ITEM 1. BUSINESS
General
The Geodyne Institutional/Pension Energy Income P-1 Limited Partnership (the "P-1 Partnership") is a limited partnership formed under the Texas Revised Limited Partnership Act and the Geodyne Institutional/Pension Energy Income Limited Partnership P-3 (the "P-3 Partnership"), Geodyne Institutional/Pension Energy Income Limited Partnership P-4 (the "P-4 Partnership"), Geodyne Institutional/Pension Energy Income Limited Partnership P-5 (the "P-5 Partnership"), and Geodyne Institutional/Pension Energy Income Limited Partnership P-6 (the "P-6 Partnership") are limited partnerships formed under the Oklahoma Revised Uniform Limited Partnership Act (collectively, the "Partnerships"). Each Partnership is composed of Geodyne Resources, Inc. ("Geodyne"), a Delaware corporation, as the general partner, Geodyne Institutional Depository 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 ----------- -----------------
P-1 October 25, 1988 P-3 May 10, 1989 P-4 November 21, 1989 P-5 February 27, 1990 P-6 September 5, 1990
Immediately following activation, each Partnership invested as a general partner in a separate Oklahoma general partnership which actually conducts the Partnerships' operations. Geodyne serves as managing partner of such general partnerships. Unless the context indicates otherwise, all references to any single Partnership or all of the Partnerships in this Annual Report on Form 10-K ("Annual Report") are references to the Partnership and its related general partnership, collectively. In addition, unless the context indicates otherwise, all references to the "General Partner" in this Annual Report are references to Geodyne as the general partner of the Partnerships, and as the managing partner of the related general partnerships.
The General Partner currently serves as general partner of 26 limited partnerships, including the Partnerships. The General Partner 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, 2004, Samson owned interests in approximately 16,000 oil
and gas wells located in 18 states of the United States and the countries of Canada, Venezuela, and Australia. At December 31, 2004, Samson operated approximately 5,000 oil and gas wells located in 14 states of the United States, as well as Canada, Venezuela, and Australia.
The Partnerships are currently engaged in the business of owning net profits and royalty interests in oil and gas properties located in the continental United States. Most of the net profits interests acquired by the Partnerships have been carved out of working interests in producing properties ("Working Interests") which were acquired by affiliated oil and gas investment programs (the "Affiliated Programs"). Net profits interests entitle the Partnerships to a share of net revenues from producing properties measured by a specific percentage of the net profits realized by such Affiliated Programs on those properties. Except where otherwise noted, references to certain operational activities of the Partnerships are actually the activities of the Affiliated Programs. As the holder of a net profits interest, a Partnership is not liable to pay any amount by which oil and gas operating costs and expenses exceed revenues for any period, although any deficit, together with interest, is applied to reduce the amounts payable to the Partnership in subsequent periods. As used throughout this Annual Report, the Partnerships' net profits and royalty interests in oil and gas sales will be referred to as "Net Profits" and the Partnerships' net profits and royalty interests in oil and gas properties will be collectively referred to as "Net Profits Interests."
In order to prudently manage the properties which are burdened by the Partnerships' Net Profits Interests, it may be appropriate for drilling operations to be conducted on such properties. Since the Partnerships' Net Profits are calculated after considering such costs, the Partnerships also indirectly engage in development drilling.
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, 2005, Samson employed approximately 1,100 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 are scheduled to terminate on December 31, 2005. However, the Partnership Agreements provide that the General Partner may extend the term of each Partnership for up to five periods of two years each. The General Partner has not yet determined whether it will extend the terms of any of the Partnerships.
Funding
Although the partnership agreement for each Partnership (the "Partnership Agreement") permits each Partnership to incur borrowings, operations and expenses are currently funded out of revenues from each Partnership's Net Profits Interests. 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 holding of certain Net Profits Interests. The Partnerships do not refine or otherwise process crude oil and condensate. The Partnerships do not hold any patents, trademarks, licenses, or concessions and are not a party to any government contracts. The Partnerships have no backlog of orders and do not participate in research and development activities. The Partnerships are not presently encountering shortages of oilfield tubular goods, compressors, production material, or other equipment. However, substantial increases in the price of steel may increase the costs of any future workover, recompletion or drilling activities indirectly conducted by the Partnerships.
Competition and Marketing
The primary source of liquidity and Partnership cash distributions comes from the net revenues generated from the sale of oil and gas produced from the Partnerships' oil and gas properties. The level of net revenues is highly dependent upon the total volumes of oil and natural gas sold. Oil and gas reserves are depleting assets and will experience production declines over time, thereby likely resulting in reduced net revenues. The level of net revenues is also highly dependent upon the prices received for oil and gas sales, which prices have historically been very volatile and may continue to be so.
Additionally, lower oil and natural gas prices may reduce the amount of oil and gas that is economic to produce and reduce the Partnerships' revenues and cash flow. Various factors beyond the Partnerships' control will affect prices for oil and natural gas, such as:
* Worldwide and domestic supplies of oil and natural gas; * The ability of the members of the Organization of Petroleum Exporting Countries ("OPEC") to agree upon and maintain oil prices and production quotas; * Political instability or armed conflict in oil-producing regions or around major shipping areas; * The level of consumer demand and overall economic activity; * The competitiveness of alternative fuels; * Weather conditions; * The availability of pipelines for transportation; and
* Domestic and foreign government regulations and taxes.
It is not possible to predict the future direction of oil or natural gas prices or whether the above discussed trends will remain. Operating costs, including General and Administrative Expenses, may not decline over time or may experience only a gradual decline, thus adversely affecting net revenues as either production or oil and natural gas prices decline. In any particular period, net revenues may also be affected by either the receipt of proceeds from property sales or the incursion of additional costs as a result of well workovers, recompletions, new well drilling, and other events.
Significant Customers
The following customers accounted for ten percent or more of the oil and gas sales attributable to the Partnerships' Net Profits Interests during the year ended December 31, 2004:
Partnership Customer Percentage ----------- ----------------------------- ----------
P-1 Cinergy Marketing ("Cinergy") 13.2% Duke Energy Field Services, Inc. 11.5% ("Duke") Chevron U.S.A., Inc. 11.3%
P-3 Duke 14.9% Cinergy 12.0%
P-4 Eaglwing Trading, Inc. 25.3% Gulfterra Central Point Alloc. 11.4%
P-5 Enogex Services Corporation 20.2% Cinergy 16.1% ONEOK Texas Energy Resources 14.6% ("ONEOK") Duke 11.5%
P-6 Duke 23.1% Kinder Morgan, Inc. 19.5% ONEOK 11.1%
In the event of interruption of purchases by one or more of these significant customers or the cessation or material change in availability of open access transportation by pipeline transporters, the Partnerships may encounter difficulty in marketing 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 in which the Partnerships own Net Profits Interests. 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 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. Although virtually all of the natural gas production affecting the Partnerships 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' Net Profits and projections of future Net Profits.
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 - Oil and gas 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 decrease the Partnerships' Net Profits. Management anticipates that various local, state, and federal environmental control agencies will have an increasing impact on oil and gas operations.
Insurance Coverage
Exploration for and production of oil and gas are subject to many inherent risks, including blowouts, pollution, fires, and other casualties. The Partnerships maintain insurance coverage as is
customary for entities of a similar size engaged in similar operations, but losses can occur from uninsurable risks or in amounts in excess of existing insurance coverage. In particular, many types of pollution and contamination can exist, undiscovered, for long periods of time and can result in substantial environmental liabilities which are not insured. The occurrence of an event which is not fully covered by insurance could have a material adverse effect on the Partnerships' financial condition and results of operations in that it could negatively impact the cash flow received from the Net Profits Interests.
ITEM 2.
ITEM 2. PROPERTIES
Well Statistics
The following table sets forth the number of productive wells as of December 31, 2004 in which the Partnerships had a Net Profits Interest which was carved from a working interest.
P/ship Number of Wells(1) ------ --------------------------- Total Oil Gas ----- --- ---
P-1 828 607 221 P-3 873 609 264 P-4 218 50 168 P-5 95 17 78 P-6 153 37 116
- ---------------
(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.
Drilling Activities
During the year ended December 31, 2004, the Partnerships indirectly participated (through their Net Profits Interests) in the developmental drilling activities described below.
P-1 Partnership Revenue Well Name County St. Interest Type Status - ------------------ -------- --- -------- ---- ----------- Wilson A-#2 Roger OK 0.0002 Gas Producing Mills Bryant #5-44 Wheeler TX 0.0023 Gas Producing Black Tiger #1 Seminole OK 0.0038 Oil Producing Armstrong #1-640.5H Dimmit TX 0.0075 N/A Shut-in Ward #17-1 Howard TX 0.0075 Gas Producing
Hill, Wess #13 Sutton TX 0.0002 Gas Producing Davis, N B #16 Sutton TX 0.0005 Gas Producing Miers, W A #17 Sutton TX 0.0002 Gas Producing Hill, Wess #14 Sutton TX 0.0002 Gas Producing Garner 12 #1 Terrell TX 0.0031 Gas Producing Emperor #24-1 (RY) Winkler TX 0.0011 Gas Producing Hill, Wess #16 Sutton TX 0.0002 Gas Producing Hill, Wess #15 Sutton TX 0.0002 Gas Producing Cox 27 #3 (RY) Upton TX 0.0068 Gas Producing Andrews Waterflood Andrews TX 0.0021 Oil Producing Unit (3 new wells) Resler B3 (RY) Lea NM 0.0009 Oil Producing Resler B2 (RY) Lea NM 0.0009 Oil Producing Resler A1 (RY) Lea NM 0.0009 Oil Producing Neal 30 #1 (RY) Upton TX 0.0013 Oil Producing Re-Entry Taylor 17 #1 Howard TX 0.0060 N/A In Progress Owens 17 #1 Crockett TX 0.0075 N/A Dry Hole Hardy Percy #9 & Lea NM 0.0030 Oil Producing #10
P-3 Partnership Revenue Well Name County St. Interest Type Status - ------------------ -------- --- -------- ---- ----------- Wilson A-#2 Roger OK 0.0002 Gas Producing Mills Bryant #5-44 Wheeler TX 0.0028 Gas Producing Black Tiger #1 Seminole OK 0.0047 Oil Producing Armstrong #1-640.5H Dimmit TX 0.0095 N/A Shut-in Ward #17-1 Howard TX 0.0095 Gas Producing Hill, Wess #13 Sutton TX 0.0003 Gas Producing Davis, N B #16 Sutton TX 0.0006 Gas Producing Miers, W A #17 Sutton TX 0.0003 Gas Producing Hill, Wess #14 Sutton TX 0.0003 Gas Producing Garner 12 #1 Terrell TX 0.0039 Gas Producing Emperor #24-1 (RY) Winkler TX 0.0014 Gas Producing Hill, Wess #16 Sutton TX 0.0003 Gas Producing Hill, Wess #15 Sutton TX 0.0003 Gas Producing Cox 27 #3 (RY) Upton TX 0.0086 Gas Producing Andrews Waterflood Andrews TX 0.0026 Oil Producing Unit (3 new wells) Resler B3 (RY) Lea NM 0.0006 Oil Producing Resler B2 (RY) Lea NM 0.0006 Oil Producing Resler A1 (RY) Lea NM 0.0006 Oil Producing Neal 30 #1 (RY) Upton TX 0.0017 Oil Producing Re-Entry Taylor 17 #1 Howard TX 0.0076 N/A In Progress Owens 17 #1 Crockett TX 0.0095 N/A Dry Hole Tribal C 4B Rio NM 0.0001 Gas Producing Arriba Jenney #1B Rio NM 0.0004 N/A In Progress Arriba
Hoyt #2C Rio NM 0.0000 N/A Shut-in (MV/Dakota) Arriba Hardy Percy #9 & Lea NM 0.0038 Oil Producing #10
P-4 Partnership Revenue Well Name County St. Interest Type Status - ------------------- -------- --- -------- ---- ----------- Lorenz #7-7 Washita OK 0.0002 Gas Producing Rancho Blanco #30 Webb TX 0.0029 Gas Producing Tribal C 4B Rio NM 0.0002 Gas Producing Arriba Jenney #1B Rio NM 0.0007 N/A In Progress Arriba Hoyt #2C Rio NM 0.0001 N/A Shut-in (MV/Dakota) Arriba
P-5 Partnership Revenue Well Name County St. Interest Type Status - ------------------- --------- --- -------- ---- ----------- Lawles #1-21 Caddo OK 0.0016 Gas Producing Thomas #4-5 Harper OK 0.0004 Gas Shut-in Pinkerton #1-6 Blaine OK 0.0004 Gas Producing Sophia #2 Wheeler TX 0.0016 Gas Producing Shonda #1-14 (RY) Grady OK 0.0027 Gas Producing Wooley Carlene 4 #1 Roger OK 0.0001 Gas Producing (RY) Mills Fresca #1-24 Roger OK 0.0041 Gas Producing Mills BK #5-11 Washita OK 0.0002 Gas Producing Mickey #3-34 Pittsburg OK 0.0012 Gas Producing Pluto #3-26 Pittsburg OK 0.0012 Gas Producing Greer #1 Pittsburg OK 0.0092 Gas Shut-in Yates #1-33 Pittsburg OK 0.0065 Gas Shut-in Mickey #2-34 Pittsburg OK 0.0012 Gas Producing Verner #1-3 (RY) Pittsburg OK 0.0031 Gas Producing McWilliams #1-23 Pittsburg OK 0.0003 Gas Producing Viets, #2N Noble OK 0.0033 Gas In Progress Summers #1-27D Hughes OK 0.0025 Gas Producing Summers #1H-27 Hughes OK 0.0025 Gas Shut-in Sellers #3-35 Hughes OK 0.0036 Gas Producing Davis Garry 20 (RY) Kay OK 0.0007 Oil Producing Davis Garry 21 (RY) Kay OK 0.0007 Oil Producing Loving 1 State #4 Eddy NM 0.0054 Gas Producing Lulu #1-22 Stephens OK 0.0902 Gas Producing Renete #3-25 (RY) Stephens OK 0.0015 Gas Producing Higgins #2H-10 Roger OK 0.0009 Gas Producing Mills
P-6 Partnership Revenue Well Name County St. Interest Type Status - ------------------- --------- --- -------- ---- ----------- Lawles #1-21 Caddo OK 0.0005 Gas Producing Thomas #4-5 Harper OK 0.0001 Gas Shut-in Pinkerton #1-6 Blaine OK 0.0013 Gas Producing Sophia #2 Wheeler TX 0.0018 Gas Producing Shonda #1-14 (RY) Grady OK 0.0009 Gas Producing Wooley Carlene 4 #1 Roger OK 0.0000 Gas Producing (RY) Mills Fresca #1-24 Roger OK 0.0014 Gas Producing Mills BK #5-11 Washita OK 0.0001 Gas Producing Mickey #3-34 Pittsburg OK 0.0004 Gas Producing Pluto #3-26 Pittsburg OK 0.0004 Gas Producing Greer #1 Pittsburg OK 0.0032 Gas Shut-in Yates #1-33 Pittsburg OK 0.0022 Gas Shut-in Mickey #2-34 Pittsburg OK 0.0004 Gas Producing Verner #1-3 (RY) Pittsburg OK 0.0011 Gas Producing McWilliams #1-23 Pittsburg OK 0.0001 Gas Producing Viets, #2N Noble OK 0.0011 Gas In Progress Summers #1-27D Hughes OK 0.0008 Gas Producing Summers #1H-27 Hughes OK 0.0008 Gas Shut-in Sellers #3-35 Hughes OK 0.0012 Gas Producing Davis Garry 20 (RY) Kay OK 0.0002 Oil Producing Davis Garry 21 (RY) Kay OK 0.0002 Oil Producing Loving 1 State #4 Eddy NM 0.0058 Gas Producing Hayden 5175-27- Campbell WY 0.0026 Gas Shut-in 11WA St 5175-16-11CA Campbell WY 0.0000 Gas Shut-in St 5175-16-23CA Campbell WY 0.0000 N/A Shut-in St 5175-16-31CA Campbell WY 0.0000 N/A Shut-in St 5175-16-33CA Campbell WY 0.0000 N/A Shut-in St 5175-16-43CA Campbell WY 0.0000 N/A Shut-in St 5175-16-41CA Campbell WY 0.0000 N/A Shut-in St 5175-16-21CA Campbell WY 0.0000 N/A Shut-in St 5175-16-13CA Campbell WY 0.0000 N/A Shut-in St 5175-16-13WA Campbell WY 0.0000 N/A Shut-in St 5175-16-21WA Campbell WY 0.0000 N/A Shut-in St 5175-16-31WA Campbell WY 0.0000 N/A Shut-in St 5175-16-33WA Campbell WY 0.0000 N/A Shut-in St 5175-16-41WA Campbell WY 0.0000 N/A Shut-in St 5175-16-43WA Campbell WY 0.0000 N/A Shut-in Lulu #1-22 Stephens OK 0.0309 Gas Producing Renete #3-25 (RY) Stephens OK 0.0005 Gas Producing Higgins #2H-10 Roger OK 0.0003 Gas Producing Mills Hayden 5175-27- Campbell WY 0.0026 Oil Shut-in 43CA - ----------------------
Oil and Gas Production, Revenue, and Price History
The following tables set forth certain historical information concerning the oil (including condensates) and gas production attributable to the Partnerships' Net Profits Interests, revenues attributable to such production, and certain price information.
Net Production Data
P-1 Partnership ---------------
Year Ended December 31, ---------------------------------------- 2004 2003 2002 ---------- ---------- ----------
Production: Oil (Bbls) 19,377 18,624 20,652 Gas (Mcf) 251,793 284,754 286,109
Oil and gas sales(1): Oil $ 704,557 $ 528,059 $ 490,488 Gas 1,164,552 1,211,241 767,070 --------- --------- --------- Total $1,869,109 $1,739,300 $1,257,558 ========= ========= ========= Average sales price: Per barrel of oil $36.36 $28.35 $23.75 Per Mcf of gas 4.63 4.25 2.68
- ---------- (1) These amounts differ from the Net Profits included in the P-1 Partnership's financial statements because they do not reflect the offset of $388,324, $369,142, and $264,289, respectively, of production expenses incurred by the Affiliated Programs.
Net Production Data
P-3 Partnership ---------------
Year Ended December 31, ---------------------------------------- 2004 2003 2002 ---------- ---------- ----------
Production: Oil (Bbls) 24,925 23,935 26,541 Gas (Mcf) 389,500 425,803 433,484
Oil and gas sales(1): Oil $ 907,837 $ 679,074 $ 630,058 Gas 1,871,173 1,868,433 1,190,447 --------- --------- --------- Total $2,779,010 $2,547,507 $1,820,505 ========= ========= ========= Average sales price: Per barrel of oil $36.42 $28.37 $23.74 Per Mcf of gas 4.80 4.39 2.75
- ---------- (1) These amounts differ from the Net Profits included in the P-3 Partnership's financial statements because they do not reflect the offset of $592,061, $554,400, and $409,030, respectively, of production expenses incurred by the Affiliated Programs.
Net Production Data
P-4 Partnership ---------------
Year Ended December 31, ---------------------------------------- 2004 2003 2002 ---------- ---------- ----------
Production: Oil (Bbls) 17,687 21,439 26,054 Gas (Mcf) 238,451 258,598 444,617
Oil and gas sales(1): Oil $ 705,893 $ 635,920 $ 630,272 Gas 1,372,022 1,347,340 1,257,617 --------- --------- --------- Total $2,077,915 $1,983,260 $1,887,889 ========= ========= ========= Average sales price: Per barrel of oil $39.91 $29.66 $24.19 Per Mcf of gas 5.75 5.21 2.83
- ---------- (1) These amounts differ from the Net Profits included in the P-4 Partnership's financial statements because they do not reflect the offset of $410,727, $410,201, and $455,891, respectively, of production expenses incurred by the Affiliated Programs.
Net Production Data
P-5 Partnership ---------------
Year Ended December 31, ---------------------------------------- 2004 2003 2002 ---------- ---------- ----------
Production: Oil (Bbls) 4,603 6,364 6,223 Gas (Mcf) 282,972 313,632 386,565
Oil and gas sales(1): Oil $ 176,939 $ 190,969 $ 150,253 Gas 1,436,877 1,455,150 1,102,856 --------- --------- --------- Total $1,613,816 $1,646,119 $1,253,109 ========= ========= ========= Average sales price: Per barrel of oil $38.44 $30.01 $24.14 Per Mcf of gas 5.08 4.64 2.85
- ---------- (1) These amounts differ from the Net Profits included in the P-5 Partnership's financial statements because they do not reflect the offset of $366,826, $365,469, and $367,327, respectively, of production expenses incurred by the Affiliated Programs.
