ITEM 1. BUSINESS
General
The Geodyne Energy Income Limited Partnership III-A (the "III-A Partnership"), Geodyne Energy Income Limited Partnership III-B (the "III-B Partnership"), Geodyne Energy Income Limited Partnership III-C (the "III-C Partnership"), Geodyne Energy Income Limited Partnership III-D (the "III-D Partnership"), Geodyne Energy Income Limited Partnership III-E (the "III-E Partnership"), Geodyne Energy Income Limited Partnership III-F (the "III-F Partnership"), and Geodyne Energy Income Limited Partnership III-G (the "III-G Partnership") (collectively, the "Partnerships") are limited partnerships formed under the Oklahoma Revised Uniform Limited Partnership Act. Each Partnership is composed of Geodyne Resources, Inc., a Delaware corporation, as general partner ("Geodyne" or the "General Partner"), Geodyne Depositary Company, a Delaware corporation, as the sole initial limited partner, and public investors as substitute limited partners (the "Limited Partners"). The Partnerships commenced operations on the dates set forth below:
Date of Partnership Activation ----------- ------------------
III-A November 21, 1989 III-B January 24, 1990 III-C February 27, 1990 III-D September 5, 1990 III-E December 26, 1990 III-F March 7, 1991 III-G September 20, 1991
The General Partner currently serves as general partner of 29 limited partnerships and is a wholly-owned subsidiary of Samson Investment Company. Samson Investment Company and its various corporate subsidiaries, including the General Partner (collectively, the "Samson Companies"), are 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, 1996, the Samson Companies owned interests in approximately 16,000 oil and gas wells located in 19 states of the United States and Canada, Venezuela, and Russia. At December 31, 1996, the Samson Companies operated approxi- mately 2,600 oil and gas wells located in 15 states of the United States and Canada, Venezuela, and Russia.
The Partnerships are currently engaged in the business of owning interests in producing oil and gas properties located in the continental United States. The Partnerships may also engage to a limited extent in development drilling on producing oil and gas properties as required for the prudent management of the Partnerships.
As limited partnerships, the Partnerships have no officers, directors, or employees. They rely instead on the personnel of the General Partner and the other Samson Companies. As of March 15, 1997, the Samson Companies employed approximately 780 persons. No employees are covered by collective bargaining agreements, and management believes that the Samson Companies provide a sound employee relations environment. For information regarding the executive officers of the General Partner, see "Item 10. Directors and Executive Officers of the General Partner."
The General Partner's and the Partnerships' principal place of business is located at Samson Plaza, Two West Second Street, Tulsa, Oklahoma 74103, and their telephone number is (918) 583-1791 or (800) 283-1791.
Funding
Although the Agreements of Limited Partnership (the "Partnership Agreements") for each Partnership permit it to incur borrowings, operations and expenses are currently funded out of each Partnership's revenues from oil and gas sales. The General Partner may, but is not required to, advance funds to a Partnership for the same purposes for which Partnership borrowings are authorized.
Principal Products Produced and Services Rendered
The Partnerships' sole business is the production of, and related incidental development of, oil and gas. The Partnerships do not refine or otherwise process crude oil and condensate. The Partnerships do not hold any patents, trademarks, licenses, or concessions and are not a party to any government contracts. The Partnerships have no backlog of orders and do not participate in research and development activities. The Partnerships are not presently encountering shortages of oilfield tubular goods, compressors, production material, or other equipment.
Competition and Marketing
The domestic oil and gas industry is highly competitive, with a large number of companies and individuals engaged in the exploration and development of oil and gas properties. The ability of the Partnerships to produce and market oil and gas profitably depends on a number of factors that are beyond the control of the Partnerships. These factors include worldwide political instability (especially in oil-producing regions), United Nations export embargoes, the supply and price of foreign imports of oil and gas, the level of consumer product demand (which can be heavily influenced by weather patterns), government regulations and taxes, the price and availability of alternative fuels, the overall economic environment, and the availability and capacity of transportation and processing facilities. The effect of these factors on future oil and gas industry trends cannot be accurately predicted or anticipated.
The most important variable affecting the Partnerships' revenues is the prices received for the sale of oil and gas. Predicting future prices is very difficult. Concerning past trends, average yearly wellhead gas prices in the United States have been relatively volatile for a number of years. For the past ten years, such prices have generally been in the $1.40 to $2.00 per Mcf range, significantly below prices received in the early 1980s. Average gas prices in the last several months have, however, been somewhat higher than those yearly averages. It is not known whether this is a short-term trend or will lead to higher average gas prices on a longer-term basis.
Substantially all of the Partnerships' gas reserves are being sold in the "spot market." Prices on the spot market are subject to wide seasonal and regional pricing fluctuations due to the highly competitive nature of the spot market. In addition, such spot market sales are generally short-term in nature and are dependent upon the obtaining of transportation services provided by pipelines. Spot prices for the Partnerships' gas increased from approximately $2.00 per Mcf at December 31, 1995 to approximately $3.57 per Mcf at December 31, 1996. Such prices were on an MMBTU basis and differ from the prices actually received by the Partnerships due to transportation and marketing costs, BTU adjustments, and regional price and quality differences.
Due to global consumption and supply trends over the last several months, oil prices have recently been higher than the yearly average prices of the late to mid-1980s and early 1990s. It is not known whether this trend will continue. Prices for the Partnerships' oil increased from approximately $18.50 per barrel at December 31, 1995 to approximately $23.75 per barrel at December 31, 1996.
Future prices for both oil and gas will likely be different from (and may be lower than) the prices in effect on December 31, 1996. Primarily due to heating season demand, year-end prices in many past years have tended to be higher, and in some cases significantly higher, than the yearly average price actually received by the Partnerships for at least the following year. In particular, it should be noted that December 31, 1996 prices were much higher than year-end prices for the last several years and substantially higher than the average prices received in each of the last several years. It is not possible to predict whether the December 1996 pricing level is indicative of a new trend toward higher energy prices or a short- term deviation from the recent history of low to moderate prices; therefore, management is unable to predict whether future oil and gas prices will (i) stabilize, (ii) increase, or (iii) decrease.
Significant Customers
The following customers accounted for ten percent or more of the Partnerships' oil and gas sales during the year ended December 31, 1996:
Partnership Purchaser Percentage ----------- -------------------- ----------
III-A El Paso Energy Marketing Company ("El Paso") 59.2% Mesa Operating Ltd. Partnership ("Mesa") 19.4%
III-B El Paso 47.9% Mesa 22.0% Sun Refining & Marketing Company 10.3%
III-C El Paso 51.2%
III-D El Paso 44.4% Oryx Energy Company ("Oryx") 19.9%
III-E Oryx 36.5% El Paso 12.3% Hunt Energy Corp. 10.0%
III-F El Paso 25.9% Amoco Production Company ("Amoco") 10.4%
III-G El Paso 21.6% Amoco 10.9%
In the event of interruption of purchases by one or more of the Partnerships' significant customers or the cessation or material change in availability of open access transportation by the Partnerships' pipeline transporters, the Partnerships may encounter difficulty in marketing their gas and in maintaining historic sales levels. Management does not expect any of its open access transporters to seek authorization to terminate their transportation services. Even if the services were terminated, management believes that alternatives would be available whereby the Partnerships would be able to continue to market their gas.
The Partnerships' principal customers for crude oil production are refiners and other companies which have pipeline facilities near the producing properties of the Partnerships. In the event pipeline facilities are not conveniently available to production areas, crude oil is usually trucked by purchasers to storage facilities.
Oil, Gas, and Environmental Control Regulations
Regulation of Production Operations -- The production of oil and gas is subject to extensive federal and state laws and regulations governing a wide variety of matters, including the drilling and spacing of wells, allowable rates of production, prevention of waste and pollution, and protection of the environment. In addition to the direct costs borne in complying with such regulations, operations and revenues may be impacted to the extent that certain regulations limit oil and gas production to below economic levels.
Regulation of Sales and Transportation of Oil and Gas -- Sales of crude oil and condensate are made by the Partnerships at market prices and are not subject to price controls. The sale of gas may be subject to both federal and state laws and regulations, including, but not limited to, the Natural Gas Act of 1938 (the "NGA"), the Natural Gas Policy Act of 1978 (the "NGPA"), and regulations promulgated by the Federal Energy Regulatory Commission (the "FERC") under the NGA, the NGPA, and other statutes. The provisions of the NGA and the NGPA, as well as the regulations thereunder, are complex and affect all who produce, resell, transport, or purchase gas, including the Partner- ships. Although virtually all of the Partnerships' gas production is not subject to price regulation, the NGA, NGPA, and FERC regulations affect the availability of gas transportation services and the ability of gas consumers to continue to purchase or use gas at current levels. Accordingly, such regulations may have a material effect on the Partnerships' operations and projections of future oil and gas production and revenues.
Future Legislation -- Legislation affecting the oil and gas industry is under constant review for amendment or expansion. Because such laws and regulations are frequently amended or reinterpreted, management is unable to predict what additional energy legislation may be proposed or enacted or the future cost and impact of complying with existing or future regulations.
Regulation of the Environment -- The Partnerships' operations are subject to numerous laws and regulations governing the discharge of materials into the environment or otherwise relating to environmental protection. Compliance with such laws and regulations, together with any penalties resulting from noncompliance therewith, may increase the cost of the Partnerships' operations or may affect the Partnerships' ability to complete, in a timely fashion, existing or future activities. Management anticipates that various local, state, and federal environmental control agencies will have an increasing impact on oil and gas operations.
Insurance Coverage
The Partnerships are subject to all of the risks inherent in the exploration for and production of oil and gas including blowouts, pollution, fires, and other casualties. The Partnerships maintain insurance coverage as is customary for entities of a similar size engaged in operations similar to that of the Partnerships, but losses can occur from uninsurable risks or in amounts in excess of existing insurance coverage. The occurrence of an event which is not fully covered by insurance could have a material adverse effect on the Partnerships' financial position and results of operations.
ITEM 2.
ITEM 2. PROPERTIES
Well Statistics
The following table sets forth the number of productive wells of the Partnerships as of December 31, 1996.
Well Statistics(1) As of December 31, 1996
Number of Gross Wells(2) Number of Net Wells(3) ------------------------- ---------------------------- P/ship Total Oil Gas N/A(4) Total Oil Gas N/A(4) - -------- ----- ----- --- ------ ------ ----- ----- ------ III-A 314 114 193 7 20.01 4.29 15.08 .64 III-B 262 81 173 8 12.18 3.95 7.75 .48 III-C 292 71 214 7 24.57 12.08 12.23 .26 III-D 277 182 77 18 22.42 12.77 7.54 2.11 III-E 351 162 164 25 102.68 54.45 31.83 16.40 III-F 643 487 145 11 31.43 17.05 13.06 1.32 III-G 2,187 1,726 445 16 21.06 12.76 7.41 .89
- ---------- (1) The designation of a well as an oil well or gas well is made by the General Partner based on the relative amount of oil and gas reserves for the well. Regardless of a well's oil or gas designation, it may produce oil, gas, or both oil and gas. (2) As used in this Annual Report on Form 10-K ("Annual Report"), "gross well" refers to a well in which a working interest is owned; accordingly, the number of gross wells is the total number of wells in which a working interest is owned. (3) As used in this Annual Report, "net well" refers to the sum of the fractional working interests owned in gross wells expressed as whole numbers and fractions thereof. For example, a 15% leasehold interest in a well represents one gross well, but 0.15 net well. (4) Wells which have not been designated as oil or gas.
Drilling Activities
The Partnerships did not participate in any drilling activities during the year ended December 31, 1996.
Oil and Gas Production, Revenue, and Price History
The following tables set forth certain historical information concerning the oil (including condensates) and gas production, net of all royalties, overriding royalties, and other third party interests, of the Partnerships, revenues attributable to such production, and certain price and cost information. As used in the following tables, direct operating expenses include lease operating expenses and production taxes. In addition, gas production is converted to oil equivalents at the rate of six Mcf per barrel, representing the estimated relative energy content of gas and oil, which rate is not necessarily indicative of the relationship of oil and gas prices. The respective prices of oil and gas are affected by market and other factors in addition to relative energy content.
