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, 2006, Samson owned interests in approximately 12,000 oil
and gas wells located in 19 states of the United States, Alberta Canada and the United Kingdom North Sea. At December 31, 2006, Samson operated approximately 4,000 oil and gas wells located in 15 states of the United States, as well as Alberta Canada.
Until liquidation (see "Partnership Termination" below), the Partnerships are 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, 2007, Samson employed approximately 1,200 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, and Corporate Governance."
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].
Partnership Termination
Pursuant to the terms of the partnership agreements for the Partnerships (the "Partnership Agreements"), the Partnerships would have terminated on December 31, 2005. However, the Partnership Agreements provide that the General Partner may extend the term of each
Partnership for up to five periods of two years each. The General Partner has extended the terms of the Partnerships for the first two-year period to December 31, 2007. On February 5, 2007, the General Partner mailed a notice to the limited partners announcing that the Partnerships will terminate at the end of their current term, December 31, 2007. See "Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations" for more information regarding the termination and liquidation 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 global price of steel as well as increases in the prices for oil and gas supplies and services will 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. During the past year, the sale of oil and gas properties has also generated significant revenues for the Partnerships. 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 and the impact of weather-related events; * The availability and proximity of pipelines for transportation; * Domestic and foreign government regulations and taxes; * Market expectations; and * The effect of worldwide energy conservation.
It is not possible to predict the future direction of oil or natural gas prices. Operating costs, including General and Administrative Expenses, may not decline over time, may increase, or may experience only a gradual decline, thus adversely affecting net revenues as either 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.
As discussed in "Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations," the Partnerships will terminate on December 31, 2007. The volumes, pricing, and expense factors discussed above may also impact the price the Partnerships receive for their oil and gas properties in connection with the liquidation of the Partnerships' assets.
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, 2006:
Partnership Customer Percentage ----------- ----------------------------- ----------
P-1 Chevron North American Exploration & Production Company 10.4%
P-3 Duke Energy Field Services, Inc. ("Duke") 11.2%
P-4 ConocoPhillips Company 32.4% Gulfterra Central Point Allocation 18.5% Enogex Services Corporation ("Enogex") 10.5%
P-5 Enogex 16.3% NGPL Allocation 11.8%
P-6 Duke 18.0% Kinder Morgan, Inc. 15.5% Eaglwing Trading, Inc. 10.2%
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 the protection of environmental, biological, cultural and aesthetic resources. 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. For example, 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 1A.
ITEM 1A. RISK FACTORS
The following factors, among others, could have a material adverse effect upon the Partnerships' business, financial condition, and results of operations.
The following discussion of risk factors should be read in conjunction with the combined financial statements and related notes included herein. Because of these and other factors, past financial performance should not be considered an indication of future performance.
Termination of Partnerships in 2007 -----------------------------------
The Partnerships will terminate on December 31, 2007. Upon termination, we will sell the Partnerships' properties. There is no assurance that the market for the Partnerships' properties will be favorable at that time. The market for oil and gas properties is highly dependent on current and anticipated future prices for oil and gas. These prices fluctuate due to a number of uncontrollable factors as described in the following paragraph. A decrease in oil and gas prices and/or anticipated future oil and gas prices would probably depress the market for oil and gas properties and result in lowered sales proceeds to the Partnerships.
Oil And Natural Gas Prices Fluctuate Due To A Number Of -------------------------------------------------------- Uncontrollable Factors, And Any Decline Will Adversely Affect The ----------------------------------------------------------------- Partnerships' Financial Condition. ----------------------------------
The Partnerships' results of operations depend upon the prices they receive for their oil and natural gas as well as the sales of oil and gas properties pursuant to the liquidation plan described in "Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations." We sell most of the Partnerships' oil and natural gas liquids at current market prices rather than through fixed-price contracts. Historically, the markets for oil and natural gas have been volatile and are likely to remain so. The prices we receive depend upon factors beyond our control, including:
* Worldwide and domestic supplies of oil and natural gas; * The ability of the members of 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 and the impact of weather-related events; * The availability and proximity of pipelines for transportation;
* Domestic and foreign government regulations and taxes; * Market expectations; and * The effect of worldwide energy conservation.
Government regulations, such as regulation of natural gas transportation and price controls, can affect product prices. These external factors and the volatile nature of the energy markets make it difficult to reliably estimate future prices of oil and natural gas.
Any decline in oil and natural gas prices adversely affects the Partnerships' financial condition. If the oil and gas industry experiences significant price declines, the Partnerships may not be able to maintain their current level of cash distributions. See "Item 1. Business-Competition and Marketing" and "Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations." Furthermore, significant price declines will negatively affect the ultimate cash received upon the sale of oil and gas properties in liquidation of the Partnerships.
Reserve Estimates Depend On Many Assumptions That May Turn Out To ----------------------------------------------------------------- Be Inaccurate. Any Material Inaccuracies In The Partnerships' -------------------------------------------------------------- Reserve Estimates Or Underlying Assumptions Could Cause ------------------------------------------------------- The Quantities And Net Present Value Of Their Reserves To Be ------------------------------------------------------------ Overstated. -----------
Estimating quantities of proved oil and natural gas reserves is a complex process. It requires interpretations of available technical data and various assumptions, including assumptions relating to economic factors. Any significant inaccuracies in these interpretations or assumptions or changes of condition could cause the quantities and net present value of the Partnerships' reserves to be overstated.
To prepare estimates of economically recoverable oil and natural gas reserves and future net cash flows, we analyze many variable factors, such as historical production from the area compared with production rates from other producing areas. We also analyze available geological, geophysical, production and engineering data, and the extent, quality and reliability of this data can vary. The process also involves economic assumptions relating to commodity prices, production costs, severance and excise taxes, capital expenditures and workover and remedial costs. Actual results most likely will vary from our estimates. Any significant variance could reduce the estimated quantities and present value of reserves shown in this Annual Report.
You should not assume that the present value of future net cash flows from the Partnerships' proved reserves shown in this Annual Report is the current market value of their estimated oil and natural
gas reserves. In accordance with Securities and Exchange Commission requirements, the Partnerships base the estimated discounted future net cash flows from their proved reserves on prices and costs on the date of the estimate. Actual current and future prices and costs may differ materially from those used in the earlier net present value estimate, and as a result, net present value estimates using current prices and costs may be significantly less than the earlier estimate which is provided in this Annual Report. See "Item 2. Properties-Proved Reserves and Net Present Value".
We have included in Note 7 to the financial statements included in this Annual Report unaudited combined balance sheets for the Partnerships which are prepared on a liquidation basis, rather than a going concern basis, due to Partnership termination on December 31, 2007. However, while these balance sheets are prepared with the intent of showing fair value, they are also based on estimates regarding future net cash flows until the properties are sold as well as the prices which may be received for the properties through the liquidation process. Actual current and future prices and costs as well as the prices buyers are willing to pay at the time the properties are sold may differ materially from the estimates used in the preparation of the unaudited liquidation basis combined balance sheets.
Drilling Oil And Natural Gas Wells Is A High-Risk Activity And -------------------------------------------------------------- Subjects Us To A Variety Of Factors That We Cannot Control. -----------------------------------------------------------
Drilling oil and natural gas wells, including development wells, involves numerous risks, including the risk that the Affiliated Programs may not encounter commercially productive oil and natural gas reservoirs. While the Affiliated Programs do not expend a significant portion of their capital on drilling activities, to the extent they do drill wells this can be a significant indirect risk factor to the Partnerships. The Affiliated Programs may not recover all or any portion of their investment in new wells. The presence of unanticipated pressures or irregularities in formations, miscalculations or accidents may cause the Partnerships' drilling activities to be unsuccessful and result in a total loss of investment. Further, drilling operations may be curtailed, delayed or canceled as a result of a variety of factors, including:
* Unexpected drilling conditions; * Title problems; * Restricted access to land for drilling or laying pipeline; * Pressure or irregularities in formations; * Equipment failure or accidents; * Adverse weather conditions; and * Costs of, or shortages or delays in the availability of, drilling rigs, tubular materials and equipment.
The Marketability Of The Partnerships' Production Is Dependent -------------------------------------------------------------- Upon Transportation And Processing Facilities Over Which We Have ---------------------------------------------------------------- No Control. -----------
The marketability of the Partnerships' production depends in part upon the availability, proximity and capacity of pipelines, natural gas gathering systems and processing facilities. Any significant change in market factors affecting these infrastructure facilities could harm their business. The Partnerships deliver oil and natural gas through gathering systems and pipelines that they do not own. These facilities may be temporarily unavailable due to market conditions or mechanical reasons, or may not be available to us in the future.
Reliance On Third Party Operators ---------------------------------
A substantial portion of the Partnerships' properties are operated by third parties. The Partnerships have little, if any, control over the operational decisions and costs associated with these properties. In addition, the Partnerships are totally reliant on the third party operators' internal controls associated with the operators' accounting for revenues and expenses.
No Market For Units -------------------
The Partnerships' Units are not listed on any exchange or national market system, and there is no established public trading market for them. Secondary market activity for the Units has been limited and varies among the Partnerships. The General Partner's annual repurchase offer was terminated on March 9, 2007 in anticipation of the Partnerships' termination at December 31, 2007. Therefore, you may only sell your Units via (i) occasional "4.9% tender offers" which are made for the Units and (ii) transfers facilitated by secondary trading firms and matching services. To ensure that the proper parties receive their share of the Partnerships' liquidation proceeds, the General Partner will not accept, process, or recognize any transfers of Units (with the exception of certain transactions between related persons) for which completed transfer documentation is not mailed to the General Partner with a postmark on or before June 30, 2007. Accordingly, there will be no market for the Partnerships' Units after June 30, 2007. See "Item 5. Market for Units, Related Limited Partner Matters, and Issuer Purchases of Units."
The Partnerships Are Subject To Complex Federal, State And Local ---------------------------------------------------------------- Laws And Regulations That Could Adversely Affect Their Business. ----------------------------------------------------------------
Extensive federal, state and local regulation of the oil and gas industry significantly affects the Partnerships' operations. In particular, they are subject to stringent environmental regulations. These regulations increase the costs of planning, designing, drilling, installing, operating and abandoning oil and natural gas wells and other related facilities. These regulations may become more demanding in the future. Matters subject to regulation include:
* Discharge permits for drilling operations; * Drilling bonds; * Spacing of wells; * Unitization and pooling of properties; * Environmental protection; * Reports concerning operations; and * Taxation.
Under these laws and regulations, the Partnerships could be liable for:
* Personal injuries; * Property damage; * Oil spills; * Discharge of hazardous materials; * Reclamation costs; * Remediation and clean-up costs; and * Other environmental damages.
While the Partnerships maintain insurance coverage customary for companies similar to their size and operations, losses can occur from uninsurable risks or in amounts in excess of existing insurance coverage. See "Item 1. Business."
Conflicts Of Interest ---------------------
Direct and indirect conflicts of interests exist among the Partnerships and among a Partnership and the General Partner and its affiliates. The General Partner and its affiliates engage in many aspects of the oil and gas business, including acting as a general partner of a number of affiliated oil and gas limited partnerships. The General Partner and its affiliates may engage in transactions with a Partnership, and Partnerships will frequently engage in transactions with other oil and gas limited partnerships. These conflicts could relate to the sale of oil and gas properties in the normal course of business as well as in the liquidation process. See "Item 13. Certain Relationships and Related Transactions and Director Independence."
Payments To The General Partner -------------------------------
The General Partner receives reimbursements for General and Administrative Expenses. The General Partner also receives a share of Partnership cash distributions. See "Item 11. Executive Compensation" and "Item 8. Financial Statements and Supplementary Data."
Financial Capability Of General Partner ---------------------------------------
The General Partner has limited financial resources. Contingencies may arise which will require funding beyond its financial resources. Even if such financial resources are available, the General Partner is not required to lend money or to fund any financial obligations of the Partnerships.
Liability And Indemnification Of General Partner And Related ------------------------------------------------------------ Parties -------
Although the General Partner generally will be liable for the obligations of the Partnerships, the Partnership Agreements provide that the claims of third parties will be initially satisfied from Partnership assets. The Partnership Agreements also provide, subject to certain conditions, that the Partnerships will reimburse (i.e. "indemnify") the General Partner and its affiliates for certain costs, claims and expenses.
ITEM 1B.
ITEM 1B. UNRESOLVED STAFF COMMENTS
None.
ITEM 2.
ITEM 2. PROPERTIES
Well Statistics
The following table sets forth the number of productive wells as of December 31, 2006 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-1 793 576 217 P-3 833 578 255 P-4 206 50 156 P-5 123 23 100 P-6 177 40 137
- --------------- (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, 2006, the Partnerships indirectly participated (through their Net Profits Interests) in the developmental drilling activities described below.
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P-1 PARTNERSHIP - --------------- WORKING REVENUE WELL NAME COUNTY ST. INTEREST INTEREST TYPE STATUS - --------- ------ --- -------- -------- ---- ------ Bennett A #1 Yoakum TX - 0.00047 Oil Producing Cochran #1 Pecos TX - 0.00094 Gas Producing Daberry #8-1 Wheeler TX - 0.00199 Gas Producing Hester 12-4 Lea NM - 0.00070 Oil Shut-in Hester #12-5 Lea NM - 0.00070 Gas In Progress Hester 12 6 Lea NM - 0.00070 Oil Shut-in Marshall #1 Howard TX - 0.00751 Gas Shut-in Miers W A #19 Sutton TX - 0.00024 Gas Producing Pettitfils J.D. A #12 Mitchell TX - 0.00313 Oil In progress Simpson Canyon #2027 Crockett TX - 0.00333 Oil Producing Simpson Canyon #3044 Crockett TX - 0.00751 Oil Producing Smith 18 #1 Lynn TX - 0.00188 Gas Dryhole Southland Royalty D #4 Andrews TX 0.00751 0.00751 Oil Producing Wilson A #3 Roger Mills OK 0.00015 0.00015 Gas Producing
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P-3 PARTNERSHIP - --------------- WORKING REVENUE WELL NAME COUNTY ST. INTEREST INTEREST TYPE STATUS - --------- ------ --- -------- -------- ---- ------ Bennett A #1 Yoakum TX - 0.00059 Oil Producing Cochran #1 Pecos TX - 0.00118 Gas Producing Daberry #8-1 Wheeler TX - 0.00250 Gas Producing Hester 12-4 Lea NM - 0.00088 Oil Producing Hester #12-5 Lea NM - 0.00088 Gas In progress Hester 12 6 Lea NM - 0.00088 Oil Shut-in Hoyt #1C (DK) Rio Arriba NM - 0.00004 Gas In Progress Hoyt #1C (MV) Rio Arriba NM - 0.00013 Gas Shut-in Jenny #1C Rio Arriba NM - 0.00040 Gas Producing Jicarilla B #1B Rio Arriba NM - 0.00005 Gas Producing Marshall #1 Howard TX - 0.00946 Gas Shut-in Miers W A #19 Sutton TX - 0.00030 Gas Producing Oliver #1 McClain OK - 0.00198 Oil Producing Pettitfils J.D. A #12 Mitchell TX - 0.00394 Oil In Progress Simpson Canyon #2027 Crockett TX - 0.00420 Oil Producing Simpson Canyon #3044 Crockett TX - 0.00946 Oil Producing Smith 18 #1 Lynn TX - 0.00236 Gas Dryhole Southland Royalty D #4 Andrews TX 0.00946 0.00946 Oil Producing Tafoya #35-5 San Juan NM - 0.00076 Gas Producing Wilson A #3 Roger Mills OK 0.00019 0.00019 Gas Producing
P-4 PARTNERSHIP - --------------- WORKING REVENUE WELL NAME COUNTY ST. INTEREST INTEREST TYPE STATUS - --------- ------ --- -------- -------- ---- ------ Clayton #11-9 Washita OK - 0.00155 Gas Producing Hachar #41 Webb TX - 0.00351 Gas Producing Hoyt #1C (DK) Rio Arriba NM - 0.00007 Gas In Progress Hoyt #1C (MV) Rio Arriba NM - 0.00023 Gas Shut-in Jenny #1C Rio Arriba NM - 0.00073 Gas Producing Jicarilla B #1B Rio Arriba NM - 0.00010 Gas Producing Phillips #1-22 Caddo OK - 0.00101 Gas Producing Ringo #10-9 Washita OK - 0.00166 Gas Producing Tafoya #35-5 San Juan NM - 0.00139 Gas Producing