Net Production Data
P-6 Partnership ---------------
Year Ended December 31, ---------------------------------------- 2004 2003 2002 ---------- ---------- ----------
Production: Oil (Bbls) 7,824 15,939 15,089 Gas (Mcf) 446,505 577,123 636,758
Oil and gas sales(1): Oil $ 336,481 $ 460,400 $ 355,875 Gas 2,382,090 2,638,742 1,840,127 --------- --------- --------- Total $2,718,571 $3,099,142 $2,196,002 ========= ========= ========= Average sales price: Per barrel of oil $43.01 $28.89 $23.59 Per Mcf of gas 5.33 4.57 2.89
- ---------- (1) These amounts differ from the Net Profits included in the P-6 Partnership's financial statements because they do not reflect the offset of $854,325, $751,876, and $719,751, respectively, of production expenses incurred by the Affiliated Programs.
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, 2004 which were attributable to the Partnerships' Net Profits Interests. 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, 2004. Such prices were not escalated except in certain circumstances where escalations were fixed and readily determinable in accordance with applicable contract provisions. Oil and gas prices at December 31, 2004 ($43.36 per barrel and $6.02 per Mcf, respectively) were higher than the prices in effect on December 31, 2003 ($29.25 per barrel and $5.77 per Mcf, respectively). This increase in oil and gas prices has caused the estimates of remaining economically recoverable reserves, as well as the values placed on said reserves, at December 31, 2004 to be higher than such estimates and values at December 31, 2003. 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, 2004. There can be no assurance that the prices used in calculating the net present value of the Partnerships' proved reserves at December 31, 2004 will actually be realized for such production.
The process of estimating oil and gas reserves is complex, requiring significant subjective decisions in the evaluation of available geological, engineering, and economic data for each reservoir. The data for a given reservoir may change substantially over time as a result of, among other things, additional development activity, production history, and viability of production under varying economic conditions; consequently, it is reasonably possible that material revisions to existing reserve estimates may occur in the near future. Although every reasonable effort has been made to ensure that these reserve estimates represent the most accurate assessment possible, the significance of the subjective decisions required and variances in available data for various reservoirs make these estimates generally less precise than other estimates presented in connection with financial statement disclosures.
Proved Reserves and Net Present Values From Proved Reserves
As of December 31, 2004(1)
P-1 Partnership: - --------------- Estimated proved reserves: Gas (Mcf) 2,291,734 Oil and liquids (Bbls) 243,982
Net present value (discounted at 10% per annum) $ 8,498,702
P-3 Partnership: - --------------- Estimated proved reserves: Gas (Mcf) 3,610,109 Oil and liquids (Bbls) 320,365
Net present value (discounted at 10% per annum) $12,485,054
P-4 Partnership: - --------------- Estimated proved reserves: Gas (Mcf) 1,969,168 Oil and liquids (Bbls) 59,656
Net present value (discounted at 10% per annum) $ 6,180,522
P-5 Partnership: - --------------- Estimated proved reserves: Gas (Mcf) 2,130,613 Oil and liquids (Bbls) 38,157
Net present value (discounted at 10% per annum) $ 5,260,713
P-6 Partnership: - --------------- Estimated proved reserves: Gas (Mcf) 3,940,334 Oil and liquids (Bbls) 124,894
Net present value (discounted at 10% per annum) $10,217,705
- --------- (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 Partnership's 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, 2004:
Operated Wells ------------------------------ Partnership Number Percent ----------- ------ ------- P-1 32 1% P-3 56 2% P-4 21 7% P-5 94 28% P-6 138 32%
The following table sets forth certain well and reserve information for the basins in which the Partnerships own a significant amount of Net Profits Interests. The table contains the following information for each significant basin: (i) the number of wells in which a Net Profits Interest is owned, (ii) the number and percentage of wells operated by the Partnership's affiliates, (iii) estimated proved oil reserves, (iv) estimated proved gas reserves, and (v) 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, while the Gulf Coast Basin is located in southern Louisiana and southeast Texas. The Permian Basin is located in west Texas and southeast New Mexico.
Significant Properties as of December 31, 2004 -----------------------------------------------
Wells Operated by Affiliates Oil Gas Total ----------- Reserves Reserves Present Basin Wells Number %(1) (Bbl) (Mcf) Value - ------------- ----- ------ ---- -------- --------- ---------- P-1 P/ship: Permian 2,092 2 - 235,019 1,418,113 $6,085,553 Anadarko 80 26 33% 2,646 849,134 2,260,555
P-3 P/ship: Permian 2,092 2 - 296,174 1,794,653 $7,687,604 Anadarko 80 26 33% 4,464 1,331,744 3,524,970
P-4 P/ship: Gulf Coast 140 4 3% 48,835 650,836 $2,916,050 Anadarko 60 17 28% 3,368 957,356 2,463,719
P-5 P/ship: Anadarko 101 26 26% 3,773 1,288,488 $3,060,332 South. Ok. Folded Belt 36 - - 22,182 501,020 1,481,413 Permian 47 40 85% 12,059 318,072 549,836
P-6 P/ship: Anadarko 101 26 26% 2,288 1,280,184 $3,114,454 East Texas 4 3 75% 3,032 964,452 2,146,629 Gulf Coast 14 3 21% 8,680 668,178 1,980,937 South. Ok. Folded Belt 57 20 35% 89,863 296,002 1,716,976
- ------------------------------- (1) Percent of the Partnership's total wells in the basin which are operated by affiliates of the Partnership.
Title to Oil and Gas Properties
Management believes that the Partnerships have satisfactory title to their Net Profits Interests. Record title to all of the properties subject to the Partnerships' Net Profits Interests is held by either the Partnerships or Geodyne Nominee Corporation, an affiliate of the General Partner.
Title to the Partnerships' Net Profits Interests 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' Net Profits Interests 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 2004.
PART II.
ITEM 5.
ITEM 5. MARKET FOR UNITS AND RELATED LIMITED PARTNER MATTERS
As of February 28, 2005, the number of Units outstanding and the approximate number of Limited Partners of record in the Partnerships were as follows:
Number of Limited Partnership Units Partners ----------- --------- --------
P-1 108,074 690 P-3 169,637 1,180 P-4 126,306 790 P-5 118,449 870 P-6 143,041 670
Units were initially sold for a price of $100. The 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 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 purposes of this Annual Report, a Unit represents an initial subscription of $100 to a Partnership.
Repurchase Offer Prices -----------------------
2003 2004 2005 ------------------------- ------------------------- ---- 1st 2nd 3rd 4th 1st 2nd 3rd 4th 1st P/ship Qtr. Qtr. Qtr. Qtr. Qtr. Qtr. Qtr. Qtr. Qtr. - ------ ---- ---- ---- ---- ---- ---- ---- ---- ----
P-1 $19 $18 $28 $25 $22 $20 $31 $28 $25 P-3 18 17 28 25 23 20 30 27 25 P-4 17 15 22 19 17 15 24 22 19 P-5 15 13 25 21 20 18 22 20 18 P-6 21 18 32 29 26 23 30 27 25
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 its Net Profits Interests 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 2003 and 2004 and the first quarter of 2005:
Cash Distributions ------------------
----------------------------------------------- 1st 2nd 3rd 4th P/ship Quarter Quarter Quarter Quarter ------ ------- ------- ------- ------- P-1 $2.04 $1.67 $3.05 $2.79 P-3 1.80 1.51 2.82 2.49 P-4 1.81 2.41 3.27 2.58 P-5 1.15 2.12 2.31 2.58 P-6 1.16 2.73 4.43 3.49
2004 2005 ----------------------------------------------- ------- 1st 2nd 3rd 4th 1st P/ship Quarter Quarter Quarter Quarter Quarter ------ ------- ------- ------- ------- ------- P-1 $2.63 $2.89 $2.69 $2.97 $2.80 P-3 2.36 2.75 2.37 2.76 2.43 P-4 1.91 2.31 2.27 2.85 2.68 P-5 1.66 1.53 1.90 1.85 1.82 P-6 2.76 2.62 2.66 3.05 1.70
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 primary source of liquidity and Partnership cash distributions comes from the net revenues generated from the sale of oil and gas produced from the Partnerships' oil and gas properties. The level of net revenues is highly dependent upon the prices received for oil and gas sales, which prices have historically been very volatile and may continue to be so. Additionally, lower oil and natural gas prices may reduce the amount of oil and gas that is economic to produce and reduce the Partnerships' revenues and cash flow. Various factors beyond the Partnerships' control will affect prices for oil and natural gas, such as:
* Worldwide and domestic supplies of oil and natural gas; * The ability of the members of the Organization of Petroleum Exporting Countries ("OPEC") to agree upon and maintain oil prices and production quotas; * Political instability or armed conflict in oil-producing regions or around major shipping areas; * The level of consumer demand and overall economic activity; * The competitiveness of alternative fuels; * Weather conditions; * The availability of pipelines for transportation; and * Domestic and foreign government regulations and taxes.
It is not possible to predict the future direction of oil or natural gas prices or whether the above discussed trends will remain. Operating costs, including General and Administrative Expenses, may not decline over time or may experience only a gradual decline, thus adversely affecting net revenues as either production or oil and natural gas prices decline. In any particular period, net revenues may also be affected by either the receipt of proceeds from property sales or the incursion of additional costs as a result of well workovers, recompletions, new well drilling, and other events.
In addition to pricing, the level of net revenues is also highly dependent upon the total volumes of oil and natural gas sold. Oil and gas reserves are depleting assets and will experience production declines over time, thereby likely resulting in reduced net revenues. Despite this general trend of declining production, several factors can cause the volumes of oil and gas sold to increase 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 (or high oil and gas prices), 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 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 Proceeds and Units of Production." Following is a discussion of each Partnerships results of operations for the year ended December 31, 2004 as compared to the year ended December 31, 2003 and for the year ended December 31, 2003 as compared to the year ended December 31, 2002.
P-1 Partnership ---------------
Year Ended December 31, 2004 Compared to Year Ended December 31, 2003 --------------------------------------
Total Net Profits increased $110,627 (8.1%) in 2004 as compared to 2003. Of this increase, approximately (i) $155,000 and $94,000, respectively, were related to increases in the average prices of oil and gas sold and (ii) $21,000 was related to an increase in volumes of oil sold. These increases were partially offset by a decrease of approximately (i) $140,000 related to a decrease in volumes of gas sold and (ii) $19,000 related to an increase in production expenses.
Volumes of oil sold increased 753 barrels, while volumes of gas sold decreased 32,961 Mcf in 2004 as compared to 2003. The increase in volumes of oil sold was primarily due to positive prior period volume adjustments made by the operators on several wells during 2004, which increases were partially offset by normal declines in production. The decrease in volumes of gas sold was primarily due to (i) negative prior period volume adjustments made by the operators on several wells during 2004 and (ii) normal declines in production. These decreases were partially offset by the receipt of first revenues on one significant well during 2004. The increase in production expenses was primarily due to (i) workover expenses incurred on two significant wells during 2004, (ii) an increase in production taxes associated with the increase in oil and gas sales, and (iii) an increase in production taxes associated with the receipt of first revenues on one significant well during 2004. These increases were partially offset by (i) negative prior period production tax adjustments made by the operator on several wells during 2004, (ii) a decrease in lease operating expenses associated with the decrease in volumes of gas sold, and (iii) workover expenses incurred on several wells during 2003. Average oil and gas prices increased to $36.36 per barrel and $4.63 per Mcf, respectively, in 2004 from $28.35 per barrel and $4.25 per Mcf, respectively, in 2003.
Depletion of Net Profits Interests decreased $12,239 (15.3%) in 2004 as compared to 2003. This decrease was primarily due to (i) upward revisions in the estimates of remaining oil and gas reserves during 2004 and (ii) the decrease in volumes of gas sold. As a percentage of Net Profits, this expense decreased to 4.6% in 2004 from 5.8% in 2003. This percentage decrease was primarily due to (i) the dollar decrease in depletion of Net Profits Interests and (ii) the increase in the average prices of oil and gas sold.
General and administrative expenses remained relatively constant in 2004 and 2003. As a percentage of Net Profits, these expenses decreased to 9.6% in 2004 from 10.4% in 2003.
Cumulative cash distributions to the Limited Partners through December 31, 2004 were $16,860,558 or 156.01% of Limited Partners' capital contributions.
Year Ended December 31, 2003 Compared to Year Ended December 31, 2002 --------------------------------------
Total Net Profits increased $376,889 (37.9%) in 2003 as compared to 2002. Of this increase, approximately $86,000 and $448,000, respectively, were related to increases in the average prices of oil and gas sold. These increases were partially offset by decreases of approximately (i) $105,000 related to an increase in production expenses and (ii) $48,000 related to a decrease in volumes of oil sold. Volumes of oil and gas sold decreased 2,028 barrels and 1,355 Mcf, respectively, in 2003 as compared to 2002. The increase in production expenses was primarily due to (i) an increase in production taxes associated with the increase in oil and gas sales and (ii) workover expenses incurred on several wells during 2003. Average oil and gas prices increased to $28.35 per barrel and $4.25 per Mcf, respectively, in 2003 from $23.75 per barrel and $2.68 per Mcf, respectively, in 2002.
Depletion of Net Profits Interests decreased $35,346 (30.7%) in 2003 as compared to 2002. This decrease was primarily due to (i) upward revisions in the estimates of remaining oil and gas reserves at December 31, 2003 and (ii) two significant wells being fully depleted in 2002 due to the lack of remaining economically recoverable reserves. As a percentage of Net Profits, this expense decreased to 5.8% in 2003 from 11.6% in 2002. This percentage decrease was primarily due to (i) the increases in the average prices of oil and gas sold and (ii) the dollar decrease in Depletion of Net Profits Interests.
General and administrative expenses remained relatively constant in 2003 and 2002. As a percentage of Net Profits, these expenses decreased to 10.4% in 2003 from 14.4% in 2002. This percentage decrease was primarily due to the increase in Net Profits.
P-3 Partnership ---------------
Year Ended December 31, 2004 Compared to Year Ended December 31, 2003 --------------------------------------
Total Net Profits increased $193,842 (9.7%) in 2004 as compared to 2003. Of this increase, approximately (i) $201,000 and $162,000, respectively, were related to increases in the average prices of oil and gas sold and (ii) $28,000 was related to an increase in volumes of oil sold. These increases were partially offset by a decrease of approximately (i) $159,000 related to a decrease in volumes of gas sold and (ii) $38,000 related to an increase in production expenses.
Volumes of oil sold increased 990 barrels, while volumes of gas sold decreased 36,303 Mcf in 2004 as compared to 2003. The increase in volumes of oil sold was primarily due to positive prior period volume adjustments made by the operators on several wells during 2004, which increases were partially offset by normal declines in production. The decrease in volumes of gas sold was primarily due to (i) negative prior period volume adjustments made by the operators on several wells during 2004 and (ii) normal declines in production. These decreases were partially offset by the receipt of first revenues on one significant well during 2004. The increase in production expenses was primarily due to (i) workover expenses incurred on two significant wells during 2004, (ii) an increase in production taxes associated with the increase in oil and gas sales, and (iii) an increase in production taxes associated with the receipt of first revenues on one significant well during 2004. These increases were partially offset by (i) negative prior period production tax adjustments made by the operator on several wells during 2004, (ii) a decrease in lease operating expenses associated with the decrease in volumes of gas sold, and (iii) workover expenses incurred on several wells during 2003. Average oil and gas prices increased to $36.42 per barrel and $4.80 per Mcf, respectively, in 2004 from $28.37 per barrel and $4.39 per Mcf, respectively, in 2003.
Depletion of Net Profits Interests increased $83,661 (69.0%) in 2004 as compared to 2003. This increase was primarily due to one significant well becoming fully depleted during 2004 due to the lack of remaining reserves. This increase was partially offset by (i) upward revisions in the estimates of remaining oil and gas reserves during 2004 and (ii) the decrease in volumes of gas sold. As a percentage of Net Profits, this expense increased to 9.4% in 2004 from 6.1% in 2003. This percentage increase was primarily due to the dollar increase in depletion of Net Profits Interests.
General and administrative expenses remained relatively constant in 2004 and 2003. As a percentage of Net Profits, these expenses decreased to 9.6% in 2004 from 10.6% in 2003.
Cumulative cash distributions to the Limited Partners through December 31, 2004 were $23,554,401 or 138.85% of Limited Partners' capital contributions.
Year Ended December 31, 2003 Compared to Year Ended December 31, 2002 --------------------------------------
Total Net Profits increased $581,632 (41.2%) in 2003 as compared to 2002. Of this increase, approximately $111,000 and $699,000, respectively, were related to increases in the average prices of oil and gas sold. These increases were partially offset by decreases of approximately (i) $145,000 related to an increase in production expenses and (ii) $62,000 related to a decrease in volumes of oil sold. Volumes of oil and gas sold decreased 2,606 barrels and 7,681 Mcf, respectively, in 2003 as compared to 2002. The increase in production expenses was primarily due to (i) an increase in production taxes associated with the increase in oil and gas sales and (ii) workover expenses incurred on several wells during 2003. Average oil and gas prices increased to $28.37 per barrel and $4.39 per Mcf, respectively, in 2003 from $23.74 per barrel and $2.75 per Mcf, respectively, in 2002.
Depletion of Net Profits Interests decreased $56,228 (31.7%) in 2003 as compared to 2002. This decrease was primarily due to (i) upward revisions in the estimates of remaining oil and gas reserves at December 31, 2003 and (ii) two significant wells being fully depleted in 2002 due to the lack of remaining economically recoverable reserves. As a percentage of Net Profits, this expense decreased to 6.1% in 2003 from 12.6% in 2002. This percentage decrease was primarily due to (i) the increases in the average prices of oil and gas sold and (ii) the dollar decrease in Depletion of Net Profits Interests.
General and administrative expenses remained relatively constant in 2003 and 2002. As a percentage of Net Profits, these expenses decreased to 10.6% in 2003 from 15.0% in 2002. This percentage decrease was primarily due to the increase in Net Profits.
P-4 Partnership ---------------
Year Ended December 31, 2004 Compared to Year Ended December 31, 2003 --------------------------------------
Total Net Profits increased $94,129 (6.0%) in 2004 as compared to 2003. Of this increase, approximately $181,000 and $130,000, respectively, were related to increases in the average prices of oil and gas sold. These increases were partially offset by decreases of approximately (i) $111,000 and $105,000, respectively, related to decreases in volumes of oil and gas sold and (ii) $1,000 related to an increase in production expenses. Volumes of oil and gas sold decreased 3,752 barrels and 20,147 Mcf, respectively, in 2004 as compared to 2003. The decrease in volumes of oil sold was primarily due to (i) normal declines in production and (ii) the shutting in of one significant well during late 2004 due to mechanical problems. As of the date of this Annual Report, the shut-in well has returned to production. The decrease in volumes of gas sold was primarily due to normal declines in production, which decrease was partially offset by the receipt of first revenues on one significant well during 2004. The increase in production expenses was primarily due to (i) an increase in production taxes associated with the increase in oil and gas sales, (ii) workover expenses incurred on several wells during 2004, and (iii) an increase in production taxes associated with the receipt of first revenues on one significant well during 2004. These increases were partially offset by a decrease in lease operating expense associated with the decreases in volumes of oil and gas sold. Average oil and gas prices increased to $39.91 per barrel and $5.75 per Mcf, respectively, in 2004 from $29.66 per barrel and $5.21 per Mcf, respectively, in 2003.
Depletion of Net Profits Interests decreased $13,415 (14.6%) in 2004 as compared to 2003. This decrease was primarily due to (i) upward revisions in the estimates of remaining oil and gas reserves during 2004 and (ii) the decreases in volumes of oil and gas sold. These decreases were partially offset by the abandonment of one significant well during 2004 following an unsuccessful recompletion attempt. As a percentage of Net Profits, this expense decreased to 4.7% in 2004 from 5.9% in 2003. This percentage decrease was primarily due to (i) the dollar decrease in depletion of Net Profits Interests and (ii) the increase in the average prices of oil and gas sold.
General and administrative expenses remained relatively constant in 2004 and 2003. As a percentage of Net Profits, these expenses decreased to 9.7% in 2004 from 10.2% in 2003.
Cumulative cash distributions to the Limited Partners through December 31, 2004 were $18,897,945 or 149.62% of Limited Partners' capital contributions.
Year Ended December 31, 2003 Compared to Year Ended December 31, 2002 --------------------------------------
Total Net Profits increased $141,061 (9.9%) in 2003 as compared to 2002. Of this increase approximately (i) $117,000 and $616,000, respectively, were related to increases in the average prices of oil and gas sold and (ii) $46,000 was related to a decrease in production expenses. These increases were partially offset by decreases of approximately $112,000 and $526,000, respectively, related to decreases in volumes of oil and gas sold.
Volumes of oil and gas sold decreased 4,615 barrels and 186,019 Mcf, respectively, in 2003 as compared to 2002. The decrease in volumes of oil sold was primarily due to normal declines in production. This decrease was partially offset by an increase in production during 2003 on one significant well due to the successful workover of that well in mid 2002. The decrease in volumes of gas sold was primarily due to (i) positive prior period gas balancing adjustments on two significant wells during 2002, (ii) normal declines in production, and (iii) a substantial decline in production on one significant well following a workover of that well in early 2002. The well with a substantial decline in production is not expected to return to its previous high levels of production. The decrease in production expense was primarily due to a decrease in lease operating expenses associated with the decreases in volumes of oil and gas sold. Average oil and gas prices increased to $29.66 per barrel and $5.21 per Mcf, respectively, in 2003 from $24.19 per barrel and $2.83 per Mcf, respectively, in 2002.
