Income Per Unit 1.26 1.80 2.51 4.30
------------------------------------------------------- First Second Third Fourth Quarter Quarter Quarter Quarter --------- --------- --------- --------
Total Revenues $223,189 $279,849 $381,358 $380,911 Gross Profit (1) 123,912 213,449 284,064 296,963 Net Income 14,394 116,698 181,819 214,975 Limited Partners' Net Income .03 .66 1.05 1.28 Per Unit
- -------------------- (1) Total revenues less oil and gas production expenses.
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III-C Partnership -----------------
------------------------------------------------------- First Second Third Fourth Quarter Quarter Quarter Quarter --------- --------- --------- --------
Total Revenues $728,078 $942,965 $1,125,883 $1,455,642 Gross Profit (1) 527,295 772,897 892,295 1,081,257 Net Income 338,583 621,526 721,923 1,016,070 Limited Partners' Net Income Per Unit 1.30 2.41 2.79 3.95
------------------------------------------------------- First Second Third Fourth Quarter Quarter Quarter Quarter --------- --------- --------- --------
Total Revenues $472,639 $590,555 $704,483 $ 692,126 Gross Profit (1) 313,098 457,132 528,761 609,782 Net Income 97,259 268,443 341,798 421,001 Limited Partners' Net Income Per Unit .36 1.02 1.31 1.62
- -------------------- (1) Total revenues less oil and gas production expenses.
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III-D Partnership -----------------
------------------------------------------------------- First Second Third Fourth Quarter Quarter Quarter Quarter -------- --------- --------- -------
Total Revenues $836,099 $699,860 $824,520 $961,560 Gross Profit (1) 620,659 531,985 618,260 655,572 Net Income 522,188 452,016 530,203 498,359 Limited Partners' Net Income Per Unit 3.77 3.27 3.83 3.58
------------------------------------------------------- First Second Third Fourth Quarter Quarter Quarter Quarter -------- --------- --------- -------
Total Revenues $394,998 $475,021 $545,489 $600,178 Gross Profit (1) 198,880 326,323 368,536 417,896 Net Income 73,977 217,117 266,455 367,740 Limited Partners' Net Income Per Unit .51 1.56 1.91 2.66
- ---------------------- (1) Total revenues less oil and gas production expenses.
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III-E Partnership -----------------
------------------------------------------------------ First Second Third Fourth Quarter Quarter Quarter Quarter -------- ---------- --------- -------
Total Revenues $3,791,774 $2,619,019 $2,508,516 $2,969,886 Gross Profit (1) 2,842,907 1,789,356 1,643,189 1,961,236 Net Income 2,576,370 1,559,810 1,423,014 1,771,391 Limited Partners' Net Income Per Unit 5.84 3.54 3.22 4.02
------------------------------------------------------- First Second Third Fourth Quarter Quarter Quarter Quarter -------- --------- --------- -------
Total Revenues $1,176,115 $1,513,877 $1,883,853 $2,500,078 Gross Profit (1) 182,620 745,018 993,218 1,195,668 Net Income (Loss) (114,304) 480,868 736,591 1,037,818 Limited Partners' Net Income (Loss) (.27) 1.08 1.66 2.35 Per Unit
- ---------------------------- (1) Total revenues less oil and gas production expenses.
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III-F Partnership -----------------
------------------------------------------------------- First Second Third Fourth Quarter Quarter Quarter Quarter -------- --------- --------- -------
Total Revenues $815,190 $1,028,017 $731,451 $1,169,034 Gross Profit (1) 569,885 820,395 528,604 957,573 Net Income 377,397 663,401 387,177 839,827 Limited Partners' Net Income Per Unit 1.60 2.83 1.65 3.59
------------------------------------------------------- First Second Third Fourth Quarter Quarter Quarter Quarter -------- --------- --------- -------
Total Revenues $441,458 $485,968 $720,161 $819,841 Gross Profit (1) 223,706 183,585 488,227 645,800 Net Income 8,273 (1,997) 283,129 570,791 Limited Partners' Net Income Per Unit .01 (.03) 1.19 2.45
- ----------------------- (1) Total revenues less oil and gas production expenses.
III-G Partnership -----------------
------------------------------------------------------- First Second Third Fourth Quarter Quarter Quarter Quarter -------- --------- --------- -------
Total Revenues $489,944 $664,837 $478,149 $675,133 Gross Profit (1) 332,001 532,654 352,629 538,539 Net Income 236,332 451,433 279,426 469,854 Limited Partners' Net Income Per Unit 1.83 3.50 2.17 3.65
------------------------------------------------------- First Second Third Fourth Quarter Quarter Quarter Quarter -------- --------- --------- -------
Total Revenues $267,877 $298,417 $455,968 $550,079 Gross Profit (1) 113,424 100,848 311,887 452,271 Net Income (Loss) (12,843) (7,647) 188,709 459,227 Limited Partners' Net Income (.13) (.08) 1.44 3.59 Per Unit
- --------------------- (1) Total revenues less oil and gas production expenses.