P-5 PARTNERSHIP - --------------- WORKING REVENUE WELL NAME COUNTY ST. INTEREST INTEREST TYPE STATUS - --------- ------ --- -------- -------- ---- ------ Aday #1-9 McClain OK - 0.00173 Gas Producing Bridges #2-18 LeFlore OK - 0.00024 Gas Producing Camel, Joe #3 Lea NM - 0.00118 Oil In Progress Cantrell #7-15H Haskell OK - 0.00094 Gas Producing Cheyenne 29 #5 Roger Mills OK - 0.00006 Gas Producing Cory #1-29 Kingfisher OK - 0.00313 Gas Producing Davis Garry #26 Kay OK - 0.00067 Oil Producing Delaware 28 #6 Roger Mills OK - 0.00006 Gas Producing Delaware 28 #7 Roger Mills OK - 0.00006 Gas In progress Duncan #2-7H Seminole OK - 0.00015 Oil Producing Gilbert A #1 Caddo OK - 0.00189 Gas Producing Grace #1-H Lincoln OK - 0.00244 Gas Producing Guinn #1-5 Coal OK - 0.00427 Gas Producing Harris #5-26H Haskell OK - 0.00052 Gas Producing Hay #10-33 Roger Mills OK - 0.00013 Gas Producing Hefley #2-36 Wheeler TX - 0.00559 Gas Producing Hefley #3-37 Wheeler TX - 0.00560 Gas Producing Hefley #16-47 Wheeler TX - 0.00839 Gas Producing Hefley #20-47 Wheeler TX - 0.00839 Gas Producing Hefley #27-47 Wheeler TX - 0.00839 Gas Producing Hefley #32-47 Wheeler TX - 0.00839 Gas Producing Helton #7-60 Wheeler TX - 0.00252 Gas Producing Helton #8-60 Wheeler TX - 0.00252 Gas Producing Helton #10A-60 Wheeler TX - 0.00252 Gas Producing Helton #11-60 Wheeler TX - 0.00252 Gas Producing Helton #14-60 Wheeler TX - 0.00252 Gas Producing Hinkle #4-28 Washita OK - 0.00370 Gas Producing Hinkle Trust #5-33 Washita OK - 0.00079 Gas Producing Hubbard #2-13 Beckham OK - 0.00065 Gas Producing Litz #1R-2 Harper OK 0.00460 0.00460 Gas Producing McWilliams #2H-23 Pittsburg OK - 0.00028 Gas Producing Melvin #1H-20 Hughes OK 0.00142 0.00142 Gas Producing Mooney #1H-19 Hughes OK 0.00155 0.00155 Gas Producing Morris #1H-21 Hughes OK - 0.00420 Gas Producing Nutley #4-33 Washita OK - 0.00079 Gas Producing Parker #1-6H Coal OK - 0.00183 Gas Producing
Patterson #1H-31 Hughes OK - 0.00290 Gas Producing Patterson #2H-31 Hughes OK - 0.00290 Gas Producing Patton #3-24 Pittsburg OK - 0.00875 Gas Producing Pee Wee #1-17 Stephens OK - 0.00364 Gas Producing Phipps #1-28 Pittsburg OK - 0.00323 Gas Producing Prater #5-10 Hemphill TX - 0.00140 Gas Producing Prater #6-10 Hemphill TX - 0.00140 Gas Producing Prater #7-10 Hemphill TX - 0.00140 Gas Producing Prater #8-10 Hemphill TX - 0.00140 Gas Producing Prater #9-10 Hemphill TX - 0.00140 Gas Producing Presson H W #1-5 Pittsburg OK - 0.00026 Gas Producing Reed #1-8 Beckham OK - 0.00008 Gas Producing Rice 1-25 LeFlore OK - 0.00017 Gas Producing Schueler #1-14H Hughes OK 0.00047 0.00047 Gas Producing Sites Troy #1-9 Beckham OK 0.00043 0.00043 Gas Producing Smith #1H-28 Hughes OK - 0.00525 Gas Producing Sophia #14-50 Wheeler TX - 0.00165 Gas Producing Sophia #21-50 Wheeler TX - 0.00165 Gas Producing Spradlin Farms #8A-20 Washita OK - 0.00159 Gas Producing Sugg-Farmar 26 #1 Irion TX - 0.00067 Gas Producing Trueblood #2-2 Noble OK 0.00400 0.00352 Gas Producing Trueblood #3-2 Noble OK 0.00400 0.00352 Gas Producing Trueblood #4-2 Noble OK 0.00402 0.00352 Oil Producing Trueblood #5-2 Noble OK 0.00400 0.00352 Oil Producing Urchison #5-12H LeFlore OK 0.00125 0.00125 Gas Producing Vanilli #3-36 LeFlore OK - 0.00117 Gas Producing Verner #5-11 Pittsburg OK - 0.00311 Gas Producing Walter #5-24 (Upr D.Moines GW) Beckham OK - 0.00055 Gas Producing
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P-6 PARTNERSHIP - --------------- WORKING REVENUE WELL NAME COUNTY ST. INTEREST INTEREST TYPE STATUS - --------- ------ --- -------- -------- ---- ------ Aday #1-9 McClain OK - 0.00059 Gas Producing Bridges #2-18 Le Flore OK - 0.00008 Gas Producing Camel, Joe #3 Lea NM - 0.00040 Oil In progress Cantrell #7-15H Haskell OK - 0.00032 Gas Producing Cheyenne 29 #5 Roger Mills OK - 0.00002 Gas Producing Coquat Et Al #1 Live Oak TX - 0.01314 Gas Dryhole Cory #1-29 Kingfisher OK - 0.00107 Gas Producing Davis Garry #26 Kay OK - 0.00023 Oil Producing Delaware 28 #6 Roger Mills OK - 0.00002 Gas Producing Delaware 28 #7 Roger Mills OK - 0.00002 Gas In progress Duncan #2-7H Seminole OK - 0.00005 Oil Producing Federal 5175-22-31WA Campbell WY - 0.01395 Gas Shut-in Federal 5175-24-21WA Campbell WY - 0.01395 Gas Shut-in Fed 5175-25-33 CA Campbell WY - 0.00966 Gas Shut-in Floyd Fed 5175-23-33WA Campbell WY - 0.01395 Gas Producing Floyd Fed 5175-24-11WA Campbell WY - 0.01395 Gas Shut-in Floyd Fed 5175-24-33WA Campbell WY - 0.01395 Gas Shut-in Gilbert A #1 Caddo OK - 0.00065 Gas Producing Grace #1-H Lincoln OK - 0.00084 Gas Producing Guinn #1-5 Coal OK - 0.00146 Gas Producing Harris #5-26H Haskell OK - 0.00018 Gas Producing Hay #10-33 Roger Mills OK - 0.00004 Gas Producing Hayden 5175-22-13CA Campbell WY - 0.00958 Gas Shut-in Hayden 5175-22-13WA Campbell WY - 0.00958 Gas Shut-in Hayden 5175-22-21CA Campbell WY - 0.00958 Gas Shut-in Hayden 5175-22-21WA Campbell WY - 0.00958 Gas Producing Hayden 5175-22-41CA Campbell WY - 0.00958 Gas Shut-in Hayden 5175-22-41WA Campbell WY - 0.00958 Gas Shut-in Hayden 5175-22-43WA Campbell WY - 0.00958 Gas Shut-in Hayden 5175-22-43CA Campbell WY - 0.00958 Gas Shut-in Hayden 5175-27-43WA Campbell WY - 0.00958 Gas Shut-in Hayden Federal 5175-27-31WA Campbell WY - 0.00966 Gas Shut-in Hefley #2-36 Wheeler TX - 0.00603 Gas Producing Hefley #3-37 Wheeler TX - 0.00604 Gas Producing Hefley #16-47 Wheeler TX - 0.00905 Gas Producing Hefley #20-47 Wheeler TX - 0.00905 Gas Producing Hefley #27-47 Wheeler TX - 0.00905 Gas Producing
Hefley #32-47 Wheeler TX - 0.00905 Gas Producing Helton #7-60 Wheeler TX - 0.00271 Gas Producing Helton #8-60 Wheeler TX - 0.00271 Gas Producing Helton #10A-60 Wheeler TX - 0.00271 Gas Producing Helton #11-60 Wheeler TX - 0.00271 Gas Producing Helton #14-60 Wheeler TX - 0.00271 Gas Producing Hinkle #4-28 Washita OK - 0.00127 Gas Producing Hinkle Trust #5-33 Washita OK - 0.00027 Gas Producing Hubbard #2-13 Beckham OK - 0.00022 Gas Producing Litz #1R-2 Harper OK 0.00158 0.00158 Gas Producing McWilliams #2H-23 Pittsburg OK - 0.00010 Gas Producing Melvin #1H-20 Hughes OK 0.00049 0.00049 Gas Producing Mooney #1H-19 Hughes OK 0.00053 0.00053 Gas Producing Mooney Fed 5175-23-13WA Campbell WY - 0.01395 Gas Shut-in Morris #1H-21 Hughes OK - 0.00144 Gas Producing Nutley #4-33 Washita OK - 0.00027 Gas Producing Parker #1-6H Coal OK - 0.00063 Gas Producing Patterson #1H-31 Hughes OK - 0.00100 Gas Producing Patterson #2H-31 Hughes OK - 0.00100 Gas Producing Patton #3-24 Pittsburg OK - 0.00300 Gas Producing Pee Wee #1-17 Stephens OK - 0.00125 Gas Producing Phipps #1-28 Pittsburg OK - 0.00111 Gas Producing Prater #5-10 Hemphill TX - 0.00151 Gas Producing Prater #6-10 Hemphill TX - 0.00151 Gas Producing Prater #7-10 Hemphill TX - 0.00151 Gas Producing Prater #8-10 Hemphill TX - 0.00151 Gas Producing Prater #9-10 Hemphill TX - 0.00151 Gas Producing Presson H W #1-5 Pittsburg OK - 0.00009 Gas Producing Reed #1-8 Beckham OK - 0.00003 Gas Producing Rice 1-25 Le Flore OK - 0.00006 Gas Producing Schueler #1-14H Hughes OK 0.00016 0.00016 Gas Shut-in Sites Troy #1-9 Beckham OK 0.00015 0.00015 Gas Producing Smith #1H-28 Hughes OK - 0.00180 Gas Producing Sophia #14-50 Wheeler TX - 0.00178 Gas Producing Sophia #21-50 Wheeler TX - 0.00178 Gas Producing Spradlin Farms #8A-20 Washita OK - 0.00055 Gas Producing Sugg-Farmar 26 #1 Irion TX - 0.00072 Gas Producing Trueblood #4-2 Noble OK 0.00138 0.00121 Oil Producing Trueblood #5-2 Noble OK 0.00137 0.00121 Oil Producing Trueblood #3-2 Noble OK 0.00137 0.00121 Gas Producing Trueblood #2-2 Noble OK 0.00137 0.00121 Gas Producing Urchison #5-12H Le Flore OK 0.00043 0.00043 Gas Producing
Vanilli #3-36 Le Flore OK - 0.00040 Gas Producing Verner #5-11 Pittsburg OK - 0.00107 Gas Producing Walter #5-24 (Upr D.Moines GW) Beckham OK - 0.00019 Gas Producing Yonkee 5175-25-31WA Campbell WY - 0.00958 Gas Shut-in Yonkee Fed 5175-25-41WA Campbell WY - 0.00966 Gas Producing
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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, --------------------------------------- 2006 2005(1) 2004(1) ---------- ---------- --------
Production: Oil (Bbls) 2,344 2,169 1,924 Gas (Mcf) 126,886 129,240 154,840
Oil and gas sales(2): Oil $141,089 $ 113,562 $ 69,359 Gas 737,253 889,032 731,696 ------- --------- ------- Total $878,342 $1,002,594 $801,055 ======= ========= ======= Average sales price: Per barrel of oil $60.19 $52.36 $36.05 Per Mcf of gas 5.81 6.88 4.73
- ---------- (1) These amounts have been restated to reflect the sale of various oil and gas properties during 2006 and assets held for sale as of December 31, 2006 as discontinued operations. See Item 7 for more information about these discontinued operations.
(2) These amounts differ from the Net Profits included in the P-1 Partnership's financial statements because they do not reflect the reduction in revenues of production expenses of $221,765, $164,977, and $137,655, respectively, incurred by the Affiliated Programs.
Net Production Data
P-3 Partnership ---------------
Year Ended December 31, ---------------------------------------- 2006 2005(1) 2004(1) ---------- ---------- ----------
Production: Oil (Bbls) 3,153 3,050 2,805 Gas (Mcf) 216,182 221,758 262,491
Oil and gas sales(2): Oil $ 190,943 $ 160,271 $ 102,288 Gas 1,318,007 1,565,093 1,293,819 --------- --------- --------- Total $1,508,950 $1,725,364 $1,396,107 ========= ========= ========= Average sales price: Per barrel of oil $60.56 $52.55 $36.47 Per Mcf of gas 6.10 7.06 4.93
- ---------- (1) These amounts have been restated to reflect the sale of various oil and gas properties during 2006 and assets held for sale as of December 31, 2006 as discontinued operations. See Item 7 for more information about these discontinued operations.
(2) These amounts differ from the Net Profits included in the P-3 Partnership's financial statements because they do not reflect the reduction in revenues of production expenses of $371,995, $304,853, and $260,481, respectively, incurred by the Affiliated Programs.
Net Production Data
P-4 Partnership ---------------
Year Ended December 31, ---------------------------------------- 2006 2005(1) 2004(1) ---------- ---------- ----------
Production: Oil (Bbls) 13,435 15,251 17,392 Gas (Mcf) 180,392 190,154 229,139
Oil and gas sales(2): Oil $ 868,175 $ 830,940 $ 694,127 Gas 1,160,347 1,448,105 1,319,238 --------- --------- --------- Total $2,028,522 $2,279,045 $2,013,365 ========= ========= ========= Average sales price: Per barrel of oil $64.62 $54.48 $39.91 Per Mcf of gas 6.43 7.62 5.76
- ---------- (1) These amounts have been restated to reflect the sale of various oil and gas properties during 2006 and assets held for sale as of December 31, 2006 as discontinued operations. See Item 7 for more information about these discontinued operations.
(2) These amounts differ from the Net Profits included in the P-4 Partnership's financial statements because they do not reflect the reduction in revenues of production expenses of $464,057, $525,057, and $382,860, respectively, incurred by the Affiliated Programs.
Net Production Data
P-5 Partnership ---------------
Year Ended December 31, ---------------------------------------- 2006 2005(1) 2004(1) ---------- ---------- ----------
Production: Oil (Bbls) 5,955 4,457 4,231 Gas (Mcf) 304,838 246,204 276,978
Oil and gas sales(2): Oil $ 378,344 $ 241,256 $ 167,681 Gas 1,954,423 1,735,135 1,408,528 --------- --------- --------- Total $2,332,767 $1,976,391 $1,576,209 ========= ========= ========= Average sales price: Per barrel of oil $63.53 $54.13 $39.63 Per Mcf of gas 6.41 7.05 5.09
- ---------- (1) These amounts have been restated to reflect the sale of various oil and gas properties during 2006 and assets held for sale as of December 31, 2006 as discontinued operations. See Item 7 for more information about these discontinued operations.
(2) These amounts differ from the Net Profits included in the P-5 Partnership's financial statements because they do not reflect the reduction in revenues of production expenses of $518,712, $423,567, and $363,782, respectively, incurred by the Affiliated Programs.
Net Production Data
P-6 Partnership ---------------
Year Ended December 31, ---------------------------------------- 2006 2005(1) 2004(1) ---------- ---------- ----------
Production: Oil (Bbls) 11,396 10,676 7,599 Gas (Mcf) 450,448 398,416 424,456
Oil and gas sales(2): Oil $ 700,756 $ 572,488 $ 330,305 Gas 2,693,104 2,779,771 2,271,682 --------- --------- --------- Total $3,393,860 $3,352,259 $2,601,987 ========= ========= ========= Average sales price: Per barrel of oil $61.49 $53.62 $43.47 Per Mcf of gas 5.98 6.98 5.35
- ---------- (1) These amounts have been restated to reflect the sale of various oil and gas properties during 2006 and assets held for sale as of December 31, 2006 as discontinued operations. See Item 7 for more information about these discontinued operations.
(2) These amounts differ from the Net Profits included in the P-6 Partnership's financial statements because they do not reflect the reduction in revenues of production expenses of $863,210, $812,868, and $783,975, respectively, 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, 2006 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"). When preparing such reserves, the General Partner follows the SEC's definition regarding oil and gas reserves, which was first published in 1978. The General Partner books proved oil and gas reserves which geological and engineering data show with reasonable certainty to be recovered in the future from known reserves under existing economic and operating conditions. Probable reserves are not booked.
The General Partner combines many methods of reserve estimation in order to obtain the most accurate forecast, including both volumetric and analogy methods. Many levels of review occur during this process. First, the engineers review their respective wells, then the operations manager and division vice presidents review the updated forecasts, and finally the executive vice president of engineering reviews approximately the top 85% (or more) wells by value. All engineers reviewing the data have completed their engineering degrees and/or are licensed petroleum engineers. In addition, reserve information for the top 80% of each Partnership's reserve base (based on volumes) has been reviewed by Ryder Scott Company, L.P. ("Ryder Scott"), an independent petroleum engineering firm. Ryder Scott has stated to the General Partner their opinion that (i) the estimates of reserves for the properties which they reviewed were prepared in accordance with generally accepted procedures for the estimation of reserves, (ii) they found no bias in the utilization and analysis of data, and (iii) the cash flow projections provided by Samson of gross and net reserves and associated revenues and costs based on constant pricing in general appear reasonable.
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, 2006. Such prices were not escalated except in certain circumstances where escalations were fixed and readily determinable in accordance with applicable contract provisions. While oil prices remained relatively constant as of December 31, 2006 and 2005 ($60.85 and $61.06 per barrel, respectively), gas prices were substantially lower as of December 31, 2006 ($5.64 per Mcf) than December 31, 2005 ($10.08 per Mcf). This decrease in gas prices caused the estimates of remaining economically recoverable reserves, as well as the values placed on said reserves, at December 31, 2006 to be lower than such estimates and values at December 31, 2005. 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, 2006. In fact, subsequent to
December 31, 2006, natural gas prices increased significantly and then declined. There can be no assurance that the prices used in calculating the net present value of the Partnerships' proved reserves at December 31, 2006 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.
The reserves table below reflects reserves as either discontinued operations or continuing operations. The discontinued operation reserves consist of all the properties classified as assets held for sale as of December 31, 2006. See "Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations" for more information about these discontinued operations.
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Proved Reserves and Net Present Values From Proved Reserves
As of December 31, 2006(1)
Oil and Net Present Value Gas Liquids (discounted at) (Mcf) (Bbls) 10% per annum --------- ------- -----------------
P-1 Partnership: - ---------------- Discontinued Operations 586,241 138,826 $4,033,131 Continuing Operations 1,033,530 14,856 2,544,557
P-3 Partnership: - ---------------- Discontinued Operations 753,962 176,381 $5,162,242 Continuing Operations 1,845,324 29,903 4,646,696
P-4 Partnership: - ---------------- Discontinued Operations 25,073 3,366 $ 154,559 Continuing Operations 1,511,674 40,996 4,835,185
P-5 Partnership: - ---------------- Discontinued Operations 15,053 1,257 $ 69,845 Continuing Operations 2,159,887 38,945 5,573,927
P-6 Partnership: - ---------------- Discontinued Operations 75,198 724 $ 89,473 Continuing Operations 3,197,665 116,911 8,591,042
- --------- (1) Includes certain gas balancing adjustments which cause the gas volumes and net present values to differ from the reserve reports which were prepared by the General Partner and reviewed by Ryder Scott.
No estimates of the proved reserves of the Partnerships comparable to those included herein have been included in reports to any federal agency other than the SEC. Additional information relating to the Partnerships' proved reserves is contained in Note 4 to the Partnerships' financial statements, included in Item 8 of this Annual Report.
Significant Properties
The following table sets forth the number and percent of each Partnership's total wells which are operated by affiliates of the Partnerships as of December 31, 2006:
Operated Wells ------------------------------ Partnership Number Percent ----------- ------ ------- P-1 34 2% P-3 58 3% P-4 21 7% P-5 114 24% P-6 155 24%
The following table sets forth certain well and reserve information as of December 31, 2006 for each oil and gas basin which holds a significant portion of the value of the Partnerships' properties. The table contains the following information for each such 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. The South Oklahoma Folded Belt Basin is located in southern Oklahoma, while the East Texas Basin is located in east Texas and northern Louisiana.
Significant Properties as of December 31, 2006 -----------------------------------------------
Wells Operated by Affiliates Oil Gas Total ----------- Reserves Reserves Present Basin Wells Number %(1) (Bbl) (Mcf) Value - ------------- ----- ------ ---- -------- --------- ----------- P-1 P/ship: Permian 1,852 2 - 143,682 802,744 $4,402,423 Anadarko 83 28 34% 2,442 806,397 2,034,101
P-3 P/ship: Permian 1,852 2 - 180,999 1,012,512 $5,546,624 Anadarko 83 28 34% 4,091 1,239,871 3,103,365
P-4 P/ship: Gulf Coast 132 4 3% 33,827 452,191 $2,339,590 Anadarko 65 17 26% 3,008 856,597 2,088,825
P-5 P/ship: Anadarko 181 42 23% 5,702 1,316,623 $3,207,990 South. Ok. Folded Belt 37 - - 20,876 498,632 1,535,854 Permian 44 39 89% 13,196 254,424 599,521
P-6 P/ship: Anadarko 181 42 23% 3,896 1,269,533 $3,108,445 South. Ok. Folded Belt 55 18 33% 87,323 306,806 2,216,509 East Texas 4 3 75% 2,854 748,598 1,477,701
- ------------------------------- (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 2006.
PART II.
ITEM 5.
ITEM 5. MARKET FOR UNITS, RELATED LIMITED PARTNER MATTERS, AND ISSUER PURCHASES OF UNITS
As of March 1, 2007, 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-1 108,074 667 P-3 169,637 1,110 P-4 126,306 757 P-5 118,449 835 P-6 143,041 638
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 -----------------------
2005 2006 2007 ------------------------- ------------------------- ------- 1st 2nd 3rd 4th 1st 2nd 3rd 4th 1st P/ship Qtr. Qtr. Qtr. Qtr. Qtr. Qtr. Qtr. Qtr. Qtr.(1) - ------ ---- ---- ---- ---- ---- ---- ---- ---- -------
P-1 $25 $23 $44 $40 $36 $32 $45 $11 $ 3 P-3 25 22 41 38 34 30 42 14 9 P-4 19 17 27 25 21 18 26 24 19 P-5 18 16 24 21 19 16 27 25 22 P-6 25 22 38 35 32 28 34 31 28
- ------------ (1) Repurchase offer terminated March 9, 2007.
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.
As described in "Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations," the Partnerships terminate on December 31, 2007. Due to such termination and the necessary liquidation process, the General Partner terminated the repurchase offer described above as of March 9, 2007. In addition, the General Partner will not accept, process, or recognize any transfers of Units (with the exception of certain transactions between related persons) for which completed transfer documentation is not mailed to the General Partner with a postmark on or before June 30, 2007. Accordingly, there will be no market for the Partnerships' Units after June 30, 2007.