Depletion of Net Profits Interests decreased $176,418 (65.7%) in 2003 as compared to 2002. This decrease was primarily due to (i) the decreases in volumes of oil and gas sold, (ii) several wells being fully depleted in 2002 due to the lack of remaining economically recoverable reserves, and (iii) upward revisions in the estimates of remaining oil and gas reserves at December 31, 2003. As a percentage of Net Profits, this expense decreased to 5.9% in 2003 from 18.8% in 2002. This percentage decrease was primarily due to the dollar decrease in depletion of Net Profits Interests.
General and administrative expenses increased $2,382 (1.5%) in 2003 as compared to 2002. As a percentage of Net Profits, these expenses decreased to 10.2% in 2003 from 11.1% in 2002.
P-5 Partnership ---------------
Year Ended December 31, 2004 Compared to Year Ended December 31, 2003 --------------------------------------
Total Net Profits decreased $33,660 (2.6%) in 2004 as compared to 2003. Of this decrease, approximately (i) $53,000 and $142,000, respectively, were related to decreases in volumes of oil and gas sold and (ii) $2,000 was related to an increase in production expenses. These decreases were partially offset by increases of approximately $39,000 and $124,000, respectively, related to increases in the average prices of oil and gas sold.
Volumes of oil and gas sold decreased 1,761 barrels and 30,660 Mcf, respectively, in 2004 as compared to 2003. The decrease in volumes of oil sold was primarily due to (i) the shutting-in of a producing zone on one significant well during late 2003 and (ii) normal declines in production. As of the date of this Annual Report, management does not expect the shut-in zone to return to production. The decrease in volumes of gas sold was primarily due to (i) downward revisions in the estimates of remaining gas reserves on one significant well resulting in the P-5 Partnership becoming over produced in excess of estimated ultimate reserves thereby increasing gas imbalance payable and (ii) normal declines in production. These decreases were partially offset by the successful completion of one significant well during early 2004. The increase in production expense was primarily due to workover expenses incurred on several wells during 2004, which increase was substantially offset by a decrease in lease operating expenses associated with the decreases in volumes of oil and gas sold. Average oil and gas prices increased to $38.44 per barrel and $5.08 per Mcf, respectively, in 2004 from $30.01 per barrel and $4.64 per Mcf, respectively, in 2003.
Depletion of Net Profits Interests increased $15,324 (19.2%) in 2004 as compared to 2003. This increase was primarily due to (i) an increase in depletable Net Profits Interests primarily due to developmental drilling activities on several properties during 2004 and (ii) one significant well being fully depleted in 2004 due to the lack of remaining reserves. These increases were partially offset by the decrease in volumes of oil and gas sold. As a percentage of Net Profits, this expense increased to 7.6% in 2004 from 6.2% in 2003. This percentage increase was primarily due to the dollar increase in depletion of Net Profits Interests.
General and administrative expenses remained relatively constant in 2004 and 2003. As a percentage of Net Profits, these expenses increased to 12.2% in 2004 from 11.9% in 2003.
Cumulative cash distributions to the Limited Partners through December 31, 2004 were $13,212,759 or 111.55% of Limited Partners' capital contributions.
Year Ended December 31, 2003 Compared to Year Ended December 31, 2002 --------------------------------------
Total Net Profits increased $394,868 (44.6%) in 2003 as compared to 2002. Of this increase, approximately $560,000 was related to an increase in the average price of gas sold, which increase was partially offset by a decrease of approximately $208,000 related to a decrease in volumes of gas sold. Volumes of oil sold increased 141 barrels, while volumes of gas sold decreased 72,933 Mcf in 2003 as compared to 2002. The decrease in volumes of gas sold was primarily due to (i) normal declines in production and (ii) the shutting-in of two significant wells during 2003 in order to perform workovers on those wells. One of the shut-in wells has already returned to production and the operator has not yet determined when the other shut-in well will return to production. These decreases were partially offset by the successful completion of one significant well in early 2003. Average oil and gas prices increased to $30.01 per barrel and $4.64 per Mcf, respectively, in 2003 from $24.14 per barrel and $2.85 per Mcf, respectively, in 2002.
Depletion of Net Profits Interests decreased $23,575 (22.8%) in 2003 as compared to 2002. This decrease was primarily due to (i) two significant wells being fully depleted in 2002 due to the lack of remaining economically recoverable reserves, (ii) the decrease in volumes of gas sold, and (iii) upward revisions in the estimates of remaining oil and gas reserves at December 31, 2003. These decreases were partially offset by one significant well being substantially depleted in 2003 due to the lack of remaining economically recoverable reserves. As a percentage of Net Profits, this expense decreased to 6.2% in 2003 from 11.7% in 2002. This percentage decrease was primarily due to the increases in the average prices of oil and gas sold.
General and administrative expenses increased $2,350 (1.6%) in 2003 as compared to 2002. As a percentage of Net Profits, these expenses decreased to 11.9% in 2003 from 16.9% in 2002. This percentage decrease was primarily due to the increase in Net Profits.
The P-5 Partnership achieved payout during the third quarter of 2003. After payout, operations and revenues for the P-5 Partnership have been and will be allocated using after payout percentages. After payout percentages allocate operating income and expenses 10% to the General Partner and 90% to the Limited Partners. Before payout, operating income and expenses were allocated 5% to the General Partner and 95% to the Limited Partners.
P-6 Partnership ---------------
Year Ended December 31, 2004 Compared to Year Ended December 31, 2003 --------------------------------------
Total Net Profits decreased $483,020 (20.6%) in 2004 as compared to 2003. Of this decrease, approximately (i) $234,000 and $597,000, respectively, were related to decreases in volumes of oil and gas sold and (ii) $102,000 was related to an increase in production expenses. These decreases were partially offset by increases of approximately $110,000 and $340,000, respectively, related to increases in the average prices of oil and gas sold.
Volumes of oil and gas sold decreased 8,115 barrels and 130,618 Mcf, respectively, in 2004 as compared to 2003. The decrease in volumes of oil sold was primarily due to (i) a negative prior period volume adjustment made by the operator on one significant well during 2004, (ii) normal declines in production, and (iii) the shutting-in of a producing zone on one other significant well during late 2003. As of the date of this Annual Report, management does not expect the shut-in zone to return to production. The decrease in volumes of gas sold was primarily due to (i) normal declines in production, (ii) downward revisions in the estimates of remaining gas reserves on one significant well resulting in the P-6 Partnership becoming over produced in excess of estimated ultimate reserves thereby increasing gas imbalance payable, and (iii) a negative prior period volume adjustment made by the operator on one significant well during 2004. The increase in production expenses was primarily due to (i) a prior period production tax adjustment on one significant unit during 2004, (ii) workover expenses incurred on two significant wells during 2004, and (iii) the abandonment of one significant well during 2004 due to severe mechanical problems. These increases were partially offset by a decrease in lease operating expenses associated with the decreases in volumes of oil and gas sold. Average oil and gas prices increased to $43.01 per barrel and $5.33 per Mcf, respectively, in 2004 from $28.89 per barrel and $4.57 per Mcf, respectively, in 2003.
Depletion of Net Profits Interests decreased $22,355 (15.6%) in 2004 as compared to 2003. This decrease was primarily due to the decreases in volumes of oil and gas sold, which decrease was partially offset by one significant well being fully depleted during 2004 due to the lack of remaining reserves. As a percentage of Net Profits, this expense increased to 6.3% in 2004 from 6.1% in 2003.
General and administrative expenses remained relatively constant in 2004 and 2003. As a percentage of Net Profits, these expenses increased to 9.4% in 2004 from 7.7% in 2003. This percentage increase was primarily due to the decrease in Net Profits.
Cumulative cash distributions to the Limited Partners through December 31, 2004 were $19,471,248 or 136.12% of Limited Partners' capital contribution.
Year Ended December 31, 2003 Compared to Year Ended December 31, 2002 --------------------------------------
Total Net Profits increased $871,015 (59.0%) in 2003 as compared to 2002. Of this increase, approximately $971,000 was related to an increase in the average price of gas sold, which increase was partially offset by a decrease of approximately $172,000 related to a decrease in volumes of gas sold. Volumes of oil sold increased 850 barrels, while volumes of gas sold decreased 59,635 Mcf in 2003 as compared to 2002. Average oil and gas prices increased to $28.89 per barrel and $4.57 per Mcf, respectively, in 2003 from $23.59 per barrel and $2.89 per Mcf, respectively, in 2002.
Depletion of Net Profits Interests decreased $39,752 (21.7%) in 2003 as compared to 2002. This decrease was primarily due to (i) several wells being fully depleted in 2002 due to the lack of remaining economically recoverable reserves, (ii) the decrease in volumes of gas sold, and (iii) upward revisions in the estimates of remaining oil and gas reserves at December 31, 2003. These decreases were partially offset by one significant well being substantially depleted in 2003 due to the lack of remaining economically recoverable reserves. As a percentage of Net Profits, this expense decreased to 6.1% in 2003 from 12.4% in 2002. This percentage decrease was primarily due to the increases in the average prices of oil and gas sold.
General and administrative expenses increased $2,457 (1.4%) in 2003 as compared to 2002. As a percentage of Net Profits, these expenses decreased to 7.7% in 2003 from 12.0% in 2002. This percentage decrease was primarily due to the increase in Net Profits.
Average Proceeds and Units of Production
The following tables are comparisons of the annual barrel of oil equivalent (one barrel of oil or six Mcf of gas) and the average proceeds (oil and gas sales less lease operating expenses and production taxes) received per barrel of oil equivalent attributable to the Partnerships' Net Profits for the years ended December 31, 2004, 2003, and 2002.
2004 Compared to 2003 ---------------------
Barrel of Oil Average Proceeds per Equivalent Barrel of Oil Equivalent -------------------------- ------------------------ P/ship 2004 2003 % Change 2004 2003 % Change ------ ------- ------- -------- ------ ------ --------
P-1 61,343 66,083 ( 7%) $24.14 $20.73 16% P-3 89,842 94,902 ( 5%) 24.34 21.00 16% P-4 57,429 64,539 (11%) 29.03 24.37 19% P-5 51,765 58,636 (12%) 24.09 21.84 10% P-6 82,242 112,126 (27%) 22.67 20.93 8%
2003 Compared to 2002 ---------------------
Barrel of Oil Average Proceeds per Equivalent Barrel of Oil Equivalent -------------------------- ------------------------ P/ship 2003 2002 % Change 2003 2002 % Change ------ ------- ------- -------- ------ ------ --------
P-1 66,083 68,337 ( 3%) $20.73 $14.53 43% P-3 94,902 98,788 ( 4%) 21.00 14.29 47% P-4 64,539 100,157 (36%) 24.37 14.30 70% P-5 58,636 70,651 (17%) 21.84 12.54 74% P-6 112,126 121,215 ( 7%) 20.93 12.18 72%
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 the Net Profits Interests are generally not reinvested in productive assets. Assuming 2004 production levels for future years, the Partnerships' proved reserve quantities at December 31, 2004 would have the following remaining lives:
Partnership Gas-Years Oil-Years ----------- --------- ---------
P-1 9.1 12.6 P-3 9.3 12.9 P-4 8.3 3.4 P-5 7.5 8.3 P-6 8.8 16.0
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, 2004 may cause a decrease in the estimated life of said reserves. As discussed below, the Partnerships must terminate no later than December 31, 2015 (eleven years after December 31, 2004).
The Partnerships' available capital from the Limited Partners' subscriptions has been spent on Net Profits Interests and there should be no further material capital resource commitments in the future. The Partnerships have no debt commitments.
The Partnerships sold certain Net Profits Interests during 2004, 2003, and 2002. These sales were made by the General Partner after giving due consideration to both the offer price and the General Partner's estimate of the underlying property's remaining proved reserves and future operating costs. Net proceeds from the sales were distributed to the Partnerships and 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 Net Profits Interest during 2004, 2003, and 2002, were as follows:
Partnership 2004 2003 2002 ----------- -------- -------- -------
P-1 $16,707 $45,230 $40,636 P-3 21,366 57,301 51,341 P-4 434 938 - P-5 - 8,657 10,398 P-6 - 5,212 11,319
Over the years, as part of the normal course of business, some of the Partnerships' interests in wells have been sold, generally at oil and gas auctions. Given the generally favorable current environment for oil and gas dispositions, it is possible that the number of and value of properties considered for sale may increase. In the event of sales, any net proceeds are distributed as soon as possible after the disposition. Future production, costs and cash flow will be reduced as properties are 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' Net Profits Interests, 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 generally replacing production.
The General Partner expects general and administrative expenses to increase substantially during 2005 and 2006 due to costs required to comply with Section 404 of the Sarbanes-Oxley Act of 2002. Such anticipated increase will reduce cash available for distribution. The General Partner expects at least a portion of this anticipated increase in general and administrative expenses to continue in years beyond 2006.
Pursuant to the terms of the Partnership Agreements, the Partnerships are scheduled to terminate on December 31, 2005. However, the Partnership Agreements provide that the General Partner may extend the term of each Partnership for up to five periods of two years each. The General Partner has not yet determined whether it will extend the terms of any of the Partnerships.
Off-Balance Sheet Arrangements
The Partnerships do not have any off-balance sheet arrangements.
Tabular Disclosure of Contractual Obligations
The Partnerships do not have any contractual obligations of the type required to be disclosed under this heading.
Critical Accounting Policies
The Partnerships follow the successful efforts method of accounting for their Net Profits Interests. Under the successful efforts method, the Partnerships capitalize all acquisition costs. Such acquisition costs include costs incurred by the Partnerships or the General Partner to acquire a Net Profits Interest, 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 net acquisition cost to the Partnerships of the Net Profits Interests in properties acquired by the General Partner consists of the cost of acquiring the underlying properties adjusted for the net cash results of operations, including any interest incurred to finance the acquisition, for the period of time the properties are held by the General Partner.
Depletion of the cost of Net Profits Interests is computed on the units-of-production method. The Partnerships' calculation of depletion of its Net Profits Interests includes estimated dismantlement and abandonment costs, net of estimated salvage values related to the underlying properties in which the Partnership has a Net Profits Interest.
The Partnerships evaluate the recoverability of the carrying costs of their Net Profits Interests in proved oil and gas properties for each oil and gas field (rather than separately for each well). If the unamortized costs of a Net Profits Interest within a field exceeds the expected undiscounted future cash flows from such Net Profits Interest, the cost of the Net Profits Interest is written down to fair value, which is determined by using the discounted future cash flows from the Net Profits Interest.
Revenues from a Net Profits Interest consist of a share of the oil and gas sales of the property, less operating and production expenses. The Partnerships accrue for oil and gas revenues less expenses from the Net Profits Interests. Sales of gas applicable to the Net Profits Interests are recorded as revenue when the gas is metered and title transferred pursuant to the gas sales contracts. During such times as sales of gas exceed a Partnership's pro rata Net Profits Interest in a well, such sales are recorded as revenue unless total sales from the well have exceeded the Partnership's share of estimated total gas reserves attributable to the underlying property, at which time such excess is recorded as a liability. The rates per Mcf used to calculate this liability are based on the average gas price for which the Partnerships are currently settling this liability. This liability is recorded as a reduction of accounts receivable.
Also included in accounts receivable(payable)-Net Profits are amounts which represent costs deferred or accrued for Net Profits relating to lease operating expenses incurred in connection with the net underproduced or overproduced gas imbalance positions. The rate used in calculating the deferred charge or accrued liability is the average annual production costs per Mcf.
Asset Retirement Obligation
In July 2001, the FASB issued FAS No. 143, "Accounting for Asset Retirement Obligations", which is effective for fiscal years beginning after June 15, 2002 (January 1, 2003 for the Partnerships). On January 1, 2003, the Partnerships adopted FAS No. 143 and recorded an increase in Net Profits Interests, an increase (decrease) in net income for the cumulative effect of the change in accounting principle, and an asset retirement obligation, resulting in a decrease of accounts receivable - Net Profits, in the following approximate amounts for each Partnership:
Increase (Decrease) in Net Income for Increase in the Change in Asset Net Profits Accounting Retirement Partnership Interests Principle Obligation - ----------- ----------- -------------- ----------
P-1 $ 59,000 $4,000 $ 55,000 P-3 99,000 4,000 95,000 P-4 54,000 ( 400) 54,000 P-5 72,000 3,000 69,000 P-6 206,000 1,000 205,000
These amounts differ significantly from the estimates disclosed in the Annual Report on Form 10-K for the year ended December 31, 2002 due to a revision of the methodology used in calculating the change in Net Profits Interests.
The asset retirement obligation is adjusted upwards each quarter in order to recognize accretion of the time-related discount factor. For 2004, the P-1, P-3, P-4, P-5, and P-6 Partnerships recognized approximately $3,000, $5,000, $3,000, $4,000, and $9,000 of an increase in depletion of Net Profits Interests, which was comprised of accretion of the asset retirement obligation and depletion of the increase in Net Profits Interests.
New Accounting Pronouncements
The Partnerships are not aware of any recently issued accounting pronouncements that would have an impact on the Partnerships' future results of operations and financial position.
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 2004. 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 15 hereof.
ITEM 9.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
None.
ITEM 9A.
ITEM 9A. CONTROLS AND PROCEDURES
As of the end of the period covered by this report, the principal executive officer and principal financial officer conducted an evaluation of the Partnerships' disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities and Exchange Act of 1934). Based on this evaluation, such officers concluded that the Partnerships' disclosure controls and procedures are effective to ensure that information required to be disclosed by the Partnerships in reports filed under the Exchange Act is recorded, processed, summarized, and reported accurately and within the time periods specified in the Securities and Exchange Commission rules and forms.
ITEM 9B.
ITEM 9B. OTHER INFORMATION
The General Partner is not aware of any information required to be reported on Form 8-K during the fourth quarter of 2004 but which was not so reported.
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 General Partner ---------------- --- --------------------------------
Dennis R. Neill 53 President and Director
Judy K. Fox 54 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 2004 of reports required under Section 16 of the Securities Exchange Act of 1934.
Audit Committee Financial Expert
The Partnerships are not required by SEC regulations or otherwise to maintain an audit committee. The board of directors of the General Partner consists of one person and therefore serves as its audit committee. There is not an audit committee financial expert, as defined in the SEC regulations, serving on the General Partner's board of directors.
Code of Ethics
The General Partner has adopted a Code of Ethics which applies to all of its executive officers, including those persons who perform the functions of principal executive officer, principal financial officer, and principal accounting officer. The Partnerships will provide, free of charge, a copy of this Code of Ethics to any person upon receipt of a written request mailed to Geodyne Resources, Inc., Samson Plaza, Two West Second Street, Tulsa, OK 74103. Such request must include the address to which the Code of Ethics should be mailed.
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 and charged to each Partnership during 2004, 2003, and 2002, 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 2004 2003 2002 ----------- -------- -------- -------- P-1 $113,760 $113,760 $113,760 P-3 178,560 178,560 178,560 P-4 132,960 132,960 132,960 P-5 124,680 124,680 124,680 P-6 150,564 150,564 150,564
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 2004, 2003, and 2002:
Affiliates of the Partnerships serve as operator of some of the wells in which the Partnerships own a Net Profits Interest. The owners of the working interests in these wells contract 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 which burdens the Partnerships' Net Profits Interests 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 a Net Profits 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.
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 the date of filing this Annual Report by (i) each beneficial owner of more than five percent of the issued and outstanding Units, (ii) the director and officers of the General Partner, and (iii) the General Partner and its affiliates. The address of the General Partner, its officers and director, and Samson Resources Company is Samson Plaza, Two West Second Street, Tulsa, Oklahoma 74103.
Number of Units Beneficially Owned (Percent Beneficial Owner of Outstanding) - -------------------------------------------- ---------------
P-1 Partnership: - ---------------
Samson Resources Company 31,197 (28.9%)
All affiliates, directors, and officers of the General Partner as a group and the General Partner (4 persons) 31,197 (28.9%)
P-3 Partnership: - ---------------
Samson Resources Company 69,425 (40.9%)
All affiliates, directors, and officers of the General Partner as a group and the General Partner (4 persons) 69,425 (40.9%)
P-4 Partnership: - ---------------
Samson Resources Company 34,448 (27.3%)
All affiliates, directors, and officers of the General Partner as a group and the General Partner (4 persons) 34,448 (27.3%)
P-5 Partnership: - ---------------
Samson Resources Company 29,480 (24.9%)
All affiliates, directors, and officers of the General Partner as a group and the General Partner (4 persons) 29,480 (24.9%)
P-6 Partnership: - ---------------
Samson Resources Company 20,917 (14.6%)
ATL, Inc. 1200 Harbor Boulevard, 5th Floor Weehawken, NJ 07087 54,887 (38.4%)
All affiliates, directors, and officers of the General Partner as a group and the General Partner (4 persons) 20,917 (14.6%)
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 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 the 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' 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 operate certain wells in which the Partnerships have a net profits interest and are compensated for such services at rates comparable to charges of unaffiliated third parties for services in the same geographic area. These costs are charged to the owners of the working interest of such wells and are considered when calculating the Net Profits payable to the Partnerships. These costs are thus indirectly borne by the Partnership.