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INDEX TO EXHIBITS -----------------
Number Description - ------ -----------
4.1 Agreement of Limited Partnership dated November 17, 1989 for Geodyne Energy Income Limited Partnership III-A filed as Exhibit 4.1 to Registrant's Annual Report on Form 10-K for the year ended December 31, 1999, filed with the SEC on February 25, 2000, and is hereby incorporated by reference.
4.2 Agreement of Limited Partnership dated January 24, 1990 for Geodyne Energy Income Limited Partnership III-B filed as Exhibit 4.2 to Registrant's Annual Report on Form 10-K for the year ended December 31, 1999, filed with the SEC on February 25, 2000, and is hereby incorporated by reference.
4.3 Agreement of Limited Partnership dated February 26, 1990 for Geodyne Energy Income Limited Partnership III-C filed as Exhibit 4.3 to Registrant's Annual Report on Form 10-K for the year ended December 31, 1999, filed with the SEC on February 25, 2000, and is hereby incorporated by reference.
*4.4 Agreement of Limited Partnership dated September 5, 1990 for Geodyne Energy Income Limited Partnership III-D.
*4.5 Agreement of Limited Partnership dated December 26, 1990 for Geodyne Energy Income Limited Partnership III-E.
*4.6 Agreement of Limited Partnership dated March 7, 1991 for Geodyne Energy Income Limited Partnership III-F.
*4.7 Agreement of Limited Partnership dated September 20, 1991 for Geodyne Energy Income Limited Partnership III-G.
4.8 First Amendment to Certificate of Limited Partnership and First Amendment to Agreement of Limited Partnership dated February 24, 1993 for Geodyne Energy Income Limited Partnership III-A filed as Exhibit 4.5 to Registrant's Annual Report on Form 10-K for the year ended December 31, 1999, filed with the SEC on February 25, 2000, and is hereby incorporated by reference.
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4.9 First Amendment to Certificate of Limited Partnership and First Amendment to Agreement of Limited Partnership dated February 24, 1993 for Geodyne Energy Income Limited Partnership III-B filed as Exhibit 4.6 to Registrant's Annual Report on Form 10-K for the year ended December 31, 1999, filed with the SEC on February 25, 2000, and is hereby incorporated by reference.
4.10 First Amendment to Certificate of Limited Partnership and First Amendment to Agreement of Limited Partnership dated February 24, 1993 for Geodyne Energy Income Limited Partnership III-C filed as Exhibit 4.7 to Registrant's Annual Report on Form 10-K for the year ended December 31, 1999, filed with the SEC on February 25, 2000, and is hereby incorporated by reference.
*4.11 First Amendment to Certificate of Limited Partnership and First Amendment to Agreement of Limited Partnership dated February 24, 1993 for Geodyne Energy Income Limited Partnership III-D.
*4.12 First Amendment to Certificate of Limited Partnership and First Amendment to Agreement of Limited Partnership dated February 24, 1993 for Geodyne Energy Income Limited Partnership III-E.
*4.13 First Amendment to Certificate of Limited Partnership and First Amendment to Agreement of Limited Partnership dated February 24, 1993 for Geodyne Energy Income Limited Partnership III-F.
*4.14 First Amendment to Certificate of Limited Partnership and First Amendment to Agreement of Limited Partnership dated February 24, 1993 for Geodyne Energy Income Limited Partnership III-G.
4.15 Second Amendment to Agreement of Limited Partnership dated August 4, 1993 for Geodyne Energy Income Limited Partnership III-A filed as Exhibit 4.8 to Registrant's Annual Report on Form 10-K for the year ended December 31, 1999, filed with the SEC on February 25, 2000, and is hereby incorporated by reference.
4.16 Second Amendment to Agreement of Limited Partnership dated August 4, 1993 for Geodyne Energy Income Limited Partnership III-B filed as Exhibit 4.9 to Registrant's Annual Report on Form 10-K for the year ended December 31, 1999, filed with the SEC on February 25, 2000, and is hereby incorporated by reference.
4.17 Second Amendment to Agreement of Limited Partnership dated August 4, 1993 for Geodyne Energy Income Limited Partnership III-C filed as Exhibit 4.19 to Registrant's Annual Report on Form 10-K for the year ended December
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31, 1999, filed with the SEC on February 25, 2000, and is hereby incorporated by reference.
*4.18 Second Amendment to Agreement of Limited Partnership dated August 4, 1993 for Geodyne Energy Income Limited Partnership III-D.
*4.19 Second Amendment to Agreement of Limited Partnership dated August 4, 1993 for Geodyne Energy Income Limited Partnership III-E.
*4.20 Second Amendment to Agreement of Limited Partnership dated August 4, 1993 for Geodyne Energy Income Limited Partnership III-F.
*4.21 Second Amendment to Agreement of Limited Partnership dated August 4, 1993 for Geodyne Energy Income Limited Partnership III-G.
4.22 Third Amendment to Agreement of Limited Partnership dated August 31, 1995 for Geodyne Energy Income Limited Partnership III-A filed as Exhibit 4.15 to Registrant's Annual Report on Form 10-K for the year ended December 31, 1999, filed with the SEC on February 25, 2000, and is hereby incorporated by reference.