Net Production Data
III-A Partnership -----------------
Year Ended December 31, ---------------------------------- 1996 1995 1994 ---------- ---------- ---------- Production: Oil (Bbls) 46,923 58,590 70,278 Gas (Mcf) 1,268,943 1,798,692 2,208,657
Oil and gas sales: Oil $ 975,701 $1,026,724 $1,131,965 Gas 2,658,303 2,620,883 3,912,771 --------- --------- --------- Total $3,634,004 $3,647,607 $5,044,736 ========= ========= ========= Total direct operating expenses $ 899,073 $1,129,096 $1,156,185 ========= ========= ========= Direct operating expenses as a percentage of oil and gas sales 24.7% 31.0% 22.9%
Average sales price: Per barrel of oil $20.79 $17.52 $16.11 Per Mcf of gas 2.09 1.46 1.77
Direct operating expenses per equivalent Bbl of oil $ 3.48 $ 3.15 $ 2.64
Net Production Data
III-B Partnership -----------------
Year Ended December 31, ---------------------------------- 1996 1995 1994 ---------- ---------- ---------- Production: Oil (Bbls) 37,849 42,818 52,083 Gas (Mcf) 642,152 900,882 1,077,009
Oil and gas sales: Oil $ 794,186 $ 752,820 $ 838,740 Gas 1,319,321 1,310,287 1,878,368 --------- --------- --------- Total $2,113,507 $2,063,107 $2,717,108 ========= ========= ========= Total direct operating expenses $ 497,491 $ 617,474 $ 616,689 ========= ========= ========= Direct operating expenses as a percentage of oil and gas sales 23.5% 29.9% 22.7%
Average sales price: Per barrel of oil $20.98 $17.58 $16.10 Per Mcf of gas 2.05 1.45 1.74
Direct operating expenses per equivalent Bbl of oil $ 3.43 $ 3.20 $ 2.66
Net Production Data
III-C Partnership -----------------
Year Ended December 31, ---------------------------------- 1996 1995 1994 ---------- ---------- ---------- Production: Oil (Bbls) 27,429 26,926 29,891 Gas (Mcf) 1,351,525 1,662,411 1,734,781
Oil and gas sales: Oil $ 567,261 $ 466,779 $ 473,009 Gas 2,692,354 2,293,709 2,756,512 --------- --------- --------- Total $3,259,615 $2,760,488 $3,229,521 ========= ========= ========= Total direct operating expenses $ 781,115 $ 819,583 $ 968,603 ========= ========= ========= Direct operating expenses as a percentage of oil and gas sales 24.0% 29.7% 30.0%
Average sales price: Per barrel of oil $20.68 $17.34 $15.82 Per Mcf of gas 1.99 1.38 1.59
Direct operating expenses per equivalent Bbl of oil $ 3.09 $ 2.70 $ 3.04
Net Production Data
III-D Partnership -----------------
Year Ended December 31, ---------------------------------- 1996 1995 1994 ---------- ---------- ---------- Production: Oil (Bbls) 41,351 42,166 46,995 Gas (Mcf) 760,593 1,000,561 852,068
Oil and gas sales: Oil $ 832,109 $ 699,885 $ 719,362 Gas 1,504,599 1,387,597 1,297,999 --------- --------- --------- Total $2,336,708 $2,087,482 $2,017,361 ========= ========= ========= Total direct operating expenses $ 928,670 $ 743,746 $1,010,710 ========= ========= ========= Direct operating expenses as a percentage of oil and gas sales 39.7% 35.6% 50.1%
Average sales price: Per barrel of oil $20.12 $16.60 $15.31 Per Mcf of gas 1.98 1.39 1.52
Direct operating expenses per equivalent Bbl of oil $ 5.52 $ 3.56 $ 5.35
Net Production Data
III-E Partnership -----------------
Year Ended December 31, ----------------------------------- 1996 1995 1994 ---------- ---------- ----------- Production: Oil (Bbls) 229,226 256,992 292,902 Gas (Mcf) 2,152,599 3,030,077 2,961,361
Oil and gas sales: Oil $4,572,097 $4,235,397 $4,470,522 Gas 4,458,018 4,440,650 4,995,491 --------- --------- --------- Total $9,030,115 $8,676,047 $9,466,013 ========= ========= ========= Total direct operating expenses $4,418,264 $4,755,568 $5,273,217 ========= ========= ========= Direct operating expenses as a percentage of oil and gas sales 48.9% 54.8% 55.7%
Average sales price: Per barrel of oil $19.95 $16.48 $15.26 Per Mcf of gas 2.07 1.47 1.69
Direct operating expenses per equivalent Bbl of oil $ 7.51 $ 6.24 $ 6.70
Net Production Data
III-F Partnership -----------------
Year Ended December 31, ---------------------------------- 1996 1995 1994 ---------- ---------- ---------- Production: Oil (Bbls) 74,064 78,456 88,759 Gas (Mcf) 924,827 1,107,951 1,331,546
Oil and gas sales: Oil $1,494,695 $1,291,617 $1,306,354 Gas 1,600,043 1,406,199 2,211,523 --------- --------- --------- Total $3,094,738 $2,697,816 $3,517,877 ========= ========= ========= Total direct operating expenses $1,237,607 $1,472,070 $1,814,607 ========= ========= ========= Direct operating expenses as a percentage of oil and gas sales 40.0% 54.6% 51.6%
Average sales price: Per barrel of oil $20.18 $16.46 $14.72 Per Mcf of gas 1.73 1.27 1.66
Direct operating expenses per equivalent Bbl of oil $ 5.42 $ 5.59 $ 5.84
Net Production Data
III-G Partnership -----------------
Year Ended December 31, ---------------------------------- 1996 1995 1994 ---------- ---------- ---------- Production: Oil (Bbls) 54,083 56,567 63,776 Gas (Mcf) 499,884 596,184 722,688
Oil and gas sales: Oil $1,091,687 $ 932,457 $ 942,438 Gas 870,868 762,390 1,195,405 --------- --------- --------- Total $1,962,555 $1,694,847 $2,137,843 ========= ========= ========= Total direct operating expenses $ 804,410 $ 937,989 $1,109,250 ========= ========= ========= Direct operating expenses as a percentage of oil and gas sales 41.0% 55.3% 51.9%
Average sales price: Per barrel of oil $20.19 $16.48 $14.78 Per Mcf of gas 1.74 1.28 1.65
Direct operating expenses per equivalent Bbl of oil $ 5.85 $ 6.02 $ 6.02
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, 1996. The schedule of quantities of proved oil and gas reserves was prepared by the General Partner in accordance with the rules prescribed by the Securities and Exchange Commission (the "SEC"). Certain reserve information was reviewed by Ryder Scott Company Petroleum Engineers ("Ryder Scott"), an independent petroleum engineering firm. As used throughout this Annual Report, "proved reserves" refers to those estimated quantities of crude oil, gas, and gas liquids which geological and engineering data demonstrate with reasonable certainty to be recoverable in future years from known oil and gas reservoirs under existing economic and operating conditions.
Net present value represents estimated future gross cash flow from the production and sale of proved reserves, net of estimated oil and gas production costs (including production taxes, ad valorem taxes, and operating expenses) and estimated future development costs, discounted at 10% per annum. Net present value attributable to the Partnerships' proved reserves was calculated on the basis of current costs and prices at December 31, 1996. Such prices were not escalated except in certain circumstances where escalations were fixed and readily determinable in accordance with applicable contract provisions. 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, 1996. Furthermore, gas prices at December 31, 1996 were much higher than the price used for determining the Partnerships' net present value of proved reserves for the year ended December 31, 1995 and substantially higher than the average prices received by the Partnerships in each of the last several years. There can be no assurance that the prices used in calculating the net present value of the Partnerships' proved reserves at December 31, 1996 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 the reserve estimates reported herein represent the most accurate assessment possible, the significance of the subjective decisions required and variances in available data for various reservoirs make these estimates generally less precise than other estimates presented in connection with financial statement disclosures.
Proved Reserves and Net Present Values From Proved Reserves
As of December 31, 1996(1)
III-A Partnership: - ----------------- Estimated proved reserves: Gas (Mcf) 6,182,269 Oil and liquids (Bbls) 153,899
Net present value (discounted at 10% per annum) $14,018,669
III-B Partnership: - ----------------- Estimated proved reserves: Gas (Mcf) 2,967,902 Oil and liquids (Bbls) 120,963
Net present value (discounted at 10% per annum) $ 7,431,868
III-C Partnership: - ----------------- Estimated proved reserves: Gas (Mcf) 7,719,803 Oil and liquids (Bbls) 162,487
Net present value (discounted at 10% per annum) $15,109,085
III-D Partnership: - ----------------- Estimated proved reserves: Gas (Mcf) 3,769,546 Oil and liquids (Bbls) 430,630
Net present value (discounted at 10% per annum) $ 9,680,125
III-E Partnership: - ----------------- Estimated proved reserves: Gas (Mcf) 9,775,737 Oil and liquids (Bbls) 2,617,639
Net present value (discounted at 10% per annum) $36,520,619
III-F Partnership: - ----------------- Estimated proved reserves: Gas (Mcf) 5,666,732 Oil and liquids (Bbls) 491,313
Net present value (discounted at 10% per annum) $14,187,273
III-G Partnership: - ----------------- Estimated proved reserves: Gas (Mcf) 3,037,326 Oil and liquids (Bbls) 369,589
Net present value (discounted at 10% per annum) $ 8,365,081
- ----------
(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 tables set forth certain well and reserves information for the basins in which the Partnerships own a significant amount of oil and gas properties. The tables contain the following information for each significant basin: (i) the number of gross wells and net wells, (ii) the number of wells in which only a non-working interest is owned, (iii) the Partnership's total number of wells, (iv) the number of wells operated by the Partnership's affiliates, (v) estimated proved oil reserves, (vi) estimated proved gas reserves, and (vii) the present value (discounted at 10% per annum) of estimated future net cash flow.
The Anadarko Basin is located in western Oklahoma and the Texas panhandle, while the Arkla Basin is located in southern Arkansas and northern Louisiana. The Gulf Coast Basin is located in southern Louisiana and southeast Texas, while the San Juan Basin is located in northwest New Mexico and southwest Colorado. The Permian Basin straddles west Texas and southeast New Mexico. Southern Oklahoma contains the Southern Oklahoma Folded Belt Basin. The Jay-Little Escambia Creek Field Unit is located in Santa Rosa County, Florida, while the Green River Basin is located in southern Wyoming and Northwest Colorado and the Paradox Basin is located in southeast Utah and southwest Colorado.
Title to Oil and Gas Properties
Management believes that the Partnerships have satisfactory title to their oil and gas properties. Record title to all of the Partnerships' properties is held by either the Partnerships or Geodyne Nominee Corporation, an affiliate of the General Partner.
Title to the Partnerships' properties is subject to customary royalty, overriding royalty, carried, working, and other similar interests and contractual arrangements customary in the oil and gas industry, to liens for current taxes not yet due, and to other encumbrances. Management believes that such burdens do not materially detract from the value of such properties or from the Partnerships' interest therein or materially interfere with their use in the operation of the Partnerships' business.
ITEM 3.
ITEM 3. LEGAL PROCEEDINGS
On October 26, 1994 Geodyne and the Partnerships, among other parties, were named as defendants in a lawsuit alleging causes of action based on fraud, negligent misrepresentation, breach of fiduciary duty, breach of implied covenant, and breach of contract in connection with the offer and sale of limited partnership interests ("Units") in the Partnerships (Sidney Neidick et al. v. Geodyne Resources, Inc., et al., Case No. 94-052860, District Court of Harris County, Texas). The plaintiffs' petition alleged that the lawsuit was being brought as a class action on behalf of investors who purchased Units in the Partnerships. On June 7, 1995, Geodyne and the Partnerships were dismissed without prejudice as defendants in the matter. In addition, on June 7, 1995, the matter was certified as a class action. A class action notice was mailed on June 7, 1995 to all Limited Partners who are members of the class.
On November 23 and 25, 1994, Geodyne, PaineWebber Incorporated ("PaineWebber"), and certain other parties were named as defendants in two related lawsuits alleging misrepresentations made to induce investments in the Partnerships and asserting causes of action for common law fraud and deceit and unjust enrichment (Romine v. PaineWebber, Inc., et al, Case No. 94-CIV-8558, U. S. District Court, Southern District of New York and Romine v. PaineWebber, Inc., et al, Case No. 94-132844, Supreme Court of the State of New York, County of New York). The federal court case was later consolidated with other similar actions (to which Geodyne is not a party) under the title In Re: PaineWebber Limited Partnerships' Litigation and was certified as a class action on May 30, 1995 (the "Federal Partnership Class Action"). A class action notice was mailed on June 7, 1995 to all members of the class. The Federal Partnership Class Action also alleges violations of 18 U.S.C. Section 1962(c) and the Securities Exchange Act of 1934. Compensatory and punitive damages, interest, and costs have been requested in both matters. The amended complaint in the Federal Partnership Class Action no longer asserts any claim directly against Geodyne.
On January 18, 1996, PaineWebber issued a press release indicating that it had reached an agreement to settle the pending Federal Partnership Class Action along with the Neidick matter referred to above (collectively, the "PaineWebber Partnership Class Actions"), along with a settlement with the SEC and an agreement to settle with various state securities regulators. On that date, PaineWebber paid $125 million into an interest bearing account as part of a memorandum of understanding in connection with the proposed settlement (the "Settlement Fund"). The Settlement Fund applies to claims related to both the Partnerships and certain other investment programs sold by PaineWebber. In addition, PaineWebber agreed to a SEC administrative order creating a capped $40 million fund (the "SEC Claims Fund"), which is to be distributed to eligible Limited Partners by an independent administrator (the "Claims Administrator"); a civil penalty of $5 million leveled by the SEC; and payments aggregating $5 million to state securities administrators. Such settlement is not an obligation of either the Partnerships or Geodyne and, accordingly, would not affect the financial statements of the Partnerships.
In connection with the PaineWebber Partnership Class Actions, on July 17, 1996 the federal court entered a preliminary order regarding the settlement proceedings referred to above. Pursuant to that order, plaintiffs' counsel mailed to class members the Class Settlement Notice (the "Notice") and Proof of Claim. Eligible class members are generally those who purchased their Units through PaineWebber on or before December 31, 1992 and who have not (i) previously opted out of the Class, (ii) previously released PaineWebber, or (iii) finally adjudicated their claims against PaineWebber.