Affiliates of the Partnerships are solely responsible for the negotiation, administration, and enforcement of oil and gas sales agreements covering the leasehold interests in which the Partnerships hold Net Profits Interests. Because affiliates of the Partnerships who provide services to the owners of the Working Interests 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 owners of such Working Interests 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 negotiating strength and contractual positions of the owners of such Working Interests have been enhanced by virtue of their affiliation with Samson.
ITEM 14.
ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES
Audit Fees
During 2004 and 2003, each Partnership paid the following audit fees:
2004 2003 ------- -------
Year-end audit per engagement letter $21,560 $19,250 1st quarter 10-Q review 825 750 2nd quarter 10-Q review 825 750 3rd quarter 10-Q review 825 750
Audit-Related Fees
During 2004 and 2003 the Partnerships did not pay any audit-related fees of the type required by the SEC to be disclosed in this Annual Report under this heading.
Tax Fees
During 2004 and 2003 the Partnerships did not pay any tax compliance, tax advice, or tax planning fees of the type required by the SEC to be disclosed in this Annual Report under this heading.
All Other Fees
During 2004 and 2003 the Partnerships did not pay any other fees of the type required by the SEC to be disclosed in this Annual Report under this heading.
Audit Approval
The Partnerships do not have audit committee pre-approval policies and procedures as described in paragraph (c)(7)(i) of Rule 2-01 of Regulation S-X. The Partnerships did not receive any services of the type described in Items 9(e)(2) through 9(e)(4) of Schedule 14A.
Audit and Related Fees Paid by Affiliates
The Partnerships' accountants received compensation from other related partnerships managed by the General Partner and from other entities affiliated with the General Partner. This compensation is for audit services, tax related services, and other accounting-related services. The General Partner does not believe this arrangement creates a conflict of interest or
impairs the auditors' independence.
PART IV.
ITEM 15.
ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
(a) Financial Statements, Financial Statement Schedules, and Exhibits.
(1) Financial Statements: The following financial statements for the
Geodyne Institutional/Pension Energy Income P-1 Limited Partnership Geodyne Institutional/Pension Energy Income Limited Partnership P-3 Geodyne Institutional/Pension Energy Income Limited Partnership P-4 Geodyne Institutional/Pension Energy Income Limited Partnership P-5 Geodyne Institutional/Pension Energy Income Limited Partnership P-6
as of December 31, 2004 and 2003 and for each of the three years in the period ended December 31, 2004 are filed as part of this report:
Report of Independent Registered Public Accounting Firm Combined Balance Sheets Combined Statements of Operations Combined Statements of Changes in Partners' Capital (Deficit) Combined Statements of Cash Flows Notes to Combined Financial Statements
(2) Financial Statement Schedules:
None.
(3) Exhibits:
Exh. No. Exhibit - --- -------
4.1 Certificate of Limited Partnership dated March 16, 1988 for the Geodyne Institutional/ Pension Energy Income P-1 Limited Partnership filed as Exhibit 4.1 to Registrant's Annual Report on Form 10-K for the year ended December 31, 2001, filed with the SEC on February 26, 2002 and is hereby incorporated by reference.
4.2 Amended and Restated Agreement of Limited Partnership dated October 25, 1988 for the Geodyne Institutional/Pension Energy Income P-1 Limited Partnership filed as Exhibit 4.2 to Registrant's Annual Report on Form 10-K for the year ended December 31, 2001, filed with the SEC on February 26, 2002 and is hereby incorporated by reference.
4.3 First Amendment to Certificate of Limited Partnership and First Amendment to Amended and Restated Agreement of Limited Partnership dated February 24, 1993, for the Geodyne Institutional/Pension Energy Income P-1 Limited Partnership filed as Exhibit 4.3 to Registrant's Annual Report on Form 10-K for the year ended December 31, 2001, filed with the SEC on February 26, 2002 and is hereby incorporated by reference.
4.4 Second Amendment to Certificate of Limited Partnership dated July 1, 1996 for the Geodyne Institutional/Pension Energy Income P-1 Limited Partnership filed as Exhibit 4.4 to Registrant's Annual Report on Form 10-K for the year ended December 31, 2001, filed with the SEC on February 26, 2002 and is hereby incorporated by reference.
4.5 Second Amendment to Amended and Restated Agreement of Limited Partnership dated August 4, 1993, for the Geodyne Institutional/Pension Energy Income P-1 Limited Partnership filed as Exhibit 4.5 to Registrant's Annual Report on Form 10-K for the year ended December 31, 2001, filed with the SEC on February 26, 2002 and is hereby incorporated by reference.
4.6 Third Amendment to Amended and Restated Agreement of Limited Partnership dated August 31, 1995, for the Geodyne Institutional/Pension Energy Income P-1 Limited Partnership filed as Exhibit 4.6 to Registrant's Annual Report on Form 10-K for the year ended December 31, 2001, filed with the SEC on February 26, 2002 and is hereby incorporated by reference.
4.7 Fourth Amendment to Amended and Restated Agreement of Limited Partnership dated July 1, 1996, for the Geodyne Institutional/Pension Energy Income P-1 Limited Partnership filed as Exhibit 4.7 to Registrant's Annual Report on Form 10-K for the year ended December 31, 2001, filed with the SEC on February 26, 2002 and is hereby incorporated by reference.
4.8 Certificate of Limited Partnership dated February 13, 1989 for the Geodyne Institutional/ Pension Energy Income Limited Partnership P-3 filed as Exhibit 4.15 to Registrant's Annual Report on Form 10-K for the year
ended December 31, 2001, filed with the SEC on February 26, 2002 and is hereby incorporated by reference.
4.9 Amended and Restated Agreement of Limited Partnership dated May 10, 1989 for the Geodyne Institutional/Pension Energy Income Limited Partnership P-3 filed as Exhibit 4.16 to Registrant's Annual Report on Form 10-K for the year ended December 31, 2001, filed with the SEC on February 26, 2002 and is hereby incorporated by reference.
4.10 First Amendment to Certificate of Limited Partnership and First Amendment to Amended and Restated Agreement of Limited Partnership dated February 24, 1993, for the Geodyne Institutional/Pension Energy Income Limited Partnership P-3 filed as Exhibit 4.17 to Registrant's Annual Report on Form 10-K for the year ended December 31, 2001, filed with the SEC on February 26, 2002 and is hereby incorporated by reference.
4.11 Second Amendment to Certificate of Limited Partnership dated July 1, 1996 for the Geodyne Institutional/Pension Energy Income Limited Partnership P-3 filed as Exhibit 4.18 to Registrant's Annual Report on Form 10-K for the year ended December 31, 2001, filed with the SEC on February 26, 2002 and is hereby incorporated by reference.
4.12 Second Amendment to Amended and Restated Agreement of Limited Partnership dated August 4, 1993, for the Geodyne Institutional/Pension Energy Income Limited Partnership P-3 filed as Exhibit 4.19 to Registrant's Annual Report on Form 10-K for the year ended December 31, 2001, filed with the SEC on February 26, 2002 and is hereby incorporated by reference.
4.13 Third Amendment to Amended and Restated Agreement of Limited Partnership dated August 31, 1995, for the Geodyne Institutional/Pension Energy Income Limited Partnership P-3 filed as Exhibit 4.20 to Registrant's Annual Report on Form 10-K for the year ended December 31, 2001, filed with the SEC on February 26, 2002 and is hereby incorporated by reference.
4.14 Fourth Amendment to Amended and Restated Agreement of Limited Partnership dated July 1, 1996, for the Geodyne Institutional/Pension Energy Income Limited Partnership P-3 filed as Exhibit 4.21 to Registrant's Annual Report on Form 10-K for the year ended December 31, 2001, filed with the SEC on February 26, 2002 and is hereby incorporated by reference.
4.15 Certificate of Limited Partnership dated May 10, 1989 for the Geodyne Institutional/ Pension Energy Income
Limited Partnership P-4 filed as Exhibit 4.22 to Registrant's Annual Report on Form 10-K for the year ended December 31, 2001, filed with the SEC on February 26, 2002 and is hereby incorporated by reference.
4.16 Amended and Restated Agreement of Limited Partnership dated November 20, 1989 for the Geodyne Institutional/Pension Energy Income Limited Partnership P-4 filed as Exhibit 4.23 to Registrant's Annual Report on Form 10-K for the year ended December 31, 2001, filed with the SEC on February 26, 2002 and is hereby incorporated by reference.
4.17 First Amendment to Certificate of Limited Partnership and First Amendment to Amended and Restated Agreement of Limited Partnership dated February 24, 1993, for the Geodyne Institutional/Pension Energy Income Limited Partnership P-4 filed as Exhibit 4.24 to Registrant's Annual Report on Form 10-K for the year ended December 31, 2001, filed with the SEC on February 26, 2002 and is hereby incorporated by reference.
4.18 Second Amendment to Certificate of Limited Partnership dated July 1, 1996 for the Geodyne Institutional/Pension Energy Income Limited Partnership P-4 filed as Exhibit 4.25 to Registrant's Annual Report on Form 10-K for the year ended December 31, 2001, filed with the SEC on February 26, 2002 and is hereby incorporated by reference.
4.19 Second Amendment to Amended and Restated Agreement of Limited Partnership dated August 4, 1993, for the Geodyne Institutional/Pension Energy Income Limited Partnership P-4 filed as Exhibit 4.26 to Registrant's Annual Report on Form 10-K for the year ended December 31, 2001, filed with the SEC on February 26, 2002 and is hereby incorporated by reference.
4.20 Third Amendment to Amended and Restated Agreement of Limited Partnership dated August 31, 1995, for the Geodyne Institutional/Pension Energy Income Limited Partnership P-4 filed as Exhibit 4.27 to Registrant's Annual Report on Form 10-K for the year ended December 31, 2001, filed with the SEC on February 26, 2002 and is hereby incorporated by reference.
4.21 Fourth Amendment to Amended and Restated Agreement of Limited Partnership dated July 1, 1996, for the Geodyne Institutional/Pension Energy Income Limited Partnership P-4 filed as Exhibit 4.28 to Registrant's Annual Report on Form 10-K for the year ended December 31, 2001, filed with the SEC on February 26, 2002 and is hereby incorporated by reference.
4.22 Certificate of Limited Partnership dated November 9, 1989 for the Geodyne Institutional/ Pension Energy Income Limited Partnership P-5 filed as Exhibit 4.29 to Registrant's Annual Report on Form 10-K for the year ended December 31, 2001, filed with the SEC on February 26, 2002 and is hereby incorporated by reference.
4.23 Amended and Restated Agreement of Limited Partnership dated February 26, 1990 for the Geodyne Institutional/Pension Energy Income Limited Partnership P-5 filed as Exhibit 4.30 to Registrant's Annual Report on Form 10-K for the year ended December 31, 2001, filed with the SEC on February 26, 2002 and is hereby incorporated by reference.
4.24 First Amendment to Certificate of Limited Partnership and First Amendment to Amended and Restated Agreement of Limited Partnership dated February 24, 1993, for the Geodyne Institutional/Pension Energy Income Limited Partnership P-5 filed as Exhibit 4.31 to Registrant's Annual Report on Form 10-K for the year ended December 31, 2001, filed with the SEC on February 26, 2002 and is hereby incorporated by reference.
4.25 Second Amendment to Certificate of Limited Partnership dated July 1, 1996 for the Geodyne Institutional/Pension Energy Income Limited Partnership P-5 filed as Exhibit 4.32 to Registrant's Annual Report on Form 10-K for the year ended December 31, 2001, filed with the SEC on February 26, 2002 and is hereby incorporated by reference.
4.26 Second Amendment to Amended and Restated Agreement of Limited Partnership dated August 4, 1993, for the Geodyne Institutional/Pension Energy Income Limited Partnership P-5 filed as Exhibit 4.33 to Registrant's Annual Report on Form 10-K for the year ended December 31, 2001, filed with the SEC on February 26, 2002 and is hereby incorporated by reference.
4.27 Third Amendment to Amended and Restated Agreement of Limited Partnership dated August 31, 1995, for the Geodyne Institutional/Pension Energy Income Limited Partnership P-5 filed as Exhibit 4.34 to Registrant's Annual Report on Form 10-K for the year ended December 31, 2001, filed with the SEC on February 26, 2002 and is hereby incorporated by reference.
4.28 Fourth Amendment to Amended and Restated Agreement of Limited Partnership dated July 1, 1996, for the Geodyne Institutional/Pension Energy Income Limited Partnership P-5 filed as Exhibit 4.35 to Registrant's Annual Report on Form 10-K for the year ended December 31, 2001,
filed with the SEC on February 26, 2002 and is hereby incorporated by reference.
4.29 Certificate of Limited Partnership dated November 28, 1989 for the Geodyne Institutional/ Pension Energy Income Limited Partnership P-6 filed as Exhibit 4.36 to Registrant's Annual Report on Form 10-K for the year ended December 31, 2001, filed with the SEC on February 26, 2002 and is hereby incorporated by reference.
4.30 Amended and Restated Agreement of Limited Partnership dated October 5, 1990 for the Geodyne Institutional/Pension Energy Income Limited Partnership P-6 filed as Exhibit 4.37 to Registrant's Annual Report on Form 10-K for the year ended December 31, 2001, filed with the SEC on February 26, 2002 and is hereby incorporated by reference.
4.31 First Amendment to Certificate of Limited Partnership and First Amendment to Amended and Restated Agreement of Limited Partnership dated February 24, 1993, for the Geodyne Institutional/Pension Energy Income Limited Partnership P-6 filed as Exhibit 4.38 to Registrant's Annual Report on Form 10-K for the year ended December 31, 2001, filed with the SEC on February 26, 2002 and is hereby incorporated by reference.
4.32 Second Amendment to Certificate of Limited Partnership dated July 1, 1996 for the Geodyne Institutional/Pension Energy Income Limited Partnership P-6 filed as Exhibit 4.39 to Registrant's Annual Report on Form 10-K for the year ended December 31, 2001, filed with the SEC on February 26, 2002 and is hereby incorporated by reference.
4.33 Second Amendment to Amended and Restated Agreement of Limited Partnership dated August 4, 1993, for the Geodyne Institutional/Pension Energy Income Limited Partnership P-6 filed as Exhibit 4.40 to Registrant's Annual Report on Form 10-K for the year ended December 31, 2001, filed with the SEC on February 26, 2002 and is hereby incorporated by reference.
4.34 Third Amendment to Amended and Restated Agreement of Limited Partnership dated August 31, 1995, for the Geodyne Institutional/Pension Energy Income Limited Partnership P-6 filed as Exhibit 4.41 to Registrant's Annual Report on Form 10-K for the year ended December 31, 2001, filed with the SEC on February 26, 2002 and is hereby incorporated by reference.
4.35 Fourth Amendment to Amended and Restated Agreement of Limited Partnership dated July 1, 1996, for the Geodyne Institutional/Pension Energy Income Limited Partnership
P-6 filed as Exhibit 4.42 to Registrant's Annual Report on Form 10-K for the year ended December 31, 2001, filed with the SEC on February 26, 2002 and is hereby incorporated by reference.
10.1 Amended and Restated Agreement of Partnership dated October 25, 1988 for the Geodyne NPI Partnership P-1 filed as Exhibit 10.1 to Registrant's Annual Report on Form 10-K for the year ended December 31, 2001, filed with the SEC on February 26, 2002 and is hereby incorporated by reference.
10.2 First Amendment to Amended and Restated Agreement of Partnership dated February 26, 1993 for the Geodyne NPI Partnership P-1 filed as Exhibit 10.2 to Registrant's Annual Report on Form 10-K for the year ended December 31, 2001, filed with the SEC on February 26, 2002 and is hereby incorporated by reference.
10.3 Second Amendment to Amended and Restated Agreement of Partnership dated July 1, 1996 for the Geodyne NPI Partnership P-1 filed as Exhibit 10.3 to Registrant's Annual Report on Form 10-K for the year ended December 31, 2001, filed with the SEC on February 26, 2002 and is hereby incorporated by reference.
10.4 Agreement of Partnership dated February 9, 1989 for the Geodyne NPI Partnership P-3 filed as Exhibit 10.7 to Registrant's Annual Report on Form 10-K for the year ended December 31, 2001, filed with the SEC on February 26, 2002 and is hereby incorporated by reference.
10.5 First Amendment to Agreement of Partnership dated February 26, 1993 for the Geodyne NPI Partnership P-3 filed as Exhibit 10.8 to Registrant's Annual Report on Form 10-K for the year ended December 31, 2001, filed with the SEC on February 26, 2002 and is hereby incorporated by reference.
10.6 Second Amendment to Agreement of Partnership dated July 1, 1996 for the Geodyne NPI Partnership P-3 filed as Exhibit 10.9 to Registrant's Annual Report on Form 10-K for the year ended December 31, 2001, filed with the SEC on February 26, 2002 and is hereby incorporated by reference.
10.7 Agreement of Partnership dated April 24, 1989 for the Geodyne NPI Partnership P-4 filed as Exhibit 10.10 to Registrant's Annual Report on Form 10-K for the year ended December 31, 2001, filed with the SEC on February 26, 2002 and is hereby incorporated by reference.
10.8 First Amendment to Agreement of Partnership dated February 26, 1993 for the Geodyne NPI Partnership P-4
filed as Exhibit 10.11 to Registrant's Annual Report on Form 10-K for the year ended December 31, 2001, filed with the SEC on February 26, 2002 and is hereby incorporated by reference.
10.9 Second Amendment to Agreement of Partnership dated July 1, 1996 for the Geodyne NPI Partnership P-4 filed as Exhibit 10.12 to Registrant's Annual Report on Form 10-K for the year ended December 31, 2001, filed with the SEC on February 26, 2002 and is hereby incorporated by reference.
10.10 Agreement of Partnership dated October 27, 1989 for the Geodyne NPI Partnership P-5 filed as Exhibit 10.13 to Registrant's Annual Report on Form 10-K for the year ended December 31, 2001, filed with the SEC on February 26, 2002 and is hereby incorporated by reference.
10.11 First Amendment to Agreement of Partnership dated February 26, 1993 for the Geodyne NPI Partnership P-5 filed as Exhibit 10.14 to Registrant's Annual Report on Form 10-K for the year ended December 31, 2001, filed with the SEC on February 26, 2002 and is hereby incorporated by reference.
10.12 Second Amendment to Agreement of Partnership dated July 1, 1996 for the Geodyne NPI Partnership P-5 filed as Exhibit 10.15 to Registrant's Annual Report on Form 10-K for the year ended December 31, 2001, filed with the SEC on February 26, 2002 and is hereby incorporated by reference.
10.13 Agreement of Partnership dated November 28, 1989 for the Geodyne NPI Partnership P-6 filed as Exhibit 10.16 to Registrant's Annual Report on Form 10-K for the year ended December 31, 2001, filed with the SEC on February 26, 2002 and is hereby incorporated by reference.
10.14 First Amendment to Agreement of Partnership dated February 26, 1993 for the Geodyne NPI Partnership P-6 filed as Exhibit 10.17 to Registrant's Annual Report on Form 10-K for the year ended December 31, 2001, filed with the SEC on February 26, 2002 and is hereby incorporated by reference.
10.15 Second Amendment to Agreement of Partnership dated July 1, 1996 for the Geodyne NPI Partnership P-6 filed as Exhibit 10.18 to Registrant's Annual Report on Form 10-K for the year ended December 31, 2001, filed with the SEC on February 26, 2002 and is hereby incorporated by reference.
*23.1 Consent of Ryder Scott Company, L.P. for the Geodyne Institutional/Pension Energy Income P-1 Limited Partnership.
*23.2 Consent of Ryder Scott Company, L.P. for the Geodyne Institutional/Pension Energy Income Limited Partnership P-3.
*23.3 Consent of Ryder Scott Company, L.P. for the Geodyne Institutional/Pension Energy Income Limited Partnership P-4.
*23.4 Consent of Ryder Scott Company, L.P. for the Geodyne Institutional/Pension Energy Income Limited Partnership P-5.
*23.5 Consent of Ryder Scott Company, L.P. for the Geodyne Institutional/Pension Energy Income Limited Partnership P-6.
*31.1 Certification by Dennis R. Neill required by Rule 13a-14(a)/15d-14(a) for the Geodyne Institutional/Pension Energy Income P-1 Limited Partnership.
*31.2 Certification by Craig D. Loseke required by Rule 13a-14(a)/15d-14(a) for the Geodyne Institutional/Pension Energy Income P-1 Limited Partnership.
*31.3 Certification by Dennis R. Neill required by Rule 13a-14(a)/15d-14(a) for the Geodyne Institutional/Pension Energy Income Limited Partnership P-3.
*31.4 Certification by Craig D. Loseke required by Rule 13a-14(a)/15d-14(a) for the Geodyne Institutional/Pension Energy Income Limited Partnership P-3.
*31.5 Certification by Dennis R. Neill required by Rule 13a-14(a)/15d-14(a) for the Geodyne Institutional/Pension Energy Income Limited Partnership P-4.