Cash Distributions
Cash distributions are primarily dependent upon a Partnership's cash receipts from its Net Profits Interests, the sale of oil and gas properties 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. See "Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations" for more information regarding the cash distribution process during liquidation of the Partnerships.
The following is a summary of cash distributions paid to the Limited Partners during 2005 and 2006 and the first quarter of 2007:
Cash Distributions ------------------
------------------------------------------------- 1st 2nd 3rd 4th P/ship Quarter Quarter Quarter Quarter ------ ------- ------- ------- --------- P-1 $2.80 $2.82 $3.25 $ 3.56 P-3 2.43 2.62 3.09 3.27 P-4 2.68 2.33 2.69 2.73 P-5 1.82 2.02 2.40 2.59 P-6 1.70 3.31 2.75 2.86
2006 2007 ------------------------------------------------- --------- 1st 2nd 3rd 4th 1st P/ship Quarter Quarter Quarter Quarter Quarter ------ ------- ------- ------- --------- --------- P-1 $4.29 $4.26 $4.74 $34.60(1) $4.23(2) P-3 4.04 4.04 4.21 28.23(1) 4.50(2) P-4 3.64 3.51 2.69 2.77 4.25(3) P-5 2.51 2.52 1.77 1.51 3.36(3) P-6 3.31 3.76 2.99 3.04 3.17(3)
- ------------ (1) Includes proceeds from the sale of the Partnerships' interests in various oil and gas properties at The Oil and Gas Clearinghouse auction in Houston, Texas on October 11, 2006.
(2) Includes proceeds from the sale of the Partnerships' interests in various oil and gas properties at The Oil and Gas Clearinghouse auction in Houston, Texas on December 13, 2006 and February 1, 2007. (3) Includes proceeds from the sale of the Partnerships' interests in various oil and gas properties at The Oil and Gas Clearinghouse auction in Houston, Texas on December 13, 2006.
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."
The selected financial data tables reflect income from both continuing operations and discontinued operations for the Partnerships. The discontinued operations income is the income for various oil and gas properties sold during 2006 and all of the properties classified as assets held for sale as of December 31, 2006. See "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 accuracy of third party payments and billings, 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.
Discontinued Operations
In October 2006, the P-1 and P-3 Partnerships sold their interests in a number of producing properties. This disposal was treated as discontinued operations. The sales proceeds consisting of approximately $3,285,000 and $4,141,000, respectively, were included in the November 15, 2006 cash distributions paid by the P-1 and P-3 Partnerships. In December 2006 the P-1, P-3, P-4, P-5, and P-6 Partnerships sold their interests in additional producing properties. The sales proceeds consisting of approximately $322,000, $537,000, $240,000, $6,000, and $2,000, respectively, were included in the February 15, 2007 cash distributions paid by the P-1, P-3, P-4, P-5, and P-6 Partnerships. These disposals were treated as discontinued operations. The sale of these producing properties will impact the continuing future operations of the Partnerships. It is anticipated that the Partnerships will have lower lease operating costs, lower oil and gas sales, and a reduction in their asset
retirement obligations as a result of these sales. The reader should refer to Note 6 - Discontinued Operations to the combined financial statements included in Item 8 of this Annual Report for additional information regarding this matter.
Partnership Terminations
The Partnerships would have terminated on December 31, 2005 in accordance with the Partnership Agreements. However, the Partnership Agreements provide that the General Partner may extend the term of each Partnership for up to five periods of two years each. The General Partner has extended the terms of the Partnerships for their first two-year extension, thereby extending their termination date to December 31, 2007. On February 5, 2007 the General Partner mailed a notice to the limited partners announcing that (i) the Partnerships will terminate on December 31, 2007 and (ii) the General Partner will liquidate the Partnerships' assets and satisfy their liabilities as part of the winding-up process required by the Partnership Agreements and state law.
The General Partner has been selling selected oil and gas properties due to the generally favorable market for oil and gas properties. The last such sales are anticipated to be The Oil and Gas Asset Clearinghouse auctions in May through July of 2007. While these property sales were not related to Partnership liquidation, all remaining property dispositions will be made as part of the liquidation and winding-up process.
Liquidation and Winding-Up Process. The General Partner intends to commence liquidating the Partnerships' properties in the second half of 2007, and hopes to have all or substantially all of the properties sold prior to March 31, 2008. As part of the liquidation process, the General Partner will actively negotiate for the sale of the properties. These properties will be offered to all interested parties through normal oil and gas property auction processes as well as appropriate negotiated transactions. It is possible that the General Partner will package some properties which have value with properties that have no or little value or are burdened with actual or potential liabilities. The General Partner intends to sell such property packages and any associated or otherwise remaining Partnership assets and liabilities to the highest bidder at auction. It is possible that affiliates of the General Partner may participate in any public auction of these properties and may be the successful high bidder on some or all of the properties.
Cash Distributions. The Partnerships will make routine cash distributions throughout the remainder of 2007. Proceeds from the sale of Partnership properties may be included in these normal cash distributions, or may be distributed to the partners by way of special cash distributions. The General Partner will analyze the level of cash held by the Partnerships throughout the
liquidation process and will retain sufficient cash to cover all final expenses and liabilities of the Partnerships. After final settlement from the sale of all properties, satisfaction of Partnership expenses and liabilities, and calculation of any remaining assets and liabilities of the Partnerships, any net cash will be paid as a final liquidating distribution to all of the remaining partners in each Partnership. It is expected that the final distribution will be made no later than December 31, 2008.
Repurchase Offer. In order to ensure that the General Partner makes all liquidation distributions to the correct parties based on the most accurate information possible, the General Partner terminated the outstanding repurchase offer as of March 9, 2007. In addition, the General Partner will not process transfers among third parties which are not postmarked on or before June 30, 2007 and received by the General Partner on or before July 13, 2007. The General Partner will not impose these deadlines on transfers between family members, their trusts, IRA accounts, or similar related entities and transfers due to death or divorce.
Financial Statements. The financial statements described in "Item 8. Financial Statements and Supplementary Data" and indexed in Item 15 to this Annual Report are audited and presented on a going concern basis. However, the General Partner has included in Note 7 to such financial statements unaudited pro forma combined balance sheets which are presented on a liquidation basis.
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 and recently the sale of 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 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 and the impact of weather-related events; * The availability and proximity of pipelines for transportation; * Domestic and foreign government regulations and taxes; * Market expectations; and * The effect of worldwide energy conservation.
It is not possible to predict the future direction of oil or natural gas prices. Operating costs, including General and Administrative Expenses, may not decline over time, may increase, or may experience only a gradual decline, thus adversely affecting net revenues as either 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, remain relatively constant, or decrease at an even greater rate over a given period. These factors include, but are not limited to:
* Geophysical conditions which cause an acceleration of the decline in production; * The shutting in of wells (or the opening of previously shut-in wells) due to low oil and gas prices (or high oil and gas prices), mechanical difficulties, loss of a market or transportation, or performance of workovers, recompletions, or other operations in the well; * Prior period volume adjustments (either positive or negative) made by operators of the properties; * Adjustments in ownership or rights to production in accordance with agreements governing the operation or ownership of the well (such as adjustments that occur at payout or due to gas balancing); and * 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 Partnership's results of operations for the year ended December 31, 2006 as compared to the year ended December 31, 2005 and for the year ended December 31, 2005 as compared to the year ended December 31, 2004.
P-1 Partnership ---------------
Year Ended December 31, 2006 Compared to Year Ended December 31, 2005 -------------------------------------
The following discussion contains amounts for the year 2005 which have been restated to reflect the Partnership's assets held for sale as discontinued operations. See Note 6 to the combined financial statements indexed in Item 15 hereof for more information about these discontinued operations.
Total Net Profits decreased $181,000 (21.6%) in 2006 as compared to 2005. Of this decrease (i) $136,000 was related to a decrease in the average price of gas sold and (ii) $57,000 was related to an increase in production expenses. These decreases were partially offset by an increase of $18,000 associated with an increase in the average price of oil sold.
Volumes of oil sold increased 175 barrels, while volumes of gas sold decreased 2,354 Mcf in 2006 as compared to 2005. The increase in volumes of oil sold was primarily due to the successful completion of several new wells during late 2005 and mid 2006. This increase was partially offset by (i) a substantial decline in production during 2006 on one significant well following its 2005 workover and (ii) normal declines in production. The well with a substantial decline in production is not expected to return to its previously high levels of production.
The increase in production expenses was primarily due to an increase in workover expenses. As of the date of this Annual Report, management anticipates workover costs remaining at or increasing above 2006 levels due to the increased cost to perform a workover and the age of the wellbores. This increase was partially offset by a decrease in production taxes associated with the decrease in oil and gas sales.
Average oil prices increased to $60.19 per barrel in 2006 from $52.36 per barrel in 2005. Average gas prices decreased to $5.81 per Mcf in 2006 from $6.88 per Mcf in 2005.
Depletion of Net Profits Interests increased $23,000 (51.7%) in 2006 as compared to 2005. This increase was primarily due to (i) several wells being fully depleted during 2006 due to their lack of remaining reserves and (ii) the abandonment of one significant well during 2006 as a result of its lack of remaining reserves. These increases were partially offset by several other wells being fully depleted during 2005 due to their lack of remaining reserves. As a percentage of Net Profits, this expense increased to 10.1% in 2006 from 5.2% in 2005, primarily due to the dollar increase in depletion of Net Profits Interests and the decrease in the average price of gas sold.
The Partnership recognized a non-cash charge against earnings of $17,000 during 2006. This charge was related to the decline in oil and gas prices used to determine recoverability of oil and gas reserves at September 30, 2006. No such charge was incurred during 2005.
General and administrative expenses increased $2,000 (1.3%) in 2006 as compared to 2005. As a percentage of Net Profits, these expenses increased to 22.8% in 2006 from 17.7% in 2005, primarily due to the decrease in Net Profits.
As further discussed in Notes 6 and 7 to the combined financial statements indexed in Item 15 hereof, the Partnership is in the process of selling an increased amount of the Partnership's properties as a result of the generally favorable current environment for oil and gas dispositions and will be selling all of the Partnership's properties in the liquidation process. The Partnership will have lower future oil and gas sales and lower future production expenses due to the sale of these properties.
The Limited Partners have received cash distributions through December 31, 2006 totaling $23,379,558 or 216.33% of Limited Partners' capital contributions.
Year Ended December 31, 2005 Compared to Year Ended December 31, 2004 --------------------------------------
The following discussion contains amounts for the years 2005 and 2004 which have been restated to reflect the Partnership's assets held for sale as discontinued operations. See Note 6 to the combined financial statements indexed in Item 15 hereof for more information about these discontinued operations.
Total Net Profits increased $174,000 (26.3%) in 2005 as compared to 2004. Of this increase $35,000 and $278,000,
respectively, were related to increases in the average prices of oil and gas sold. These increases were partially offset by (i) a decrease of $121,000 related to a decrease in volumes of gas sold and (ii) $27,000 related to an increase in production expenses.
Volumes of oil sold increased 245 barrels, while volumes of gas sold decreased 25,600 Mcf in 2005 as compared to 2004. The increase in volumes of oil sold was primarily due to the successful completion of two new wells during late 2004. This increase was partially offset by (i) normal declines in production and (ii) positive prior period volume adjustments made by the operators on several wells during 2004. The decrease in volumes of gas sold was primarily due to (i) normal declines in production and (ii) a positive prior period volume adjustment included in the receipt of first revenues on one significant well during 2004.
The increase in production expenses was primarily due to (i) an increase in workover expenses and (ii) an increase in production taxes associated with the increase in oil and gas sales.
Average oil and gas prices increased to $52.36 per barrel and $6.88 per Mcf in 2005 from $36.05 per barrel and $4.73 per Mcf in 2004.
Depletion of Net Profits Interests increased $2,000 (5.2%) in 2005 as compared to 2004. Of this increase (i) $8,000 was due to the depletion of additional Net Profits Interests as a result of the upward revision in the estimate of the asset retirement obligations, of which $6,000 was related to previously fully depleted wells, and (ii) $2,000 was due to accretion of these additional asset retirement obligations. These increases were partially offset by the decrease in volumes of gas sold. As a percentage of Net Profits, this expense decreased to 5.2% in 2005 from 6.3% in 2004, primarily due to the increases in the average prices of oil and gas sold.
General and administrative expenses increased $6,000 (4.1%) in 2005 as compared to 2004. As a percentage of Net Profits, these expenses decreased to 17.7% in 2005 from 21.4% in 2004, primarily due to the increase in Net Profits.
As further discussed in Notes 6 and 7 to the combined financial statements indexed in Item 15 hereof, the Partnership is in the process of selling an increased amount of the Partnership's properties as a result of the generally favorable current environment for oil and gas dispositions and will be selling all of the Partnership's properties in the liquidation process. The Partnership will have lower future oil and gas sales and lower future production expenses due to the sale of these properties.
P-3 Partnership ---------------
Year Ended December 31, 2006 Compared to Year Ended December 31, 2005 -------------------------------------
The following discussion contains amounts for the year 2005 which have been restated to reflect the Partnership's assets held for sale as discontinued operations. See Note 6 to the combined financial statements indexed in Item 15 hereof for more information about these discontinued operations.
Total Net Profits decreased $284,000 (20.0%) in 2006 as compared to 2005. Of this decrease (i) $208,000 was related to a decrease in the average price of gas sold, (ii) $39,000 was related to a decrease in volumes of gas sold, and (iii) $67,000 was associated with an increase in production expenses.
Volumes of oil sold increased 103 barrels, while volumes of gas sold decreased 5,576 Mcf in 2006 as compared to 2005. The increase in volumes of oil sold was primarily due to the successful completion of several new wells during late 2005 and mid 2006. This increase was partially offset by (i) a substantial decline in production during 2006 on one significant well following its 2005 workover and (ii) normal declines in production. The well with a substantial decline in production is not expected to return to its previously high levels of production.
The increase in production expenses was primarily due to an increase in workover expenses. As of the date of this Annual Report, management anticipates workover costs remaining at or increasing above 2006 levels due to the increased cost to perform a workover and the age of the wellbores. This increase was partially offset by a decrease in production taxes associated with the decrease in oil and gas sales.
Average oil prices increased to $60.56 per barrel in 2006 from $52.55 per barrel in 2005. Average gas prices decreased to $6.10 per Mcf in 2006 from $7.06 per Mcf in 2005.
Depletion of Net Profits Interests increased $38,000 (52.8%) in 2006 as compared to 2005. This increase was primarily due to (i) several wells being fully depleted during 2006 due to their lack of remaining reserves and (ii) the abandonment of one significant well during 2006 as a result of its lack of remaining reserves. These increases were partially offset by several other wells being fully depleted during 2005 due to their lack of remaining reserves. As a percentage of Net Profits, this expense increased to 9.6% in 2006 from 5.0% in 2005, primarily due to the dollar increase in depletion of Net Profits Interests and the decrease in the average price of gas sold.
The Partnership recognized a non-cash charge against earnings of $25,000 during 2006. This charge was related to the decline in oil and gas prices used to determine recoverability of oil and gas reserves at September 30, 2006. No such charge was incurred during 2005.
General and administrative expenses remained relatively constant in 2006 and 2005. As a percentage of Net Profits, these expenses increased to 19.1% in 2006 from 15.2% in 2005, primarily due to the decrease in Net Profits.
As further discussed in Notes 6 and 7 to the combined financial statements indexed in Item 15 hereof, the Partnership is in the process of selling an increased amount of the Partnership's properties as a result of the generally favorable current environment for oil and gas dispositions and will be selling all of the Partnership's properties in the liquidation process. The Partnership will have lower future oil and gas sales and lower future production expenses due to the sale of these properties.
The Limited Partners have received cash distributions through December 31, 2006 totaling $32,364,401 or 190.79% of Limited Partners' capital contributions.
Year Ended December 31, 2005 Compared to Year Ended December 31, 2004 --------------------------------------
The following discussion contains amounts for the years 2005 and 2004 which have been restated to reflect the Partnership's assets held for sale as discontinued operations. See Note 6 to the combined financial statements indexed in Item 15 hereof for more information about these discontinued operations.
Total Net Profits increased $285,000 (25.1%) in 2005 as compared to 2004. Of this increase $49,000 and $472,000, respectively, were related to increases in the average prices of oil and gas sold. These increases were partially offset by decreases of (i) $201,000 related to a decrease in volumes of gas sold and (ii) $44,000 related to an increase in production expenses.
Volumes of oil sold increased 245 barrels, while volumes of gas sold decreased 40,733 Mcf in 2005 as compared to 2004. The increase in volumes of oil sold was primarily due to the successful completion of two new wells during late 2004. This increase was partially offset by (i) normal declines in production and (ii) positive prior period volume adjustments made by the operators on several wells during 2004. The decrease in volumes of gas sold was primarily due to (i) normal declines in production and (ii) a positive prior period volume adjustment
included in the receipt of first revenues on one significant well during 2004.
The increase in production expenses was primarily due to (i) an increase in workover expenses and (ii) an increase in production taxes associated with the increase in oil and gas sales.
Average oil and gas prices increased to $52.55 per barrel and $7.06 per Mcf in 2005 from $36.47 per barrel and $4.93 per Mcf in 2004.
Depletion of Net Profits Interests decreased $99,000 (58.2%) in 2005 as compared to 2004. This decrease was primarily due to (i) one significant well being fully depleted during 2004 due to its lack of remaining reserves and (ii) the decrease in volumes of gas sold. These decreases were partially offset by (i) an increase of $11,000 due to the depletion of additional Net Profits Interests as a result of the upward revision in the estimate of the asset retirement obligations, of which $8,000 was related to previously fully depleted wells, (ii) an increase of $2,000 due to accretion of these additional asset retirement obligations, and (iii) one significant well being fully depleted during 2005 due to its lack of remaining reserves. As a percentage of Net Profits, this expense decreased to 5.0% in 2005 from 15.0% in 2004, primarily due to the dollar decrease in depletion of Net Profits Interests.
General and administrative expenses increased $6,000 (2.7%) in 2005 as compared to 2004. As a percentage of Net Profits, these expenses decreased to 15.2% in 2005 from 18.5% in 2004, primarily due to the increase in Net Profits.
As further discussed in Notes 6 and 7 to the combined financial statements indexed in Item 15 hereof, the Partnership is in the process of selling an increased amount of the Partnership's properties as a result of the generally favorable current environment for oil and gas dispositions and will be selling all of the Partnership's properties in the liquidation process. The Partnership will have lower future oil and gas sales and lower future production expenses due to the sale of these properties.
P-4 Partnership ---------------
Year Ended December 31, 2006 Compared to Year Ended December 31, 2005 -------------------------------------
The following discussion contains amounts for the year 2005 which have been restated to reflect the Partnership's assets held
for sale as discontinued operations. See Note 6 to the combined financial statements indexed in Item 15 hereof for more information about these discontinued operations.
Total Net Profits decreased $190,000 (10.8%) in 2006 as compared to 2005. Of this decrease (i) $214,000 was related to a decrease in the average price of gas sold and (ii) $99,000 and $74,000, respectively, were related to decreases in volumes of oil and gas sold. These decreases were partially offset by increases of (i) $136,000 related to an increase in the average price of oil sold and (ii) $61,000 related to a decrease in production expenses.
Volumes of oil and gas sold decreased 1,816 barrels and 9,762 Mcf in 2006 as compared to 2005. The decrease in volumes of oil sold was primarily due to (i) the shutting-in of one significant well during late 2005 through late 2006 in order to perform an unsuccessful workover and (ii) normal declines in production. As of the date of this Annual Report, the operator has not yet determined when or if the shut-in well will return to production and, if returned to production, at what rate. The decrease in volumes of gas sold was primarily due to (i) normal declines in production and (ii) positive prior period volume adjustments made by the operators on several wells during 2005. These decreases were partially offset by a positive prior period volume adjustment made by the operator on another significant well during 2006.