Plaintiffs' counsel will be responsible for allocating payments from the $125 million Settlement Fund previously funded by PaineWebber among eligible Limited Partners and investors in other unrelated PaineWebber partnerships in accordance with the settlement. The amount and date of any payment will vary depending upon many factors set forth in the Notice. It is currently expected that payments from the Settlement Fund will be made some time in 1997.
In addition, eligible Limited Partners in the Partnerships who held their Units on June 3, 1996 may be entitled to certain additional payments from an escrow fund to which PaineWebber will make payments through May 30, 2001 if spot market oil and natural gas prices as reported by the New York Mercantile Exchange fall below certain thresholds set forth in the Notice (the "Pricing Guarantee"). The threshold prices used in the Pricing Guarantee are $18.00 per barrel of oil and $1.80 per Mcf of gas. Under the Notice, PaineWebber payments, if any, made pursuant to the Pricing Guarantee will be paid to Limited Partners of record on June 30, 1996 irrespective of whether they subsequently sell/dispose of their Units to third parties. The Pricing Guarantee does NOT attach to the Units as an attribute of ownership in the Partnerships and is not an obligation of either Geodyne or the Partnerships.
A look back provision is also included in the settlement which may provide additional funds as of January 1, 2001 for eligible Limited Partners. Class members who sold their Units prior to June 30, 1996 will not be eligible for payments, if any, under the Pricing Guarantee or the look back provision.
Eligible Limited Partners were required to timely execute and return a proof of claim by January 17, 1997 in order to participate in the settlement.
In connection with the SEC Claims Fund, on April 17, 1996, PaineWebber mailed a Notice and Claim Form to each Limited Partner who purchased Units in the Partnerships through PaineWebber from January 1, 1986 to December 31, 1992. Limited Partners are not eligible to participate in the claims process if they (i) previously reached a settlement with PaineWebber or (ii) had their direct investment claim resolved by a court or in arbitration. Participation in the claims process is optional, and does not prevent a Limited Partner from pursuing any other remedy against PaineWebber that may be available. Limited Partners had until October 22, 1996 to complete the claim form and return it to the Claims Administrator. The determination of whether a Limited Partner is entitled to a recovery under the SEC Claims Fund will be based on whether or not the Claims Administrator determines that the Limited Partner's investment in the Partnerships was suitable for him at the time of purchase. In addition, if the Limited Partner has opted out of the PaineWebber Partnership Class Action and has not already settled with PaineWebber or has had a claim resolved by a court or in arbitration, the Claims Administrator will also consider allegations that misrepresentations were made in connection with the sale of the Units.
The General Partner has been advised that PaineWebber is awaiting confirmation of the settlement described above by the federal court judge. The deadline for such confirmation is currently scheduled for March 28, 1997, subject to an additional thirty day extension.
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 1996.
PART II
ITEM 5.
ITEM 5. MARKET FOR UNITS AND RELATED LIMITED PARTNER MATTERS
As of February 28, 1997, the number of Units outstanding and the approximate number of Limited Partners of record in the Partnerships were as follows:
Number of Number of Partnership Units Limited Partners ----------- --------- ----------------
III-A 263,976 1,468 III-B 138,336 822 III-C 244,536 1,377 III-D 131,008 737 III-E 418,266 2,394 III-F 221,484 1,231 III-G 121,925 640
Units were initially sold for a price of $100. Units are not traded on any exchange and there is no public trading market for them. The General Partner is aware of certain transfers of Units between unrelated parties, some of which are facilitated by secondary trading firms and matching services. However, the General Partner believes that these transfers have been limited and sporadic in number and volume. Other than trades facilitated by certain secondary trading firms and matching services, no organized trading market for Units exists and none is expected to develop. Due to the nature of these transactions, the General Partner has no verifiable information regarding prices at which Units have been transferred. Further, a transferee may not become a substitute Limited Partner without the consent of the General Partner.
Pursuant to the terms of the Partnership Agreements, the General Partner is obligated to annually issue a repurchase offer which is based on the estimated future net revenues from the Partnerships' reserves and is calculated pursuant to the terms of the Partnership Agreements. Such repurchase offer is recalculated monthly in order to reflect cash distributions to the Limited Partners and extraordinary events. The following table sets forth the General Partner's repur- chase offer per Unit as of the periods indicated. For purpose of this Annual Report, a Unit represents an initial subscription of $100 to a Partnership.
Repurchase Offer Prices -----------------------
1995 1996 1997 ---------------------- ---------------------- ---- 1st 2nd 3rd 4th 1st 2nd 3rd 4th 1st P/ship Qtr. Qtr. Qtr. Qtr. Qtr. Qtr. Qtr. Qtr. Qtr. - ------ ---- ---- ---- ---- ---- ---- ---- ---- ---- III-A $18 $20 $19 $17 $15 $12 $18 $14 $12 III-B 19 21 19 17 15 12 18 15 12 III-C 27 20 19 17 16 14 19 16 14 III-D 23 27 25 23 22 20 28 25 23 III-E 24 37 35 34 32 30 36 34 31 III-F 27 26 25 25 24 23 23 21 20 III-G 29 28 27 26 25 24 25 23 22
Cash Distributions
Cash distributions are primarily dependent upon a Partnership's cash receipts from the sale of oil and gas production and cash requirements of the Partnership. Distributable cash is determined by the General Partner at the end of each calendar quarter and distributed to the Limited Partners within 45 days after the end of the quarter. Distributions are restricted to cash on hand less amounts required to be retained out of such cash as determined in the sole judgment of the General Partner to pay costs, expenses, or other Partnership obligations whether accrued or anticipated to accrue. In certain instances, the General Partner may not distribute the full amount of cash receipts which might otherwise be available for distribution in an effort to equalize or stabilize the amounts of quarterly distributions. Any available amounts not distributed are invested and the interest or income thereon is for the accounts of the Limited Partners.
The following is a summary of cash distributions paid to the Limited Partners for the years ended December 31, 1995 and 1996 and for the first quarter of 1997:
Cash Distributions -----------------
------------------------------------- 1st 2nd 3rd 4th P/ship Qtr. Qtr. Qtr. Qtr. ------ ------- ------- ------- -------
III-A $2.22 $2.37 $1.52 $2.08 III-B 2.39 2.64 1.59 2.24 III-C 1.06 1.92 1.51 1.27 III-D 1.45 1.30 2.06 1.49 III-E 2.39 1.14 1.67 1.23 III-F 1.26 - 0.23 0.56 III-G 1.31 - 0.33 1.03
1996 1997 --------------------------------------- --------- 1st 2nd 3rd 4th 1st P/ship Qtr. Qtr. Qtr. Qtr. Qtr. ------ ------- ------- ------- --------- ---------
III-A $1.97 $2.33 $2.08 $3.09(1) $2.01 III-B 2.20 2.65 2.23 3.07(1) 2.49(1) III-C 1.25 1.73 1.93 2.35(1) 2.05(1) III-D 1.45 2.07 2.14 2.67(1) 2.31(1) III-E 1.56 2.48 2.27 2.36(1) 2.55(1) III-F 1.13 1.13 1.21 1.76(1) 1.55(1) III-G 1.23 1.23 1.29 2.17(1) 1.55(1)
- ------------------- (1) Includes proceeds from the sale of oil and gas properties.
ITEM 6.
ITEM 6. SELECTED FINANCIAL DATA
The following tables present selected financial data for the Partnerships. This data should be read in conjunction with the financial statements of the Partnerships and the respective notes thereto, included elsewhere in this Annual Report. See "Item 8. Financial Statements and Supplementary Data."
ITEM 7.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Use of Forward-Looking Statements and Estimates
This Annual Report contains certain forward-looking statements. The words "anticipate," "believe," "expect," "plan," "intend," "estimate," "project," "could," "may," and similar expressions are intended to identify forward-looking statements. Such statements reflect management's current views with respect to future events and financial performance. This Annual Report also includes certain information which is, or is based upon, estimates and assumptions. Such estimates and assumptions are management's efforts to accurately reflect the condition and operation of the Partnerships.
Use of forward-looking statements and estimates and assumptions involve risks and uncertainties which include, but are not limited to, the volatility of oil and gas prices, the uncertainty of reserve information, the operating risk associated with oil and gas properties (including the risk of personal injury, death, property damage, damage to the well or producing reservoir, environmental contamination, and other operating risks), the prospect of changing tax and regulatory laws, the availability and capacity of processing and transportation facilities, the general economic climate, the supply and price of foreign imports of oil and gas, the level of consumer product demand, and the price and availability of alternative fuels. Should one or more of these risks or uncertainties occur or should estimates or underlying assumptions prove incorrect, actual conditions or results may vary materially and adversely from those stated, anticipated, believed, estimated, or otherwise indicated.
General Discussion
The following general discussion should be read in conjunction with the analysis of results of operations provided below. The most important variable affecting the Partnerships' revenues is the prices received for the sale of oil and gas. Predicting future prices is very difficult. Concerning past trends, average yearly wellhead gas prices in the United States have been relatively volatile for a number of years. For the past ten years, such prices have generally been in the $1.40 to $2.00 per Mcf range, significantly below prices received in the early 1980s. Average gas prices in the last several months have, however, been somewhat higher than those yearly averages. It is not known whether this is a short-term trend or will lead to higher average gas prices on a longer-term basis.
Substantially all of the Partnerships' gas reserves are being sold in the "spot market." Prices on the spot market are subject to wide seasonal and regional pricing fluctuations due to the highly competitive nature of the spot market. In addition, such spot market sales are generally short-term in nature and are dependent upon the obtaining of transportation services provided by pipelines. Spot prices for the Partnerships' gas increased from approximately $2.00 per Mcf at December 31, 1995 to approximately $3.57 per Mcf at December 31, 1996. Such prices were on an MMBTU basis and differ from the prices actually received by the Partnerships due to transportation and marketing costs, BTU adjustments, and regional price and quality differences.
Due to global consumption and supply trends over the last several months, oil prices have recently been higher than the yearly average prices of the late to mid-1980s and early 1990s. It is not known whether this trend will continue. Prices for the Partnerships' oil increased from approximately $18.50 per barrel at December 31, 1995 to approximately $23.75 per barrel at December 31, 1996.
Future prices for both oil and gas will likely be different from (and may be lower than) the prices in effect on December 31, 1996. Primarily due to heating season demand, year-end prices in many past years have tended to be higher, and in some cases significantly higher, than the yearly average price actually received by the Partnerships for at least the following year. In particular, it should be noted that December 31, 1996 prices were much higher than year-end prices for the last several years and substantially higher than the average prices received in each of the last several years. It is not possible to predict whether the December 1996 pricing level is indicative of a new trend toward higher energy prices or a short- term deviation from the recent history of low to moderate prices; therefore, management is unable to predict whether future oil and gas prices will (i) stabilize, (ii) increase, or (iii) decrease.
Results of Operations
An analysis of the change in net oil and gas operations (oil and gas sales, less lease operating expenses and production taxes), is presented in the tables following "Results of Operations" under the heading "Average Sales Prices, Production Volumes, and Average Production Costs."
Effective October 1, 1995 the Partnerships adopted the requirements of Statement of Financial Accounting Standards ("SFAS") No. 121, "Accounting for the Impairment of Long Lived Assets and Assets Held for Disposal," which is intended to establish more consistent accounting standards for measuring the recoverability of long-lived assets. SFAS No. 121 requires successful efforts companies, like the Partnerships, to evaluate the recoverability of the carrying costs of their proved oil and gas properties for each field, rather than for the Partnerships' properties as a whole as previously allowed by the SEC. See Note 1 to the Partnerships' financial statements, included in Item 8
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The financial statements and supplementary data are indexed in Item 14 hereof.
ITEM 9.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
None.
PART III
ITEM 10.
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE GENERAL PARTNER
The Partnerships have no directors or executive officers. The following individuals are directors and executive officers of the General Partner. The business address of such director and executive officers is Two West Second Street, Tulsa, Oklahoma 74103.
Name Age Position with Geodyne ---------------- --- -------------------------------- Dennis R. Neill 45 President and Director
Judy K. Fox 46 Secretary
The director will hold office until the next annual meeting of shareholders of Geodyne and 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 the Samson Companies in 1981, was named Senior Vice President and Director of Geodyne on March 3, 1993, and was named President of Geodyne on June 30, 1996. Prior to joining the Samson Companies, 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; President and Director of Samson Properties Incorporated, Samson Hydrocarbons Company, Dyco Petroleum Corporation, Geodyne Depositary Company, Geodyne Institutional Depositary Company, Geodyne Nominee Corporation, Berry Gas Company, Circle L Drilling Company, and Compression, Inc.; and President and Chairman of the Board of Directors of Samson Securities Company.
Judy K. Fox joined the Samson Companies in 1990 and was named Secretary of Geodyne on June 30, 1996. Prior to joining the Samson Companies, 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, Geodyne Depositary Company, Geodyne Institutional Depositary Company, Geodyne Nominee Corporation, Samson Hydrocarbons Company, and Samson Properties Incorporated.
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. The amount of general and administrative expense allocated to the General Partner and its affiliates and charged to each Partnership for each year during the years ended December 31, 1996, 1995, and 1994 is set forth in the table below.