*31.6 Certification by Craig D. Loseke required by Rule 13a-14(a)/15d-14(a) for the Geodyne Institutional/Pension Energy Income Limited Partnership P-4.
*31.7 Certification by Dennis R. Neill required by Rule 13a-14(a)/15d-14(a) for the Geodyne Institutional/Pension Energy Income Limited Partnership P-5.
*31.8 Certification by Craig D. Loseke required by Rule 13a-14(a)/15d-14(a) for the Geodyne Institutional/Pension Energy Income Limited Partnership P-5.
*31.9 Certification by Dennis R. Neill required by Rule 13a-14(a)/15d-14(a) for the Geodyne Institutional/Pension Energy Income Limited Partnership P-6.
*31.10 Certification by Craig D. Loseke required by Rule 13a-14(a)/15d-14(a) for the Geodyne Institutional/Pension Energy Income Limited Partnership P-6.
*32.1 Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 for the Geodyne Institutional/Pension Energy Income P-1 Limited Partnership.
*32.2 Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 for the Geodyne Institutional/Pension Energy Income Limited Partnership P-3.
*32.3 Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 for the Geodyne Institutional/Pension Energy Income Limited Partnership P-4.
*32.4 Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 for the Geodyne Institutional/Pension Energy Income Limited Partnership P-5.
*32.5 Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 for the Geodyne Institutional/Pension Energy Income Limited Partnership P-6.
All other Exhibits are omitted as inapplicable.
----------
*Filed herewith.
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 INSTITUTIONAL/PENSION ENERGY INCOME P-1 LIMITED PARTNERSHIP GEODYNE INSTITUTIONAL/PENSION ENERGY INCOME LIMITED PARTNERSHIP P-3 GEODYNE INSTITUTIONAL/PENSION ENERGY INCOME LIMITED PARTNERSHIP P-4 GEODYNE INSTITUTIONAL/PENSION ENERGY INCOME LIMITED PARTNERSHIP P-5 GEODYNE INSTITUTIONAL/PENSION ENERGY INCOME LIMITED PARTNERSHIP P-6
By: GEODYNE RESOURCES, INC. General Partner March 30, 2005
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 30, 2005 ------------------- Director (Principal Dennis R. Neill Executive Officer)
//s//Craig D. Loseke Chief Accounting March 30, 2005 ------------------- Officer (Principal Craig D. Loseke Accounting and Financial Officer)
//S//Judy K. Fox Secretary March 30, 2005 ------------------- Judy K. Fox
ITEM 8: FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
TO THE PARTNERS
GEODYNE INSTITUTIONAL/PENSION ENERGY INCOME P-1 LIMITED PARTNERSHIP AND GEODYNE NPI PARTNERSHIP P-1
In our opinion, the accompanying combined balance sheets and the related combined statements of operations, changes in partners' capital (deficit) and cash flows present fairly, in all material respects, the combined financial position of the Geodyne Institutional/Pension Energy Income P-1 Limited Partnership, a Texas limited partnership, and Geodyne NPI Partnership P-1, an Oklahoma general partnership, at December 31, 2004 and 2003, and the combined results of their operations and their cash flows for each of the three years in the period ended December 31, 2004, in conformity with accounting principles generally accepted in the United States of America. These financial statements are the responsibility of the Partnerships' 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 the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
As discussed in Note 1 of Notes to the Combined Financial Statements under the heading "Asset Retirement Obligation", effective January 1, 2003 the Partnerships changed the manner in which they account for asset retirement obligations.
PricewaterhouseCoopers LLP
Tulsa, Oklahoma March 30, 2005
GEODYNE INSTITUTIONAL/PENSION ENERGY INCOME P-1 LIMITED PARTNERSHIP GEODYNE NPI PARTNERSHIP P-1 Combined Balance Sheets December 31, 2004 and 2003
ASSETS ------
2004 2003 ------------ ------------
CURRENT ASSETS: Cash and cash equivalents $ 448,368 $ 399,580 Accounts receivable: Net Profits 77,602 139,856 --------- ---------
Total current assets $ 525,970 $ 539,436
NET PROFITS INTERESTS, net, utilizing the successful efforts method 693,128 732,423 --------- ---------
$1,219,098 $1,271,859 ========= =========
PARTNERS' CAPITAL (DEFICIT) ---------------------------
PARTNERS' CAPITAL (DEFICIT): General Partner ($ 64,846) ($ 58,713) Limited Partners, issued and outstanding, 108,074 Units 1,283,944 1,330,572 --------- ---------
Total Partners' capital $1,219,098 $1,271,859 ========= =========
The accompanying notes are an integral part of these combined financial statements.
GEODYNE INSTITUTIONAL/PENSION ENERGY INCOME P-1 LIMITED PARTNERSHIP GEODYNE NPI PARTNERSHIP P-1 Combined Statements of Operations For the Years Ended December 31, 2004, 2003, and 2002
2004 2003 2002 ---------- ---------- ---------- REVENUES: Net Profits $1,480,785 $1,370,158 $ 993,269 Interest income 2,902 2,110 1,751 Gain on sale of Net Profits Interests 17,563 43,930 37,624 Other income 3,474 - - --------- --------- --------- $1,504,724 $1,416,198 $1,032,644
COSTS AND EXPENSES: Depletion of Net Profits Interests $ 67,699 $ 79,938 $ 115,284 General and administrative 142,133 143,103 143,004 --------- --------- --------- $ 209,832 $ 223,041 $ 258,288 --------- --------- ---------
INCOME BEFORE CUMULATIVE EFFECT OF ACCOUNTING CHANGE $1,294,892 $1,193,157 $ 774,356
Cumulative effect of change in accounting for asset retirement obligations (Note 1) - 3,732 - --------- --------- ---------
NET INCOME $1,294,892 $1,196,889 $ 774,356 ========= ========= ========= GENERAL PARTNER - NET INCOME $ 133,520 $ 126,336 $ 87,636 ========= ========= ========= LIMITED PARTNERS - NET INCOME $1,161,372 $1,070,553 $ 686,720 ========= ========= ========= NET INCOME per Unit $ 10.75 $ 9.91 $ 6.35 ========= ========= ========= UNITS OUTSTANDING 108,074 108,074 108,074 ========= ========= =========
The accompanying notes are an integral part of these combined financial statements.
GEODYNE INSTITUTIONAL/PENSION ENERGY INCOME P-1 LIMITED PARTNERSHIP GEODYNE NPI PARTNERSHIP P-1 Combined Statements of Changes in Partners' Capital (Deficit) For the Years Ended December 31, 2004, 2003, and 2002
Limited General Partners Partner Total ------------ ---------- ------------
Balance, Dec. 31, 2001 $1,168,299 ($ 77,557) $1,090,742 Net income 686,720 87,636 774,356 Cash distributions ( 563,000) ( 71,206) ( 634,206) --------- ------- ---------
Balance, Dec. 31, 2002 $1,292,019 ($ 61,127) $1,230,892 Net income 1,070,553 126,336 1,196,889 Cash distributions ( 1,032,000) ( 123,922) ( 1,155,922) --------- ------- ---------
Balance, Dec. 31, 2003 $1,330,572 ($ 58,713) $1,271,859 Net income 1,161,372 133,520 1,294,892 Cash distributions ($1,208,000) ($139,653) ($1,347,653) --------- ------- ---------
Balance, Dec. 31, 2004 $1,283,944 ($ 64,846) $1,219,098 ========= ======= =========
The accompanying notes are an integral part of these combined financial statements.
GEODYNE INSTITUTIONAL/PENSION ENERGY INCOME P-1 LIMITED PARTNERSHIP GEODYNE NPI PARTNERSHIP P-1 Combined Statements of Cash Flows For the Years Ended December 31, 2004, 2003, and 2002
2004 2003 2002 ------------ ------------ ---------- CASH FLOWS FROM OPERATING ACTIVITIES: Net income $1,294,892 $1,196,889 $774,356 Adjustments to reconcile net income to net cash provided by operating activities: Cumulative effect of change in accounting for asset retirement obligations (Note 1) - ( 3,732) - Depletion of Net Profits Interests 67,699 79,938 115,284 Gain on sale of Net Profits Interests ( 17,563) ( 43,930) ( 37,624) (Increase)decrease in accounts receivable - Net Profits 54,004 ( 1,201) ( 70,331) --------- --------- -------
Net cash provided by operating activities $1,399,032 $1,227,964 $781,685 --------- --------- -------
CASH FLOWS FROM INVESTING ACTIVITIES: Capital expenditures ($ 19,298) ($ 26,919) ($ 61,170) Proceeds from sale of Net Profits Interests 16,707 45,230 40,636 --------- --------- -------
Net cash provided (used) by investing activities ($ 2,591) $ 18,311 ($ 20,534) --------- --------- ------- CASH FLOWS FROM FINANCING ACTIVITIES: Cash distributions ($1,347,653) ($1,155,922) ($634,206) --------- --------- ------- Net cash used by financing activities ($1,347,653) ($1,155,922) ($634,206) --------- --------- -------
NET INCREASE IN CASH AND CASH EQUIVALENTS $ 48,788 $ 90,353 $126,945
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 399,580 309,227 182,282 --------- --------- -------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 448,368 $ 399,580 $309,227 ========= ========= =======
The accompanying notes are an integral part of these combined financial statements.
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
TO THE PARTNERS
GEODYNE INSTITUTIONAL/PENSION ENERGY INCOME LIMITED PARTNERSHIP P-3 AND GEODYNE NPI PARTNERSHIP P-3
In our opinion, the accompanying combined balance sheets and the related combined statements of operations, changes in partners' capital (deficit) and cash flows present fairly, in all material respects, the combined financial position of the Geodyne Institutional/Pension Energy Income Limited Partnership P-3, an Oklahoma limited partnership, and Geodyne NPI Partnership P-3, an Oklahoma general partnership, at December 31, 2004 and 2003, and the combined results of their operations and their cash flows for each of the three years in the period ended December 31, 2004, in conformity with accounting principles generally accepted in the United States of America. These financial statements are the responsibility of the Partnerships' 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 the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
As discussed in Note 1 of Notes to the Combined Financial Statements under the heading "Asset Retirement Obligation", effective January 1, 2003 the Partnerships changed the manner in which they account for asset retirement obligations.
PricewaterhouseCoopers LLP
Tulsa, Oklahoma March 30, 2005
GEODYNE INSTITUTIONAL/PENSION ENERGY INCOME LIMITED PARTNERSHIP P-3 GEODYNE NPI PARTNERSHIP P-3 Combined Balance Sheets December 31, 2004 and 2003
ASSETS ------
2004 2003 ------------ ------------
CURRENT ASSETS: Cash and cash equivalents $ 633,196 $ 581,527 Accounts receivable: Net Profits 130,416 199,159 --------- ---------
Total current assets $ 763,612 $ 780,686
NET PROFITS INTERESTS, net, utilizing the successful efforts method 1,071,849 1,190,694 --------- ---------
$1,835,461 $1,971,380 ========= =========
PARTNERS' CAPITAL (DEFICIT) ---------------------------
PARTNERS' CAPITAL (DEFICIT): General Partner ($ 53,429) ($ 47,020) Limited Partners, issued and outstanding, 169,637 Units 1,888,890 2,018,400 --------- ---------
Total Partners' capital $1,835,461 $1,971,380 ========= =========
The accompanying notes are an integral part of these combined financial statements.
GEODYNE INSTITUTIONAL/PENSION ENERGY INCOME LIMITED PARTNERSHIP P-3 GEODYNE NPI PARTNERSHIP P-3 Combined Statements of Operations For the Years Ended December 31, 2004, 2003, and 2002
2004 2003 2002 ---------- ---------- ---------- REVENUES: Net Profits $2,186,949 $1,993,107 $1,411,475 Interest income 4,406 3,060 2,610 Gain on sale of Net Profits Interests 22,514 55,610 47,198 Other income 4,376 - - --------- --------- ---------
$2,218,245 $2,051,777 $1,461,283
COSTS AND EXPENSES: Depletion of Net Profits Interests $ 204,906 $ 121,245 $ 177,473 General and administrative 209,719 211,602 211,234 --------- --------- --------- $ 414,625 $ 332,847 $ 388,707 --------- --------- ---------
INCOME BEFORE CUMULATIVE EFFECT OF ACCOUNTING CHANGE $1,803,620 $1,718,930 $1,072,576
Cumulative effect of change in accounting for asset retirement obligations (Note 1) - 4,070 - --------- --------- --------- NET INCOME $1,803,620 $1,723,000 $1,072,576 ========= ========= ========= GENERAL PARTNER - NET INCOME $ 196,130 $ 182,540 $ 122,969 ========= ========= ========= LIMITED PARTNERS - NET INCOME $1,607,490 $1,540,460 $ 949,607 ========= ========= ========= NET INCOME per Unit $ 9.48 $ 9.08 $ 5.60 ========= ========= ========= UNITS OUTSTANDING 169,637 169,637 169,637 ========= ========= =========
The accompanying notes are an integral part of these combined financial statements.
GEODYNE INSTITUTIONAL/PENSION ENERGY INCOME LIMITED PARTNERSHIP P-3 GEODYNE NPI PARTNERSHIP P-3 Combined Statements of Changes in Partners' Capital (Deficit) For the Years Ended December 31, 2004, 2003, and 2002
Limited General Partners Partner Total ------------ ---------- ------------
Balance, Dec. 31, 2001 $1,793,333 ($ 74,177) $1,719,156 Net income 949,607 122,969 1,072,576 Cash distributions ( 802,000) ( 100,386) ( 902,386) --------- ------- ---------
Balance, Dec. 31, 2002 $1,940,940 ($ 51,594) $1,889,346 Net income 1,540,460 182,540 1,723,000 Cash distributions ( 1,463,000) ( 177,966) ( 1,640,966) --------- ------- ---------
Balance, Dec. 31, 2003 $2,018,400 ($ 47,020) $1,971,380 Net income 1,607,490 196,130 1,803,620 Cash distributions ( 1,737,000) ( 202,539) ( 1,939,539) --------- ------- ---------
Balance, Dec. 31, 2004 $1,888,890 ($ 53,429) $1,835,461 ========= ======= =========
The accompanying notes are an integral part of these combined financial statements.
GEODYNE INSTITUTIONAL/PENSION ENERGY INCOME LIMITED PARTNERSHIP P-3 GEODYNE NPI PARTNERSHIP P-3 Combined Statements of Cash Flows For the Years Ended December 31, 2004, 2003, and 2002
2004 2003 2002 ------------ ------------ ------------ CASH FLOWS FROM OPERATING ACTIVITIES: Net income $1,803,620 $1,723,000 $1,072,576 Adjustments to reconcile net income to net cash provided by operating activities: Cumulative effect of change in accounting for asset retirement obligations (Note 1) - ( 4,070) - Depletion of Net Profits Interests 204,906 121,245 177,473 Gain on sale of Net Profits Interests ( 22,514) ( 55,610) ( 47,198) (Increase) decrease in accounts receivable - Net Profits 52,782 ( 9,446) ( 96,400) --------- --------- ---------
Net cash provided by operating activities $2,038,794 $1,775,119 $1,106,451 --------- --------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES: Capital expenditures ($ 68,952) ($ 43,489) ($ 88,773) Proceeds from sale of Net Profits Interests 21,366 57,301 51,341 --------- --------- ---------
Net cash provided (used) by investing activities ($ 47,586) $ 13,812 ($ 37,432) --------- --------- --------- CASH FLOWS FROM FINANCING ACTIVITIES: Cash distributions ($1,939,539) ($1,640,966) ($ 902,386) --------- --------- --------- Net cash used by financing activities ($1,939,539) ($1,640,966) ($ 902,386) --------- --------- ---------
NET INCREASE IN CASH AND CASH EQUIVALENTS $ 51,669 $ 147,965 $ 166,633
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 581,527 433,562 266,929 --------- --------- ---------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 633,196 $ 581,527 $ 433,562 ========= ========= =========
The accompanying notes are an integral part of these combined financial statements.
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
TO THE PARTNERS
GEODYNE INSTITUTIONAL/PENSION ENERGY INCOME LIMITED PARTNERSHIP P-4 AND GEODYNE NPI PARTNERSHIP P-4
In our opinion, the accompanying combined balance sheets and the related combined statements of operations, changes in partners' capital (deficit) and cash flows present fairly, in all material respects, the combined financial position of the Geodyne Institutional/Pension Energy Income Limited Partnership P-4, an Oklahoma limited partnership, and Geodyne NPI Partnership P-4, an Oklahoma general partnership, at December 31, 2004 and 2003, and the combined results of their operations and their cash flows for each of the three years in the period ended December 31, 2004, in conformity with accounting principles generally accepted in the United States of America. These financial statements are the responsibility of the Partnerships' 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 the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
As discussed in Note 1 of Notes to the Combined Financial Statements under the heading "Asset Retirement Obligation", effective January 1, 2003 the Partnerships changed the manner in which they account for asset retirement obligations.
PricewaterhouseCoopers LLP
Tulsa, Oklahoma March 30, 2005
GEODYNE INSTITUTIONAL/PENSION ENERGY INCOME LIMITED PARTNERSHIP P-4 GEODYNE NPI PARTNERSHIP P-4 Combined Balance Sheets December 31, 2004 and 2003
ASSETS ------ 2004 2003 ------------ ------------
CURRENT ASSETS: Cash and cash equivalents $ 510,213 $ 399,864 Accounts receivable: Net Profits 281,672 240,436 --------- ---------
Total current assets $ 791,885 $ 640,300
NET PROFITS INTERESTS, net, utilizing the successful efforts method 394,957 436,463 --------- ---------
$1,186,842 $1,076,763 ========= =========
PARTNERS' CAPITAL (DEFICIT) ---------------------------
PARTNERS' CAPITAL (DEFICIT): General Partner ($ 57,646) ($ 66,233) Limited Partners, issued and outstanding, 126,306 Units 1,244,488 1,142,996 --------- ---------
Total Partners' capital $1,186,842 $1,076,763 ========= =========
The accompanying notes are an integral part of these combined financial statements.
GEODYNE INSTITUTIONAL/PENSION ENERGY INCOME LIMITED PARTNERSHIP P-4 GEODYNE NPI PARTNERSHIP P-4 Combined Statements of Operations For the Years Ended December 31, 2004, 2003, and 2002
2004 2003 2002 ------------ ------------ ------------ REVENUES: Net Profits $1,667,188 $1,573,059 $1,431,998 Interest income 3,147 2,788 3,567 Gain (loss) on sale of Net Profits Interests 962 - ( 5,853) --------- --------- --------- $1,671,297 $1,575,847 $1,429,712
COSTS AND EXPENSES: Depletion of Net Profits Interests $ 78,779 $ 92,194 $ 268,612 General and administrative 161,110 160,974 158,592 --------- --------- --------- $ 239,889 $ 253,168 $ 427,204 --------- --------- ---------
INCOME BEFORE CUMULATIVE EFFECT OF ACCOUNTING CHANGE $1,431,408 $1,322,679 $1,002,508
Cumulative effect of change in accounting for asset retirement obligations (Note 1) - ( 439) - --------- --------- ---------
NET INCOME $1,431,408 $1,322,240 $1,002,508 ========= ========= ========= GENERAL PARTNER - NET INCOME $ 149,916 $ 140,282 $ 124,069 ========= ========= ========= LIMITED PARTNERS - NET INCOME $1,281,492 $1,181,958 $ 878,439 ========= ========= ========= NET INCOME per Unit $ 10.15 $ 9.36 $ 6.95 ========= ========= ========= UNITS OUTSTANDING 126,306 126,306 126,306 ========= ========= =========
The accompanying notes are an integral part of these combined financial statements.
GEODYNE INSTITUTIONAL/PENSION ENERGY INCOME LIMITED PARTNERSHIP P-4 GEODYNE NPI PARTNERSHIP P-4 Combined Statements of Changes in Partners' Capital (Deficit) For the Years Ended December 31, 2004, 2003, and 2002
Limited General Partners Partner Total ------------ ---------- ------------
Balance, Dec. 31, 2001 $1,473,599 ($ 71,619) $1,401,980 Net income 878,439 124,069 1,002,508 Cash distributions ( 1,118,000) ( 110,237) ( 1,228,237) --------- ------- ---------
Balance, Dec. 31, 2002 $1,234,038 ($ 57,787) $1,176,251 Net income 1,181,958 140,282 1,322,240 Cash distributions ( 1,273,000) (148,728) ( 1,421,728) --------- ------- ---------
Balance, Dec. 31, 2003 $1,142,996 ($ 66,233) $1,076,763 Net income 1,281,492 149,916 1,431,408 Cash distributions ( 1,180,000) ( 141,329) ( 1,321,329) --------- ------- ---------
Balance, Dec. 31, 2004 $1,244,488 ($ 57,646) $1,186,842 ========= ======= =========
The accompanying notes are an integral part of these combined financial statements.