The decrease in production expenses was primarily due to (i) workover expenses incurred on several wells during 2005, (ii) a decrease in production taxes associated with the decrease in oil and gas sales, and (iii) a decrease in saltwater disposal expenses incurred on several wells during 2006 as compared to 2005. As of the date of this Annual Report, management anticipates that these saltwater disposal expenses will remain at 2006 levels. These decreases were partially offset by workover expenses incurred on one significant well during 2006.
Average oil prices increased to $64.62 per barrel in 2006 from $54.48 per barrel in 2005. Average gas prices decreased to $6.43 per Mcf in 2006 from $7.62 per Mcf in 2005.
Depletion of Net Profits Interests increased $1,000 (1.4%) in 2006 as compared to 2005. This increase was primarily due to several wells being fully depleted during 2006 due to their lack of remaining reserves. This increase was partially offset by (i) several other wells being fully depleted during 2005 due to their lack of remaining reserves and (ii) the decreases in volumes of oil and gas sold. As a percentage of Net Profits, this expense increased to 5.2% in 2006 from 4.6% in 2005, primarily due to the decrease in the average price of gas sold.
The Partnership recognized a non-cash charge against earnings of $3,000 during 2006. This charge was related to the
decline in oil and gas prices used to determine recoverability of oil and gas reserves at September 30, 2006. No such charge was incurred during 2005.
General and administrative expenses decreased $3,000 (1.6%) in 2006 as compared to 2005. As a percentage of Net Profits, these expenses increased to 10.6% in 2006 from 9.6% in 2005, primarily due to the decrease in Net Profits.
As further discussed in Notes 6 and 7 to the combined financial statements indexed in Item 15 hereof, the Partnership is in the process of selling an increased amount of the Partnership's properties as a result of the generally favorable current environment for oil and gas dispositions and will be selling all of the Partnership's properties in the liquidation process. The Partnership will have lower future oil and gas sales and lower future production expenses due to the sale of these properties.
Cumulative cash distributions to the Limited Partners through December 31, 2006 were $21,807,945 or 172.66% of Limited Partners' capital contributions.
Year Ended December 31, 2005 Compared to Year Ended December 31, 2004 --------------------------------------
The following discussion contains amounts for the years 2005 and 2004 which have been restated to reflect the Partnership's assets held for sale as discontinued operations. See Note 6 to the combined financial statements indexed in Item 15 hereof for more information about these discontinued operations.
Total Net Profits increased $123,000 (7.6%) in 2005 as compared to 2004. Of this increase $222,000 and $353,000, respectively, were related to increases in the average prices of oil and gas sold. These increases were partially offset by decreases of (i) $85,000 and $225,000, respectively, related to decreases in volumes of oil and gas sold and (ii) $142,000 related to an increase in production expenses.
Volumes of oil and gas sold decreased 2,141 barrels and 38,985 Mcf in 2005 as compared to 2004. 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 and early 2005 in order to perform a workover. The decrease in volumes of gas sold was primarily due to (i) normal declines in production, (ii) a positive prior period volume adjustment included in the receipt of first revenues on one significant well during 2004, and (iii) the shutting-in of two significant wells during early 2005 in order to perform workovers.
The increase in production expenses was primarily due to (i) workover expenses, (ii) an increase in production taxes associated with the increase in oil and gas sales, and (iii) a positive prior period production tax adjustment made by the operator on one significant well during 2005.
Average oil and gas prices increased to $54.48 per barrel and $7.62 per Mcf in 2005 from $39.91 per barrel and $5.76 per Mcf in 2004.
Depletion of Net Profits Interests increased $3,000 (4.3%) in 2005 as compared to 2004. Of this increase (i) $31,000 was due to the depletion of additional Net Profits Interests as a result of the upward revision in the estimate of the asset retirement obligations, of which $20,000 was related to previously fully depleted wells, and (ii) $4,000 was due to accretion of these additional asset retirement obligations. These increases were partially offset by (i) the abandonment of one significant well during 2004 following an unsuccessful recompletion attempt and (ii) the decreases in volumes of oil and gas sold. As a percentage of Net Profits, this expense decreased to 4.6% in 2005 from 4.8% in 2004.
General and administrative expenses increased $7,000 (4.2%) in 2005 as compared to 2004. As a percentage of Net Profits, these expenses decreased to 9.6% in 2005 from 9.9% in 2004.
As further discussed in Notes 6 and 7 to the combined financial statements indexed in Item 15 hereof, the Partnership is in the process of selling an increased amount of the Partnership's properties as a result of the generally favorable current environment for oil and gas dispositions and will be selling all of the Partnership's properties in the liquidation process. The Partnership will have lower future oil and gas sales and lower future production expenses due to the sale of these properties.
P-5 Partnership ---------------
Year Ended December 31, 2006 Compared to Year Ended December 31, 2005 -------------------------------------
The following discussion contains amounts for the year 2005 which have been restated to reflect the Partnership's assets held for sale as discontinued operations. See Note 6 to the combined financial statements indexed in Item 15 hereof for more information about these discontinued operations.
Total Net Profits increased $261,000 (16.8%) in 2006 as compared to 2005. Of this increase (i) $81,000 and $413,000,
respectively, were related to increases in volumes of oil and gas sold and (ii) $56,000 was related to an increase in the average price of oil sold. These increases were partially offset by decreases of (i) $194,000 related to a decrease in the average price of gas sold and (ii) $95,000 related to an increase in production expenses.
Volumes of oil and gas sold increased 1,498 barrels and 58,634 Mcf in 2006 as compared to 2005. The increase in volumes of oil sold was primarily due to (i) the successful completion of several new wells during mid 2005 through mid 2006 and (ii) an increase in production on two significant wells following their successful recompletion during early and mid 2006. These increases were partially offset by (i) normal declines in production and (ii) positive prior period volume adjustments made by the operator on several wells during 2005. The increase in volumes of gas sold was primarily due to (i) the successful completion of several new wells during mid 2005 through late 2006, (ii) upward revisions in the estimates of remaining gas reserves on one significant well which reduced the Partnership's overproduced in excess of estimated ultimate reserves position, thereby decreasing its gas imbalance payable, and (iii) a negative prior period volume adjustment on one significant well during 2005. These increases were partially offset by normal declines in production.
The increase in production expenses was primarily due to (i) an increase in workover expenses, (ii) a $31,000 decrease in lease operating expenses during 2005 resulting from a decrease in the Partnership's gas balancing position on several wells, and (iii) an increase in production taxes associated with the increase in oil and gas sales. As of the date of this Annual Report, management anticipates workover costs remaining at or increasing above 2006 levels due to the increased cost to perform a workover and the age of the wellbores.
Average oil prices increased to $63.53 per barrel in 2006 from $54.13 per barrel in 2005. Average gas prices decreased to $6.41 per Mcf in 2006 from $7.05 per Mcf in 2005.
Depletion of Net Profits Interests increased $149,000 (140.4%) in 2006 as compared to 2005. This increase was primarily due to (i) an increase in depletable Net Profits Interests during 2006 primarily due to the recompletion of several wells and (ii) the increases in volumes of oil and gas sold. These increases were partially offset by several wells being fully depleted during 2005 due to their lack of remaining reserves. As a percentage of Net Profits, this expense increased to 14.1% in 2006 from 6.8% in 2005, primarily due to the dollar increase in depletion of Net Profits Interests.
The Partnership recognized a non-cash charge against earnings of $57,000 during 2006. This charge was related to the decline in oil and gas prices used to determine recoverability of
oil and gas reserves at September 30, 2006. No such charge was incurred during 2005.
General and administrative expenses decreased $3,000 (1.7%) in 2006 as compared to 2005. As a percentage of Net Profits, these expenses decreased to 8.6% in 2006 from 10.3% in 2005, primarily due to the increase in Net Profits.
As further discussed in Notes 6 and 7 to the combined financial statements indexed in Item 15 hereof, the Partnership is in the process of selling an increased amount of the Partnership's properties as a result of the generally favorable current environment for oil and gas dispositions and will be selling all of the Partnership's properties in the liquidation process. The Partnership will have lower future oil and gas sales and lower future production expenses due to the sale of these properties.
Cumulative cash distributions to the Limited Partners through December 31, 2006 were $15,241,759 or 128.68% of Limited Partners' capital contributions.
Year Ended December 31, 2005 Compared to Year Ended December 31, 2004 --------------------------------------
The following discussion contains amounts for the years 2005 and 2004 which have been restated to reflect the Partnership's assets held for sale as discontinued operations. See Note 6 to the combined financial statements indexed in Item 15 hereof for more information about these discontinued operations.
Total Net Profits increased $340,000 (28.1%) in 2005 as compared to 2004. Of this increase $65,000 and $483,000, respectively, were related to increases in the average prices of oil and gas sold. These increases were partially offset by decreases of (i) $156,000 related to a decrease in volumes of gas sold and (ii) $60,000 related to an increase in production expenses.
Volumes of oil sold increased 226 barrels, while volumes of gas sold decreased 30,774 Mcf in 2005 as compared to 2004. The increase in volumes of oil sold was primarily due to (i) the successful completion of several new wells during mid 2004 through mid 2005 and (ii) positive prior period volume adjustments made by the operator on several wells during 2005. These increases were partially offset by normal declines in production. The decrease in volumes of gas sold was primarily due to (i) normal declines in production, (ii) a negative prior period volume adjustment on one significant well during 2005, and (iii) a substantial decline in production during 2005 on one significant well following a workover of that well. The well with a substantial decline in production is not expected to
return to its previously high levels of production. These decreases were partially offset by the successful completion of several new wells during mid 2004 through early 2005.
The increase in production expenses was primarily due to (i) an increase in workover expenses and (ii) an increase in production taxes associated with the increase in oil and gas sales.
Average oil and gas prices increased to $54.13 per barrel and $7.05 per Mcf in 2005 from $39.63 per barrel and $5.09 per Mcf in 2004.
Depletion of Net Profits Interests increased $12,000 (12.9%) in 2005 as compared to 2004. Of this increase (i) $23,000 was due to the depletion of additional Net Profits Interests as a result of the upward revision in the estimate of the asset retirement obligations, of which $16,000 was related to previously fully depleted wells, and (ii) $3,000 was due to accretion of these additional asset retirement obligations. This increase was also due to an increase in depletable Net Profits Interests during 2005 primarily due to the drilling of two developmental wells. These increases were partially offset by (i) the decrease in volumes of gas sold, (ii) one significant well being fully depleted during 2004 due to its lack of remaining reserves, and (iii) upward revisions in the estimates of remaining oil and gas reserves since December 31, 2004. As a percentage of Net Profits, this expense decreased to 6.8% in 2005 from 7.8% in 2004, primarily due to the increases in the average prices of oil and gas sold.
General and administrative expenses increased $7,000 (4.5%) in 2005 as compared to 2004. As a percentage of Net Profits, these expenses decreased to 10.3% in 2005 from 12.6% in 2004, primarily due to the increase in Net Profits.
As further discussed in Notes 6 and 7 to the combined financial statements indexed in Item 15 hereof, the Partnership is in the process of selling an increased amount of the Partnership's properties as a result of the generally favorable current environment for oil and gas dispositions and will be selling all of the Partnership's properties in the liquidation process. The Partnership will have lower future oil and gas sales and lower future production expenses due to the sale of these properties.
P-6 Partnership ---------------
Year Ended December 31, 2006 Compared to Year Ended December 31, 2005 -------------------------------------
The following discussion contains amounts for the year 2005 which have been restated to reflect the Partnership's assets held for sale as discontinued operations. See Note 6 to the combined financial statements indexed in Item 15 hereof for more information about these discontinued operations.
Total Net Profits remained relatively constant in 2006 and 2005. Decreases of (i) $450,000 related to a decrease in the average price of gas sold and (ii) $50,000 related to an increase in production expenses were substantially offset by increases of (i) $38,000 and $363,000, respectively, related to increases in volumes of oil and gas sold and (ii) $90,000 related to an increase in the average price of oil sold.
Volumes of oil and gas sold increased 720 barrels and 52,032 Mcf in 2006 as compared to 2005. The increase in volumes of oil sold was primarily due to (i) the successful completion of several new wells during mid 2005 through mid 2006 and (ii) an increase in production on two significant wells following their successful recompletion during early and mid 2006. These increases were partially offset by normal declines in production. The increase in volumes of gas sold was primarily due (i) the successful completion of several new wells during mid 2005 through late 2006, (ii) upward revisions in the estimates of remaining gas reserves on one significant well which reduced the Partnership's overproduced in excess of estimated ultimate reserves position, thereby decreasing its gas imbalance payable, and (iii) an increase in production on one significant well following its successful workover during early 2006. These increases were partially offset by normal declines in production.
The increase in production expenses was primarily due to (i) an increase in workover expenses and (ii) a $43,000 decrease in lease operating expenses during 2005 resulting from a decrease in the Partnership's gas balancing position on several wells. As of the date of this Annual Report, management anticipates workover costs remaining at or increasing above 2006 levels due to the increased cost to perform a workover and the age of the wellbores. These increases were partially offset by the receipt of a $51,000 lease operating expense credit resulting from a class action settlement on one significant unit during 2006.
Average oil prices increased to $61.49 per barrel in 2006 from $53.62 per barrel in 2005. Average gas prices decreased to $5.98 per Mcf in 2006 from $6.98 per Mcf in 2005.
Depletion of Net Profits Interests increased $63,000 (22.2%) in 2006 as compared to 2005. This increase was primarily due to (i) an increase in depletable Net Profits Interests during 2006 primarily due to the recompletion of several wells and (ii) the increases in volumes of oil and gas sold. These increases were partially offset by (i) several wells being fully depleted during 2005 due to their lack of remaining reserves and (ii) two significant wells being substantially depleted during 2005 due to their lack of remaining reserves. As a percentage of Net Profits, this expense increased to 13.7 % in 2006 from 11.2% in 2005, primarily due to the dollar increase in depletion of Net Profits Interests.
The Partnership recognized a non-cash charge against earnings of $20,000 during 2006. This charge was related to the decline in oil and gas prices used to determine recoverability of oil and gas reserves at September 30, 2006. No such charge was incurred during 2005.
General and administrative expenses decreased $3,000 (1.5%) in 2006 as compared to 2005. As a percentage of Net Profits, these expenses decreased to 7.2% in 2006 from 7.3% in 2005.
As further discussed in Notes 6 and 7 to the combined financial statements indexed in Item 15 hereof, the Partnership is in the process of selling an increased amount of the Partnership's properties as a result of the generally favorable current environment for oil and gas dispositions and will be selling all of the Partnership's properties in the liquidation process. The Partnership will have lower future oil and gas sales and lower future production expenses due to the sale of these properties.
The Limited Partners have received cash distributions through December 31, 2006 totaling $22,865,248 or 159.85% of Limited Partners' capital contributions.
Year Ended December 31, 2005 Compared to Year Ended December 31, 2004 --------------------------------------
The following discussion contains amounts for the years 2005 and 2004 which have been restated to reflect the Partnership's assets held for sale as discontinued operations. See Note 6 to the combined financial statements indexed in Item 15 hereof for more information about these discontinued operations.
Total Net Profits increased $721,000 (39.7%) in 2005 as compared to 2004. Of this increase (i) $108,000 and $647,000, respectively, were related to increases in the average prices of oil and gas sold and (ii) $134,000 was related to an increase in volumes of oil sold. These increases were partially offset by a
decrease of $139,000 related to a decrease in volumes of gas sold.
Volumes of oil sold increased 3,077 barrels, while volumes of gas sold decreased 26,040 Mcf in 2005 as compared to 2004. The increase 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 and (ii) the successful completion of several new wells during early to mid 2005. The decrease in volumes of gas sold was primarily due to (i) normal declines in production, (ii) a substantial decline in production during 2005 on one significant well following a workover of that well, and (iii) a negative prior period volume adjustment on one significant well during 2005. The well with a substantial decline in production is not expected to return to its previous levels of production. These decreases were partially offset by (i) a negative prior period volume adjustment made by the operator on another significant well during 2004 and (ii) the successful completion of several wells during 2004 and early 2005.
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) an increase in workover expenses. These increases were partially offset by (i) a prior period production tax adjustment on one significant unit during 2004 and (ii) the abandonment of one significant well during 2004 due to severe mechanical problems.
Average oil and gas prices increased to $53.62 per barrel and $6.98 per Mcf in 2005 from $43.47 per barrel and $5.35 per Mcf in 2004.
Depletion of Net Profits Interests increased $163,000 (135.8%) in 2005 as compared to 2004. Of this increase (i) $74,000 was due to the depletion of additional Net Profits Interests as a result of the upward revision in the estimate of the asset retirement obligations, of which $53,000 was related to previously fully depleted wells, (ii) $9,000 was due to accretion of these additional asset retirement obligations, and (iii) two significant wells being substantially depleted during 2005 due to their lack of remaining reserves. These increases were partially offset by one significant well being fully depleted during 2004 due to its lack of remaining reserves. As a percentage of Net Profits, this expense increased to 11.2% in 2005 from 6.6% in 2004, primarily due to the dollar increase in depletion of Net Profits Interests.
General and administrative expenses increased $7,000 (3.7%) in 2005 as compared to 2004. As a percentage of Net Profits, these expenses decreased to 7.3% in 2005 from 9.9% in 2004, primarily due to the increase in Net Profits.
As further discussed in Notes 6 and 7 to the combined financial statements indexed in Item 15 hereof, the Partnership is in the process of selling an increased amount of the Partnership's properties as a result of the generally favorable current environment for oil and gas dispositions and will be selling all of the Partnership's properties in the liquidation process. The Partnership will have lower future oil and gas sales and lower future production expenses due to the sale of these properties.
Average Proceeds and Units of Production
The following tables are comparisons of the annual barrel of oil equivalent ("boe") (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 boe attributable to the Partnerships' Net Profits for the years ended December 31, 2006, 2005, and 2004.
2006 Compared to 2005 ---------------------
Average Proceeds per BOE BOE ----------------------------- -------------------------- P/ship 2006 2005(1) % Change 2006 2005(1) % Change ------ ------ ------- -------- ------ ------- --------
P-1 23,492 23,709 ( 1%) $27.95 $35.33 (21%) P-3 39,183 40,010 ( 2%) 29.02 35.50 (18%) P-4 43,500 46,943 ( 7%) 35.96 37.36 ( 4%) P-5 56,761 45,491 25% 31.96 34.13 ( 6%) P-6 86,471 77,079 12% 29.27 32.95 (11%)
2005 Compared to 2004 ---------------------
Average Proceeds per BOE BOE ----------------------------- -------------------------- P/ship 2005(1) 2004(1) % Change 2005(1) 2004(1) % Change ------ ------- ------- -------- ------- ------- --------
P-1 23,709 27,731 (15%) $35.33 $23.92 48% P-3 40,010 46,554 (14%) 35.50 24.39 46% P-4 46,943 55,582 (16%) 37.36 29.34 27% P-5 45,491 50,394 (10%) 34.13 24.06 42% P-6 77,079 78,342 ( 2%) 32.95 23.21 42%
- ------------ (1) These amounts have been restated to reflect the sale of various oil and gas properties during 2006 and assets held for sale as of December 31, 2006 as discontinued operations. See Item 7 for more information about these discontinued operations.
Liquidity and Capital Resources
See discussion above under the heading "Partnership Termination" for information regarding termination of the Partnerships as of December 31, 2007.