Partnership 1996 1995 1994 ----------- -------- -------- --------
III-A $277,872 $277,872 $277,869 III-B 145,620 145,620 145,617 III-C 257,412 257,412 257,406 III-D 137,904 137,904 137,903 III-E 440,280 440,280 440,280 III-F 233,136 233,136 233,141 III-G 128,340 128,340 128,342
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. 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 for the years ended December 31, 1996, 1995, and 1994:
During 1994 and 1995 El Paso, an affiliate of the Partnerships until December 6, 1995, purchased a portion of the Partnerships' gas at market prices and resold such gas at market prices directly to end- users and local distribution companies. The table below summarizes the dollar amount of gas sold by the Partnerships to El Paso for the years ended December 31, 1995 and 1994.
Partnership 1995 1994 ----------- ---------- ----------
III-A $1,811,755 $2,523,522 III-B 863,111 1,148,530 III-C 1,325,188 1,994,570 III-D 849,298 1,042,455 III-E 2,128,723 2,131,890 III-F 847,849 1,297,252 III-G 446,378 672,645
After December 6, 1995 the Partnerships' gas was marketed by the General Partner and its affiliates, who were reimbursed for such activities as general and administrative expenses. See "Item 13. Certain Relationships and Related Transactions."
Affiliates of the Partnerships serve as operator of some of the Partnerships' wells. The General Partner contracts with such affiliates for services as operator of the wells. As operator, such affiliates are compensated at rates provided in the operating agreements in effect and charged to all parties to such agreement. Such compensation may occur both prior and subsequent to the commencement of commercial marketing of production of oil or gas. The dollar amount of such compensation paid by the Partnerships to the affiliates is impossible to quantify as of the date of this Annual Report.
In addition to the compensation/reimbursements noted above, during the three years ended December 31, 1996, the Samson Companies were in the business of supplying field and drilling equipment and services to affiliated and unaffiliated parties in the industry. These companies may have provided equipment and services for wells in which the Partnerships have an interest. These equipment and services were provided at prices or rates equal to or less than those normally charged in the same or comparable geographic area by unaffiliated persons or companies dealing at arm's length. The operators of these wells billed the Partnerships for a portion of such costs based upon the Partnerships' interest in the well.
ITEM 12.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table provides information as to the beneficial ownership of the Units as of February 28, 1997 by (i) each beneficial owner of more than five percent of the issued and outstanding Units, (ii) the directors and officers of the General Partner, and (iii) the General Partner and its affiliates. The address of each of such persons is Samson Plaza, Two West Second Street, Tulsa, Oklahoma 74103.
Number of Units Beneficially Owned (Percent Beneficial Owner of Outstanding) - ------------------------------------ ------------------
III-A Partnership: - ----------------- Samson Resources Company 25,500.0 ( 9.7%)
All affiliates, directors, and officers of the General Partner as a group and the General Partner (4 persons) 25,500.0 ( 9.7%)
III-B Partnership: - ----------------- Samson Resources Company 14,198.0 (10.3%)
All affiliates, directors, and officers of the General Partner as a group and the General Partner (4 persons) 14,198.0 (10.3%)
III-C Partnership: - ----------------- Samson Resources Company 27,069.0 (11.1%)
All affiliates, directors, and officers of the General Partner as a group and the General Partner (4 persons) 27,069.0 (11.1%)
III-D Partnership: - ----------------- Samson Resources Company 19,119.5 (14.6%)
All affiliates, directors, and officers of the General Partner as a group and the General Partner (4 persons) 19,119.5 (14.6%)
III-E Partnership: - ----------------- Samson Resources Company 48,048.0 (11.5%)
All affiliates, directors, and officers of the General Partner as a group and the General Partner (4 persons) 48,048.0 (11.5%)
III-F Partnership: - ----------------- Samson Resources Company 28,125.0 (12.7%)
All affiliates, directors, and officers of the General Partner as a group and the General Partner (4 persons) 28,125.0 (12.7%)
III-G Partnership: - ----------------- Samson Resources Company 13,613.0 (11.2%)
All affiliates, directors, and officers of the General Partner as a group and the General Partner (4 persons) 13,613.0 (11.2%)
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 of reports required under Section 16 of the Securities Exchange Act of 1934.
ITEM 13.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The General Partner and certain of its affiliates engage in oil and gas activities independently of the Partnerships which result in conflicts of interest that cannot be totally eliminated. The allocation of acquisition and drilling opportunities and the nature of the compensation arrangements between the Partnerships and the General Partner also create potential conflicts of interest. An affiliate of the Partnerships owns some of the Partnerships' Units and therefore has an identity of interest with other Limited Partners with respect to the operations of the Partnerships.
In order to attempt to assure limited liability for Limited Partners as well as an orderly conduct of business, management of the Partnerships is exercised solely by the General Partner. The Partnership Agreements grant the General Partner broad discretionary authority with respect to the Partnerships' participation in drilling prospects and expenditure and control of funds, including borrowings. These provisions are similar to those contained in prospectuses and partnership agreements for other public oil and gas partnerships. Broad discretion as to general management of the Partnerships involves circumstances where the General Partner has conflicts of interest and where it must allocate costs and expenses, or opportunities, among the Partnerships and other competing interests.
The General Partner does not devote all of its time, efforts, and personnel exclusively to the Partnerships. Furthermore, the Partnerships do not have any employees, but instead rely on the personnel of the Samson Companies. The Partnerships thus compete with the Samson Companies (including other currently sponsored oil and gas partnerships) for the time and resources of such personnel. The Samson Companies devote such time and personnel to the management of the Partnerships as are indicated by the circumstances and as are con- sistent with the General Partner's fiduciary duties.
As a result of Samson Investment Company's ("Samson") acquisition of the General Partner and its affiliates, Samson, PaineWebber and the General Partner and certain of its affiliates entered into an advisory agreement which relates primarily to the Partnerships. PaineWebber served as the dealer manager of the original offering of Units. The Advisory Agreement will expire on March 3, 1998. The Advisory Agreement provides that: (i) Samson and the General Partner will comply, and will cause the Partnerships to comply, with provisions of the Partnership Agreements (including all restrictions, prohibitions, and other provisions of such agreements concerning transactions in which Samson or its affiliates purchase or sell properties from or to, or render services to, the Partnerships and the terms of such agreements relating to farmouts of oil and gas properties), and Samson will cause the General Partner to comply with all applicable fiduciary duties; (ii) Samson will review periodically with PaineWebber on a retrospective basis the general operations and performance of the Partnerships and the terms of any material transaction by a Partnership, including any transaction that involves participation by the Samson Companies; and (iii) Samson will review with PaineWebber on a prospective basis, and will allow PaineWebber to advise Samson and to comment on, (A) any General Partner-initiated amendment to a Partnership Agreement which requires a vote of the Limited Partners of such Partnership and (B) any proposal initiated by the General Partner or any of its affiliates that would involve a reorganization, merger, or consolidation of a Partnership, a sale of all or substantially all
of the assets of a Partnership (including a roll-up or corporate stock exchange), the liquidation or dissolution of a Partnership, or the exchange of cash, securities, or other assets for all or any outstanding Units.
In addition, the Advisory Agreement provides, among other things, that: (i) Samson will cause the General Partner to offer to repurchase Units at a price to be calculated in accordance with certain guidelines and to be paid in cash or a combination of cash and certain securities, all subject to certain limitations and restrictions; (ii) Samson will provide PaineWebber certain information relating to the Partnerships and the Limited Partners; (iii) Samson and the General Partner will maintain an "800" investor services telephone number; (iv) Samson and the General Partner will take certain actions with respect to oil and gas properties held by nominees, insurance maintained by the Partnerships, approval as to transfers of interests in the Partnerships, and the selection of independent reserve engineers; (v) Samson and the General Partner acknowledge the standing of PaineWebber to institute actions, subject to certain limitations, in connection with the Advisory Agreement on behalf of Limited Partners; and (vi) if Samson proposes a consolidation, merger, or exchange offer involving any limited partnership managed by Samson, it will propose to include all of the Partnerships in such transaction or provide a statement to PaineWebber as to the reasons why some or all of the Partnerships are not included in such transaction.
Pursuant to the Advisory Agreement, the General Partner has agreed to reimburse PaineWebber for all reasonable expenses incurred by it in connection with the matters contemplated by the Advisory Agreement, and Samson has agreed to indemnify PaineWebber and certain related parties from certain liabilities incurred in connection with the Advisory Agreement.
Affiliates of the Partnerships are solely responsible for the negotiation, administration, and enforcement of oil and gas sales agreements covering the Partnerships' leasehold interests. Because affiliates of the Partnerships who provide services to the Partnerships have fiduciary or other duties to other members of the Samson Companies, contract amendments and negotiating positions taken by them in their effort to enforce contracts with purchasers may not necessarily represent the positions that the Partnerships would take if they were to administer their own contracts without involvement with other members of the Samson Companies. On the other hand, management believes that the Partnerships' negotiating strength and contractual positions have been enhanced by virtue of their affiliation with the Samson Companies. For a description of certain other relationships and related transactions see "Item 11. Executive Compensation."
PART IV
ITEM 14.
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K
(a) Financial Statements, Financial Statement Schedules, and Exhibits.
(1) Financial Statements: The following financial statements for the
Geodyne Energy Income Limited Partnership III-A Geodyne Energy Income Limited Partnership III-B Geodyne Energy Income Limited Partnership III-C Geodyne Energy Income Limited Partnership III-D Geodyne Energy Income Limited Partnership III-E Geodyne Energy Income Limited Partnership III-F Geodyne Energy Income Limited Partnership III-G
as of December 31, 1996 and 1995 and for each of the three years in the period ended December 31, 1996 are filed as part of this report:
Report of Independent Accountants Balance Sheets Statements of Operations Statements of Changes in Partners' Capital (Deficit) Statements of Cash Flows Notes to Financial Statements
(2) Financial Statement Schedules:
None.
(3) Exhibits:
4.1 The Certificate and Agreements of Limited Partnership for the following Partnerships have been previously filed with the Securities and Exchange Commission as Exhibit 2.1 to Form 8-A filed by each Partnership on the dates shown below and are hereby incorporated by reference.
Partnership Filing Date File No. ----------- ----------- --------
III-A February 20, 1990 0-18302 III-B March 30, 1990 0-18636 III-C March 30, 1990 0-18634 III-D November 14, 1990 0-18936 III-E January 22, 1991 0-19010 III-F March 25, 1991 0-19102 III-G September 30, 1991 0-19563
4.2 Advisory Agreement dated as of November 24, 1992 between Samson, PaineWebber, Geodyne Resources, Geodyne Properties, Inc., Geodyne Production Company, and Geodyne Energy Company filed as Exhibit 28.3 to Registrant's Current Report on Form 8-K on December 24, 1992 and is hereby incorporated by reference.
4.3 Second Amendment to Agreement of Limited Partner- ship of Geodyne Energy Income Limited Partnership III-A, filed as Exhibit 4.1 to Registrant's Current Report on Form 8-K dated August 2, 1993 filed with the SEC on August 10, 1993 and is hereby incorporated by reference.
4.4 Second Amendment to Agreement of Limited Partner- ship of Geodyne Energy Income Limited Partnership III-B, filed as Exhibit 4.2 to Registrant's Current Report on Form 8-K dated August 2, 1993 filed with the SEC on August 10, 1993 and is hereby incorporated by reference.
4.5 Second Amendment to Agreement of Limited Partner- ship of Geodyne Energy Income Limited Partnership III-C, filed as Exhibit 4.3 to Registrant's Current Report on Form 8-K dated August 2, 1993 filed with the SEC on August 10, 1993 and is hereby incorporated by reference.
4.6 Second Amendment to Agreement of Limited Partner- ship of Geodyne Energy Income Limited Partnership III-D, filed as Exhibit 4.4 to Registrant's Current Report on Form 8-K dated August 2, 1993 filed with the SEC on August 10, 1993 and is hereby incorporated by reference.
4.7 Second Amendment to Agreement of Limited Partner- ship of Geodyne Energy Income Limited Partnership III-E, filed as Exhibit 4.5 to Registrant's Current Report on Form 8-K dated August 2, 1993 filed with the SEC on August 10, 1993 and is hereby incorporated by reference.
4.8 Second Amendment to Agreement of Limited Partner- ship of Geodyne Energy Income Limited Partnership III-F, filed as Exhibit 4.6 to Registrant's Current Report on Form 8-K dated August 2, 1993 filed with the SEC on August 10, 1993 and is hereby incorporated by reference.
4.9 Second Amendment to Agreement of Limited Partner- ship of Geodyne Energy Income Limited Partnership III-G, filed as Exhibit 4.7 to Registrant's Current Report on Form 8-K dated August 2, 1993 filed with the SEC on August 10, 1993 and is hereby incorporated by reference.
4.10 Third Amendment to Agreement of Limited Part- nership of Geodyne Energy Income Limited Partnership III-A, filed as Exhibit 4.10 to Registrant's Annual Report on Form 10-K for the year ended December 31, 1995 filed with the SEC on April 1, 1996 and is hereby incorporated by reference.
4.11 Third Amendment to Agreement of Limited Part- nership of Geodyne Energy Income Limited Partnership III-B, filed as Exhibit 4.11 to Registrant's Annual Report on Form 10-K for the year ended December 31, 1995 filed with the SEC on April 1, 1996 and is hereby incorporated by reference.