GEODYNE INSTITUTIONAL/PENSION ENERGY INCOME LIMITED PARTNERSHIP P-4 GEODYNE NPI PARTNERSHIP P-4 Combined Statements of Cash Flows For the Years Ended December 31, 2004, 2003, and 2002
2004 2003 2002 ------------ ------------ ------------ CASH FLOWS FROM OPERATING ACTIVITIES: Net income $1,431,408 $1,322,240 $1,002,508 Adjustments to reconcile net income to net cash provided by operating activities: Cumulative effect of change in accounting for asset retirement obligations (Note 1) - 439 - Depletion of Net Profits Interests 78,779 92,194 268,612 (Gain) loss on sale of Net Profits Interests ( 962) - 5,853 Settlement of asset retirement obligation ( 77) - - (Increase) decrease in accounts receivable- related party - 5 ( 5) (Increase) decrease in accounts receivable - Net Profits ( 46,036) 79,535 ( 44,241) --------- --------- ---------
Net cash provided by operating activities $1,463,112 $1,494,413 $1,232,727 --------- --------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES: Capital expenditures ($ 31,868) ($ 24,938) ($ 73,913) Proceeds from sale of Net Profits Interests 434 938 - --------- --------- ---------
Net cash used by investing activities ($ 31,434) ($ 24,000) ($ 73,913) --------- --------- --------- CASH FLOWS FROM FINANCING ACTIVITIES: Cash distributions ($1,321,329) ($1,421,728) ($1,228,237) --------- --------- --------- Net cash used by financing activities ($1,321,329) ($1,421,728) ($1,228,237) --------- --------- ---------
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS $ 110,349 $ 48,685 ($ 69,423)
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 399,864 351,179 420,602 --------- --------- ---------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 510,213 $ 399,864 $ 351,179 ========= ========= =========
The accompanying notes are an integral part of these combined financial statements.
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
TO THE PARTNERS
GEODYNE INSTITUTIONAL/PENSION ENERGY INCOME LIMITED PARTNERSHIP P-5 AND GEODYNE NPI PARTNERSHIP P-5
In our opinion, the accompanying combined balance sheets and the related combined statements of operations, changes in partners' capital (deficit) and cash flows present fairly, in all material respects, the combined financial position of the Geodyne Institutional/Pension Energy Income Limited Partnership P-5, an Oklahoma limited partnership, and Geodyne NPI Partnership P-5, an Oklahoma general partnership, at December 31, 2004 and 2003, and the combined results of their operations and their cash flows for each of the three years in the period ended December 31, 2004, in conformity with accounting principles generally accepted in the United States of America. These financial statements are the responsibility of the Partnerships' 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 the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
As discussed in Note 1 of Notes to the Combined Financial Statements under the heading "Asset Retirement Obligation", effective January 1, 2003 the Partnerships changed the manner in which they account for asset retirement obligations.
PricewaterhouseCoopers LLP
Tulsa, Oklahoma March 30, 2005
GEODYNE INSTITUTIONAL/PENSION ENERGY INCOME LIMITED PARTNERSHIP P-5 GEODYNE NPI PARTNERSHIP P-5 Combined Balance Sheets December 31, 2004 and 2003
ASSETS ------ 2004 2003 ------------ ------------
CURRENT ASSETS: Cash and cash equivalents $ 393,840 $ 337,494 Accounts receivable: Net Profits 37,416 - --------- ---------
Total current assets $ 431,256 $ 337,494
NET PROFITS INTERESTS, net, utilizing the successful efforts method 600,879 616,277 --------- ---------
$1,032,135 $ 953,771 ========= =========
LIABILITIES AND PARTNERS' CAPITAL (DEFICIT) -------------------------------------------
CURRENT LIABILITIES: Accounts payable: Net Profits $ - $ 3,810 --------- --------- Total current liabilities $ - $ 3,810
PARTNERS' CAPITAL (DEFICIT): General Partner ($ 48,512) ($ 59,667) Limited Partners, issued and outstanding, 118,449 Units 1,080,647 1,009,628 --------- ---------
Total Partners' capital $1,032,135 $ 949,961 ========= =========
$1,032,135 $ 953,771 ========= =========
The accompanying notes are an integral part of these combined financial statements.
GEODYNE INSTITUTIONAL/PENSION ENERGY INCOME LIMITED PARTNERSHIP P-5 GEODYNE NPI PARTNERSHIP P-5 Combined Statements of Operations For the Years Ended December 31, 2004, 2003, and 2002
2004 2003 2002 ---------- ---------- -------- REVENUES: Net Profits $1,246,990 $1,280,650 $885,782 Interest income 2,632 2,365 2,106 Gain (loss) on sale of Net Profits Interests ( 749) - 9,113 --------- --------- ------- $1,248,873 $1,283,015 $897,001
COSTS AND EXPENSES: Depletion of Net Profits Interests $ 94,961 $ 79,637 $103,212 General and administrative 152,465 152,225 149,875 --------- --------- ------- $ 247,426 $ 231,862 $253,087 --------- --------- -------
INCOME BEFORE CUMULATIVE EFFECT OF ACCOUNTING CHANGE $1,001,447 $1,051,153 $643,914
Cumulative effect of change in accounting for asset retirement obligations (Note 1) - 2,785 - --------- --------- -------
NET INCOME $1,001,447 $1,053,938 $643,914 ========= ========= ======= GENERAL PARTNER - NET INCOME $ 108,428 $ 78,297 $ 36,219 ========= ========= ======= LIMITED PARTNERS - NET INCOME $ 893,019 $ 975,641 $607,695 ========= ========= ======= NET INCOME per Unit $ 7.54 $ 8.24 $ 5.13 ========= ========= ======= UNITS OUTSTANDING 118,449 118,449 118,449 ========= ========= =======
The accompanying notes are an integral part of these combined financial statements.
GEODYNE INSTITUTIONAL/PENSION ENERGY INCOME LIMITED PARTNERSHIP P-5 GEODYNE NPI PARTNERSHIP P-5 Combined Statements of Changes in Partners' Capital (Deficit) For the Years Ended December 31, 2004, 2003, and 2002
Limited General Partners Partner Total ------------ ---------- ------------
Balance, Dec. 31, 2001 $ 938,292 ($ 74,788) $ 863,504 Net income 607,695 36,219 643,914 Cash distributions ( 545,000) ( 31,544) ( 576,544) --------- ------- ---------
Balance, Dec. 31, 2002 $1,000,987 ($ 70,113) $ 930,874 Net income 975,641 78,297 1,053,938 Cash distributions ( 967,000) ( 67,851) ( 1,034,851) --------- ------- ---------
Balance, Dec. 31, 2003 $1,009,628 ($ 59,667) $ 949,961 Net income 893,019 108,428 1,001,447 Cash distributions ( 822,000) ( 97,273) ( 919,273) --------- ------- ---------
Balance, Dec. 31, 2004 $1,080,647 ($ 48,512) $1,032,135 ========= ======= =========
The accompanying notes are an integral part of these combined financial statements.
GEODYNE INSTITUTIONAL/PENSION ENERGY INCOME LIMITED PARTNERSHIP P-5 GEODYNE NPI PARTNERSHIP P-5 Combined Statements of Cash Flows For the Years Ended December 31, 2004, 2003, and 2002
2004 2003 2002 ------------ ------------ ---------- CASH FLOWS FROM OPERATING ACTIVITIES: Net income $1,001,447 $1,053,938 $643,914 Adjustments to reconcile net income to net cash provided by operating activities: Cumulative effect of change in accounting for asset retirement obligations (Note 1) - ( 2,785) - Depletion of Net Profits Interests 94,961 79,637 103,212 (Gain) loss on sale of Net Profits Interests 749 - ( 9,113) Settlement of asset retirement obligation ( 104) - - Net change in accounts receivable (accounts payable) - Net Profits ( 62,284) ( 3,357) ( 14,540) --------- --------- -------
Net cash provided by operating activities $1,034,769 $1,127,433 $723,473 --------- --------- -------
CASH FLOWS FROM INVESTING ACTIVITIES: Capital expenditures ($ 59,150) ($ 16,739) ($ 76,041) Proceeds from sale of Net Profits Interests - 8,657 10,398 --------- --------- ------- Net cash used by investing activities ($ 59,150) ($ 8,082) ($ 65,643) --------- --------- ------- CASH FLOWS FROM FINANCING ACTIVITIES: Cash distributions ($ 919,273) ($1,034,851) ($576,544) --------- --------- ------- Net cash used by financing activities ($ 919,273) ($1,034,851) ($576,544) --------- --------- -------
NET INCREASE IN CASH AND CASH EQUIVALENTS $ 56,346 $ 84,500 $ 81,286
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 337,494 252,994 171,708 --------- --------- -------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 393,840 $ 337,494 $252,994 ========= ========= =======
The accompanying notes are an integral part of these combined financial statements.
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
TO THE PARTNERS
GEODYNE INSTITUTIONAL/PENSION ENERGY INCOME LIMITED PARTNERSHIP P-6 AND GEODYNE NPI PARTNERSHIP P-6
In our opinion, the accompanying combined balance sheets and the related combined statements of operations, changes in partners' capital (deficit) and cash flows present fairly, in all material respects, the combined financial position of the Geodyne Institutional/Pension Energy Income Limited Partnership P-6, an Oklahoma limited partnership, and Geodyne NPI Partnership P-6, an Oklahoma general partnership, at December 31, 2004 and 2003, and the combined results of their operations and their cash flows for each of the three years in the period ended December 31, 2004, in conformity with accounting principles generally accepted in the United States of America. These financial statements are the responsibility of the Partnerships' 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 the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
As discussed in Note 1 of Notes to the Combined Financial Statements under the heading "Asset Retirement Obligation", effective January 1, 2003 the Partnerships changed the manner in which they account for asset retirement obligations.
PricewaterhouseCoopers LLP
Tulsa, Oklahoma March 30, 2005
GEODYNE INSTITUTIONAL/PENSION ENERGY INCOME LIMITED PARTNERSHIP P-6 GEODYNE NPI PARTNERSHIP P-6 Combined Balance Sheets December 31, 2004 and 2003
ASSETS ------ 2004 2003 ------------ ------------
CURRENT ASSETS: Cash and cash equivalents $ 469,272 $ 567,735 --------- ---------
Total current assets $ 469,272 $ 567,735
NET PROFITS INTERESTS, net, utilizing the successful efforts method 1,171,095 1,264,192 --------- ---------
$1,640,367 $1,831,927 ========= =========
LIABILITIES AND PARTNERS' CAPITAL (DEFICIT) -------------------------------------------
CURRENT LIABILITIES: Accounts payable: Net Profits $ 26,403 $ 39,658 --------- --------- Total current liabilities $ 26,403 $ 39,658
PARTNERS' CAPITAL (DEFICIT): General Partner ($ 52,148) ($ 60,944) Limited Partners, issued and outstanding, 143,041 Units 1,666,112 1,853,213 --------- ---------
Total Partners' capital $1,613,964 $1,792,269 ========= =========
$1,640,367 $1,831,927 ========= =========
The accompanying notes are an integral part of these combined financial statements.
GEODYNE INSTITUTIONAL/PENSION ENERGY INCOME LIMITED PARTNERSHIP P-6 GEODYNE NPI PARTNERSHIP P-6 Combined Statements of Operations For the Years Ended December 31, 2004, 2003, and 2002
2004 2003 2002 ----------- ---------- ---------- REVENUES: Net Profits $1,864,246 $2,347,266 $1,476,251 Interest income 3,941 3,518 2,815 Gain (loss) on sale of Net Profits Interests ( 256) - 10,267 --------- --------- ---------
$1,867,931 $2,350,784 $1,489,333
COSTS AND EXPENSES: Depletion of Net Profits Interests $ 121,279 $ 143,634 $ 183,386 General and administrative 179,519 179,618 177,161 --------- --------- --------- $ 300,798 $ 323,252 $ 360,547 --------- --------- ---------
INCOME BEFORE CUMULATIVE EFFECT OF ACCOUNTING CHANGE $1,567,133 $2,027,532 $1,128,786
Cumulative effect of change in accounting for asset retirement obligations (Note 1) - 1,477 - --------- --------- ---------
NET INCOME $1,567,133 $2,029,009 $1,128,786 ========= ========= ========= GENERAL PARTNER - NET INCOME $ 167,234 $ 215,343 $ 129,102 ========= ========= ========= LIMITED PARTNERS - NET INCOME $1,399,899 $1,813,666 $ 999,684 ========= ========= ========= NET INCOME per Unit $ 9.79 $ 12.68 $ 6.99 ========= ========= ========= UNITS OUTSTANDING 143,041 143,041 143,041 ========= ========= =========
The accompanying notes are an integral part of these combined financial statements.
GEODYNE INSTITUTIONAL/PENSION ENERGY INCOME LIMITED PARTNERSHIP P-6 GEODYNE NPI PARTNERSHIP P-6 Combined Statements of Changes in Partners' Capital (Deficit) For the Years Ended December 31, 2004, 2003, and 2002
Limited General Partners Partner Total ------------ ---------- ------------
Balance, Dec. 31, 2001 $1,640,863 ($ 87,910) $1,552,953 Net income 999,684 129,102 1,128,786 Cash distributions ( 912,000) ( 108,921) ( 1,020,921) --------- ------- ---------
Balance, Dec. 31, 2002 $1,728,547 ($ 67,729) $1,660,818 Net income 1,813,666 215,343 2,029,009 Cash distributions ( 1,689,000) ( 208,558) ( 1,897,558) --------- ------- ---------
Balance, Dec. 31, 2003 $1,853,213 ($ 60,944) $1,792,269 Net income 1,399,899 167,234 1,567,133 Cash distributions ( 1,587,000) ( 158,438) ( 1,745,438) --------- ------- ---------
Balance, Dec. 31, 2004 $1,666,112 ($ 52,148) $1,613,964 ========= ======= =========
The accompanying notes are an integral part of these combined financial statements.
GEODYNE INSTITUTIONAL/PENSION ENERGY INCOME LIMITED PARTNERSHIP P-6 GEODYNE NPI PARTNERSHIP P-6 Combined Statements of Cash Flows For the Years Ended December 31, 2004, 2003, and 2002
2004 2003 2002 ------------ ------------ ------------
CASH FLOWS FROM OPERATING ACTIVITIES: Net income $1,567,133 $2,029,009 $1,128,786 Adjustments to reconcile net income to net cash provided by operating activities: Cumulative effect of change in accounting for asset retirement obligations (Note 1) - ( 1,477) - Depletion of Net Profits Interests 121,279 143,634 183,386 (Gain) loss on sale of Net Profits Interests 256 - ( 10,267) Settlement of asset retirement obligation ( 388) - - Net change in accounts receivable (accounts payable) - Net Profits ( 19,939) ( 20,933) ( 83,527) --------- --------- ---------
Net cash provided by operating activities $1,668,341 $2,150,233 $1,218,378 --------- --------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES: Capital expenditures ($ 21,366) ($ 7,948) ($ 78,281) Proceeds from sale of Net Profits Interests - 5,212 11,319 --------- --------- ---------
Net cash used by investing activities ($ 21,366) ($ 2,736) ($ 66,962) --------- --------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES: Cash distributions ($1,745,438) ($1,897,558) ($1,020,921) --------- --------- --------- Net cash used by financing activities ($1,745,438) ($1,897,558) ($1,020,921) --------- --------- ---------
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS ($ 98,463) $ 249,939 $ 130,495
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 567,735 317,796 187,301 --------- --------- ---------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 469,272 $ 567,735 $ 317,796 ========= ========= =========
The accompanying notes are an integral part of these combined financial statements.
GEODYNE INSTITUTIONAL/PENSION PROGRAM Notes to the Combined Financial Statements For the Periods Ended December 31, 2004, 2003, and 2002
1. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Organization and Nature of Operations
The Geodyne Institutional/Pension 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. ("Geodyne") is the general partner of each of the Partnerships. Each Partnership is a general partner in the related Geodyne NPI Partnership (the "NPI Partnerships") in which Geodyne serves as the managing partner. Limited Partners' capital contributions were contributed to the related NPI Partnerships for investment in net profits interests, royalty interests, and other nonoperating interests in producing oil and gas properties. Most of the net profits interests acquired by the Partnerships have been carved out of working interests in producing properties, located in the continental United States, which were acquired by affiliated oil and gas investment programs (the "Affiliated Programs").
Net profits interests entitle the Partnerships to a share of net revenues from producing properties measured by a specific percentage of the net profits realized by such Affiliated Programs as owners of the working interests in the producing properties. Except where otherwise noted, references to certain operational activities of the Partnerships are actually the activities of the Affiliated Programs. As the holder of a net profits interest, a Partnership is not liable to pay any amount by which oil and gas operating costs and expenses exceed revenues for any period, although any deficit, together with interest, is applied to reduce the amounts payable to the Partnership in subsequent periods. As used in these financial statements, the Partnerships' net profits and royalty interests in oil and gas sales are referred to as "Net Profits" and the Partnerships' net profits and royalty interests in oil and gas properties are referred to as "Net Profits Interests." The Partnerships do not directly bear capital costs. However, the Partnerships indirectly bear certain capital costs incurred by the Affiliated Programs to the extent such capital costs are charged against the applicable oil and gas revenues in calculating the net profits payable to the Partnerships. For financial reporting purposes, such capital costs are reported as capital expenditures in the Partnerships' Statements of Cash Flows.
The Partnerships were activated on the following dates with the following Limited Partner capital contributions:
Limited Partner Date of Capital Partnership Activation Contributions ----------- ----------------- ---------------
P-1 October 25, 1988 $10,807,400 P-3 May 10, 1989 16,963,700 P-4 November 21, 1989 12,630,600 P-5 February 27, 1990 11,844,900 P-6 September 5, 1990 14,304,100
The Partnerships' termination date under their partnership agreements is December 31, 2005. The General Partner may extend the terms of the Partnerships for up to five two-year extension periods. The General Partner has not yet determined whether it will extend the terms of any Partnership.
For purposes of these financial statements, the Partnerships and NPI Partnerships are collectively referred to as the "Partnerships" and the general partner and managing partner are collectively referred to as the "General Partner". An affiliate of the General Partner owned the following Units at December 31, 2004:
Percent of Number of Outstanding Partnership Units Owned Units ----------- ----------- -----------
P-1 31,037 28.7% P-3 69,180 40.8% P-4 34,234 27.1% P-5 29,360 24.8% P-6 20,827 14.6%
The Partnerships' sole business is owning Net Profits Interests. Substantially all of the gas reserves attributable to the Partnerships' Net Profits Interests 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 combination of the allocation provisions in each Partnerships' limited partnership agreement and NPI Partnerships'
partnership agreement (collectively, the "Partnership Agreement") results in allocations of costs and income between the Limited Partners and General Partner as follows:
Before Payout(1) After Payout(1) -------------------- -------------------- General Limited General Limited Partner Partners Partner Partners ------- -------- ------- -------- Costs(2) - --------------------------
Sales commissions, payment for organization and offering costs and acquisition fee 1% 99% - - Property Acquisition Costs 1% 99% 1% 99% General and administrative costs and direct administrative costs(3) 5% 95% 15% 85%
Income(2) - --------------------------
Temporary investments of Limited Partners' Subscriptions 1% 99% 1% 99% Income from oil and gas production(3) 5% 95% 15% 85% Gain on sale of Net Profits Interests(3) 5% 95% 15% 85% All other income(3) 5% 95% 15% 85%
- ----------
(1) Payout occurs when total distributions to Limited Partners equal total original Limited Partner subscriptions. (2) The allocations in the table result generally from the combined effect of the allocation provisions in the Partnership Agreements. For example, direct administrative costs of the NPI Partnership are allocated 95.9596% to the Partnership and 4.0404% to the managing partner. The 95.9596% portion of these costs allocated to the limited partnership, when passed through the limited partnership, is further allocated 99% to the Limited Partners and 1% to the general partner. In this manner the Limited Partners are allocated 95% of such costs and the General Partner is allocated 5% of such costs. (3) If at payout the total distributions received by the Limited Partners from the commencement of the property investment period have averaged on an annualized basis an amount that is less than 12% of the Limited Partners' subscriptions, the percentage of income, and costs which are shared in the same
proportions as income, allocated to the General Partner will increase to only 10% and the Limited Partners will be allocated 90% thereof until such time, if ever, that the distributions to the Limited Partners from the commencement of the property investment period reaches a yearly average equal to at least 12% of the Limited Partners' subscriptions. Thereafter, income, and costs shared in the same proportions as income, will be allocated 15% to the General Partner and 85% to the Limited Partners.
After payout, operations and revenues for the Partnerships have been and will be allocated using the 10%/90% after payout percentages set forth in Footnote 3 to the table above. The Partnerships achieved payout during the following periods:
Partnership Payout Occurred ----------- --------------- P-1 3rd Qtr. 1998 P-3 2nd Qtr. 2000 P-4 4th Qtr. 1999 P-5 3rd Qtr. 2003 P-6 3rd Qtr. 2001
Basis of Presentation
These financial statements reflect the combined accounts of each Partnership after the elimination of all inter-partnership transactions and balances.
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 Risk
Accrued oil and gas sales, which are included in the Partnerships' accounts receivable (accounts payable) - Net Profits, are due from a variety of oil and gas purchasers and, therefore, indirectly subject the Partnerships to a concentration of credit risk. Some of these purchasers are discussed in Note 3 - Major Customers.