Net proceeds from operations less necessary operating capital are distributed to the Limited Partners on a quarterly basis. See "Item 5. Market for Units, Related Limited Partner Matters, and Issuer Purchases of Units." The net proceeds from the Net Profits Interests are generally not reinvested in productive assets. Assuming 2006 production levels for future years, the Partnerships' proved reserve quantities at December 31, 2006 would have the following remaining lives:
Discontinued Operations Continuing Operations ----------------------- --------------------- Partnership Gas-Years Oil-Years Gas-Years Oil-Years ----------- --------- --------- --------- ---------
P-1 5.3 8.5 8.1 6.3 P-3 5.3 8.5 8.5 9.5 P-4 2.9 12.4 8.4 3.1 P-5 2.8 11.6 7.1 6.5 P-6 2.6 15.7 7.1 10.3
These life of reserves estimates are based on the current estimates of remaining oil and gas reserves. See "Item 2. Properties" for a discussion of these reserve estimates. Any increase or decrease from the high oil and gas prices at December 31, 2006 may cause an increase or decrease in the estimated life of said reserves. As discussed above, the Partnerships will terminate on December 31, 2007.
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.
Expenditures by the Affiliated Programs for new wells, well recompletions, or workovers, however, may reduce or eliminate cash available for a particular quarterly cash distribution. 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, 2006, 2005,
and 2004. 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 2006 2005 2004 ----------- -------- -------- -------
P-1 $ 72,683 $ 15,825 $25,183 P-3 89,696 19,244 80,861 P-4 - 7,805 36,380 P-5 371,520 79,369 75,826 P-6 432,269 213,430 26,625
During 2006, capital expenditures affecting the P-5 Partnership's Net Profits Interests totaled approximately $372,000. These costs were indirectly incurred primarily as a result of recompletion activities on the Sugg AA 3067 #1 and Sugg AA 3 #1 wells located in Irion County, Texas, and the Loving 1 State #1 and Loving 1 State #2 wells located in Eddy County, New Mexico.
During 2006, capital expenditures affecting the P-6 Partnership's Net Profits Interests totaled $432,000. These costs were indirectly incurred primarily as a result of recompletion activities on the Sugg AA 3067 #1, Sugg AA 3 #1, Loving 1 State #1, Loving 1 State #2 wells referenced above and the Henderson Stovall GU #2 well located in Wharton County, Texas. During 2005, capital expenditures affecting the P-6 Partnership's Net Profits Interests totaled $213,000. These costs were indirectly incurred primarily as a result of recompletion activities on (i) the Henderson Stovall GU #2 well located in Wharton County, Texas and (ii) the Berniece 1 well located in Grayson County, Texas. The Henderson Stovall GU #2 well is included in the discontinued operations and is anticipated to be sold in the next twelve months. The reader should refer to Note 6 to the combined financial statements included in Item 8 of this Annual Report for additional information regarding this matter.
Other capital expenditures incurred by the Partnerships during 2006, 2005, and 2004 were not material to the Partnerships' cash flows.
The Partnerships sold certain Net Profits Interests during 2006 and 2004. No such sales occurred during 2005. 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 2006, 2005, and 2004, were as follows:
Partnership 2006 2005 2004 ----------- ---------- ---- -------
P-1 $3,607,523 $ - $16,707 P-3 4,678,725 - 21,366 P-4 240,230 - 434 P-5 6,297 - - P-6 2,162 - -
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 and sale of oil and gas properties, which will be affected (either positively or negatively) by many factors beyond the control of the Partnerships, including the price of and demand for oil and gas and other market and economic conditions. 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.
If the Partnerships were to continue past December 31, 2007, the General Partner would expect the Partnerships' general and administrative expenses to increase due to costs required to comply with Section 404 of the Sarbanes-Oxley Act of 2002. Such anticipated increase would reduce cash available for distributions. Due to the Partnerships' termination on December 31, 2007, these expenses will not occur; however, the Partnerships will incur increased expenses as part of their liquidation (e.g. auction fees, legal and title expenses associated with property sales, etc.).
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 well. If the unamortized costs, net of salvage value, of a Net Profits Interest 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. In the third quarter of 2006, natural gas prices declined significantly. Consequently, the Partnerships incurred impairments utilizing the natural gas spot prices that existed on September 30, 2006. The impairments related to continuing operations recognized in the third quarter totaled approximately $17,000, $25,000, $3,000, $57,000 and $20,000 for the P-1, P-3, P-4, P-5, and P-6 Partnerships, respectively. Once incurred, an impairment of oil and natural gas properties is not reversible.
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
The Partnerships' wells must be properly plugged and abandoned after their oil and gas reserves are exhausted. The Partnerships follow FAS No. 143, "Accounting for Asset Retirement Obligations" in accounting for the future expenditures that will be necessary to plug and abandon these wells. FAS No. 143 requires the estimated plugging and abandonment obligations to be recognized in the period in which they are incurred (i.e. when the well is drilled or acquired) if a reasonable estimate of fair value can be made and to be capitalized as part of the carrying amount of the well.
New Accounting Pronouncement
In September 2006, the FASB issued FAS No. 157, "Fair Value Measurements" (FAS No. 157). FAS No. 157 establishes a common definition for fair value to be applied to US GAAP guidance requiring use of fair value, establishes a framework for measuring fair value, and expands the disclosure about such fair value measurements. FAS No. 157 is effective for fiscal years beginning after November 5, 2007. The Partnerships are currently assessing the impact of FAS No. 157 on their results of operations, financial condition and cash flows.
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. Inflationary pressure on drilling and operating costs have impacted the operating and drilling costs incurred by the Partnerships. This pressure is expected to continue to the extent commodity prices remain at their current levels. 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 value of net assets in liquidation of the Partnerships is substantially dependent on prices of crude oil, natural gas, and natural gas liquids. Declines in commodity prices will adversely affect the amount of cash that will be received from the sale of oil and gas and from the sale of the Partnerships' oil and gas properties in liquidation, and thus ultimately affect the amount of cash that will be available for distribution to the partners. The following table presents the estimated change in value presuming a decrease of 10% in forecasted natural gas and crude oil prices. These estimated decreases in liquidation values are in comparison to the estimated liquidation value calculated using strip pricing for the unaudited pro-forma balance sheet at December 31, 2006 presented in Note 7 to the combined financial statements indexed in Item 15 hereof.
General Limited Partnership Partner Partners Total ----------- -------- -------- ----------
P-1 $106,000 $602,000 $ 708,000 P-3 103,000 926,000 1,029,000 P-4 53,000 474,000 527,000 P-5 47,000 423,000 470,000 P-6 107,000 964,000 1,071,000
ITEM 8.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The financial statements and supplementary data are indexed in Item 15 hereof. Such financial statements and supplementary data are audited and presented on a going concern basis. Since termination of the Partnerships is now imminent, the General Partner has prepared unaudited pro forma combined balance sheets which are presented on a liquidation basis. These unaudited liquidation basis combined balance sheets are included in Note 7 to the financial statements 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. This evaluation did not result in any changes in the Partnerships' internal control over financial reporting that materially affected, or were reasonably likely to materially affect, the Partnerships' internal control over financial reporting.
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 2006 but which was not so reported.
PART III.
ITEM 10.
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE GENERAL PARTNER, AND CORPORATE GOVERNANCE
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 55 President and Director
Judy K. Fox 56 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 2006 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.
Compensation Committee Interlocks and Insider Participation
As described above and in "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 2006, 2005, and 2004, 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 2006 2005 2004 ----------- -------- -------- -------- 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 2006, 2005, and 2004:
[Remainder of Page Intentionally Left Blank]
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 burdened the Partnerships' Net Profits Interests during the year ended December 31, 2006 is approximately $8,000, $29,000, $8,000, $39,000, and $124,000, respectively, for the P-1, P-3, P-4, P-5 and P-6 Partnerships.
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 34,423 (31.9%)
All affiliates, directors, and officers of the General Partner as a group and the General Partner (4 persons) 34,423 (31.9%)
P-3 Partnership: - ---------------
Samson Resources Company 73,379 (43.3%)
All affiliates, directors, and officers of the General Partner as a group and the General Partner (4 persons) 73,379 (43.3%)
P-4 Partnership: - ---------------
Samson Resources Company 37,572 (29.7%)
All affiliates, directors, and officers of the General Partner as a group and the General Partner (4 persons) 37,572 (29.7%)
P-5 Partnership: - ---------------
Samson Resources Company 32,565 (27.5%)
All affiliates, directors, and officers of the General Partner as a group and the General Partner (4 persons) 32,565 (27.5%)
P-6 Partnership: - ---------------
Samson Resources Company 23,192 (16.2%)
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) 23,192 (16.2%)
ITEM 13.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR INDEPENDENCE
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.
The Partnerships will terminate as of December 31, 2007. As part of the liquidation and winding-up process the General Partner will liquidate the Partnerships' properties by offering them to all interested parties through normal oil and gas property auction processes as well as appropriate negotiated transactions. It is possible that the General Partner will package some properties which have value with properties that have no or low value or are burdened with actual or potential liabilities. The General Partner intends to sell all such property packages and any associated or otherwise remaining Partnership assets and liabilities to the highest bidder at auction. It is possible that affiliates of the General Partner may participate in any public auction of these properties and may be the successful high bidder on some or all of the properties.
ITEM 14.
ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES
Audit Fees
During 2006 and 2005, each Partnership paid the following audit fees: 2006 2005 ------- -------
Year-end audit per engagement letter $26,418 $23,716 1st quarter 10-Q review 1,020 925 2nd quarter 10-Q review 1,020 917 3rd quarter 10-Q review 1,020 917 8-K reviews(1) 4,525 -
-------------- (1) These fees were incurred by only the P-1 and P-3 Partnerships.
Audit-Related Fees
During 2006 and 2005 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 2006 and 2005 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 2006 and 2005 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' independent registered public 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 independent registered public accountants' 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 and Geodyne NPI Partnership P-1 Geodyne Institutional/Pension Energy Income Limited Partnership P-3 and Geodyne NPI Partnership P-3 Geodyne Institutional/Pension Energy Income Limited Partnership P-4 and Geodyne NPI Partnership P-4 Geodyne Institutional/Pension Energy Income Limited Partnership P-5 and Geodyne NPI Partnership P-5 Geodyne Institutional/Pension Energy Income Limited Partnership P-6 and Geodyne NPI Partnership P-6
as of December 31, 2006 and 2005 and for each of the three years in the period ended December 31, 2006 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 Fifth Amendment to Amended and Restated Agreement of Limited Partnership dated October 27, 2005, for the Geodyne Institutional/ Pension Energy Income P-1 Limited Partnership filed as Exhibit 4.8 to Registrant's Annual Report on Form 10-K for the year ended December 31, 2005, filed with the SEC on March 29, 2006 and is hereby incorporated by reference.
4.9 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.
4.10 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.
4.11 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.
4.12 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.
4.13 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.
4.14 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.
4.15 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.
4.16 Fifth Amendment to Amended and Restated Agreement of Limited Partnership dated October 27, 2005, for the Geodyne Institutional/ Pension Energy Income P-3 Limited Partnership filed as Exhibit 4.16 to Registrant's Annual Report on Form 10-K for the year ended December 31, 2005, filed with the SEC on March 29, 2006 and is hereby incorporated by reference.
4.17 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.
4.18 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.
4.19 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.
4.20 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.
4.21 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.
4.22 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.
4.23 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.
4.24 Fifth Amendment to Amended and Restated Agreement of Limited Partnership dated October 27, 2005, for the Geodyne Institutional/ Pension Energy Income P-41 Limited Partnership filed as Exhibit 4.24 to Registrant's Annual Report on Form 10-K for the year ended December 31, 2005, filed with the SEC on March 29, 2006 and is hereby incorporated by reference.
4.25 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.
4.26 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.
4.27 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.
4.28 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.
4.29 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.
4.30 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.
4.31 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.
4.32 Fifth Amendment to Amended and Restated Agreement of Limited Partnership dated October 27, 2005, for the Geodyne Institutional/ Pension Energy Income P-5 Limited Partnership filed as Exhibit 4.32 to Registrant's Annual Report on Form 10-K for the year ended December 31, 2005, filed with the SEC on March 29, 2006 and is hereby incorporated by reference.
4.33 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.
4.34 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.
4.35 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.
4.36 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.
4.37 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.
4.38 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.
4.39 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.
4.40 Fifth Amendment to Amended and Restated Agreement of Limited Partnership dated October 27, 2005, for the Geodyne Institutional/ Pension Energy Income P-6 Limited Partnership filed as Exhibit 4.40 to Registrant's Annual Report on Form 10-K for the year ended December 31, 2005, filed with the SEC on March 29, 2006 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 Third Amendment to Amended and Restated Agreement of Partnership dated October 27, 2005 for the Geodyne NPI Partnership P-1 filed as Exhibit 10.4 to Registrant's Annual Report on Form 10-K for the year ended December 31, 2005, filed with the SEC on March 29, 2006 and is hereby incorporated by reference.
10.5 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.
10.6 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.
10.7 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.
10.8 Third Amendment to Agreement of Partnership dated October 27, 2005for 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, 2005, filed with the SEC on March 29, 2006 and is hereby incorporated by reference.
10.9 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.
10.10 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.
10.11 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.
10.12 Third Amendment to Agreement of Partnership dated October 27, 2005 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, 2005, filed with the SEC on March 29, 2006 and is hereby incorporated by reference.
10.13 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.
10.14 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.
10.15 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.
10.16 Third Amendment to Agreement of Partnership dated October 27, 2005 for the Geodyne NPI Partnership P-5 filed as Exhibit 10.16 to Registrant's Annual Report on Form 10-K for the year ended December 31, 2005, filed with the SEC on March 29, 2006 and is hereby incorporated by reference.
10.17 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.
10.18 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.
10.19 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.
10.20 Third Amendment to Agreement of Partnership dated October 27, 2005 for the Geodyne NPI Partnership P-6 filed as Exhibit 10.20 to Registrant's Annual Report on Form 10-K for the year ended December 31, 2005, filed with the SEC on March 29, 2006 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 April 16, 2007
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 April 16, 2007 -------------------- Director (Principal Dennis R. Neill Executive Officer)
//s//Craig D. Loseke Chief Accounting April 16, 2007 -------------------- Officer (Principal Craig D. Loseke Accounting and Financial Officer)
//S//Judy K. Fox Secretary April 16, 2007 -------------------- 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, 2006 and 2005, and the combined results of their operations and their cash flows for each of the three years in the period ended December 31, 2006, 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 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 7 to the combined financial statements, on February 5, 2007 the General Partner mailed a notice to the limited partners that the Partnership will terminate at the end of its current term, December 31, 2007, and that in connection with such termination the General Partner would liquidate all of the Partnership's assets.
PricewaterhouseCoopers LLP
Tulsa, Oklahoma April 16, 2007
GEODYNE INSTITUTIONAL/PENSION ENERGY INCOME P-1 LIMITED PARTNERSHIP GEODYNE NPI PARTNERSHIP P-1 Combined Balance Sheets December 31, 2006 and 2005
ASSETS ------
2006 2005 ------------ ------------
CURRENT ASSETS: Cash and cash equivalents $ 496,665 $ 595,286 Accounts receivable: Net Profits 54,786 320,323 Assets held for sale (Note 6) 311,549 - --------- ---------
Total current assets $ 863,000 $ 915,609
NET PROFITS INTERESTS, net, utilizing the successful efforts method 327,000 690,032 --------- ---------
$1,190,000 $1,605,641 ========= =========
PARTNERS' CAPITAL (DEFICIT) ---------------------------
PARTNERS' CAPITAL (DEFICIT): General Partner ($ 19,475) ($ 29,401) Limited Partners, issued and outstanding, 108,074 Units 1,209,475 1,635,042 --------- ---------
Total Partners' capital $1,190,000 $1,605,641 ========= =========
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, 2006, 2005, and 2004
2006 2005 2004 ---------- ---------- ---------- REVENUES: Net Profits $ 656,577 $ 837,617 $ 663,400 Interest income 18,609 8,941 2,902 Gain on sale of Net Profits Interests 19 349 17,563 Other income 13,571 - 3,474 -------- --------- --------- $ 688,776 $ 846,907 $ 687,339
COSTS AND EXPENSES: Depletion of Net Profits Interests $ 66,642 $ 43,933 $ 41,781 Impairment provision 16,962 - - General and administrative 149,919 148,028 142,133 --------- --------- --------- $ 233,523 $ 191,961 $ 183,914 --------- --------- ---------
INCOME FROM CONTINUING OPERATIONS $ 455,253 $ 654,946 $ 503,425
DISCONTINUED OPERATIONS: Income from discontinued operations (Note 6) 1,348,728 1,235,452 791,467 Gain on disposal of discontinued operations (Note 6) 3,481,351 - - --------- --------- --------- NET INCOME $5,285,332 $1,890,398 $1,294,892 ========= ========= =========
GENERAL PARTNER: Net income from continuing operations $ 51,189 $ 68,554 $ 52,040 Net income from discontinued operations 484,710 126,746 81,480 ---------- --------- --------- NET INCOME $ 535,899 $ 195,300 $ 133,520 ========= ========= =========
LIMITED PARTNERS: Net income from continuing operations $ 404,064 $ 586,392 $ 451,385 Net income from discontinued operations 4,345,369 1,108,706 709,987 --------- --------- --------- NET INCOME $4,749,433 $1,695,098 $1,161,372 ========= ========= =========
NET INCOME FROM CONTINUING OPERATIONS PER UNIT $ 3.74 $ 5.43 $ 4.18 NET INCOME FROM DISCONTINUED OPERATIONS PER UNIT 40.21 10.26 6.57 --------- --------- --------- NET INCOME PER UNIT $ 43.95 $ 15.69 $ 10.75 ========= ========= ========= 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, 2006, 2005, and 2004
Limited General Partners Partner Total ------------ ---------- ------------
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 Net income 1,695,098 195,300 1,890,398 Cash distributions ( 1,344,000) ( 159,855) ( 1,503,855) --------- ------- ---------
Balance, Dec. 31, 2005 $1,635,042 ($ 29,401) $1,605,641 Net income 4,749,433 535,899 5,285,332 Cash distributions ( 5,175,000) ( 525,973) ( 5,700,973) --------- ------- ---------
Balance, Dec. 31, 2006 $1,209,475 ($ 19,475) $1,190,000 ========= ======= =========
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, 2006, 2005, and 2004
2006 2005 2004 ------------ ------------ ------------ CASH FLOWS FROM OPERATING ACTIVITIES: Net income $5,285,332 $1,890,398 $1,294,892 Adjustments to reconcile net income to net cash provided by operating activities: Depletion of Net Profits Interests 85,516 79,493 67,699 Impairment provision 17,000 - - Gain on sale of Net Profits Interests ( 19) ( 349) ( 17,563) Gain on disposal of discontinued operations (Note 6) ( 3,481,351) - - Settlement of asset retirement obligation ( 263) ( 496) - Net change in accounts receivable / accounts payable - Net Profits 148,160 ( 299,785) 54,004 --------- --------- ----------
Net cash provided by operating activities $2,054,375 $1,669,261 $1,399,032 --------- --------- ----------
CASH FLOWS FROM INVESTING ACTIVITIES: Capital expenditures ($ 59,546) ($ 18,488) ($ 19,298) Proceeds from sale of oil and gas properties - - 16,707 Proceeds from sale of discontinued operations (Note 6) 3,607,523 - - --------- --------- ----------
Net cash provided (used) by investing activities $3,547,977 ($ 18,488) ($ 2,591) --------- --------- --------- CASH FLOWS FROM FINANCING ACTIVITIES: Cash distributions ($5,700,973) ($1,503,855) ($1,347,653) --------- --------- ---------- Net cash used by financing activities ($5,700,973) ($1,503,855) ($1,347,653) --------- --------- ----------
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS ($ 98,621) $ 146,918 $ 48,788
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 595,286 448,368 399,580 --------- --------- ---------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 496,665 $ 595,286 $ 448,368 ========= ========= =========
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, 2006 and 2005, and the combined results of their operations and their cash flows for each of the three years in the period ended December 31, 2006, 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 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 7 to the combined financial statements, on February 5, 2007 the General Partner mailed a notice to the limited partners that the Partnership will terminate at the end of its current term, December 31, 2007, and that in connection with such termination the General Partner would liquidate all of the Partnership's assets.