4.12 Third Amendment to Agreement of Limited Part- nership of Geodyne Energy Income Limited Partnership III-C, filed as Exhibit 4.12 to Registrant's Annual Report on Form 10-K for the year ended December 31, 1995 filed with the SEC on April 1, 1996 and is hereby incorporated by reference.
4.13 Third Amendment to Agreement of Limited Part- nership of Geodyne Energy Income Limited Partnership III-D, filed as Exhibit 4.13 to Registrant's Annual Report on Form 10-K for the year ended December 31, 1995 filed with the SEC on April 1, 1996 and is hereby incorporated by reference.
4.14 Third Amendment to Agreement of Limited Part- nership of Geodyne Energy Income Limited Partnership III-E, filed as Exhibit 4.14 to Registrant's Annual Report on Form 10-K for the year ended December 31, 1995 filed with the SEC on April 1, 1996 and is hereby incorporated by reference.
4.15 Third Amendment to Agreement of Limited Part- nership of Geodyne Energy Income Limited Partnership III-F, filed as Exhibit 4.15 to Registrant's Annual Report on Form 10-K for the year ended December 31, 1995 filed with the SEC on April 1, 1996 and is hereby incorporated by reference.
4.16 Third Amendment to Agreement of Limited Part- nership of Geodyne Energy Income Limited Partnership III-G, filed as Exhibit 4.16 to Registrant's Annual Report on Form 10-K for the year ended December 31, 1995 filed with the SEC on April 1, 1996 and is hereby incorporated by reference.
* 23.1 Consent of Ryder Scott Company, Petroleum Engineers for Geodyne Energy Income Limited Partnership III-A.
* 23.2 Consent of Ryder Scott Company, Petroleum Engineers for Geodyne Energy Income Limited Partnership III-B.
* 23.3 Consent of Ryder Scott Company, Petroleum Engineers for Geodyne Energy Income Limited Partnership III-C.
* 23.4 Consent of Ryder Scott Company, Petroleum Engineers for Geodyne Energy Income Limited Partnership III-D.
* 23.5 Consent of Ryder Scott Company, Petroleum Engineers for Geodyne Energy Income Limited Partnership III-E.
* 23.6 Consent of Ryder Scott Company, Petroleum Engineers for Geodyne Energy Income Limited Partnership III-F.
* 23.7 Consent of Ryder Scott Company, Petroleum Engineers for Geodyne Energy Income Limited Partnership III-G.
* 27.1 Financial Data Schedule containing summary financial information extracted from the Geodyne Energy Income Limited Partnership III-A's financial statements as of December 31, 1996 and for the year ended December 31, 1996.
* 27.2 Financial Data Schedule containing summary financial information extracted from the Geodyne Energy Income Limited Partnership III-B's financial statements as of December 31, 1996 and for the year ended December 31, 1996.
* 27.3 Financial Data Schedule containing summary financial information extracted from the Geodyne Energy Income Limited Partnership III-C's financial statements as of December 31, 1996 and for the year ended December 31, 1996.
* 27.4 Financial Data Schedule containing summary financial information extracted from the Geodyne Energy Income Limited Partnership III-D's financial statements as of December 31, 1996 and for the year ended December 31, 1996.
* 27.5 Financial Data Schedule containing summary financial information extracted from the Geodyne Energy Income Limited Partnership III-E's financial statements as of December 31, 1996 and for the year ended December 31, 1996.
* 27.6 Financial Data Schedule containing summary financial information extracted from the Geodyne Energy Income Limited Partnership III-F's financial statements as of December 31, 1996 and for the year ended December 31, 1996.
* 27.7 Financial Data Schedule containing summary financial information extracted from the Geodyne Energy Income Limited Partnership III-G's financial statements as of December 31, 1996 and for the year ended December 31, 1996.
All other Exhibits are omitted as inapplicable.
---------- *Filed herewith.
(b) Reports on Form 8-K for the fourth quarter of 1996:
None.
SIGNATURES
Pursuant to the requirements of Sections 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly organized.
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-A
By: GEODYNE RESOURCES, INC. General Partner
March 20, 1997
By: /s/Dennis R. Neill ------------------------------ Dennis R. Neill President
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities on the dates indicated.
By: /s/Dennis R. Neill President and March 20, 1997 ------------------- Director (Principal Dennis R. Neill Executive Officer)
/s/Patrick M. Hall (Principal March 20, 1997 ------------------- Financial and Patrick M. Hall Accounting Officer)
/s/Judy K. Fox Secretary March 20, 1997 ------------------- Judy K. Fox
SIGNATURES
Pursuant to the requirements of Sections 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly organized.
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-B
By: GEODYNE RESOURCES, INC. General Partner
March 20, 1997
By: /s/Dennis R. Neill ------------------------------ Dennis R. Neill President
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities on the dates indicated.
By: /s/Dennis R. Neill President and March 20, 1997 ------------------- Director (Principal Dennis R. Neill Executive Officer)
/s/Patrick M. Hall (Principal March 20, 1997 ------------------- Financial and Patrick M. Hall Accounting Officer)
/s/Judy K. Fox Secretary March 20, 1997 ------------------- Judy K. Fox
SIGNATURES
Pursuant to the requirements of Sections 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly organized.
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-C
By: GEODYNE RESOURCES, INC. General Partner
March 20, 1997
By: /s/Dennis R. Neill ------------------------------ Dennis R. Neill President
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities on the dates indicated.
By: /s/Dennis R. Neill President and March 20, 1997 ------------------- Director (Principal Dennis R. Neill Executive Officer)
/s/Patrick M. Hall (Principal March 20, 1997 ------------------- Financial and Patrick M. Hall Accounting Officer)
/s/Judy K. Fox Secretary March 20, 1997 ------------------- Judy K. Fox
SIGNATURES
Pursuant to the requirements of Sections 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly organized.
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-D
By: GEODYNE RESOURCES, INC. General Partner
March 20, 1997
By: /s/Dennis R. Neill ------------------------------ Dennis R. Neill President
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities on the dates indicated.
By: /s/Dennis R. Neill President and March 20, 1997 ------------------- Director (Principal Dennis R. Neill Executive Officer)
/s/Patrick M. Hall (Principal March 20, 1997 ------------------- Financial and Patrick M. Hall Accounting Officer)
/s/Judy K. Fox Secretary March 20, 1997 ------------------- Judy K. Fox
SIGNATURES
Pursuant to the requirements of Sections 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly organized.
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-E
By: GEODYNE RESOURCES, INC. General Partner
March 20, 1997
By: /s/Dennis R. Neill ------------------------------ Dennis R. Neill President
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities on the dates indicated.
By: /s/Dennis R. Neill President and March 20, 1997 ------------------- Director (Principal Dennis R. Neill Executive Officer)
/s/Patrick M. Hall (Principal March 20, 1997 ------------------- Financial and Patrick M. Hall Accounting Officer)
/s/Judy K. Fox Secretary March 20, 1997 ------------------- Judy K. Fox
SIGNATURES
Pursuant to the requirements of Sections 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly organized.
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-F
By: GEODYNE RESOURCES, INC. General Partner
March 20, 1997
By: /s/Dennis R. Neill ------------------------------ Dennis R. Neill President
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities on the dates indicated.
By: /s/Dennis R. Neill President and March 20, 1997 ------------------- Director (Principal Dennis R. Neill Executive Officer)
/s/Patrick M. Hall (Principal March 20, 1997 ------------------- Financial and Patrick M. Hall Accounting Officer)
/s/Judy K. Fox Secretary March 20, 1997 ------------------- Judy K. Fox
SIGNATURES
Pursuant to the requirements of Sections 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly organized.
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-G
By: GEODYNE RESOURCES, INC. General Partner
March 20, 1997
By: /s/Dennis R. Neill ------------------------------ Dennis R. Neill President
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities on the dates indicated.
By: /s/Dennis R. Neill President and March 20, 1997 ------------------- Director (Principal Dennis R. Neill Executive Officer)
/s/Patrick M. Hall (Principal March 20, 1997 ------------------- Financial and Patrick M. Hall Accounting Officer)
/s/Judy K. Fox Secretary March 20, 1997 ------------------- Judy K. Fox
Item 8: Financial Statements and Supplementary Data
REPORT OF INDEPENDENT ACCOUNTANTS
TO THE PARTNERS
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-A
We have audited the balance sheets of the Geodyne Energy Income Limited Partnership III-A, an Oklahoma limited partnership, as of December 31, 1996 and 1995 and the related statements of operations, changes in partners' capital (deficit), and cash flows for the years ended December 31, 1996, 1995, and 1994. These financial statements are the responsibility of the Partnership's management. Our responsibility is to express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing standards. 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. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the Geodyne Energy Income Limited Partnership III-A at December 31, 1996 and 1995 and the results of its operations and cash flows for the years ended December 31, 1996, 1995, and 1994, in conformity with generally accepted accounting principles.
As discussed in Note 1 to the financial statements, the Geodyne Energy Income Limited Partnership III-A changed its policy of accounting for impairment of its oil and gas properties on October 1, 1995.
COOPERS & LYBRAND L.L.P.
Tulsa, Oklahoma March 18, 1997
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-A Balance Sheets December 31, 1996 and 1995
ASSETS ------ 1996 1995 ------------- ------------- CURRENT ASSETS: Cash and cash equivalents $ 610,116 $ 560,906 Accounts receivable: Oil and gas sales, including $349,181 due from related parties at 1995 680,167 639,787 --------- ---------- Total current assets $1,290,283 $ 1,200,693
NET OIL AND GAS PROPERTIES, utilizing the successful efforts method 5,360,656 6,874,396
DEFERRED CHARGE 244,220 278,829 --------- ---------- $6,895,159 $ 8,353,918 ========= ==========
LIABILITIES AND PARTNERS' CAPITAL (DEFICIT) -------------------------------------------
CURRENT LIABILITIES: Accounts payable $ 50,726 $ 90,496 Gas imbalance payable 76,797 43,854 --------- ----------
Total current liabilities $ 127,523 $ 134,350
ACCRUED LIABILITY $ 80,396 $ 87,624
PARTNERS' CAPITAL (DEFICIT): General Partner ($ 198,911) ($ 143,923) Limited Partners, issued and outstanding, 263,976 Units 6,886,151 8,275,867 --------- ---------- Total Partners' capital $6,687,240 $ 8,131,944 --------- ---------- $6,895,159 $ 8,353,918 ========= ==========
The accompanying notes are an integral part of these financial statements.
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-A Statements of Operations For the Years Ended December 31, 1996, 1995, and 1994
1996 1995 1994 ------------ ------------ ---------- REVENUES: Oil and gas sales, including $1,811,755 and $2,523,522 of sales to related parties in 1995 and 1994 $3,634,004 $3,647,607 $5,044,736 Interest and other income 23,840 24,119 37,679 Loss on sale of oil and gas properties ( 84,561) ( 22,260) ( 1,360) --------- --------- --------- $3,573,283 $3,649,466 $5,081,055
COSTS AND EXPENSES: Lease operating $ 644,998 $ 846,401 $ 782,886 Production tax 254,075 282,695 373,299 Depreciation, deple- tion, and amorti- zation of oil and gas properties 1,135,745 2,111,654 3,553,491 Impairment provision - 1,267,185 - General and administrative 324,232 308,527 312,996 --------- --------- --------- $2,359,050 $4,816,462 $5,022,672 --------- --------- ---------
NET INCOME (LOSS) $1,214,233 ($1,166,996) $ 58,383 ========= ========= =========
GENERAL PARTNER - NET INCOME $ 104,949 $ 76,804 $ 145,059 ========= ========= =========
LIMITED PARTNERS - NET INCOME (LOSS) $1,109,284 ($1,243,800) ($ 86,676) ========= ========= ========= NET INCOME (LOSS) per Unit $ 4.20 ($ 4.71) ($ .33) ========= ========= ========= UNITS OUTSTANDING 263,976 263,976 263,976 ========= ========= =========
The accompanying notes are an integral part of these financial statements.
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-A Statements of Partners' Capital (Deficit) For the Years Ended December 31, 1996, 1995, and 1994
Limited General Partners Partner Total ------------- ---------- -------------
Balance, Dec. 31, 1993 $15,726,343 ($ 38,786) $15,687,557 Net income (loss) ( 86,676) 145,059 58,383 Cash distributions ( 3,960,000) ( 218,000) ( 4,178,000) ---------- ------- ----------
Balance, Dec. 31, 1994 $11,679,667 ($111,727) $11,567,940 Net income (loss) ( 1,243,800) 76,804 ( 1,166,996) Cash distributions ( 2,160,000) ( 109,000) ( 2,269,000) ---------- ------- ----------
Balance, Dec. 31, 1995 $ 8,275,867 ($143,923) $ 8,131,944 Net income 1,109,284 104,949 1,214,233 Cash distributions ( 2,499,000) ( 159,937) ( 2,658,937) ---------- ------- ----------
Balance, Dec. 31, 1996 $ 6,886,151 ($198,911) $ 6,687,240 ========== ======= ==========
The accompanying notes are an integral part of these financial statements.