Net Profits Interests
The Partnerships follow the successful efforts method of accounting for their Net Profits Interests. Under the successful efforts method, the Partnerships capitalize all acquisition
costs. Such acquisition costs include costs incurred by the Partnerships or the General Partner to acquire a Net Profits Interest, 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 net acquisition cost to the Partnerships of the Net Profits Interests in properties acquired by the General Partner consists of the cost of acquiring the underlying properties, adjusted for the net cash results of operations, including interest incurred to finance the net acquisition, for the period of time the properties are held by the General Partner.
Depletion of the cost of Net Profits Interests is computed on the units-of-production method. The Partnerships' calculation of depletion of its Net Profits Interests includes estimated dismantlement and abandonment costs, net of estimated salvage values. The depletion rate, which includes accretion of the asset retirement obligation, per equivalent barrel of oil produced during the years ended December 31, 2004, 2003, and 2002 were as follows:
Partnership 2004 2003 2002 ----------- ----- ----- -----
P-1 $1.10 $1.21 $1.69 P-3 2.28 1.28 1.80 P-4 1.37 1.43 2.68 P-5 1.83 1.36 1.46 P-6 1.47 1.28 1.51
The Partnerships evaluate the recoverability of the carrying costs of their Net Profits Interests in proved oil and gas properties at the field level. If the unamortized costs of a Net Profits Interest within a field exceed the expected undiscounted future cash flows from such Net Profits Interest, the cost of the Net Profits Interest is written down to fair value, which is determined by using the discounted future cash flows from the Net Profits Interest. No non-cash charges against earnings (impairment provisions) were recorded by the Partnerships during the three years ended December 31, 2004.
The risk that the Partnerships will be required to record impairment provisions in the future increases as oil and gas prices decrease.
Accounts Receivable (Accounts Payable) - Net Profits
Revenues from a Net Profits Interest consist of a share of the oil and gas sales of the property, less operating and production expenses. The Partnerships accrue for oil and gas revenues less expenses from its Net Profits Interests. Sales of gas applicable to the Net Profits Interests are recorded as
revenue when the gas is metered and title transferred pursuant to the gas sales contracts. During such times as sales of gas exceed a Partnership's pro rata Net Profits Interest in a well, such sales are recorded as revenue unless total sales from the well have exceeded the Partnership's share of estimated total gas reserves attributable to the underlying property, at which time such excess is recorded as a liability. The rates per Mcf used to calculate the liability are based on the average gas price for which the Partnerships are currently settling this liability. This liability is recorded as a reduction of accounts receivable.
Also included in accounts receivable (accounts payable) - Net Profits are the estimated asset retirement obligations (see "Asset Retirement Obligation") and the amounts which represent costs deferred or accrued for Net Profits relating to lease operating expenses incurred in connection with the net underproduced or overproduced gas imbalance positions. The rate used in calculating the deferred charge or accrued liability is the average annual production costs per Mcf.
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, accounts receivable (accounts payable) - Net Profits includes accrued liabilities, accrued lease operating expenses, asset retirement obligations, and deferred lease operating expenses related to gas balancing which involve estimates that could materially differ from the actual amounts ultimately realized or incurred in the near term. Oil and gas reserves (see Note 4) also involve significant estimates which could materially differ from the actual amounts ultimately realized.
Income Taxes
Income or loss for income tax purposes is includable in the income tax returns of the partners. Accordingly, no recognition has been given to income taxes in these financial statements.
Asset Retirement Obligation
In July 2001, the FASB issued FAS No. 143, "Accounting for Asset Retirement Obligations" which is effective for fiscal years beginning after June 15, 2002 (January 1, 2003 for the Partnerships). FAS No. 143 requires the fair value of a liability for an asset retirement obligation to be recognized in the period in which it is incurred if a reasonable estimate of fair value can be made, and that the associated asset retirement costs be capitalized as part of the carrying amount of the long-lived asset. The Partnerships own interests in oil and gas properties which require expenditures to plug and abandon the wells when reserves in the wells are depleted. On January 1, 2003, the Partnerships adopted FAS No. 143 and recorded an increase in Net Profits Interests, an increase (decrease) in net income for the cumulative effect of the change in accounting principle, and an asset retirement obligation (included in accounts receivable - Net Profits), resulting in a decrease of accounts receivable - Net Profits, in the following approximate amounts for each Partnership:
Increase (Decrease) in Net Income for Increase in the Change in Asset Net Profits Accounting Retirement Partnership Interests Principle Obligation - ----------- ----------- -------------- ----------
P-1 $ 59,000 $ 4,000 $ 55,000 P-3 99,000 4,000 95,000 P-4 54,000 ( 400) 54,000 P-5 72,000 3,000 69,000 P-6 206,000 1,000 205,000
The asset retirement obligation will be adjusted upwards each quarter in order to recognize accretion of the time-related discount factor. For 2004, the P-1, P-3, P-4, P-5, and P-6 Partnerships recognized approximately $3,000, $5,000, $3,000, $4,000, and $9,000 of an increase in depletion of Net Profits Interests, which was comprised of accretion of the asset retirement obligation and depletion of the increase in Net Profits Interests.
The components of the change in asset retirement obligations for the years ended December 31, 2004 and December 31, 2003 are as shown below.
P-1 Partnership ---------------
2004 2003 ---------- ----------
Total Asset Retirement Obligation, January 1 $ 56,388 $ 55,495 Additions and Revisions 27 79 Settlements and Disposals ( 238) ( 1,737) Accretion Expense 2,576 2,551 ------- ------- Total Asset Retirement Obligation, December 31 $ 58,753 $ 56,388 ======= =======
P-3 Partnership ---------------
2004 2003 ---------- ----------
Total Asset Retirement Obligation, January 1 $ 95,666 $ 94,622 Additions and Revisions 33 247 Settlements and Disposals ( 300) ( 3,483) Accretion Expense 4,319 4,280 ------- ------- Total Asset Retirement Obligation, December 31 $ 99,718 $ 95,666 ======= =======
P-4 Partnership ---------------
2004 2003 ---------- ----------
Total Asset Retirement Obligation, January 1 $ 56,632 $ 53,986 Additions and Revisions 440 354 Settlements and Disposals ( 2,277) - Accretion Expense 2,125 2,292 ------- ------- Total Asset Retirement Obligation, December 31 $ 56,920 $ 56,632 ======= =======
P-5 Partnership ---------------
2004 2003 ---------- --------
Total Asset Retirement Obligation, January 1 $ 72,299 $ 68,918 Additions and Revisions 1,608 141 Settlements and Disposals ( 104) - Accretion Expense 2,878 3,240 ------- ------- Total Asset Retirement Obligation, December 31 $ 76,681 $ 72,299 ======= =======
P-6 Partnership ---------------
2004 2003 ---------- --------
Total Asset Retirement Obligation, January 1 $206,661 $204,576 Additions and Revisions 954 50 Settlements and Disposals ( 6,956) - Accretion Expense 7,427 2,035 ------- ------- Total Asset Retirement Obligation, December 31 $208,086 $206,661 ======= =======
Had FAS No. 143 been adopted at January 1, 2002 the amount of the asset retirement obligation at that date and at December 31, 2002 would not have been materially different from the amount recorded at January 1, 2003. If this accounting policy had been in effect on January 1, 2002, the pro forma impact for the P-1, P-3, P-4, P-5, and P-6 Partnerships during the year ended December 31, 2002 would have been an increase in Depletion of Net Profits Interest of approximately $3,000, $5,000, $4,000, $3,000, and $9,000, respectively.
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 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 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, 2004, 2003, and 2002:
Partnership 2004 2003 2002 ----------- -------- -------- --------
P-1 $113,760 $113,760 $113,760 P-3 178,560 178,560 178,560 P-4 132,960 132,960 132,960 P-5 124,680 124,680 124,680 P-6 150,564 150,564 150,564
Affiliates of the Partnerships operate certain of the properties in which the Partnerships own a Net Profits Interest and their policy is to bill the owners of the working interests of such properties for all customary charges and cost reimbursements associated with these activities, together with any compressor rentals, consulting, or other services provided.
3. MAJOR CUSTOMERS
The following table sets forth purchasers who individually accounted for ten percent or more of combined oil and gas sales attributable to each of the Partnership's Net Profits Interest during the years ended December 31, 2004, 2003, and 2002:
Percentage ----------------------- Partnership Purchaser 2004 2003 2002 - ----------- ------------------------ ----- ----- -----
P-1 Cinergy Marketing ("Cinergy") 13.2% 14.3% - Duke Energy Field Services, Inc. ("Duke") 11.5% - - Chevron U.S.A., Inc. 11.3% - - El Paso Energy Marketing Company ("El Paso") - - 17.5%
P-3 Duke 14.9% - - Cinergy 12.0% 13.2% - El Paso - - 17.4%
P-4 Eaglwing Trading, Inc. 25.3% 25.9% 23.3% Gulfterra Central Point Alloc. 11.4% - - Valero Industrial Gas LP - 22.8% 20.3% Conoco, Inc. - - 15.7% El Paso - - 11.9%
P-5 Enogex Services Corporation 20.2% 18.3% - Cinergy 16.1% 27.0% - ONEOK Texas Energy 14.6% 14.4% 12.0% Resources ("ONEOK") Duke 11.5% 13.6% - El Paso - - 59.2%
P-6 Duke 23.1% 22.9% 18.0% Kinder Morgan, Inc. 19.5% 18.0% - ONEOK 11.1% - - Cinergy - 15.2% - El Paso - - 28.0%
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 pipeline transporters, the Partnerships may encounter difficulty in marketing their gas and in maintaining historic sales levels. Alternative purchasers or transporters may not be readily available.
4. SUPPLEMENTAL OIL AND GAS INFORMATION
The following supplemental information regarding the Net Profits Interest activities of the Partnerships is presented pursuant to the disclosure requirements promulgated by the SEC.
Capitalized Costs
Capitalized costs and accumulated depletion at December 31, 2004 and 2003 were as follows:
P-1 Partnership ---------------
2004 2003 ------------ ------------ Net Profits Interests in proved oil and gas properties $6,539,536 $6,585,411
Less accumulated depletion and valuation allowance ( 5,846,408) ( 5,852,988) --------- --------- Net Profits Interests, net $ 693,128 $ 732,423 ========= =========
P-3 Partnership ---------------
2004 2003 ------------ ------------ Net Profits Interests in proved oil and gas properties $9,964,344 $9,972,636
Less accumulated depletion and valuation allowance ( 8,892,495) ( 8,781,942) --------- --------- Net Profits Interests, net $1,071,849 $1,190,694 ========= =========
P-4 Partnership ---------------
2004 2003 ------------ ------------ Net Profits Interests in proved oil and gas properties $8,050,934 $8,290,388
Less accumulated depletion and valuation allowance ( 7,655,977) ( 7,853,925) --------- --------- Net Profits Interests, net $ 394,957 $ 436,463 ========= =========
P-5 Partnership ---------------
2004 2003 ------------- ------------- Net Profits Interests in proved oil and gas properties $ 9,509,448 $ 9,432,867
Less accumulated depletion and valuation allowance ( 8,908,569) ( 8,816,590) ---------- ---------- Net Profits Interest, net $ 600,879 $ 616,277 ========== ==========
P-6 Partnership ---------------
2004 2003 ------------- ------------- Net Profits Interests in proved oil and gas properties $11,329,527 $11,391,974
Less accumulated depletion and valuation allowance ( 10,158,432) ( 10,127,782) ---------- ---------- Net Profits Interests, net $ 1,171,095 $ 1,264,192 ========== ==========
Costs Incurred
No property acquisition or exploration costs were incurred by the Partnerships during the three years ended December 31, 2004. The following table sets forth the development costs related to the working interests which are burdened by the Partnerships' Net Profits Interests during the years ended December 31, 2004, 2003, and 2002. Since these acquisition and development costs were charged against the Net Profits payable to the Partnerships, such costs were indirectly borne by the Partnerships.
Partnership 2004 2003(1) 2002 ----------- ------- ------- -------
P-1 $25,183 $26,919 $61,170 P-3 80,861 43,489 88,773 P-4 36,380 24,938 73,913 P-5 75,826 16,739 76,041 P-6 26,625 7,948 78,281
--------------- (1) Excludes the estimated asset retirement costs for the P-1, P-3, P-4, P-5, and P-6 Partnerships of
approximately $32,000, $56,000, $37,000, $44,000, and $149,000, respectively, recorded as part of the FAS No. 143 implementation.
Quantities of Proved Oil and Gas Reserves - Unaudited
The following tables summarize changes in net quantities of proved reserves attributable to the Partnerships' Net Profits Interests, all of which are located in the United States of America, for the periods indicated. The proved reserves 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.
P-1 Partnership ---------------
Crude Natural Oil Gas (Barrels) (Mcf) --------- -----------
Proved reserves, December 31, 2001 151,869 1,787,352 Production ( 20,652) ( 286,109) Sale of minerals in place - ( 24,441) Extensions and discoveries 3,020 84,663 Revision of previous estimates 26,101 171,515 ------- ---------
Proved reserves, December 31, 2002 160,338 1,732,980 Production ( 18,624) ( 284,754) Sale of minerals in place ( 1,899) ( 35,150) Extensions and discoveries 2,324 2,792 Revision of previous estimates 66,134 850,842 ------- ---------
Proved reserves, December 31, 2003 208,273 2,266,710 Production ( 19,377) ( 251,793) Sale of minerals in place ( 30) - Extensions and discoveries 4,643 8,281 Revision of previous estimates 50,473 268,536 ------- ---------
Proved reserves, December 31, 2004 243,982 2,291,734 ======= =========
PROVED DEVELOPED RESERVES: December 31, 2002 160,338 1,732,980 ======= ========= December 31, 2003 208,273 2,266,710 ======= ========= December 31, 2004 243,982 2,291,734 ======= =========
P-3 Partnership ---------------
Crude Natural Oil Gas (Barrels) (Mcf) --------- -----------
Proved reserves, December 31, 2001 205,619 2,921,349 Production ( 26,541) ( 433,484) Sale of minerals in place - ( 30,718) Extensions and discoveries 4,543 121,217 Revision of previous estimates 33,066 323,117 ------- ---------
Proved reserves, December 31, 2002 216,687 2,901,481 Production ( 23,935) ( 425,803) Sale of minerals in place ( 2,398) ( 44,904) Extensions and discoveries 4,154 5,815 Revision of previous estimates 81,987 1,282,716 ------- ---------
Proved reserves, December 31, 2003 276,495 3,719,305 Production ( 24,925) ( 389,500) Sale of minerals in place ( 57) - Extensions and discoveries 5,755 9,293 Revision of previous estimates 63,097 271,011 ------- ---------
Proved reserves, December 31, 2004 320,365 3,610,109 ======= ========= PROVED DEVELOPED RESERVES: December 31, 2002 216,687 2,901,481 ======= ========= December 31, 2003 276,495 3,719,305 ======= ========= December 31, 2004 320,365 3,610,109 ======= =========
P-4 Partnership ---------------
Crude Natural Oil Gas (Barrels) (Mcf) --------- -----------
Proved reserves, December 31, 2001 90,296 2,083,182 Production (26,054) ( 444,617) Sale of minerals in place - ( 43,199) Extensions and discoveries 2,359 52,147 Revision of previous estimates (37,086) 361,135 ------ ---------
Proved reserves, December 31, 2002 29,515 2,008,648 Production (21,439) ( 258,598) Extensions and discoveries 19 3,707 Revision of previous estimates 57,895 344,786 ------ ---------
Proved reserves, December 31, 2003 65,990 2,098,543 Production (17,687) ( 238,451) Sale of minerals in place ( 52) - Extensions and discoveries 485 1,456 Revision of previous estimates 10,920 107,620 ------ ---------
Proved reserves, December 31, 2004 59,656 1,969,168 ====== =========
PROVED DEVELOPED RESERVES: December 31, 2002 27,086 1,984,642 ====== ========= December 31, 2003 63,561 2,074,944 ====== ========= December 31, 2004 57,343 1,945,771 ====== =========
P-5 Partnership ---------------
Crude Natural Oil Gas (Barrels) (Mcf) --------- -----------
Proved reserves, December 31, 2001 29,903 2,340,665 Production ( 6,223) ( 386,565) Sale of minerals in place ( 60) ( 7,037) Extensions and discoveries 13,919 93,056 Revision of previous estimates 7,248 166,776 ------ ---------
Proved reserves, December 31, 2002 44,787 2,206,895 Production ( 6,364) ( 313,632) Sale of minerals in place - ( 1) Revision of previous estimates 9,047 453,379 ------ ---------
Proved reserves, December 31, 2003 47,470 2,346,641 Production ( 4,603) ( 282,972) Sale of minerals in place ( 5) - Extensions and discoveries 2 31,722 Revision of previous estimates ( 4,707) 35,222 ------ ---------
Proved reserves, December 31, 2004 38,157 2,130,613 ====== ========= PROVED DEVELOPED RESERVES: December 31, 2002 44,787 2,206,895 ====== ========= December 31, 2003 47,470 2,346,641 ====== ========= December 31, 2004 38,157 2,130,613 ====== =========
P-6 Partnership ---------------
Crude Natural Oil Gas (Barrels) (Mcf) --------- -----------
Proved reserves, December 31, 2001 93,698 3,954,081 Production ( 15,089) ( 636,758) Sale of minerals in place ( 63) ( 7,595) Extensions and discoveries 15,007 107,938 Revision of previous estimates 20,662 506,262 ------- ---------
Proved reserves, December 31, 2002 114,215 3,923,928 Production ( 15,939) ( 577,123) Revision of previous estimates 27,563 763,881 ------- ---------
Proved reserves, December 31, 2003 125,839 4,110,686 Production ( 7,824) ( 446,505) Extensions and discoveries 2 10,991 Revision of previous estimates 6,877 265,162 ------- ---------
Proved reserves, December 31, 2004 124,894 3,940,334 ======= ========= PROVED DEVELOPED RESERVES: December 31, 2002 114,215 3,923,928 ======= ========= December 31, 2003 125,839 4,110,686 ======= ========= December 31, 2004 124,894 3,940,334 ======= =========
5. QUARTERLY FINANCIAL DATA (Unaudited)
Summarized unaudited quarterly financial data for 2004 and 2003 are as follows:
P-1 Partnership ---------------
----------------------------------------------- First Second Third Fourth Quarter Quarter Quarter Quarter -------- -------- -------- --------
Total Revenues $419,312 $403,648 $392,532 $289,232 Gross Profit(1) 400,614 390,433 371,996 273,982 Net Income 364,183 345,236 341,352 244,121 Limited Partners' Net Income Per Unit 3.02 2.87 2.83 2.03
----------------------------------------------- First Second Third Fourth Quarter Quarter Quarter Quarter -------- -------- -------- --------
Total Revenues $387,144 $381,855 $329,721 $317,478 Gross Profit(1) 361,419 365,392 306,678 302,771 Net Income 324,187 326,738 273,879 272,085 Limited Partners' Net Income Per Unit 2.68 2.71 2.26 2.26
- ----------------------------- (1) Total revenues less depletion of Net Profits Interests.
P-3 Partnership ---------------
----------------------------------------------- First Second Third Fourth Quarter Quarter Quarter Quarter -------- -------- -------- --------
Total Revenues $622,810 $581,919 $568,032 $445,484 Gross Profit(1) 593,416 562,711 468,521 388,691 Net Income 539,621 500,379 421,230 342,390 Limited Partners' Net Income Per Unit 2.85 2.65 2.19 1.79
----------------------------------------------- First Second Third Fourth Quarter Quarter Quarter Quarter -------- -------- -------- --------
Total Revenues $549,486 $571,428 $475,740 $455,123 Gross Profit(1) 512,012 543,756 442,102 432,662 Net Income 458,027 488,285 391,411 385,277 Limited Partners' Net Income Per Unit 2.41 2.58 2.06 2.03
- ------------------------------ (1) Total revenues less depletion of Net Profits Interests.
P-4 Partnership ---------------
----------------------------------------------- First Second Third Fourth Quarter Quarter Quarter Quarter -------- -------- -------- --------
Total Revenues $401,670 $439,393 $416,322 $413,912 Gross Profit(1) 367,468 414,383 403,705 406,962 Net Income 326,828 364,113 368,236 372,231 Limited Partners' Net Income Per Unit 2.30 2.58 2.62 2.65
----------------------------------------------- First Second Third Fourth Quarter Quarter Quarter Quarter -------- -------- -------- --------
Total Revenues $511,516 $434,810 $358,498 $271,023 Gross Profit(1) 483,557 419,755 334,988 245,353 Net Income 438,118 376,799 297,050 210,273 Limited Partners' Net Income Per Unit 3.10 2.68 2.10 1.48
- --------------------------------- (1) Total revenues less depletion of Net Profits Interests.