PricewaterhouseCoopers LLP
Tulsa, Oklahoma April 16, 2007
GEODYNE INSTITUTIONAL/PENSION ENERGY INCOME LIMITED PARTNERSHIP P-3 GEODYNE NPI PARTNERSHIP P-3 Combined Balance Sheets December 31, 2006 and 2005
ASSETS ------
2006 2005 ---------- ------------
CURRENT ASSETS: Cash and cash equivalents $ 852,351 $ 885,655 Accounts receivable: Net Profits 86,855 460,877 Assets held for sale (Note 6) 404,587 - --------- ---------
Total current assets $1,343,793 $1,346,532
NET PROFITS INTERESTS, net, utilizing the successful efforts method 556,629 1,058,322 --------- ---------
$1,900,422 $2,404,854 ========= =========
PARTNERS' CAPITAL (DEFICIT) ---------------------------
PARTNERS' CAPITAL (DEFICIT): General Partner $ 15,052 ($ 4,259) Limited Partners, issued and outstanding, 169,637 Units 1,885,370 2,409,113 --------- ---------
Total Partners' capital $1,900,422 $2,404,854 ========= =========
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, 2006, 2005, and 2004
2006 2005 2004 ---------- ---------- ---------- REVENUES: Net Profits $1,136,955 $1,420,511 $1,135,626 Interest income 27,558 13,401 4,406 Gain on sale of Net Profits Interests 28 440 22,514 Other income 17,097 - 4,376 --------- --------- ---------
$1,181,638 $1,434,352 $1,166,922
COSTS AND EXPENSES: Depletion of Net Profits Interests $ 109,112 $ 71,407 $ 170,836 Impairment provision 25,083 - - General and administrative 217,060 215,347 209,719 --------- --------- --------- $ 351,255 $ 286,754 $ 380,555 --------- --------- ---------
INCOME FROM CONTINUING OPERATIONS $ 830,383 $1,147,598 $ 786,367
DISCONTINUED OPERATIONS: Income from discontinued operations (Note 6) 1,727,111 1,591,882 1,017,253 Gain on disposal of discontinued operations (Note 6) 4,511,148 - - --------- --------- --------- NET INCOME $7,068,642 $2,739,480 $1,803,620 ========= ========= =========
GENERAL PARTNER: Net income from continuing operations $ 92,360 $ 119,846 $ 91,339 Net income from discontinued operations 626,025 163,411 104,791 --------- --------- --------- NET INCOME $ 718,385 $ 283,257 $ 196,130 ========= ========= =========
LIMITED PARTNERS: Net income from continuing operations $ 738,023 $1,027,752 $ 695,028 Net income from discontinued operations 5,612,234 1,428,471 912,462 --------- --------- --------- NET INCOME $6,350,257 $2,456,223 $1,607,490 ========= ========= ========= NET INCOME FROM CONTINUING OPERATIONS PER UNIT $ 4.35 $ 6.06 $ 4.10 NET INCOME FROM DISCONTINUED OPERATIONS PER UNIT 33.08 8.42 5.38 --------- --------- --------- NET INCOME PER UNIT $ 37.43 $ 14.48 $ 9.48 ========= ========= ========= 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, 2006, 2005, and 2004
Limited General Partners Partner Total ------------ ---------- ------------
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 Net income 2,456,223 283,257 2,739,480 Cash distributions ( 1,936,000) ( 234,087) ( 2,170,087) --------- ------- ---------
Balance, Dec. 31, 2005 $2,409,113 ($ 4,259) $2,404,854 Net income 6,350,257 718,385 7,068,642 Cash distributions ( 6,874,000) ( 699,074) ( 7,573,074) --------- ------- ---------
Balance, Dec. 31, 2006 $1,885,370 $ 15,052 $1,900,422 ========= ======= =========
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, 2006, 2005, and 2004
2006 2005 2004 ------------ ------------ ------------ CASH FLOWS FROM OPERATING ACTIVITIES: Net income $7,068,642 $2,739,480 $1,803,620 Adjustments to reconcile net income to net cash provided by operating activities: Depletion of Net Profits Interests 133,527 118,326 204,906 Impairment provisions 25,105 - - Gain on sale of Net Profits Interests ( 28) ( 440) ( 22,514) Gain on disposal of discontinued operations (Note 6) ( 4,511,148) - - Settlement of asset retirement obligation ( 330) ( 622) - Net change in accounts receivable / accounts payable - Net Profits 218,171 ( 406,835) 52,782 --------- --------- ---------
Net cash provided by operating activities $2,933,939 $2,449,909 $2,038,794 --------- --------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES: Capital expenditures ($ 72,894) ($ 27,363) ($ 68,952) Proceeds from sale of oil and gas properties - - 21,366 Proceeds from disposal of discontinued operations (Note 6) 4,678,725 - - --------- --------- ---------
Net cash provided (used) by investing activities $4,605,831 ($ 27,363) ($ 47,586) --------- --------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES: Cash distributions ($7,573,074) ($2,170,087) ($1,939,539) --------- --------- ---------
Net cash used by financing activities ($7,573,074) ($2,170,087) ($1,939,539) --------- --------- ---------
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS ($ 33,304) $ 252,459 $ 51,669
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 885,655 633,196 581,527 --------- --------- ---------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 852,351 $ 885,655 $ 633,196 ========= ========= =========
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, 2006 and 2005, and the combined results of their operations and their cash flows for each of the three years in the period ended December 31, 2006, 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 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 7 to the combined financial statements, on February 5, 2007 the General Partner mailed a notice to the limited partners that the Partnership will terminate at the end of its current term, December 31, 2007, and that in connection with such termination the General Partner would liquidate all of the Partnership's assets.
PricewaterhouseCoopers LLP
Tulsa, Oklahoma April 16, 2007
GEODYNE INSTITUTIONAL/PENSION ENERGY INCOME LIMITED PARTNERSHIP P-4 GEODYNE NPI PARTNERSHIP P-4 Combined Balance Sheets December 31, 2006 and 2005
ASSETS ------ 2006 2005 ------------ ------------
CURRENT ASSETS: Cash and cash equivalents $ 697,647 $ 599,645 Accounts receivable: Net Profits 154,779 304,105 Assets held for sale (Note 6) 12,789 - --------- ---------
Total current assets $ 865,215 $ 903,750
NET PROFITS INTERESTS, net, utilizing the successful efforts method 303,374 401,259 --------- ---------
$1,168,589 $1,305,009 ========= =========
PARTNERS' CAPITAL (DEFICIT) ---------------------------
PARTNERS' CAPITAL (DEFICIT): General Partner ($ 45,401) ($ 43,366) Limited Partners, issued and outstanding, 126,306 Units 1,213,990 1,348,375 --------- ---------
Total Partners' capital $1,168,589 $1,305,009 ========= =========
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, 2006, 2005, and 2004
2006 2005 2004 ---------- ---------- ---------- REVENUES: Net Profits $1,564,465 $1,753,988 $1,630,505 Interest income 16,816 9,403 3,147 Gain on sale of Net Profits Interests - - 962 --------- --------- --------- $1,581,281 $1,763,391 $1,634,614
COSTS AND EXPENSES: Depletion of Net Profits Interests $ 82,128 $ 81,028 $ 77,685 Impairment provision 2,591 - - General and administrative 165,163 167,890 161,110 --------- --------- --------- $ 249,882 $ 248,918 $ 238,795 --------- --------- ---------
INCOME FROM CONTINUING OPERATIONS $1,331,399 $1,514,473 $1,395,819
DISCONTINUED OPERATIONS: Income from discontinued operations (Note 6) 63,260 71,575 35,589 Gain on disposal of discontinued operations (Note 6) 232,679 - - --------- --------- --------- NET INCOME $1,627,338 $1,586,048 $1,431,408 ========= ========= =========
GENERAL PARTNER: Net income from continuing operations $ 139,083 $ 157,799 $ 146,259 Net income from discontinued operations 29,640 7,362 3,657 --------- --------- --------- NET INCOME $ 168,723 $ 165,161 $ 149,916 ========= ========= ========= LIMITED PARTNERS - Net income from continuing operations $1,192,316 $1,356,674 $1,249,560 Net income from discontinued operations 266,299 64,213 31,932 --------- --------- --------- NET INCOME $1,458,615 $1,420,887 $1,281,492 ========= ========= =========
NET INCOME FROM CONTINUING OPERATIONS PER UNIT $ 9.44 $ 10.74 $ 9.89 NET INCOME FROM DISCONTINUED OPERATIONS PER UNIT 2.11 .51 .25 --------- --------- --------- NET INCOME PER UNIT $ 11.55 $ 11.25 $ 10.14 ========= ========= ========= 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, 2006, 2005, and 2004
Limited General Partners Partner Total ------------ ---------- ------------
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 Net income 1,420,887 165,161 1,586,048 Cash distributions ( 1,317,000) ( 150,881) ( 1,467,881) --------- ------- ---------
Balance, Dec. 31, 2005 $1,348,375 ($ 43,366) $1,305,009 Net income 1,458,615 168,723 1,627,338 Cash distributions ( 1,593,000) ( 170,758) ( 1,763,758) --------- ------- ---------
Balance, Dec. 31, 2006 $1,213,990 ($ 45,401) $1,168,589 ========= ======= =========
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, 2006, 2005, and 2004
2006 2005 2004 ------------ ------------ ------------ CASH FLOWS FROM OPERATING ACTIVITIES: Net income $1,627,338 $1,586,048 $1,431,408 Adjustments to reconcile net income to net cash provided by operating activities: Depletion of Net Profits Interests 82,637 83,298 78,779 Impairment Provision 2,591 - - Gain on sale of Net Profits Interests - - ( 962) Gain on disposal of discontinued operations (Note 6) ( 232,679) - - Settlement of asset retirement obligation - - ( 77) Net changes in accounts receivable / accounts payable - Net Profits 143,466 ( 103,529) ( 46,036) --------- --------- ---------
Net cash provided by operating activities $1,623,353 $1,565,817 $1,463,112 --------- --------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES: Capital expenditures ($ 1,823) ($ 8,504) ($ 31,868) Proceeds from sale of oil and gas properties - - 434 Proceeds from disposal of discontinued operations (Note 6) 240,230 - - --------- --------- ---------
Net cash provided (used) by investing activities $ 238,407 ($ 8,504) ($ 31,434) --------- --------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES: Cash distributions ($1,763,758) ($1,467,881) ($1,321,329) --------- --------- --------- Net cash used by financing activities ($1,763,758) ($1,467,881) ($1,321,329) --------- --------- ---------
NET INCREASE IN CASH AND CASH EQUIVALENTS $ 98,002 $ 89,432 $ 110,349
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 599,645 510,213 399,864 --------- --------- ---------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 697,647 $ 599,645 $ 510,213 ========= ========= =========
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, 2006 and 2005, and the combined results of their operations and their cash flows for each of the three years in the period ended December 31, 2006, 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 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 7 to the combined financial statements, on February 5, 2007 the General Partner mailed a notice to the limited partners that the Partnership will terminate at the end of its current term, December 31, 2007, and that in connection with such termination the General Partner would liquidate all of the Partnership's assets.
PricewaterhouseCoopers LLP
Tulsa, Oklahoma April 16, 2007
GEODYNE INSTITUTIONAL/PENSION ENERGY INCOME LIMITED PARTNERSHIP P-5 GEODYNE NPI PARTNERSHIP P-5 Combined Balance Sheets December 31, 2006 and 2005
ASSETS ------ 2006 2005 ------------ ------------
CURRENT ASSETS: Cash and cash equivalents $ 546,848 $ 479,513 Accounts receivable: Net Profits 205,280 76,668 Assets held for sale (Note 6) 8,219 - --------- ---------
Total current assets $ 760,347 $ 556,181
NET PROFITS INTERESTS, net, utilizing the successful efforts method 701,700 639,293 --------- ---------
$1,462,047 $1,195,474 ========= =========
PARTNERS' CAPITAL (DEFICIT) ---------------------------
PARTNERS' CAPITAL (DEFICIT): General Partner ($ 24,852) ($ 33,844) Limited Partners, issued and outstanding, 118,449 Units 1,486,899 1,229,318 --------- ---------
Total Partners' capital $1,462,047 $1,195,474 ========= =========
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, 2006, 2005, and 2004
2006 2005 2004 ---------- ---------- ------------ REVENUES: Net Profits $1,814,055 $1,552,824 $1,212,427 Interest income 13,511 8,691 2,632 Loss on sale of Net Profits Interests - - ( 749) Other income 6,968 2,136 - --------- --------- --------- $1,834,534 $1,563,651 $1,214,310
COSTS AND EXPENSES: Depletion of Net Profits Interests $ 255,240 $ 106,181 $ 94,021 Impairment provision 57,321 - - General and administrative 156,573 159,284 152,465 --------- --------- --------- $ 469,134 $ 265,465 $ 246,486 --------- --------- ---------
INCOME FROM CONTINUING OPERATIONS $1,365,400 $1,298,186 $ 967,824
DISCONTINUED OPERATIONS: Income from discontinued operations (Note 6) 37,817 37,857 33,623 Gain on disposal of discontinued operations (Note 6) 6,297 - - --------- --------- --------- NET INCOME $1,409,514 $1,336,043 $1,001,447 ========= ========= =========
GENERAL PARTNER: Net income from continuing operations $ 163,319 $ 138,506 $ 104,981 Net income from discontinued operations 4,614 3,866 3,447 --------- --------- --------- NET INCOME $ 167,933 $ 142,372 $ 108,428 ========= ========= =========
LIMITED PARTNERS: Net income from continuing operations $1,202,081 $1,159,680 $ 862,843 Net income from discontinued operations 39,500 33,991 30,176 --------- --------- --------- NET INCOME $1,241,581 $1,193,671 $ 893,019 ========= ========= =========
NET INCOME FROM CONTINUING OPERATIONS PER UNIT $ 10.15 $ 9.79 $ 7.28 NET INCOME FROM DISCONTINUED OPERATIONS PER UNIT .33 .29 .25 --------- --------- --------- NET INCOME PER UNIT $ 10.48 $ 10.08 $ 7.53 ========= ========= ========= 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, 2006, 2005, and 2004
Limited General Partners Partner Total ------------ ---------- ------------
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 Net income 1,193,671 142,372 1,336,043 Cash distributions ( 1,045,000) ( 127,704) ( 1,172,704) --------- ------- ---------
Balance, Dec. 31, 2005 $1,229,318 ($ 33,844) $1,195,474 Net income 1,241,581 167,933 1,409,514 Cash distributions ( 984,000) ( 158,941) ( 1,142,941) --------- ------- ---------
Balance, Dec. 31, 2006 $1,486,899 ($ 24,852) $1,462,047 ========= ======= =========
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, 2006, 2005, and 2004
2006 2005 2004 ------------ ------------ ------------ CASH FLOWS FROM OPERATING ACTIVITIES: Net income $1,409,514 $1,336,043 $1,001,447 Adjustments to reconcile net income to net cash provided by operating activities: Depletion of Net Profits Interests 257,205 107,072 94,961 Impairment provision 57,609 - - Loss on sale of Net Profits Interests - - 749 Gain on disposal of discontinued operations (Note 6) ( 6,297) - - Settlement of asset retirement obligation ( 91) - ( 104) Net change in accounts receivable / accounts payable - Net Profits ( 123,464) ( 116,235) ( 62,284) --------- --------- ---------
Net cash provided by operating activities $1,594,476 $1,326,880 $1,034,769 --------- --------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES: Capital expenditures ($ 390,497) ($ 68,503) ($ 59,150) Proceeds from disposal of discontinued operations (Note 6) 6,297 - - --------- --------- --------- Net cash used by investing activities ($ 384,200) ($ 68,503) ($ 59,150) --------- --------- --------- CASH FLOWS FROM FINANCING ACTIVITIES: Cash distributions ($1,142,941) ($1,172,704) ($ 919,273) --------- --------- --------- Net cash used by financing activities ($1,142,941) ($1,172,704) ($ 919,273) --------- --------- ---------
NET INCREASE IN CASH AND CASH EQUIVALENTS $ 67,335 $ 85,673 $ 56,346
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 479,513 393,840 337,494 --------- --------- ---------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 546,848 $ 479,513 $ 393,840 ========= ========= =========
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, 2006 and 2005, and the combined results of their operations and their cash flows for each of the three years in the period ended December 31, 2006, 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 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 7 to the combined financial statements, on February 5, 2007 the General Partner mailed a notice to the limited partners that the Partnership will terminate at the end of its current term, December 31, 2007, and that in connection with such termination the General Partner would liquidate all of the Partnership's assets.
PricewaterhouseCoopers LLP
Tulsa, Oklahoma April 16, 2007
GEODYNE INSTITUTIONAL/PENSION ENERGY INCOME LIMITED PARTNERSHIP P-6 GEODYNE NPI PARTNERSHIP P-6 Combined Balance Sheets December 31, 2006 and 2005
ASSETS ------ 2006 2005 ------------ ------------
CURRENT ASSETS: Cash and cash equivalents $ 661,731 $ 770,659 Accounts receivable: Net Profits 6,110 - --------- ---------
Total current assets $ 667,841 $ 770,659
NET PROFITS INTERESTS, net, utilizing the successful efforts method 1,196,173 1,292,562 --------- ---------
$1,864,014 $2,063,221 ========= =========
LIABILITIES AND PARTNERS' CAPITAL (DEFICIT) -------------------------------------------
CURRENT LIABILITIES: Accounts payable: Net Profits $ - $ 36,095 Liabilities - held for sale (Note 6) 25,179 - --------- --------- Total current liabilities $ 25,179 $ 36,095
PARTNERS' CAPITAL (DEFICIT): General Partner ($ 34,262) ($ 17,913) Limited Partners, issued and outstanding, 143,041 Units 1,873,097 2,045,039 --------- ---------
Total Partners' capital $1,838,835 $2,027,126 ========= =========
$1,864,014 $2,063,221 ========= =========
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, 2006, 2005, and 2004
2006 2005 2004 ------------ ---------- ------------ REVENUES: Net Profits $2,530,650 $2,539,391 $1,818,012 Interest income 21,454 11,284 3,941 Loss on sale of Net Profits Interests - - ( 256) Other income 2,392 733 - --------- --------- ---------
$2,554,496 $2,551,408 $1,821,697
COSTS AND EXPENSES: Depletion of Net Profits Interests $ 346,157 $ 283,347 $ 120,184 Impairment provision 20,082 - - General and administrative 183,454 186,214 179,519 --------- --------- --------- $ 549,693 $ 469,561 $ 299,703 --------- --------- ---------
INCOME FROM CONTINUING OPERATIONS $2,004,803 $2,081,847 $1,521,994
DISCONTINUED OPERATIONS: Income (loss) from discontinued operations (Note 6) ( 63,474) 56,589 45,139 Gain on disposal of discontinued operations (Note 6) 2,162 - - --------- --------- --------- NET INCOME $1,943,491 $2,138,436 $1,567,133 ========= ========= ========= GENERAL PARTNER: Net income from continuing operations $ 231,296 $ 232,558 $ 162,622 Net income from discontinued operations 10,137 6,951 4,612 --------- --------- --------- NET INCOME $ 241,433 $ 239,509 $ 167,234 ========= ========= =========
LIMITED PARTNERS: Net income from continuing operations $1,773,507 $1,849,289 $1,359,372 Net income (loss) from discontinued operations ( 71,449) 49,638 40,527 --------- --------- --------- NET INCOME $1,702,058 $1,898,927 $1,399,899 ========= ========= =========
NET INCOME FROM CONTINUING OPERATIONS PER UNIT $ 12.40 $ 12.93 $ 9.50 NET INCOME (LOSS) FROM DISCONTINUED OPERATIONS PER UNIT ( .50) .35 .28 --------- --------- --------- NET INCOME PER UNIT $ 11.90 $ 13.28 $ 9.78 ========= ========= ========= 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, 2006, 2005, and 2004
Limited General Partners Partner Total ------------ ---------- ------------
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 Net income 1,898,927 239,509 2,138,436 Cash distributions ( 1,520,000) ( 205,274) ( 1,725,274) --------- ------- ---------
Balance, Dec. 31, 2005 $2,045,039 ($ 17,913) $2,027,126 Net income 1,702,058 241,433 1,943,491 Cash distributions ( 1,874,000) ( 257,782) ( 2,131,782) --------- ------- ---------
Balance, Dec. 31, 2006 $1,873,097 ($ 34,262) $1,838,835 ========= ======= =========
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, 2006, 2005, and 2004
2006 2005 2004 ------------ ------------ ------------
CASH FLOWS FROM OPERATING ACTIVITIES: Net income $1,943,491 $2,138,436 $1,567,133 Adjustments to reconcile net income to net cash provided by operating activities: Depletion of Net Profits Interests 357,769 297,704 121,279 Impairment provision 189,225 - - Loss on sale of Net Profits Interests - - 256 Gain on disposal of discontinued operations (Note 6) ( 2,162) - - Settlement of asset retirement obligation ( 2,312) ( 382) ( 388) Net change in accounts receivable / accounts payable - Net Profits 50,323 ( 279,798) ( 19,939) --------- --------- ---------
Net cash provided by operating activities $2,536,334 $2,155,960 $1,668,341 --------- --------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES: Capital expenditures ($ 515,642) ($ 129,299) ($ 21,366) Proceeds from disposal of discontinued operations (Note 6) 2,162 - - --------- --------- ---------
Net cash used by investing activities ($ 513,480) ($ 129,299) ($ 21,366) --------- --------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES: Cash distributions ($2,131,782) ($1,725,274) ($1,745,438) --------- --------- --------- Net cash used by financing activities ($2,131,782) ($1,725,274) ($1,745,438) --------- --------- ---------
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS ($ 108,928) $ 301,387 ($ 98,463)
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 770,659 469,272 567,735 --------- --------- ---------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 661,731 $ 770,659 $ 469,272 ========= ========= =========
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, 2006, 2005, and 2004
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.