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-A Statements of Cash Flows For the Years Ended December 31, 1996, 1995, and 1994
1996 1995 1994 ------------ ------------ ------------ CASH FLOWS FROM OPERATING ACTIVITIES: Net income (loss) $1,214,233 ($1,166,996) $ 58,383 Adjustments to reconcile net income (loss) to net cash provided by operating activities: Depreciation, deple- tion, and amortiza- tion of oil and gas properties 1,135,745 2,111,654 3,553,491 Impairment provision - 1,267,185 - Loss on sale of oil and gas properties 84,561 22,260 1,360 (Increase) decrease in accounts receivable ( 40,380) ( 77,267) 329,719 (Increase) decrease in deferred charge 34,609 ( 47,355) ( 87,278) Increase (decrease) in accounts payable ( 39,770) 10,063 10,389 Increase (decrease) in gas imbalance payable 32,943 ( 14,727) ( 322,380) Increase (decrease) in accrued liability ( 7,228) 25,434 987 --------- --------- ---------
Net cash provided by operating activities $2,414,713 $2,130,251 $3,544,671 --------- --------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES: Capital expenditures ($ 4,548) ($ 36,695) ($ 29,172) Proceeds from sale of oil and gas properties 297,982 21,300 2,237 --------- --------- ---------
Net cash provided (used) by investing activities $ 293,434 ($ 15,395) ($ 26,935) --------- --------- --------- CASH FLOWS FROM FINANCING ACTIVITIES: Cash distributions ($2,658,937) ($2,269,000) ($4,178,000) --------- --------- --------- Net cash used by financing activities ($2,658,937) ($2,269,000) ($4,178,000) --------- --------- --------- NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS $ 49,210 ($ 154,144) ($ 660,264)
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 560,906 715,050 1,375,314 --------- --------- --------- CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 610,116 $ 560,906 $ 715,050 ========= ========= =========
The accompanying notes are an integral part of these financial statements.
REPORT OF INDEPENDENT ACCOUNTANTS
TO THE PARTNERS
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-B
We have audited the balance sheets of the Geodyne Energy Income Limited Partnership III-B, an Oklahoma limited partnership, as of December 31, 1996 and 1995 and the related statements of operations, changes in partners' capital (deficit), and cash flows for the years ended December 31, 1996, 1995, and 1994. These financial statements are the responsibility of the Partnership's management. Our responsibility is to express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing standards. 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. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the Geodyne Energy Income Limited Partnership III-B at December 31, 1996 and 1995 and the results of its operations and cash flows for the years ended December 31, 1996, 1995, and 1994, in conformity with generally accepted accounting principles.
As discussed in Note 1 to the financial statements, the Geodyne Energy Income Limited Partnership III-B changed its policy of accounting for impairment of its oil and gas properties on October 1, 1995.
COOPERS & LYBRAND L.L.P.
Tulsa, Oklahoma March 18, 1997
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-B Balance Sheets December 31, 1996 and 1995
ASSETS ------ 1996 1995 ------------- ------------- CURRENT ASSETS: Cash and cash equivalents $ 376,603 $ 311,585 Accounts receivable: Oil and gas sales, including $169,725 due from related parties at 1995 396,970 373,676 --------- --------- Total current assets $ 773,573 $ 685,261
NET OIL AND GAS PROPERTIES, utilizing the successful efforts method 2,854,520 3,648,394
DEFERRED CHARGE 144,819 169,089 --------- --------- $3,772,912 $4,502,744 ========= =========
LIABILITIES AND PARTNERS' CAPITAL (DEFICIT) -------------------------------------------
CURRENT LIABILITIES: Accounts payable $ 27,983 $ 49,382 Gas imbalance payable 26,735 6,202 --------- ---------
Total current liabilities $ 54,718 $ 55,584
ACCRUED LIABILITY $ 38,690 $ 47,360
PARTNERS' CAPITAL (DEFICIT): General Partner ($ 97,092) ($ 66,996) Limited Partners, issued and outstanding, 138,336 Units 3,776,596 4,466,796 --------- --------- Total Partners' capital $3,679,504 $4,399,800 --------- ---------
$3,772,912 $4,502,744 ========= ========= The accompanying notes are an integral part of these financial statements.
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-B Statements of Operations For the Years Ended December 31, 1996, 1995, and 1994
1996 1995 1994 ------------ ------------ ---------- REVENUES: Oil and gas sales, including $863,111 and $1,148,530 of sales to related parties in 1995 and 1994 $2,113,507 $2,063,107 $2,717,108 Interest and other income 12,611 12,778 20,089 Loss on sale of oil and gas properties ( 47,201) ( 11,295) ( 588) --------- --------- --------- $2,078,917 $2,064,590 $2,736,609
COSTS AND EXPENSES: Lease operating $ 345,352 $ 457,146 $ 419,322 Production tax 152,139 160,328 197,367 Depreciation, deple- tion, and amorti- zation of oil and gas properties 633,628 1,052,242 1,924,287 Impairment provision - 480,618 - General and administrative 171,467 161,432 164,311 --------- --------- --------- $1,302,586 $2,311,766 $2,705,287 --------- --------- ---------
NET INCOME (LOSS) $ 776,331 ($ 247,176) $ 31,322 ========= ========= ========= GENERAL PARTNER - NET INCOME $ 63,531 $ 48,956 $ 78,538 ========= ========= ========= LIMITED PARTNERS - NET INCOME (LOSS) $ 712,800 ($ 296,132) ($ 47,216) ========= ========= ========= NET INCOME (LOSS) per Unit $ 5.15 ($ 2.14) ($ .34) ========= ========= ========= UNITS OUTSTANDING 138,336 138,336 138,336 ========= ========= =========
The accompanying notes are an integral part of these financial statements.
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-B Statements of Partners' Capital (Deficit) For the Years Ended December 31, 1996, 1995, and 1994
Limited General Partners Partner Total ------------- ---------- -------------
Balance, Dec. 31, 1993 $8,210,144 ($ 16,490) $8,193,654 Net income (loss) ( 47,216) 78,538 31,322 Cash distributions ( 2,175,000) ( 115,000) ( 2,290,000) --------- ------- ---------
Balance, Dec. 31, 1994 $5,987,928 ($ 52,952) $5,934,976 Net income (loss) ( 296,132) 48,956 ( 247,176) Cash distributions ( 1,225,000) ( 63,000) ( 1,288,000) --------- ------- ---------
Balance, Dec. 31, 1995 $4,466,796 ($ 66,996) $4,399,800 Net income 712,800 63,531 776,331 Cash distributions ( 1,403,000) ( 93,627) ( 1,496,627) --------- ------- ---------
Balance, Dec. 31, 1996 $3,776,596 ($ 97,092) $3,679,504 ========= ======= =========
The accompanying notes are an integral part of these financial statements.
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-B Statements of Cash Flows For the Years Ended December 31, 1996, 1995, and 1994
1996 1995 1994 ------------ ------------ ------------ CASH FLOWS FROM OPERATING ACTIVITIES: Net income (loss) $ 776,331 ($ 247,176) $ 31,322 Adjustments to reconcile net income (loss) to net cash provided by operating activities: Depreciation, deple- tion, and amortiza- tion of oil and gas properties 633,628 1,052,242 1,924,287 Impairment provision - 480,618 - Loss on sale of oil and gas properties 47,201 11,295 588 (Increase) decrease in accounts receivable ( 23,294) ( 67,977) 215,361 (Increase) decrease in deferred charge 24,270 ( 8,674) ( 44,104) Increase (decrease) in accounts payable ( 21,399) 4,622 5,008 Increase (decrease) in gas imbalance payable 20,533 ( 6,643) ( 211,856) Increase (decrease) in accrued liability ( 8,670) 16,253 ( 196) --------- --------- ---------
Net cash provided by operating activities $1,448,600 $1,234,560 $1,920,410 --------- --------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES: Capital expenditures ($ 21,881) ($ 48,179) ($ 16,478) Proceeds from sale of oil and gas properties 134,926 8,949 943 --------- --------- ---------
Net cash provided (used) by investing activities $ 113,045 ($ 39,230) ($ 15,535) --------- --------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES: Cash distributions ($1,496,627) ($1,288,000) ($2,290,000) --------- --------- --------- Net cash used by financing activities ($1,496,627) ($1,288,000) ($2,290,000) --------- --------- --------- NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS $ 65,018 ($ 92,670) ($ 385,125)
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 311,585 404,255 789,380 --------- --------- --------- CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 376,603 $ 311,585 $ 404,255 ========= ========= =========
The accompanying notes are an integral part of these financial statements.
REPORT OF INDEPENDENT ACCOUNTANTS
TO THE PARTNERS
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-C
We have audited the balance sheets of the Geodyne Energy Income Limited Partnership III-C, an Oklahoma limited partnership, as of December 31, 1996 and 1995 and the related statements of operations, changes in partners' capital (deficit), and cash flows for the years ended December 31, 1996, 1995, and 1994. These financial statements are the responsibility of the Partnership's management. Our responsibility is to express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing standards. 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. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the Geodyne Energy Income Limited Partnership III-C at December 31, 1996 and 1995 and the results of its operations and cash flows for the years ended December 31, 1996, 1995, and 1994, in conformity with generally accepted accounting principles.
As discussed in Note 1 to the financial statements, the Geodyne Energy Income Limited Partnership III-C changed its policy of accounting for impairment of its oil and gas properties on October 1, 1995.
COOPERS & LYBRAND L.L.P.
Tulsa, Oklahoma March 18, 1997
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-C Balance Sheets December 31, 1996 and 1995
ASSETS ------
1996 1995 ------------- ------------- CURRENT ASSETS: Cash and cash equivalents $ 537,233 $ 319,730 Accounts receivable: General partner 40,940 - Oil and gas sales, including $232,323 due from related parties at 1995 627,697 461,693 --------- --------- Total current assets $1,205,870 $ 781,423
NET OIL AND GAS PROPERTIES, utilizing the successful efforts method 5,727,898 6,723,292
DEFERRED CHARGE 76,014 67,846 --------- --------- $7,009,782 $7,572,561 ========= =========
LIABILITIES AND PARTNERS' CAPITAL (DEFICIT) -------------------------------------------
CURRENT LIABILITIES: Accounts payable $ 57,357 $ 84,760 Gas imbalance payable 30,749 22,554 --------- ---------
Total current liabilities $ 88,106 $ 107,314
ACCRUED LIABILITY $ 141,394 $ 139,809
PARTNERS' CAPITAL (DEFICIT): General Partner ($ 143,741) ($ 125,913) Limited Partners, issued and outstanding, 244,536 Units 6,924,023 7,451,351 --------- --------- Total Partners' capital $6,780,282 $7,325,438 --------- --------- $7,009,782 $7,572,561 ========= =========
The accompanying notes are an integral part of these financial statements.
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-C Statements of Operations For the Years Ended December 31, 1996, 1995, and 1994
1996 1995 1994 ------------ ------------ ------------ REVENUES: Oil and gas sales, including $1,325,188 and $1,994,570 of sales to related parties in 1995 and 1994 $3,259,615 $2,760,488 $3,229,521 Interest and other income 16,964 15,965 20,912 Gain (loss) on sale of oil and gas properties 79,865 ( 11,907) 1,238 --------- --------- --------- $3,356,444 $2,764,546 $3,251,671 COSTS AND EXPENSES: Lease operating $ 544,593 $ 626,774 $ 729,751 Production tax 236,522 192,809 238,852 Depreciation, deple- tion, and amorti- zation of oil and gas properties 930,015 1,587,281 2,821,028 Impairment provision - 1,338,693 1,232,000 General and administrative 293,709 287,615 291,741 --------- --------- --------- $2,004,839 $4,033,172 $5,313,372 --------- --------- --------- NET INCOME (LOSS) $1,351,605 ($1,268,626) ($2,061,701) ========= ========= ========= GENERAL PARTNER - NET INCOME $ 103,933 $ 53,608 $ 59,036 ========= ========= =========
LIMITED PARTNERS - NET INCOME (LOSS) $1,247,672 ($1,322,234) ($2,120,737) ========= ========= =========
NET INCOME (LOSS) per Unit $ 5.10 ($ 5.41) ($ 8.67) ========= ========= =========
UNITS OUTSTANDING 244,536 244,536 244,536 ========= ========= =========
The accompanying notes are an integral part of these financial statements.
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-C Statements of Partners' Capital (Deficit) For the Years Ended December 31, 1996, 1995, and 1994
Limited General Partners Partner Total ------------- ---------- -------------
Balance, Dec. 31, 1993 $14,629,322 ($ 41,557) $14,587,765 Net income (loss) ( 2,120,737) 59,036 ( 2,061,701) Cash distributions ( 2,325,000) ( 125,000) ( 2,450,000) ---------- ------- ----------
Balance, Dec. 31, 1994 $10,183,585 ($107,521) $10,076,064 Net income (loss) ( 1,322,234) 53,608 ( 1,268,626) Cash distributions ( 1,410,000) ( 72,000) ( 1,482,000) ---------- ------- ----------
Balance, Dec. 31, 1995 $ 7,451,351 ($125,913) $ 7,325,438 Net income 1,247,672 103,933 1,351,605 Cash distributions ( 1,775,000) ( 121,761) ( 1,896,761) ---------- ------- ----------
Balance, Dec. 31, 1996 $ 6,924,023 ($143,741) $ 6,780,282 ========== ======= ==========
The accompanying notes are an integral part of these financial statements.