P-5 Partnership ---------------
----------------------------------------------- First Second Third Fourth Quarter Quarter Quarter Quarter -------- -------- -------- --------
Total Revenues $315,510 $363,670 $263,101 $306,592 Gross Profit(1) 285,130 340,503 253,326 274,953 Net Income 246,704 292,420 220,002 242,321 Limited Partners' Net Income Per Unit 1.85 2.21 1.66 1.82
----------------------------------------------- First Second Third Fourth Quarter Quarter Quarter Quarter -------- -------- -------- --------
Total Revenues $446,994 $313,378 $289,476 $233,167 Gross Profit(1) 430,669 288,313 274,839 209,557 Net Income 390,634 247,488 239,208 176,608 Limited Partners' Net Income Per Unit 3.13 1.98 1.80 1.33
- ------------------------------ (1) Total revenues less depletion of Net Profits Interests.
P-6 Partnership ---------------
----------------------------------------------- First Second Third Fourth Quarter Quarter Quarter Quarter -------- -------- -------- --------
Total Revenues $539,568 $541,823 $337,091 $449,449 Gross Profit(1) 503,481 505,438 314,188 423,545 Net Income 458,121 450,510 274,155 384,347 Limited Partners' Net Income Per Unit 2.86 2.81 1.71 2.41
----------------------------------------------- First Second Third Fourth Quarter Quarter Quarter Quarter -------- -------- -------- --------
Total Revenues $722,864 $722,350 $457,829 $447,741 Gross Profit(1) 688,470 680,373 424,305 414,002 Net Income 640,302 632,881 381,441 374,385 Limited Partners' Net Income Per Unit 4.01 3.95 2.38 2.34
- ------------------------------ (1) Total revenues less depletion of Net Profits Interests.
INDEX TO EXHIBITS -----------------
No. Description - ---- -----------
4.1 Certificate of Limited Partnership dated March 16, 1988 for the Geodyne Institutional/ Pension Energy Income P-1 Limited Partnership filed as Exhibit 4.1 to Registrant's Annual Report on Form 10-K for the year ended December 31, 2001, filed with the SEC on February 26, 2002 and is hereby incorporated by reference.
4.2 Amended and Restated Agreement of Limited Partnership dated October 25, 1988 for the Geodyne Institutional/Pension Energy Income P-1 Limited Partnership filed as Exhibit 4.2 to Registrant's Annual Report on Form 10-K for the year ended December 31, 2001, filed with the SEC on February 26, 2002 and is hereby incorporated by reference.
4.3 First Amendment to Certificate of Limited Partnership and First Amendment to Amended and Restated Agreement of Limited Partnership dated February 24, 1993, for the Geodyne Institutional/Pension Energy Income P-1 Limited Partnership filed as Exhibit 4.3 to Registrant's Annual Report on Form 10-K for the year ended December 31, 2001, filed with the SEC on February 26, 2002 and is hereby incorporated by reference.
4.4 Second Amendment to Certificate of Limited Partnership dated July 1, 1996 for the Geodyne Institutional/Pension Energy Income P-1 Limited Partnership filed as Exhibit 4.4 to Registrant's Annual Report on Form 10-K for the year ended December 31, 2001, filed with the SEC on February 26, 2002 and is hereby incorporated by reference.
4.5 Second Amendment to Amended and Restated Agreement of Limited Partnership dated August 4, 1993, for the Geodyne Institutional/Pension Energy Income P-1 Limited Partnership filed as Exhibit 4.5 to Registrant's Annual Report on Form 10-K for the year ended December 31, 2001, filed with the SEC on February 26, 2002 and is hereby incorporated by reference.
4.6 Third Amendment to Amended and Restated Agreement of Limited Partnership dated August 31, 1995, for the Geodyne Institutional/Pension Energy Income P-1 Limited Partnership filed as Exhibit 4.6 to Registrant's Annual Report on Form 10-K for the year ended December 31, 2001, filed with the SEC on February 26, 2002 and is hereby incorporated by reference.
4.7 Fourth Amendment to Amended and Restated Agreement of Limited Partnership dated July 1, 1996, for the Geodyne Institutional/Pension Energy Income P-1 Limited Partnership filed as Exhibit 4.7 to Registrant's Annual Report on Form 10-K for the year ended December 31, 2001, filed with the SEC on February 26, 2002 and is hereby incorporated by reference.
4.8 Certificate of Limited Partnership dated February 13, 1989 for the Geodyne Institutional/ Pension Energy Income Limited Partnership P-3 filed as Exhibit 4.15 to Registrant's Annual Report on Form 10-K for the year ended December 31, 2001, filed with the SEC on February 26, 2002 and is hereby incorporated by reference.
4.9 Amended and Restated Agreement of Limited Partnership dated May 10, 1989 for the Geodyne Institutional/Pension Energy Income Limited Partnership P-3 filed as Exhibit 4.16 to Registrant's Annual Report on Form 10-K for the year ended December 31, 2001, filed with the SEC on February 26, 2002 and is hereby incorporated by reference.
4.10 First Amendment to Certificate of Limited Partnership and First Amendment to Amended and Restated Agreement of Limited Partnership dated February 24, 1993, for the Geodyne Institutional/Pension Energy Income Limited Partnership P-3 filed as Exhibit 4.17 to Registrant's Annual Report on Form 10-K for the year ended December 31, 2001, filed with the SEC on February 26, 2002 and is hereby incorporated by reference.
4.11 Second Amendment to Certificate of Limited Partnership dated July 1, 1996 for the Geodyne Institutional/Pension Energy Income Limited Partnership P-3 filed as Exhibit 4.18 to Registrant's Annual Report on Form 10-K for the year ended December 31, 2001, filed with the SEC on February 26, 2002 and is hereby incorporated by reference.
4.12 Second Amendment to Amended and Restated Agreement of Limited Partnership dated August 4, 1993, for the Geodyne Institutional/Pension Energy Income Limited Partnership P-3 filed as Exhibit 4.19 to Registrant's Annual Report on Form 10-K for the year ended December 31, 2001, filed with the SEC on February 26, 2002 and is hereby incorporated by reference.
4.13 Third Amendment to Amended and Restated Agreement of Limited Partnership dated August 31, 1995, for the Geodyne Institutional/Pension Energy Income Limited Partnership P-3 filed as Exhibit 4.20 to Registrant's Annual Report on Form 10-K for the year ended December
31, 2001, filed with the SEC on February 26, 2002 and is hereby incorporated by reference.
4.14 Fourth Amendment to Amended and Restated Agreement of Limited Partnership dated July 1, 1996, for the Geodyne Institutional/Pension Energy Income Limited Partnership P-3 filed as Exhibit 4.21 to Registrant's Annual Report on Form 10-K for the year ended December 31, 2001, filed with the SEC on February 26, 2002 and is hereby incorporated by reference.
4.15 Certificate of Limited Partnership dated May 10, 1989 for the Geodyne Institutional/ Pension Energy Income Limited Partnership P-4 filed as Exhibit 4.22 to Registrant's Annual Report on Form 10-K for the year ended December 31, 2001, filed with the SEC on February 26, 2002 and is hereby incorporated by reference.
4.16 Amended and Restated Agreement of Limited Partnership dated November 20, 1989 for the Geodyne Institutional/Pension Energy Income Limited Partnership P-4 filed as Exhibit 4.23 to Registrant's Annual Report on Form 10-K for the year ended December 31, 2001, filed with the SEC on February 26, 2002 and is hereby incorporated by reference.
4.17 First Amendment to Certificate of Limited Partnership and First Amendment to Amended and Restated Agreement of Limited Partnership dated February 24, 1993, for the Geodyne Institutional/Pension Energy Income Limited Partnership P-4 filed as Exhibit 4.24 to Registrant's Annual Report on Form 10-K for the year ended December 31, 2001, filed with the SEC on February 26, 2002 and is hereby incorporated by reference.
4.18 Second Amendment to Certificate of Limited Partnership dated July 1, 1996 for the Geodyne Institutional/Pension Energy Income Limited Partnership P-4 filed as Exhibit 4.25 to Registrant's Annual Report on Form 10-K for the year ended December 31, 2001, filed with the SEC on February 26, 2002 and is hereby incorporated by reference.
4.19 Second Amendment to Amended and Restated Agreement of Limited Partnership dated August 4, 1993, for the Geodyne Institutional/Pension Energy Income Limited Partnership P-4 filed as Exhibit 4.26 to Registrant's Annual Report on Form 10-K for the year ended December 31, 2001, filed with the SEC on February 26, 2002 and is hereby incorporated by reference.
4.20 Third Amendment to Amended and Restated Agreement of Limited Partnership dated August 31, 1995, for the Geodyne Institutional/Pension Energy Income Limited
Partnership P-4 filed as Exhibit 4.27 to Registrant's Annual Report on Form 10-K for the year ended December 31, 2001, filed with the SEC on February 26, 2002 and is hereby incorporated by reference.
4.21 Fourth Amendment to Amended and Restated Agreement of Limited Partnership dated July 1, 1996, for the Geodyne Institutional/Pension Energy Income Limited Partnership P-4 filed as Exhibit 4.28 to Registrant's Annual Report on Form 10-K for the year ended December 31, 2001, filed with the SEC on February 26, 2002 and is hereby incorporated by reference.
4.22 Certificate of Limited Partnership dated November 9, 1989 for the Geodyne Institutional/ Pension Energy Income Limited Partnership P-5 filed as Exhibit 4.29 to Registrant's Annual Report on Form 10-K for the year ended December 31, 2001, filed with the SEC on February 26, 2002 and is hereby incorporated by reference.
4.23 Amended and Restated Agreement of Limited Partnership dated February 26, 1990 for the Geodyne Institutional/Pension Energy Income Limited Partnership P-5 filed as Exhibit 4.30 to Registrant's Annual Report on Form 10-K for the year ended December 31, 2001, filed with the SEC on February 26, 2002 and is hereby incorporated by reference.
4.24 First Amendment to Certificate of Limited Partnership and First Amendment to Amended and Restated Agreement of Limited Partnership dated February 24, 1993, for the Geodyne Institutional/Pension Energy Income Limited Partnership P-5 filed as Exhibit 4.31 to Registrant's Annual Report on Form 10-K for the year ended December 31, 2001, filed with the SEC on February 26, 2002 and is hereby incorporated by reference.
4.25 Second Amendment to Certificate of Limited Partnership dated July 1, 1996 for the Geodyne Institutional/Pension Energy Income Limited Partnership P-5 filed as Exhibit 4.32 to Registrant's Annual Report on Form 10-K for the year ended December 31, 2001, filed with the SEC on February 26, 2002 and is hereby incorporated by reference.
4.26 Second Amendment to Amended and Restated Agreement of Limited Partnership dated August 4, 1993, for the Geodyne Institutional/Pension Energy Income Limited Partnership P-5 filed as Exhibit 4.33 to Registrant's Annual Report on Form 10-K for the year ended December 31, 2001, filed with the SEC on February 26, 2002 and is hereby incorporated by reference.
4.27 Third Amendment to Amended and Restated Agreement of Limited Partnership dated August 31, 1995, for the Geodyne Institutional/Pension Energy Income Limited Partnership P-5 filed as Exhibit 4.34 to Registrant's Annual Report on Form 10-K for the year ended December 31, 2001, filed with the SEC on February 26, 2002 and is hereby incorporated by reference.
4.28 Fourth Amendment to Amended and Restated Agreement of Limited Partnership dated July 1, 1996, for the Geodyne Institutional/Pension Energy Income Limited Partnership P-5 filed as Exhibit 4.35 to Registrant's Annual Report on Form 10-K for the year ended December 31, 2001, filed with the SEC on February 26, 2002 and is hereby incorporated by reference.
4.29 Certificate of Limited Partnership dated November 28, 1989 for the Geodyne Institutional/ Pension Energy Income Limited Partnership P-6 filed as Exhibit 4.36 to Registrant's Annual Report on Form 10-K for the year ended December 31, 2001, filed with the SEC on February 26, 2002 and is hereby incorporated by reference.
4.30 Amended and Restated Agreement of Limited Partnership dated October 5, 1990 for the Geodyne Institutional/Pension Energy Income Limited Partnership P-6 filed as Exhibit 4.37 to Registrant's Annual Report on Form 10-K for the year ended December 31, 2001, filed with the SEC on February 26, 2002 and is hereby incorporated by reference.
4.31 First Amendment to Certificate of Limited Partnership and First Amendment to Amended and Restated Agreement of Limited Partnership dated February 24, 1993, for the Geodyne Institutional/Pension Energy Income Limited Partnership P-6 filed as Exhibit 4.38 to Registrant's Annual Report on Form 10-K for the year ended December 31, 2001, filed with the SEC on February 26, 2002 and is hereby incorporated by reference.
4.32 Second Amendment to Certificate of Limited Partnership dated July 1, 1996 for the Geodyne Institutional/Pension Energy Income Limited Partnership P-6 filed as Exhibit 4.39 to Registrant's Annual Report on Form 10-K for the year ended December 31, 2001, filed with the SEC on February 26, 2002 and is hereby incorporated by reference.
4.33 Second Amendment to Amended and Restated Agreement of Limited Partnership dated August 4, 1993, for the Geodyne Institutional/Pension Energy Income Limited Partnership P-6 filed as Exhibit 4.40 to Registrant's Annual Report on Form 10-K for the year ended December
31, 2001, filed with the SEC on February 26, 2002 and is hereby incorporated by reference.
4.34 Third Amendment to Amended and Restated Agreement of Limited Partnership dated August 31, 1995, for the Geodyne Institutional/Pension Energy Income Limited Partnership P-6 filed as Exhibit 4.41 to Registrant's Annual Report on Form 10-K for the year ended December 31, 2001, filed with the SEC on February 26, 2002 and is hereby incorporated by reference.
4.35 Fourth Amendment to Amended and Restated Agreement of Limited Partnership dated July 1, 1996, for the Geodyne Institutional/Pension Energy Income Limited Partnership P-6 filed as Exhibit 4.42 to Registrant's Annual Report on Form 10-K for the year ended December 31, 2001, filed with the SEC on February 26, 2002 and is hereby incorporated by reference.
10.1 Amended and Restated Agreement of Partnership dated October 25, 1988 for the Geodyne NPI Partnership P-1 filed as Exhibit 10.1 to Registrant's Annual Report on Form 10-K for the year ended December 31, 2001, filed with the SEC on February 26, 2002 and is hereby incorporated by reference.
10.2 First Amendment to Amended and Restated Agreement of Partnership dated February 26, 1993 for the Geodyne NPI Partnership P-1 filed as Exhibit 10.2 to Registrant's Annual Report on Form 10-K for the year ended December 31, 2001, filed with the SEC on February 26, 2002 and is hereby incorporated by reference.
10.3 Second Amendment to Amended and Restated Agreement of Partnership dated July 1, 1996 for the Geodyne NPI Partnership P-1 filed as Exhibit 10.3 to Registrant's Annual Report on Form 10-K for the year ended December 31, 2001, filed with the SEC on February 26, 2002 and is hereby incorporated by reference.
10.4 Agreement of Partnership dated February 9, 1989 for the Geodyne NPI Partnership P-3 filed as Exhibit 10.7 to Registrant's Annual Report on Form 10-K for the year ended December 31, 2001, filed with the SEC on February 26, 2002 and is hereby incorporated by reference.
10.5 First Amendment to Agreement of Partnership dated February 26, 1993 for the Geodyne NPI Partnership P-3 filed as Exhibit 10.8 to Registrant's Annual Report on Form 10-K for the year ended December 31, 2001, filed with the SEC on February 26, 2002 and is hereby incorporated by reference.
10.6 Second Amendment to Agreement of Partnership dated July 1, 1996 for the Geodyne NPI Partnership P-3 filed as Exhibit 10.9 to Registrant's Annual Report on Form 10-K for the year ended December 31, 2001, filed with the SEC on February 26, 2002 and is hereby incorporated by reference.
10.7 Agreement of Partnership dated April 24, 1989 for the Geodyne NPI Partnership P-4 filed as Exhibit 10.10 to Registrant's Annual Report on Form 10-K for the year ended December 31, 2001, filed with the SEC on February 26, 2002 and is hereby incorporated by reference.
10.8 First Amendment to Agreement of Partnership dated February 26, 1993 for the Geodyne NPI Partnership P-4 filed as Exhibit 10.11 to Registrant's Annual Report on Form 10-K for the year ended December 31, 2001, filed with the SEC on February 26, 2002 and is hereby incorporated by reference.
10.9 Second Amendment to Agreement of Partnership dated July 1, 1996 for the Geodyne NPI Partnership P-4 filed as Exhibit 10.12 to Registrant's Annual Report on Form 10-K for the year ended December 31, 2001, filed with the SEC on February 26, 2002 and is hereby incorporated by reference.
10.10 Agreement of Partnership dated October 27, 1989 for the Geodyne NPI Partnership P-5 filed as Exhibit 10.13 to Registrant's Annual Report on Form 10-K for the year ended December 31, 2001, filed with the SEC on February 26, 2002 and is hereby incorporated by reference.
10.11 First Amendment to Agreement of Partnership dated February 26, 1993 for the Geodyne NPI Partnership P-5 filed as Exhibit 10.14 to Registrant's Annual Report on Form 10-K for the year ended December 31, 2001, filed with the SEC on February 26, 2002 and is hereby incorporated by reference.
10.12 Second Amendment to Agreement of Partnership dated July 1, 1996 for the Geodyne NPI Partnership P-5 filed as Exhibit 10.15 to Registrant's Annual Report on Form 10-K for the year ended December 31, 2001, filed with the SEC on February 26, 2002 and is hereby incorporated by reference.
10.13 Agreement of Partnership dated November 28, 1989 for the Geodyne NPI Partnership P-6 filed as Exhibit 10.16 to Registrant's Annual Report on Form 10-K for the year ended December 31, 2001, filed with the SEC on February 26, 2002 and is hereby incorporated by reference.
10.14 First Amendment to Agreement of Partnership dated February 26, 1993 for the Geodyne NPI Partnership P-6 filed as Exhibit 10.17 to Registrant's Annual Report on Form 10-K for the year ended December 31, 2001, filed with the SEC on February 26, 2002 and is hereby incorporated by reference.
10.15 Second Amendment to Agreement of Partnership dated July 1, 1996 for the Geodyne NPI Partnership P-6 filed as Exhibit 10.18 to Registrant's Annual Report on Form 10-K for the year ended December 31, 2001, filed with the SEC on February 26, 2002 and is hereby incorporated by reference.
*23.1 Consent of Ryder Scott Company, L.P. for the Geodyne Institutional/Pension Energy Income P-1 Limited Partnership.
*23.2 Consent of Ryder Scott Company, L.P. for the Geodyne Institutional/Pension Energy Income Limited Partnership P-3.
*23.3 Consent of Ryder Scott Company, L.P. for the Geodyne Institutional/Pension Energy Income Limited Partnership P-4.
*23.4 Consent of Ryder Scott Company, L.P. for the Geodyne Institutional/Pension Energy Income Limited Partnership P-5.
*23.5 Consent of Ryder Scott Company, L.P. for the Geodyne Institutional/Pension Energy Income Limited Partnership P-6.
*31.1 Certification by Dennis R. Neill required by Rule 13a-14(a)/15d-14(a) for the Geodyne Institutional/Pension Energy Income P-1 Limited Partnership.
*31.2 Certification by Craig D. Loseke required by Rule 13a-14(a)/15d-14(a) for the Geodyne Institutional/Pension Energy Income P-1 Limited Partnership.
*31.3 Certification by Dennis R. Neill required by Rule 13a-14(a)/15d-14(a) for the Geodyne Institutional/Pension Energy Income Limited Partnership P-3.
*31.4 Certification by Craig D. Loseke required by Rule 13a-14(a)/15d-14(a) for the Geodyne Institutional/Pension Energy Income Limited Partnership P-3.
*31.5 Certification by Dennis R. Neill required by Rule 13a-14(a)/15d-14(a) for the Geodyne Institutional/Pension Energy Income Limited Partnership P-4.
*31.6 Certification by Craig D. Loseke required by Rule 13a-14(a)/15d-14(a) for the Geodyne Institutional/Pension Energy Income Limited Partnership P-4.
*31.7 Certification by Dennis R. Neill required by Rule 13a-14(a)/15d-14(a) for the Geodyne Institutional/Pension Energy Income Limited Partnership P-5.
*31.8 Certification by Craig D. Loseke required by Rule 13a-14(a)/15d-14(a) for the Geodyne Institutional/Pension Energy Income Limited Partnership P-5.
*31.9 Certification by Dennis R. Neill required by Rule 13a-14(a)/15d-14(a) for the Geodyne Institutional/Pension Energy Income Limited Partnership P-6.
*31.10 Certification by Craig D. Loseke required by Rule 13a-14(a)/15d-14(a) for the Geodyne Institutional/Pension Energy Income Limited Partnership P-6.
*32.1 Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 for the Geodyne Institutional/Pension Energy Income P-1 Limited Partnership.
*32.2 Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 for the Geodyne Institutional/Pension Energy Income Limited Partnership P-3.
*32.3 Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 for the Geodyne Institutional/Pension Energy Income Limited Partnership P-4.
*32.4 Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 for the Geodyne Institutional/Pension Energy Income Limited Partnership P-5.
*32.5 Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 for the Geodyne Institutional/Pension Energy Income Limited Partnership P-6.
All other Exhibits are omitted as inapplicable.
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*Filed herewith.