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".
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' original termination date under their partnership agreements was 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 extended the terms of the Partnerships for their first two-year period to December 31, 2007. On February 5, 2007 the General Partner mailed a notice to the limited partners announcing that the Partnerships will terminate at the end of their current term, December 31, 2007. See Note 7 for more information regarding the Partnership terminations.
An affiliate of the General Partner owned the following Units at December 31, 2006:
Percent of Number of Outstanding Partnership Units Owned Units ----------- ----------- -----------
P-1 34,348 31.78% P-3 73,164 43.13% P-4 36,858 29.18% P-5 32,277 27.25% P-6 22,653 15.84%
The Partnerships' sole business is owning Net Profits Interests. Substantially all of the gas production attributable to the Partnerships' Net Profits Interests is 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.
Basis of Presentation
These financial statements reflect the combined accounts of each Geodyne Institutional/Pension Energy Income Limited Partnership and its related Geodyne NPI Partnership after the elimination of all inter-partnership transactions and balances. These financial statements are presented on a going concern basis.
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 are 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
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, 2006, 2005, and 2004 were as follows:
Partnership 2006 2005(1) 2004(1) ----------- ----- ------- -------
P-1 $2.84 $1.85 $1.51 P-3 2.78 1.78 3.67 P-4 1.89 1.73 1.40 P-5 4.50 2.33 1.87 P-6 4.00 3.68 1.53
(1) These amounts have been restated to reflect the sale of various oil and gas properties during 2006 and assets held for sale as of December 31, 2006 as discontinued operations. See Note 6 for more information about these discontinued operations.
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 well. If the unamortized costs, net of salvage value, of a Net Profits Interest 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. In the third quarter of 2006, natural gas prices declined significantly. Consequently, the partnerships incurred impairments utilizing the natural gas spot prices that existed on September 30, 2006. The impairments related to continuing operations recognized in the third quarter totaled approximately $17,000, $25,000, $3,000, $57,000, and $20,000 for the P-1, P-3, P-4, P-5 and P-6 Partnerships, respectively. Once incurred, an impairment of oil and natural gas properties is not reversible.
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
The Partnerships' wells must be properly plugged and abandoned after their oil and gas reserves are exhausted. FAS No. 143 requires the estimated plugging and abandonment obligations to be recognized in the period in which they are incurred (i.e. when the well is drilled or acquired) if a reasonable estimate of fair value can be made and to be capitalized as part of the carrying amount of the well. Estimated abandonment dates will be revised in the future based on changes to related economic lives, which vary with product prices and production costs. Estimated plugging costs may also be adjusted to reflect changing industry experience. During the year ended December 31, 2005, the Partnerships' asset retirement obligations were revised upward due to an increase in both the labor and rig costs associated with plugging wells. Cash flows would not be affected until wells are actually plugged and abandoned. The asset retirement obligation is adjusted upwards each quarter in order to recognize accretion of the time-related discount factor.
The components of the change in asset retirement obligations for the years ended December 31, 2006 and 2005 are as shown below.
P-1 Partnership ---------------
2006 2005 ---------- ----------
Total Asset Retirement Obligation, January 1 $118,480 $ 58,753 Additions 558 803 Revisions - 54,482 Settlements and Disposals ( 5,402) ( 1,250) Accretion Expense 5,942 5,692 Discontinued operations ( 54,420) - ------- ------- Total Asset Retirement Obligation, December 31 $ 65,158 $118,480 ======= =======
P-3 Partnership ---------------
2006 2005 ---------- ----------
Total Asset Retirement Obligation, January 1 $184,212 $ 99,718 Additions 772 1,016 Revisions - 76,321 Settlements and Disposals ( 10,189) ( 1,574) Accretion Expense 9,101 8,731 Discontinued operations ( 66,837) - ------- ------- Total Asset Retirement Obligation, December 31 $117,059 $184,212 ======= =======
P-4 Partnership ---------------
2006 2005 ---------- ----------
Total Asset Retirement Obligation, January 1 $138,714 $ 56,920 Additions 122 - Revisions - 75,529 Settlements and Disposals ( 6,577) - Accretion Expense 6,561 6,265 Discontinued operations ( 2,621) - ------- ------- Total Asset Retirement Obligation, December 31 $136,199 $138,714 ======= =======
P-5 Partnership ---------------
2006 2005 ---------- ----------
Total Asset Retirement Obligation, January 1 $142,799 $ 76,681 Additions 340 1,477 Revisions - 58,400 Settlements and Disposals ( 91) - Accretion Expense 6,625 6,241 Discontinued operations ( 164) - ------- -------- Total Asset Retirement Obligation, December 31 $149,509 $142,799 ======= =======
P-6 Partnership ---------------
2006 2005 ---------- ----------
Total Asset Retirement Obligation, January 1 $413,445 $208,086 Additions 120 573 Revisions - 192,567 Settlements and Disposals ( 5,470) ( 5,636) Accretion Expense 18,467 17,855 Discontinued operations ( 27,527) - ------- -------- Total Asset Retirement Obligation, December 31 $399,035 $413,445 ======= =======
New Accounting Pronouncement
In September 2006, the FASB issued FAS No. 157, "Fair Value Measurements" (FAS No. 157). FAS No. 157 establishes a common definition for fair value to be applied to US GAAP guidance requiring use of fair value, establishes a framework for measuring fair value, and expands the disclosure about such fair value measurements. FAS No 157 is effective for fiscal years beginning after November 5, 2007. The Partnerships are currently assessing the impact of FAS No. 157 on their results of operations, financial condition and cash flows.
Discontinued Operations
As further discussed in Note 3, the P-1, P-3, P-4, P-5 and P-6 Partnerships sold their interests in a number of producing properties to independent third parties at large public oil and gas auctions in 2006. Additional properties for all of the Partnerships will be sold at auctions in 2007. The properties sold in the 2006 auctions and those scheduled to be sold in 2007 auctions represent a disposal of a component under Statement of Financial Accounting Standards No. 144, "Accounting for the Impairment or Disposal of Long-Lived Assets" (FAS 144). Accordingly, current year results of these properties have been classified as discontinued, and prior periods have been restated. Once properties are classified as assets held for sale, they no longer incur any depreciation, depletion, and amortization expenses.
Reclassification
Certain prior year balances have been reclassified to conform with current year presentation.
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, 2006, 2005, and 2004:
Partnership 2006 2005 2004 ----------- -------- -------- --------
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 serve as operator of some of the Partnerships' wells. The General Partner contracts with such affiliates for services as operator of the wells. As operator, such affiliates are compensated at rates provided in the operating agreements in effect and charged to all parties to such agreement. Such compensation may occur both prior and subsequent to the commencement of commercial marketing of production of oil or gas. The dollar amount of such compensation paid by the Partnerships to the affiliates during the year ended December 31, 2006 is approximately as set forth in the table below:
Partnership Amount ----------- ------- P-1 $ 8,000 P-3 29,000 P-4 8,000 P-5 39,000 P-6 124,000
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, 2006, 2005, and 2004:
Percentage ---------------------------- Partnership Purchaser 2006 2005 2004 - ----------- ------------------------ ----- ----- -----
P-1 Chevron North American Exploration & Production Company 10.4% - 11.3% Duke Energy Field Services, Inc. ("Duke") - 10.7% 11.5% Cinergy Marketing ("Cinergy") - - 13.2%
P-3 Duke 11.2% 13.9% 14.9% Cinergy - - 12.0%
P-4 ConocoPhillips Company 32.4% 27.8% - Gulfterra Central Point Allocation 18.5% 21.8% 11.4% Enogex Services Corporation ("Enogex") 10.5% 10.1% - Eaglwing Trading, Inc. - - 25.3%
P-5 Enogex 16.3% 18.2% 20.2% NGPL Allocation 11.8% - - ONEOK Texas Energy Resources ("ONEOK") - 21.0% 14.6% Cinergy - 11.7% 16.1% Duke - 10.3% 11.5%
P-6 Duke 18.0% 19.8% 23.1% Kinder Morgan, Inc. 15.5% 17.1% 19.5% Eaglwing Trading, Inc. 10.2% - - ONEOK - 13.3% 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 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, 2006 and 2005 were as follows:
P-1 Partnership ---------------
2006 2005 ------------- ------------- Net Profits Interests in proved oil and gas properties $ 3,677,284 $ 6,474,014
Less accumulated depletion and valuation allowance ( 3,350,284) ( 5,783,982) ---------- ---------- Net Profits Interests, net $ 327,000 $ 690,032 ========== ==========
P-3 Partnership ---------------
2006 2005 ------------- ------------- Net Profits Interests in proved oil and gas properties $ 6,247,289 $ 9,889,591
Less accumulated depletion and valuation allowance ( 5,690,660) ( 8,831,269) ---------- ---------- Net Profits Interests, net $ 556,629 $ 1,058,322 ========== ==========
P-4 Partnership ---------------
2006 2005 ------------- ------------- Net Profits Interests in proved oil and gas properties $ 7,878,970 $ 8,134,269
Less accumulated depletion and valuation allowance ( 7,575,596) ( 7,733,010) ---------- ---------- Net Profits Interests, net $ 303,374 $ 401,259 ========== ==========
P-5 Partnership ---------------
2006 2005 ------------- ------------- Net Profits Interests in proved oil and gas properties $ 9,483,512 $ 9,156,799
Less accumulated depletion and valuation allowance ( 8,781,812) ( 8,517,506) ---------- ---------- Net Profits Interest, net $ 701,700 $ 639,293 ========== ==========
P-6 Partnership ---------------
2006 2005 ------------- ------------- Net Profits Interests in proved oil and gas properties $11,473,716 $11,605,260
Less accumulated depletion and valuation allowance ( 10,277,543) ( 10,312,698) ---------- ---------- Net Profits Interests, net $ 1,196,173 $ 1,292,562 ========== ==========
Costs Incurred
No property acquisition or exploration costs were incurred by the Partnerships during the three years ended December 31, 2006. 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, 2006, 2005, and 2004. 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 2006 2005(1) 2004 ----------- ---------- -------- -------
P-1 $ 72,683 $ 15,825 $25,183 P-3 89,696 19,244 80,861 P-4 - 7,805 36,380 P-5 371,520 79,369 75,826 P-6 432,269 213,430 26,625
--------------- (1) Excludes the estimated asset retirement costs for the P-1, P-3, P-4, P-5, and P-6 Partnerships of approximately $54,000, $76,000, $76,000, $58,000, and $193,000, respectively, recorded as a revision in FAS No. 143 during 2005 due to an increase in both the labor and rig costs associated with plugging wells.
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. In addition, reserve information for the top 80% of each Partnership's reserve base (based on volumes) has been reviewed by Ryder Scott Company, L.P. ("Ryder Scott"), an independent petroleum engineering firm. Ryder Scott has stated to the General Partner their opinion that (i) the estimates of reserves for the properties which they reviewed were prepared in accordance with generally accepted procedures for the estimation of reserves, (ii) they found no bias in the utilization and analysis of data, and (iii) the cash flow projections provided by Samson of gross and net reserves and associated revenues and costs based on constant pricing in general appear reasonable. The following information includes certain gas balancing adjustments which cause the gas volume to differ from the reserve reports prepared by the General Partner and reviewed by Ryder Scott.
In general, the Partnerships experienced downward revisions in gas reserves at December 31, 2006 as compared to December 31, 2005 due to the decrease in the gas prices used to estimate reserves. The P-4, P-5, and P-6 Partnerships had an increase in gas reserves due to revised forecasts on several properties based on actual production experience.
Following is a description of those oil and gas properties for which revisions in the continuing operations estimated proved reserves as of December 31, 2006 as compared to December 31, 2005 were significant to the Partnerships:
The P-1 and P-3 Partnerships' estimated proved oil reserves decreased approximately 13,000 barrels and 17,000 barrels, respectively, in the Pecos Valley Unit due to a revised forecast in reserves based on actual production experience and a steeper decline rate resulting in a shorter reserve life.
In addition, the P-4 Partnership's estimated proved oil reserves increased approximately 12,000 barrels in the Amoco Fee #3 due to a revised forecast in reserves based on actual production experience.
Following is a description of those oil and gas properties for which revisions in the discontinued operations estimated proved reserves as of December 31, 2006 as compared to December 31, 2005 were significant to the Partnerships:
The P-5 Partnership's estimated proved oil reserves increased approximately 1,100 barrels in the North Robertson Unit due to a revised forecast in reserves based on actual production experience and a lower decline rate resulting in a long reserve life.
The P-6 Partnership's estimated proved gas reserves decreased approximately 62,000 Mcf in the Jo Neal #1 due to a revised forecast in reserves based on actual production experience and an increase in monthly lease operating expenses.
QUARTERLY FINANCIAL DATA (Unaudited)
Summarized unaudited quarterly financial data for 2006 and 2005 are as follows:
P-1 Partnership ---------------
-------------------------------------------------- First Second Third Fourth Quarter(2) Quarter(2) Quarter(2) Quarter ---------- ---------- ---------- ----------
Total Revenues $190,977 $169,055 $191,915 $ 136,829 Gross Profit(1) 176,036 158,594 140,909 129,633 Income from continuing operations 122,044 127,889 110,656 94,664 Income from discontinued operations 318,323 364,403 402,796 3,744,557 Net Income 440,367 492,292 513,452 3,839,221 Limited Partners' Net Income per Unit 3.65 4.09 4.23 31.98
-------------------------------------------------- First Second Third Fourth Quarter(2) Quarter(2) Quarter(2) Quarter(2) ---------- ---------- ---------- ----------
Total Revenues $192,981 $188,789 $237,614 $ 227,523 Gross Profit(1) 185,644 177,916 221,882 217,532 Income from continuing operations 133,832 147,090 191,183 182,841 Income from discontinued operations 349,940 245,638 380,325 259,549 Net Income 483,772 392,728 571,508 442,390 Limited Partners' Net Income per Unit 4.02 3.26 4.74 3.67
- ------------ (1) Total revenues less depletion of Net Profits Interests and impairment provision. (2) Quarterly and prior year amounts have been restated to reflect the sale of various oil and gas properties during 2006 and assets held for sale as of December 31, 2006 as discontinued operations, as described in Note 6 to the combined financial statements of the Partnership.
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P-3 Partnership ---------------
-------------------------------------------------- First Second Third Fourth Quarter(2) Quarter(2) Quarter(2) Quarter ---------- ---------- ---------- ----------
Total Revenues $324,513 $283,212 $330,252 $ 243,661 Gross Profit(1) 303,950 267,565 247,124 228,804 Income from continuing operations 232,822 220,038 200,173 177,350 Income from discontinued operations 407,135 468,003 518,482 4,844,639 Net Income 639,957 688,041 718,655 5,021,989 Limited Partners' Net Income per Unit 3.38 3.64 3.77 26.64
-------------------------------------------------- First Second Third Fourth Quarter(2) Quarter(2) Quarter(2) Quarter(2) ---------- ---------- ---------- ----------
Total Revenues $361,170 $281,766 $393,443 $ 397,973 Gross Profit(1) 345,453 265,739 365,575 386,178 Income from continuing operations 276,638 218,096 318,142 334,722 Income from discontinued operations 416,137 351,776 485,782 338,187 Net Income 692,775 569,872 803,924 672,909 Limited Partners' Net Income per Unit 3.66 3.01 4.25 3.56
- ------------ (1) Total revenues less depletion of Net Profits Interests and impairment provision. (2) Quarterly and prior year amounts have been restated to reflect the sale of various oil and gas properties during 2006 and assets held for sale as of December 31, 2006 as discontinued operations, as described in Note 6 to the combined financial statements of the Partnership.
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P-4 Partnership ---------------
-------------------------------------------------- First Second Third Fourth Quarter(2) Quarter(2) Quarter(2) Quarter ---------- ---------- ---------- ----------
Total Revenues $428,190 $394,152 $416,025 $342,914 Gross Profit(1) 415,261 368,036 377,073 336,192 Income from continuing operations 356,195 332,383 341,841 300,980 Income from discontinued operations 12,776 15,593 16,992 250,578 Net Income 368,971 347,976 358,833 551,558 Limited Partners' Net Income per Unit 2.62 2.47 2.53 3.93
-------------------------------------------------- First Second Third Fourth Quarter(2) Quarter(2) Quarter(2) Quarter(2) --------- --------- --------- ----------
Total Revenues $327,295 $431,806 $443,553 $560,737 Gross Profit(1) 316,062 421,238 415,683 529,380 Income from continuing operations 259,216 385,431 380,104 489,722 Income from discontinued operations 19,674 15,398 17,045 19,458 Net Income 278,890 400,829 397,149 509,180 Limited Partners' Net Income per Unit 1.98 2.85 2.81 3.61
- --------------------------- (1) Total revenues less depletion of Net Profits Interests and impairment provision. (2) Quarterly and prior year amounts have been restated to reflect the sale of various oil and gas properties during 2006 and assets held for sale as of December 31, 2006 as discontinued operations, as described in Note 6 to the combined financial statements of the Partnership.
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P-5 Partnership ---------------
-------------------------------------------------- First Second Third Fourth Quarter(2) Quarter(2) Quarter(2) Quarter ---------- ---------- ---------- ---------
Total Revenues $495,847 $361,950 $511,505 $465,232 Gross Profit(1) 471,769 333,716 353,219 363,269 Income from continuing operations 414,889 300,217 320,112 330,182 Income from discontinued operations 7,827 9,788 8,403 18,096 Net Income 422,716 310,005 328,515 348,278 Limited Partners' Net Income per Unit 3.20 2.33 2.38 2.57
-------------------------------------------------- First Second Third Fourth Quarter(2) Quarter(2) Quarter(2) Quarter(2) ---------- ---------- ---------- ---------
Total Revenues $371,486 $409,046 $433,322 $349,797 Gross Profit(1) 342,027 399,823 395,158 320,462 Income from continuing operations 287,350 366,163 361,727 282,946 Income from discontinued operations 7,694 7,639 10,176 12,348 Net Income 295,044 373,802 371,903 295,294 Limited Partners' Net Income per Unit 2.22 2.84 2.79 2.23
- ------------ (1) Total revenues less depletion of Net Profits Interests and impairment provision. (2) Quarterly and prior year amounts have been restated to reflect the sale of various oil and gas properties during 2006 and assets held for sale as of December 31, 2006 as discontinued operations, as described in Note 6 to the combined financial statements of the Partnership.