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-C Statements of Cash Flows For the Years Ended December 31, 1996, 1995, and 1994
1996 1995 1994 ------------ ------------ ------------ CASH FLOWS FROM OPERATING ACTIVITIES: Net income (loss) $1,351,605 ($1,268,626) ($2,061,701) Adjustments to reconcile net income (loss) to net cash provided by operating activities: Depreciation, deple- tion, and amortiza- tion of oil and gas properties 930,015 1,587,281 2,821,028 Impairment provision - 1,338,693 1,232,000 (Gain) loss on sale of oil and gas properties ( 79,865) 11,907 ( 1,238) Increase in accounts receivable - General Partner ( 40,940) - - (Increase) decrease in accounts receivable ( 166,004) 184,610 ( 12,438) Increase in deferred charge ( 8,168) ( 1,057) ( 19,104) Increase (decrease) in accounts payable ( 27,403) 11,239 ( 25,828) Increase (decrease) in gas imbalance payable 8,195 ( 152,960) ( 26,862) Increase (decrease) in accrued liability 1,585 ( 35,004) 21,188 --------- --------- --------- Net cash provided by operating activities $1,969,020 $1,676,083 $1,927,045 --------- --------- --------- CASH FLOWS FROM INVESTING ACTIVITIES: Capital expenditures ($ 24,068) ($ 98,870) ($ 103,486) Proceeds from sale of oil and gas properties 169,312 7,952 4,244 --------- --------- --------- Net cash provided (used) by investing activities $ 145,244 ($ 90,918) ($ 99,242) --------- --------- --------- CASH FLOWS FROM FINANCING ACTIVITIES: Cash distributions ($1,896,761) ($1,482,000) ($2,450,000) --------- --------- --------- Net cash used by financing activities ($1,896,761) ($1,482,000) ($2,450,000) --------- --------- --------- NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS $ 217,503 $ 103,165 ($ 622,197)
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 319,730 216,565 838,762 --------- --------- --------- CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 537,233 $ 319,730 $ 216,565 ========= ========= =========
The accompanying notes are an integral part of these financial statements.
REPORT OF INDEPENDENT ACCOUNTANTS
TO THE PARTNERS
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-D
We have audited the balance sheets of the Geodyne Energy Income Limited Partnership III-D, an Oklahoma limited partnership, as of December 31, 1996 and 1995 and the related statements of operations, changes in partners' capital (deficit), and cash flows for the years ended December 31, 1996, 1995, and 1994. These financial statements are the responsibility of the Partnership's management. Our responsibility is to express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing standards. 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. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the Geodyne Energy Income Limited Partnership III-D at December 31, 1996 and 1995 and the results of its operations and cash flows for the years ended December 31, 1996, 1995, and 1994, in conformity with generally accepted accounting principles.
As discussed in Note 1 to the financial statements, the Geodyne Energy Income Limited Partnership III-D changed its policy of accounting for impairment of its oil and gas properties on October 1, 1995.
COOPERS & LYBRAND L.L.P.
Tulsa, Oklahoma March 18, 1997
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-D Balance Sheets December 31, 1996 and 1995
ASSETS ------
1996 1995 ------------- ------------- CURRENT ASSETS: Cash and cash equivalents $ 319,245 $ 169,395 Accounts receivable: Oil and gas sales, including $186,231 due from related parties at 1995 425,312 365,008 --------- --------- Total current assets $ 744,557 $ 534,403
NET OIL AND GAS PROPERTIES, utilizing the successful efforts method 3,470,494 3,887,916
DEFERRED CHARGE 26,139 41,578 --------- --------- $4,241,190 $4,463,897 ========= =========
LIABILITIES AND PARTNERS' CAPITAL (DEFICIT) -------------------------------------------
CURRENT LIABILITIES: Accounts payable $ 112,221 $ 67,198 Gas imbalance payable 5,694 9,437 --------- ---------
Total current liabilities $ 117,915 $ 76,635
ACCRUED LIABILITY $ 220,286 $ 174,533
PARTNERS' CAPITAL (DEFICIT): General Partner ($ 50,214) ($ 36,176) Limited Partners, issued and outstanding, 131,008 Units 3,953,203 4,248,905 --------- --------- Total Partners' capital $3,902,989 $4,212,729 --------- --------- $4,241,190 $4,463,897 ========= =========
The accompanying notes are an integral part of these financial statements.
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-D Statements of Operations For the Years Ended December 31, 1996, 1995, and 1994
1996 1995 1994 ------------ ------------ ------------ REVENUES: Oil and gas sales, including $849,298 and $1,042,455 of sales to related parties in 1995 and 1994 $2,336,708 $2,087,482 $2,017,361 Interest and other income 9,848 9,501 11,794 Gain (loss) on sale of oil and gas properties 37,737 1,582 ( 123) --------- --------- --------- $2,384,293 $2,098,565 $2,029,032 COSTS AND EXPENSES: Lease operating $ 763,477 $ 604,541 $ 866,473 Production tax 165,193 139,205 144,237 Depreciation, deple- tion, and amorti- zation of oil and gas properties 441,513 888,974 1,428,954 Impairment provision - 495,810 1,986,000 General and administrative 158,883 158,547 157,809 --------- --------- --------- $1,529,066 $2,287,077 $4,583,473 --------- --------- --------- NET INCOME (LOSS) $ 855,227 ($ 188,512) ($2,554,441) ========= ========= ========= GENERAL PARTNER - NET INCOME $ 59,929 $ 45,966 $ 8,876 ========= ========= =========
LIMITED PARTNERS - NET INCOME (LOSS) $ 795,298 ($ 234,478) ($2,563,317) ========= ========= =========
NET INCOME (LOSS) per Unit $ 6.07 ($ 1.79) ($ 19.57) ========= ========= =========
UNITS OUTSTANDING 131,008 131,008 131,008 ========= ========= =========
The accompanying notes are an integral part of these financial statements.
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-D Statements of Partners' Capital (Deficit) For the Years Ended December 31, 1996, 1995, and 1994
Limited General Partners Partner Total ------------- ---------- -------------
Balance, Dec. 31, 1993 $8,946,700 $10,982 $8,957,682 Net income (loss) ( 2,563,317) 8,876 ( 2,554,441) Cash distributions ( 1,075,000) ( 59,000) ( 1,134,000) ---------- ------ ---------
Balance, Dec. 31, 1994 $5,308,383 ($39,142) $5,269,241 Net income (loss) ( 234,478) 45,966 ( 188,512) Cash distributions ( 825,000) ( 43,000) ( 868,000) ---------- ------ ---------
Balance, Dec. 31, 1995 $4,248,905 ($36,176) $4,212,729 Net income 795,298 59,929 855,227 Cash distributions ( 1,091,000) ( 73,967) ( 1,164,967) --------- ------ ---------
Balance, Dec. 31, 1996 $3,953,203 ($50,214) $3,902,989 ========= ====== =========
The accompanying notes are an integral part of these financial statements.
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-D Statements of Cash Flows For the Years Ended December 31, 1996, 1995, and 1994
1996 1995 1994 ------------ ------------ ------------ CASH FLOWS FROM OPERATING ACTIVITIES: Net income (loss) $ 855,227 ($ 188,512) ($2,554,441) Adjustments to reconcile net income (loss) to net cash provided by operating activities: Depreciation, deple- tion, and amortiza- tion of oil and gas properties 441,513 888,974 1,428,954 Impairment provision - 495,810 1,986,000 (Gain) loss on sale of oil and gas proper- ties ( 37,737) ( 1,582) 123 (Increase) decrease in accounts receivable ( 60,304) ( 69,652) 95,392 (Increase) decrease in deferred charge 15,439 ( 11,483) ( 13,379) Increase (decrease) in accounts payable 45,023 ( 28,434) ( 14,535) Decrease in gas imbalance payable ( 3,743) ( 116,398) ( 25,865) Increase (decrease) in accrued liability 45,753 ( 122,546) 77,260 --------- --------- --------- Net cash provided by operating activities $1,301,171 $ 846,177 $ 979,509 --------- --------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES: Capital expenditures ($ 24,953) ($ 26,512) ($ 36,474) Proceeds from sale of oil and gas properties 38,599 1,831 108 --------- --------- ---------
Net cash provided (used) by investing activities $ 13,646 ($ 24,681) ($ 36,366) --------- --------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES: Cash distributions ($1,164,967) ($ 868,000) ($1,134,000) --------- --------- --------- Net cash used by financing activities ($1,164,967) ($ 868,000) ($1,134,000) --------- --------- --------- NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS $ 149,850 ($ 46,504) ($ 190,857)
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 169,395 215,899 406,756 --------- --------- --------- CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 319,245 $ 169,395 $ 215,899 ========= ========= =========
The accompanying notes are an integral part of these financial statements.
REPORT OF INDEPENDENT ACCOUNTANTS
TO THE PARTNERS
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-E
We have audited the balance sheets of the Geodyne Energy Income Limited Partnership III-E, an Oklahoma limited partnership, as of December 31, 1996 and 1995 and the related statements of operations, changes in partners' capital (deficit), and cash flows for the years ended December 31, 1996, 1995, and 1994. These financial statements are the responsibility of the Partnership's management. Our responsibility is to express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing standards. 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. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the Geodyne Energy Income Limited Partnership III-E at December 31, 1996 and 1995 and the results of its operations and cash flows for the years ended December 31, 1996, 1995, and 1994, in conformity with generally accepted accounting principles.
As discussed in Note 1 to the financial statements, the Geodyne Energy Income Limited Partnership III-E changed its policy of accounting for impairment of its oil and gas properties on October 1, 1995.
COOPERS & LYBRAND L.L.P.
Tulsa, Oklahoma March 18, 1997
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-E Balance Sheets December 31, 1996 and 1995
ASSETS ------
1996 1995 ------------- ------------- CURRENT ASSETS: Cash and cash equivalents $ 1,243,143 $ 665,050 Accounts receivable: Oil and gas sales, including $574,916 due from related parties at 1995 1,554,748 1,574,465 ---------- ---------- Total current assets $ 2,797,891 $ 2,239,515
NET OIL AND GAS PROPERTIES, utilizing the successful efforts method 12,822,109 14,521,982
DEFERRED CHARGE 298,358 351,769 ---------- ---------- $15,918,358 $17,113,266 ========== ==========
LIABILITIES AND PARTNERS' CAPITAL (DEFICIT) -------------------------------------------
CURRENT LIABILITIES: Accounts payable $ 623,087 $ 388,772 Gas imbalance payable 156,497 120,272 ---------- ---------- Total current liabilities $ 779,584 $ 509,044
ACCRUED LIABILITY $ 355,235 $ 412,184
PARTNERS' CAPITAL (DEFICIT): General Partner ($ 187,947) ($ 127,750) Limited Partners, issued and outstanding, 418,266 Units 14,971,486 16,319,788 ---------- ---------- Total Partners' capital $14,783,539 $16,192,038 ---------- ---------- $15,918,358 $17,113,266 ========== ==========
The accompanying notes are an integral part of these financial statements.
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-E Statements of Operations For the Years Ended December 31, 1996, 1995, and 1994
1996 1995 1994 ------------ ------------- ------------- REVENUES: Oil and gas sales, including $2,128,723 and $2,131,890 of sales to related parties in 1995 and 1994 $9,030,115 $8,676,047 $ 9,466,013 Interest and other income 36,750 23,852 36,097 Gain (loss) on sale of oil and gas properties 58,579 24,387 ( 124,840) --------- --------- ---------- $9,125,444 $8,724,286 $ 9,377,270
COSTS AND EXPENSES: Lease operating $3,785,813 $4,141,427 $ 4,624,062 Production tax 632,451 614,141 649,155 Depreciation, deple- tion, and amorti- zation of oil and gas properties 1,737,844 3,448,296 3,703,170 Impairment provision - 210,152 1,573,000 General and administrative 502,626 512,981 557,137 --------- --------- ---------- $6,658,734 $8,926,997 $11,106,524 --------- --------- ---------- NET INCOME (LOSS) $2,466,710 ($ 202,711) ($ 1,729,254) ========= ========= ========== GENERAL PARTNER - NET INCOME $ 191,012 $ 136,202 $ 124,584 ========= ========= ========== LIMITED PARTNERS - NET INCOME (LOSS) $2,275,698 ($ 338,913) ($ 1,853,838) ========= ========= ==========
NET INCOME (LOSS) per Unit $ 5.44 ($ .81) ($ 4.43) ========= ========= ==========
UNITS OUTSTANDING 418,266 418,266 418,266 ========= ========= ==========
The accompanying notes are an integral part of these financial statements.