4.23 Third Amendment to Agreement of Limited Partnership dated August 31, 1995 for Geodyne Energy Income Limited Partnership III-B filed as Exhibit 4.16 to Registrant's Annual Report on Form 10-K for the year ended December 31, 1999, filed with the SEC on February 25, 2000, and is hereby incorporated by reference.
4.24 Third Amendment to Agreement of Limited Partnership dated August 31, 1995 for Geodyne Energy Income Limited Partnership III-C filed as Exhibit 4.17 to Registrant's Annual Report on Form 10-K for the year ended December 31, 1999, filed with the SEC on February 25, 2000, and is hereby incorporated by reference.
*4.25 Third Amendment to Agreement of Limited Partnership dated August 31, 1995 for Geodyne Energy Income Limited Partnership III-D.
*4.26 Third Amendment to Agreement of Limited Partnership dated August 31, 1995 for Geodyne Energy Income Limited Partnership III-E.
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*4.27 Third Amendment to Agreement of Limited Partnership dated August 31, 1995 for Geodyne Energy Income Limited Partnership III-F.
*4.28 Third Amendment to Agreement of Limited Partnership dated August 31, 1995 for Geodyne Energy Income Limited Partnership III-G.
4.29 Fourth Amendment to Agreement of Limited Partnership dated July 1, 1996 for Geodyne Energy Income Limited Partnership III-A filed as Exhibit 4.22 to Registrant's Annual Report on Form 10-K for the year ended December 31, 1999, filed with the SEC on February 25, 2000, and is hereby incorporated by reference.
4.30 Fourth Amendment to Agreement of Limited Partnership dated July 1, 1996 for Geodyne Energy Income Limited Partnership III-B filed as Exhibit 4.23 to Registrant's Annual Report on Form 10-K for the year ended December 31, 1999, filed with the SEC on February 25, 2000, and is hereby incorporated by reference.
4.31 Fourth Amendment to Agreement of Limited Partnership dated July 1, 1996 for Geodyne Energy Income Limited Partnership III-C filed as Exhibit 4.24 to Registrant's Annual Report on Form 10-K for the year ended December 31, 1999, filed with the SEC on February 25, 2000, and is hereby incorporated by reference.
*4.32 Fourth Amendment to Agreement of Limited Partnership dated July 1, 1996 for the Geodyne Energy Income Limited Partnership III-D.
*4.33 Fourth Amendment to Agreement of Limited Partnership dated July 1, 1996 for the Geodyne Energy Income Limited Partnership III-E.
*4.34 Fourth Amendment to Agreement of Limited Partnership dated July 1, 1996 for the Geodyne Energy Income Limited Partnership III-F.
*4.35 Fourth Amendment to Agreement of Limited Partnership dated July 1, 1996 for the Geodyne Energy Income Limited Partnership III-G.
4.36 Fifth Amendment to Agreement of Limited Partnership dated November 15, 1999 for Geodyne Energy Income Limited Partnership III-A filed as Exhibit 4.25 to Registrant's Annual Report on Form 10-K for the year ended December 31, 1999, filed with the SEC on February 25, 2000, and is hereby incorporated by reference.
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4.37 Fifth Amendment to Agreement of Limited Partnership dated December 30, 1999 for Geodyne Energy Income Limited Partnership III-B filed as Exhibit 4.26 to Registrant's Annual Report on Form 10-K for the year ended December 31, 1999, filed with the SEC on February 25, 2000, and is hereby incorporated by reference.
4.38 Fifth Amendment to Agreement of Limited Partnership dated December 30, 1999 for Geodyne Energy Income Limited Partnership III-C filed as Exhibit 4.27 to Registrant's Annual Report on Form 10-K for the year ended December 31, 1999, filed with the SEC on February 25, 2000, and is hereby incorporated by reference.
*4.39 Fifth Amendment to Agreement of Limited Partnership dated August 23, 2000 for the Geodyne Energy Income Limited Partnership III-D.
*4.40 Fifth Amendment to Agreement of Limited Partnership dated November 15, 2000 for the Geodyne Energy Income Limited Partnership III-E.
*4.41 Fifth Amendment to Agreement of Limited Partnership dated February 5, 2001 for the Geodyne Energy Income Limited Partnership III-F.
*23.1 Consent of Ryder Scott Company, L.P. for Geodyne Energy Income Limited Partnership III-A.
*23.2 Consent of Ryder Scott Company, L.P. for Geodyne Energy Income Limited Partnership III-B.
*23.3 Consent of Ryder Scott Company, L.P. for Geodyne Energy Income Limited Partnership III-C.
*23.4 Consent of Ryder Scott Company, L.P. for Geodyne Energy Income Limited Partnership III-D.
*23.5 Consent of Ryder Scott Company, L.P. for Geodyne Energy Income Limited Partnership III-E.
*23.6 Consent of Ryder Scott Company, L.P. for Geodyne Energy Income Limited Partnership III-F.
*23.7 Consent of Ryder Scott Company, L.P. for Geodyne Energy Income Limited Partnership III-G.
All other Exhibits are omitted as inapplicable.
----------
* Filed herewith.
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