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P-6 Partnership ---------------
-------------------------------------------------- First Second Third Fourth Quarter(2) Quarter(2) Quarter(2) Quarter ---------- ---------- ---------- ---------
Total Revenues $662,349 $623,995 $686,923 $581,229 Gross Profit(1) 608,637 596,617 576,075 406,928 Income from continuing operations 544,914 556,379 536,318 367,192 Income (Loss) from discontinued operations 5,211 88,542 ( 154,181) ( 884) Net Income 550,125 644,921 382,137 366,308 Limited Partners' Net Income per Unit 3.42 4.05 2.24 2.19
-------------------------------------------------- First Second Third Fourth Quarter(2) Quarter(2) Quarter(2) Quarter(2) ---------- ---------- ---------- ---------
Total Revenues $559,322 $655,860 $640,422 $695,804 Gross Profit(1) 530,061 604,343 552,253 581,404 Income from continuing operations 468,593 563,966 512,096 537,192 Income (Loss) from discontinued operations 32,521 16,593 ( 24,742) 32,217 Net Income 501,114 580,559 487,354 569,409 Limited Partners' Net Income per Unit 3.13 3.63 2.99 3.53
- ------------ (1) Total revenues less depletion of Net Profits Interests and impairment provision. (2) Quarterly and prior year amounts have been restated to reflect the sale of various oil and gas properties during 2006 and assets held for sale as of December 31, 2006 as discontinued operations, as described in Note 6 to the combined financial statements of the Partnership.
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6. DISCONTINUED OPERATIONS
During August 2006, the General Partner approved a plan to sell an increased amount of the Partnerships' properties as a result of the generally favorable current environment for oil and gas properties. On October 11, 2006 and December 13, 2006, the P-1, P-3, P-4, P-5, and P-6 Partnerships sold their interests in several producing properties at a large public oil and gas auction which resulted in proceeds of approximately $3,608,000, $4,679,000, $240,000, $6,000, and $2,000 (net of fees), respectively, to the P-1, P-3, P-4, P-5, and P-6 Partnerships. The sale resulted in a gain on disposal of discontinued operations of approximately $3,481,000, $4,511,000, $233,000, $6,000, and $2,000, respectively, for the P-1, P-3, P-4, P-5, and P-6 Partnerships. Additional properties of the Partnerships will be sold at auctions in 2007. The properties sold in the 2006 auctions and those scheduled to be sold in 2007 auctions represent "disposal of a component" under Statement of Financial Accounting Standards No. 144, "Accounting for the Impairment or Disposal of Long-Lived Assets" (FAS 144). Accordingly, current year results of operations for these properties have been classified as discontinued, and prior periods have been restated. In conjunction with the planned sales, the Partnerships will retain all assets and liabilities through the effective date of the sale and purchasers will assume the asset retirement obligations associated with the sold interests.
Net income (loss) from discontinued operations is as follows:
P-1 Partnership ---------------
2006 2005 2004 ------------ ------------ ------------
Net profits $1,367,640 $1,271,012 $ 817,385 Depreciation, depletion, and amortization of oil and gas properties ( 18,874) ( 35,560) ( 25,918) Impairment provision ( 38) - - --------- --------- --------- Income from discontinued operations $1,348,728 $1,235,452 $ 791,467 ========= ========= =========
P-3 Partnership ---------------
2006 2005 2004 ------------ ------------ ------------
Net profits $1,751,548 $1,638,801 $1,051,323 Depreciation, depletion, and amortization of oil and gas properties ( 24,415) ( 46,919) ( 34,070) Impairment provision ( 22) - - --------- --------- --------- Income from discontinued operations $1,727,111 $1,591,882 $1,017,253 ========= ========= =========
P-4 Partnership ---------------
2006 2005 2004 ----------- ----------- ----------
Net profits $ 63,769 $ 73,845 $ 36,683 Depreciation, depletion, and amortization of oil and gas properties ( 509) ( 2,270) ( 1,094) --------- --------- ------- Income from discontinued operations $ 63,260 $ 71,575 $ 35,589 ========= ========= =======
P-5 Partnership ---------------
2006 2005 2004 ------------ ------------ ----------
Net profits $ 40,070 $ 38,748 $ 34,563 Depreciation, depletion, and amortization of oil and gas properties ( 1,965) ( 891) ( 940) Impairment provision ( 288) - - --------- --------- ------- Income from discontinued operations $ 37,817 $ 37,857 $ 33,623 ========= ========= =======
P-6 Partnership ---------------
2006 2005 2004 ------------ ------------ ----------
Net profits $ 117,281 $ 70,946 $ 46,234 Depreciation, depletion, and amortization of oil and gas properties ( 11,612) ( 14,357) ( 1,095) Impairment provision ( 169,143) - - --------- --------- ------- Income (Loss) from discontinued operations ($ 63,474) $ 56,589 $ 45,139 ========= ========= =======
Assets (liabilities) of the discontinued operations as of December 31, 2006 were as follows:
P-1 Partnership -----------
Accounts receivable - Net Profits $ 103,142 Net Profits Interests 1,968,201 Accumulated depreciation, depletion, and amortization of Net Profits Interests and valuation allowance ( 1,759,794) --------- Net assets held for sale $ 311,549 =========
P-3 Partnership -----------
Accounts receivable - Net Profits $ 139,365 Net Profits Interests 2,489,494 Accumulated depreciation, depletion, and amortization of Net Profits Interests and valuation allowance ( 2,224,272) --------- Net assets held for sale $ 404,587 =========
P-4 Partnership -----------
Accounts receivable - Net Profits $ 9,348 Net Profits Interests 46,525 Accumulated depreciation, depletion, and amortization of Net Profits Interests and valuation allowance ( 43,084) --------- Net assets held for sale $ 12,789 =========
P-5 Partnership -----------
Accounts receivable - Net Profits $ 6,955 Net Profits Interests 44,972 Accumulated depreciation, depletion, and amortization of Net Profits Interests and valuation allowance ( 43,708) --------- Net assets held for sale $ 8,219 =========
P-6 Partnership -----------
Accounts payable - Net Profits ($ 25,179) Net Profits Interests 560,299 Accumulated depreciation, depletion, and amortization of Net Profits Interests and valuation allowance ( 560,299) --------- Net liabilities held for sale ($ 25,179) =========
7. SUBSEQUENT EVENT
On February 5, 2007, the General Partner mailed a notice to the limited partners announcing that the Partnerships will terminate on December 31, 2007.
The following unaudited pro forma combined balance sheets as of December 31, 2006 give effect to a change from the going concern basis of accounting to the liquidation basis of accounting. The unaudited pro forma combined balance sheets are presented as if the change had occurred on December 31, 2006. The unaudited pro forma combined balance sheets are based on assumptions and include adjustments as explained in the notes to the unaudited pro forma combined balance sheets. While these balance sheets are prepared with the intent of showing fair value, they are also based on estimates regarding (i) future net cash flows until the properties are sold and (ii) sales prices which will be received for the properties through the liquidation process. Actual current and future prices and costs, as well as the prices purchasers are willing to pay at the time the properties are sold, may differ materially from the estimates used in the preparation of the unaudited liquidation basis combined balance sheets.
GEODYNE INSTITUTION/PENSION ENERGY INCOME LIMITED PARTNERSHIP P-1 Unaudited Pro Forma Combined Balance Sheet December 31, 2006
Pro Forma Adjustments To Liquidation Liquidation Basis Accounting Basis Historical (Note B) Pro Forma ----------- ---------------- -----------
CURRENT ASSETS: Cash and cash equivalents $ 496,665 ($ 496,665) $ - Accounts receivable: Net profits 54,786 ( 54,786) - Assets held for sale 311,549 ( 311,549) - --------- ---------- --------- Total current assets $ 863,000 ($ 863,000) $ -
NET PROFITS INTEREST utilizing the successful efforts method $ 327,000 ($ 327,000) $ - NET ASSETS OF PARTNERSHIP IN LIQUIDATION, at fair value - 7,727,575 7,727,575 --------- --------- --------- $1,190,000 $6,537,575 $7,727,575 ========= ========= ==========
Pro Forma Adjustments To Liquidation Liquidation Basis Accounting Basis Historical (Note B) Pro Forma ----------- ---------------- -----------
PARTNER'S CAPITAL (DEFICIT): General Partner ($ 19,475) $1,058,331 $1,038,856 Limited Partners, issued and outstanding 108,074 units 1,209,475 5,479,244 6,688,719 --------- --------- ---------- Total partners' capital $1,190,000 $6,537,575 $7,727,575 --------- -------- --------- $1,190,000 $6,537,575 $7,727,575 ========= ========= =========
GEODYNE INSTITUTION/PENSION ENERGY INCOME LIMITED PARTNERSHIP P-3 Unaudited Pro Forma Combined Balance Sheet December 31, 2006
Pro Forma Adjustments To Liquidation Liquidation Basis Accounting Basis Historical (Note B) Pro Forma ----------- ---------------- -----------
CURRENT ASSETS: Cash and cash equivalents $ 852,351 ($ 852,351) $ - Accounts receivable: Net profits 86,855 ( 86,855) - Assets held for sale 404,587 ( 404,587) - --------- ---------- ---------- Total current assets $1,343,793 ($ 1,343,793) $ -
NET PROFITS INTEREST utilizing the successful efforts method $ 556,629 ($ 556,629) $ - NET ASSETS OF PARTNERSHIP IN LIQUIDATION, at fair value - 11,637,467 11,637,467 --------- ---------- ---------- $1,900,422 $ 9,737,045 $11,637,467 ========= ========== ==========
Pro Forma Adjustments To Liquidation Liquidation Basis Accounting Basis Historical (Note B) Pro Forma ----------- ---------------- -----------
PARTNER'S CAPITAL: General Partner $ 15,052 $ 1,013,363 $ 1,028,415 Limited Partners, issued and outstanding 169,637 units 1,885,370 8,723,682 10,609,052 --------- ---------- ---------- Total partners' capital $1,900,422 $ 9,737,045 $11,637,467 --------- ---------- ---------- $1,900,422 $ 9,737,045 $11,637,467 ========= ========== ==========
GEODYNE INSTITUTION/PENSION ENERGY INCOME LIMITED PARTNERSHIP P-4 Unaudited Pro Forma Combined Balance Sheet December 31, 2006
Pro Forma Adjustments To Liquidation Liquidation Basis Accounting Basis Historical (Note B) Pro Forma ----------- ---------------- -----------
CURRENT ASSETS: Cash and cash equivalents $ 697,647 ($ 697,647) $ - Accounts receivable: Net profits 154,779 ( 154,779) - Assets held for sale 12,789 ( 12,789) - --------- --------- --------- Total current assets $ 865,215 ($ 865,215) $ -
NET PROFITS INTEREST utilizing the successful efforts method $ 303,374 ($ 303,374) $ - NET ASSETS OF PARTNERSHIP IN LIQUIDATION, at fair value - 6,401,959 6,401,959 --------- --------- --------- $1,168,589 $5,233,370 $6,401,959 ========= ========= =========
Pro Forma Adjustments To Liquidation Liquidation Basis Accounting Basis Historical (Note B) Pro Forma ----------- ---------------- ------------
PARTNER'S CAPITAL (DEFICIT): General Partner ($ 45,401) $ 588,529 $ 543,128 Limited Partners, issued and outstanding 126,306 units 1,213,990 4,644,841 5,858,831 --------- --------- --------- Total partners' capital $1,168,589 $5,233,370 $6,401,959 --------- --------- --------- $1,168,589 $5,233,370 $6,401,959 ========= ========= =========
GEODYNE INSTITUTION/PENSION ENERGY INCOME LIMITED PARTNERSHIP P-5 Unaudited Pro Forma Combined Balance Sheet December 31, 2006
Pro Forma Adjustments To Liquidation Liquidation Basis Accounting Basis Historical (Note B) Pro Forma ----------- ---------------- -----------
CURRENT ASSETS: Cash and cash equivalents $ 546,848 ($ 546,848) $ - Accounts receivable: Net profits 205,280 ( 205,280) - Assets held for sale 8,219 ( 8,219) - --------- --------- --------- Total current assets $ 760,347 ($ 760,347) $ -
NET PROFITS INTEREST utilizing the successful efforts method $ 701,700 ($ 701,700) $ - NET ASSETS OF PARTNERSHIP IN LIQUIDATION, at fair value - 6,960,346 6,960,346 --------- --------- --------- $1,462,047 $5,498,299 $6,960,346 ========= ========== =========
Pro Forma Adjustments To Liquidation Liquidation Basis Accounting Basis Historical (Note B) Pro Forma ----------- ---------------- -----------
PARTNER'S CAPITAL (DEFICIT): General Partner ($ 24,852) $ 603,049 $ 578,197 Limited Partners, issued and outstanding 118,449 units 1,486,899 4,895,250 6,382,149 --------- --------- --------- Total partners' capital $1,462,047 $5,498,299 $6,960,346 --------- --------- --------- $1,462,047 $5,498,299 $6,960,346 ========= ========= =========
GEODYNE INSTITUTION/PENSION ENERGY INCOME LIMITED PARTNERSHIP P-6 Unaudited Pro Forma Combined Balance Sheet December 31, 2006
Pro Forma Adjustments To Liquidation Liquidation Basis Accounting Basis Historical (Note B) Pro Forma ----------- ---------------- -----------
CURRENT ASSETS: Cash and cash equivalents $ 661,731 ($ 661,731) $ - Accounts receivable: Net profits 6,110 ( 6,110) - --------- ---------- ---------- Total current assets $ 667,841 ($ 667,841) $ -
NET PROFITS INTEREST utilizing the successful efforts method $1,196,173 ($ 1,196,173) $ - NET ASSETS OF PARTNERSHIP IN LIQUIDATION, at fair value - 10,308,752 10,308,752 --------- ---------- ---------- $1,864,014 $ 8,444,738 $10,308,752 ========= ========== ==========
Pro Forma Adjustments To Liquidation Liquidation Basis Accounting Basis Historical (Note B) Pro Forma ----------- ---------------- -----------
CURRENT LIABILITIES: Accounts payable: Liabilities - held for sale $ 25,179 ($ 25,179) $ - --------- ---------- ---------- Total current liabilities $ 25,179 ($ 25,179) $ -
PARTNER'S CAPITAL (DEFICIT): General Partner ($ 34,262) $ 891,308 $ 857,046 Limited Partners, issued and outstanding 143,041 units 1,873,097 7,578,609 9,451,706 --------- ---------- ---------- Total partners' capital $1,838,835 $ 8,469,917 $10,308,752 ========= ========== ========== $1,864,014 $ 8,444,738 $10,308,752 ========= ========== ==========
NOTE A - Basis of presentation
The unaudited pro forma combined balance sheets as of December 31, 2006 are presented as if the change in the basis of accounting from the going concern basis to the liquidation basis occurred on December 31, 2006. The liquidation basis of accounting reports the net assets of the Partnerships at their net realizable value.
NOTE B - Pro forma adjustments
Adjustments have been made to reduce all balance sheet categories into one line, net assets of partnership in liquidation, which is an estimate of the net fair value of all partnership assets and liabilities. Cash, accounts receivable, and accounts payable have all been valued at their historical cost, which approximates fair value. Oil and gas properties have been valued at their estimated net sales price, which have been estimated utilizing discounted cash flows based on strip pricing as of February 5, 2007 at a discount rate of 10% for proved developed producing reserves, 18% for proved developed non- producing reserves and 20% for proved undeveloped reserves. An adjustment has been made to the discounted cash flows for the effects of gas balancing and asset retirement obligations. A provision has also been made to account for expenses that will be incurred directly related to the sale of the oil and gas properties. The allocation of the net assets of partnership in liquidation to the General Partner and limited partners was calculated using the current allocation of income and expense, which may change.
INDEX TO EXHIBITS ----------------- Exh. 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 Fifth Amendment to Amended and Restated Agreement of Limited Partnership dated October 27, 2005, for the Geodyne Institutional/ Pension Energy Income P-1 Limited Partnership filed as Exhibit 4.8 to Registrant's Annual Report on Form 10-K for the year ended December 31, 2005, filed with the SEC on March 29, 2006 and is hereby incorporated by reference.
4.9 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.
4.10 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.
4.11 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.
4.12 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.
4.13 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.
4.14 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.
4.15 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.
4.16 Fifth Amendment to Amended and Restated Agreement of Limited Partnership dated October 27, 2005, for the Geodyne Institutional/ Pension Energy Income P-3 Limited Partnership filed as Exhibit 4.16 to Registrant's Annual Report on Form 10-K for the year ended December 31, 2005, filed with the SEC on March 29, 2006 and is hereby incorporated by reference.
4.17 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.
4.18 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.
4.19 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.
4.20 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.
4.21 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.
4.22 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.
4.23 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.
4.24 Fifth Amendment to Amended and Restated Agreement of Limited Partnership dated October 27, 2005, for the Geodyne Institutional/ Pension Energy Income P-41 Limited Partnership filed as Exhibit 4.24 to Registrant's Annual Report on Form 10-K for the year ended December 31, 2005, filed with the SEC on March 29, 2006 and is hereby incorporated by reference.
4.25 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.
4.26 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.
4.27 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.
4.28 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.
4.29 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.
4.30 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.
4.31 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.
4.32 Fifth Amendment to Amended and Restated Agreement of Limited Partnership dated October 27, 2005, for the Geodyne Institutional/ Pension Energy Income P-5 Limited Partnership filed as Exhibit 4.32 to Registrant's Annual Report on Form 10-K for the year ended December 31, 2005, filed with the SEC on March 29, 2006 and is hereby incorporated by reference.
4.33 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.
4.34 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.
4.35 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.
4.36 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.
4.37 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.
4.38 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.
4.39 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.
4.40 Fifth Amendment to Amended and Restated Agreement of Limited Partnership dated October 27, 2005, for the Geodyne Institutional/ Pension Energy Income P-6 Limited Partnership filed as Exhibit 4.40 to Registrant's Annual Report on Form 10-K for the year ended December 31, 2005, filed with the SEC on March 29, 2006 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 Third Amendment to Amended and Restated Agreement of Partnership dated October 27, 2005 for the Geodyne NPI Partnership P-1 filed as Exhibit 10.4 to Registrant's Annual Report on Form 10-K for the year ended December 31, 2005, filed with the SEC on March 29, 2006 and is hereby incorporated by reference.
10.5 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.
10.6 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.
10.7 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.
10.8 Third Amendment to Agreement of Partnership dated October 27, 2005for 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, 2005, filed with the SEC on March 29, 2006 and is hereby incorporated by reference.
10.9 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.
10.10 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.
10.11 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.
10.12 Third Amendment to Agreement of Partnership dated October 27, 2005 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, 2005, filed with the SEC on March 29, 2006 and is hereby incorporated by reference.
10.13 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.
10.14 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.
10.15 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.
10.16 Third Amendment to Agreement of Partnership dated October 27, 2005 for the Geodyne NPI Partnership P-5 filed as Exhibit 10.16 to Registrant's Annual Report on Form 10-K for the year ended December 31, 2005, filed with the SEC on March 29, 2006 and is hereby incorporated by reference.
10.17 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.
10.18 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.
10.19 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.
10.20 Third Amendment to Agreement of Partnership dated October 27, 2005 for the Geodyne NPI Partnership P-6 filed as Exhibit 10.20 to Registrant's Annual Report on Form 10-K for the year ended December 31, 2005, filed with the SEC on March 29, 2006 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.