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-E Statements of Partners' Capital (Deficit) For the Years Ended December 31, 1996, 1995, and 1994
Limited General Partners Partner Total ------------- ---------- -------------
Balance, Dec. 31, 1993 $25,387,539 ($ 37,536) $25,350,003 Net income (loss) ( 1,853,838) 124,584 ( 1,729,254) Cash distributions ( 4,185,000) ( 212,000) ( 4,397,000) ---------- ------- ----------
Balance, Dec. 31, 1994 $19,348,701 ($124,952) $19,223,749 Net income (loss) ( 338,913) 136,202 ( 202,711) Cash distributions ( 2,690,000) ( 139,000) ( 2,829,000) ---------- ------- ----------
Balance, Dec. 31, 1995 $16,319,788 ($127,750) $16,192,038 Net income 2,275,698 191,012 2,466,710 Cash distributions ( 3,624,000) ( 251,209) ( 3,875,209) ---------- ------- -----------
Balance, Dec. 31, 1996 $14,971,486 ($187,947) $14,783,539 ========== ======= ==========
The accompanying notes are an integral part of these financial statements.
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-E Statements of Cash Flows For the Years Ended December 31, 1996, 1995, and 1994
1996 1995 1994 ------------ ------------ ------------ CASH FLOWS FROM OPERATING ACTIVITIES: Net income (loss) $2,466,710 ($ 202,711) ($1,729,254) Adjustments to reconcile net income (loss) to net cash provided by operating activities: Depreciation, deple- tion, and amortiza- tion of oil and gas properties 1,737,844 3,448,296 3,703,170 Impairment provision - 210,152 1,573,000 (Gain) loss on sale of oil and gas proper- ties ( 58,579) ( 24,387) 124,840 (Increase) decrease in accounts receivable 19,717 ( 303,759) 760,731 (Increase) decrease in deferred charge 53,411 21,045 ( 146,930) Increase (decrease) in accounts payable 234,315 ( 469,229) 332,457 Increase (decrease) in gas imbalance payable 36,225 25,001 ( 35,900) Increase (decrease) in accrued liability ( 56,949) ( 77,132) 137,032 --------- --------- ---------
Net cash provided by operating activities $4,432,694 $2,627,276 $4,719,146 --------- --------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES: Capital expenditures ($ 37,987) ($ 339,148) ($ 342,965) Proceeds from sale of oil and gas properties 58,595 41,433 172 --------- --------- --------- Net cash provided (used) by investing activities $ 20,608 ($ 297,715) ($ 342,793) --------- --------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES: Cash distributions ($3,875,209) ($2,829,000) ($4,397,000) --------- --------- --------- Net cash used by financing activities ($3,875,209) ($2,829,000) ($4,397,000) --------- --------- --------- NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS $ 578,093 ($ 499,439) ($ 20,647)
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 665,050 1,164,489 1,185,136 --------- --------- --------- CASH AND CASH EQUIVALENTS AT END OF PERIOD $1,243,143 $ 665,050 $1,164,489 ========= ========= =========
The accompanying notes are an integral part of these financial statements.
REPORT OF INDEPENDENT ACCOUNTANTS
TO THE PARTNERS
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-F
We have audited the balance sheets of the Geodyne Energy Income Limited Partnership III-F, an Oklahoma limited partnership, as of December 31, 1996 and 1995 and the related statements of operations, changes in partners' capital (deficit), and cash flows for the years ended December 31, 1996, 1995, and 1994. These financial statements are the responsibility of the Partnership's management. Our responsibility is to express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing standards. 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. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the Geodyne Energy Income Limited Partnership III-F at December 31, 1996 and 1995 and the results of its operations and cash flows for the years ended December 31, 1996, 1995, and 1994, in conformity with generally accepted accounting principles.
As discussed in Note 1 to the financial statements, the Geodyne Energy Income Limited Partnership III-F changed its policy of accounting for impairment of its oil and gas properties on October 1, 1995.
COOPERS & LYBRAND L.L.P.
Tulsa, Oklahoma March 18, 1997
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-F Balance Sheets December 31, 1996 and 1995
ASSETS ------ 1996 1995 ------------- ------------- CURRENT ASSETS: Cash and cash equivalents $ 504,658 $ 324,616 Accounts receivable: Oil and gas sales, including $131,943 due from related parties at 1995 661,215 413,249 --------- --------- Total current assets $1,165,873 $ 737,865
NET OIL AND GAS PROPERTIES, utilizing the successful efforts method 7,307,487 8,463,035
DEFERRED CHARGE 159,453 237,269 --------- --------- $8,632,813 $9,438,169 ========= =========
LIABILITIES AND PARTNERS' CAPITAL (DEFICIT) -------------------------------------------
CURRENT LIABILITIES: Accounts payable $ 168,316 $ 163,289 Gas imbalance payable 109,044 97,233 --------- ---------
Total current liabilities $ 277,360 $ 260,522
ACCRUED LIABILITY $ 142,686 $ 261,411
PARTNERS' CAPITAL (DEFICIT): General Partner ($ 97,523) ($ 70,576) Limited Partners, issued and outstanding, 221,484 Units 8,310,290 8,986,812 --------- --------- Total Partners' capital $8,212,767 $8,916,236 --------- ---------
$8,632,813 $9,438,169 ========= =========
The accompanying notes are an integral part of these financial statements.
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-F Statements of Operations For the Years Ended December 31, 1996, 1995, and 1994
1996 1995 1994 ------------ ------------- ------------- REVENUES: Oil and gas sales, including $847,849 and $1,297,252 of sales to related parties in 1995 and 1994 $3,094,738 $2,697,816 $ 3,517,877 Interest and other income 14,160 5,456 15,165 Gain (loss) on sale of oil and gas properties 81,481 45,550 ( 109,467) --------- --------- ---------- $3,190,379 $2,748,822 $ 3,423,575
COSTS AND EXPENSES: Lease operating $1,075,305 $1,315,378 $ 1,599,364 Production tax 162,302 156,692 215,243 Depreciation, deple- tion, and amorti- zation of oil and gas properties 1,130,451 1,509,514 2,383,233 Impairment provision - 998,811 - General and administrative 266,544 264,360 305,309 --------- --------- ---------- $2,634,602 $4,244,755 $ 4,503,149 --------- --------- ---------- NET INCOME (LOSS) $ 555,777 ($1,495,933) ($ 1,079,574) ========= ========= ========== GENERAL PARTNER - NET INCOME $ 72,299 $ 25,536 $ 41,351 ========= ========= ========== LIMITED PARTNERS - NET INCOME (LOSS) $ 483,478 ($1,521,469) ($ 1,120,925) ========= ========= ==========
NET INCOME (LOSS) per Unit $ 2.18 ($ 6.87) ($ 5.06) ========= ========= ==========
UNITS OUTSTANDING 221,484 221,484 221,484 ========= ========= ==========
The accompanying notes are an integral part of these financial statements.
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-F Statements of Partners' Capital (Deficit) For the Years Ended December 31, 1996, 1995, and 1994
Limited General Partners Partner Total ------------- ---------- -------------
Balance, Dec. 31, 1993 $13,984,206 ($20,163) $13,964,043 Net income (loss) ( 1,120,925) 41,351 ( 1,079,574) Cash distributions ( 1,900,000) ( 94,000) ( 1,994,000) ---------- ------ ----------
Balance, Dec. 31, 1994 $10,963,281 ($72,812) $10,890,469 Net income (loss) ( 1,521,469) 25,536 ( 1,495,933) Cash distributions ( 455,000) ( 23,300) ( 478,300) ---------- ------ ----------
Balance, Dec. 31, 1995 $ 8,986,812 ($70,576) $ 8,916,236 Net income 483,478 72,299 555,777 Cash distributions ( 1,160,000) ( 99,246) ( 1,259,246) ---------- ------ ----------
Balance, Dec. 31, 1996 $ 8,310,290 ($97,523) $ 8,212,767 ========== ====== ==========
The accompanying notes are an integral part of these financial statements.
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-F Statements of Cash Flows For the Years Ended December 31, 1996, 1995, and 1994
1996 1995 1994 ------------ ------------ ------------ CASH FLOWS FROM OPERATING ACTIVITIES: Net income (loss) $ 555,777 ($1,495,933) ($1,079,574) Adjustments to reconcile net income (loss) to net cash provided by operating activities: Depreciation, deple- tion, and amortiza- tion of oil and gas properties 1,130,451 1,509,514 2,383,233 Impairment provision - 998,811 - (Gain) loss on sale of oil and gas properties ( 81,481) ( 45,550) 109,467 (Increase) decrease in accounts receivable ( 247,966) 47,205 453,517 (Increase) decrease in deferred charge 77,816 ( 22,173) ( 90,499) Increase (decrease) in accounts payable 5,027 ( 182,836) 220,665 Increase in gas imbalance payable 11,811 22,377 19,891 Increase (decrease) in accrued liability ( 118,725) ( 26,356) 74,523 --------- --------- ---------
Net cash provided by operating activities $1,332,710 $ 805,059 $2,091,223 --------- --------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES: Capital expenditures ($ 12,107) ($ 363,847) ($ 333,934) Proceeds from sale of oil and gas properties 118,685 59,533 203 --------- --------- ---------
Net cash provided (used) by investing activities $ 106,578 ($ 304,314) ($ 333,731) --------- --------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES: Cash distributions ($1,259,246) ($ 478,300) ($1,994,000) --------- --------- --------- Net cash used by financing activities ($1,259,246) ($ 478,300) ($1,994,000) --------- --------- --------- NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS $ 180,042 $ 22,445 ($ 236,508)
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 324,616 302,171 538,679 --------- --------- --------- CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 504,658 $ 324,616 $ 302,171 ========= ========= =========
The accompanying notes are an integral part of these financial statements.
REPORT OF INDEPENDENT ACCOUNTANTS
TO THE PARTNERS
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-G
We have audited the balance sheets of the Geodyne Energy Income Limited Partnership III-G, an Oklahoma limited partnership, as of December 31, 1996 and 1995 and the related statements of operations, changes in partners' capital (deficit), and cash flows for the years ended December 31, 1996, 1995, and 1994. These financial statements are the responsibility of the Partnership's management. Our responsibility is to express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing standards. 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. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the Geodyne Energy Income Limited Partnership III-G at December 31, 1996 and 1995 and the results of its operations and cash flows for the years ended December 31, 1996, 1995, and 1994, in conformity with generally accepted accounting principles.
As discussed in Note 1 to the financial statements, the Geodyne Energy Income Limited Partnership III-G changed its policy of accounting for impairment of its oil and gas properties on October 1, 1995.
COOPERS & LYBRAND L.L.P.
Tulsa, Oklahoma March 18, 1997
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-G Balance Sheets December 31, 1996 and 1995
ASSETS ------ 1996 1995 ------------- ------------- CURRENT ASSETS: Cash and cash equivalents $ 315,955 $ 188,474 Accounts receivable: Oil and gas sales, including $69,792 due from related parties at 1995 408,115 258,324 --------- --------- Total current assets $ 724,070 $ 446,798
NET OIL AND GAS PROPERTIES, utilizing the successful efforts method 4,150,885 4,820,243
DEFERRED CHARGE 102,775 148,234 --------- --------- $4,977,730 $5,415,275 ========= =========
LIABILITIES AND PARTNERS' CAPITAL (DEFICIT) -------------------------------------------
CURRENT LIABILITIES: Accounts payable $ 99,540 $ 99,578 Gas imbalance payable 54,219 48,600 --------- ---------
Total current liabilities $ 153,759 $ 148,178
ACCRUED LIABILITY $ 86,853 $ 157,334
PARTNERS' CAPITAL (DEFICIT): General Partner ($ 58,669) ($ 26,964) Limited Partners, issued and outstanding, 121,925 Units 4,795,787 5,136,727 --------- --------- Total Partners' capital $4,737,118 $5,109,763 --------- ---------
$4,977,730 $5,415,275 ========= =========
The accompanying notes are an integral part of these financial statements.
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-G Statements of Operations For the Years Ended December 31, 1996, 1995, and 1994
1996 1995 1994 ------------ ------------ ------------- REVENUES: Oil and gas sales, including $446,378 and $672,645 of sales to related parties in 1995 and 1994 $1,962,555 $1,694,847 $2,137,843 Interest and other income 8,144 3,666 7,362 Gain (loss) on sale of oil and gas properties 61,146 29,096 ( 54,482) --------- --------- --------- $2,031,845 $1,727,609 $2,090,723
COSTS AND EXPENSES: Lease operating $ 703,303 $ 843,215 $ 980,797 Production tax 101,107 94,774 128,453 Depreciation, deple- tion, and amorti- zation of oil and gas properties 653,459 974,725 1,359,088 Impairment provision - 677,010 - General and administrative 146,827 146,505 167,992 --------- --------- --------- $1,604,696 $2,736,229 $2,636,330 --------- --------- --------- NET INCOME (LOSS) $ 427,149 ($1,008,620) ($ 545,607) ========= ========= ========= GENERAL PARTNER - NET INCOME $ 47,089 $ 15,638 $ 27,083 ========= ========= ========= LIMITED PARTNERS - NET INCOME (LOSS) $ 380,060 ($1,024,258) ($ 572,690) ========= ========= =========
NET INCOME (LOSS) per Unit $ 3.12 ($ 8.40) ($ 4.70) ========= ========= =========
UNITS OUTSTANDING 121,925 121,925 121,925 ========= ========= =========
The accompanying notes are an integral part of these financial statements.
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-G Statements of Partners' Capital (Deficit) For the Years Ended December 31, 1996, 1995, and 1994
Limited General Partners Partner Total ------------- ---------- -------------
Balance, Dec. 31, 1993 $8,078,675 ($ 5,685) $8,072,990 Net income (loss) ( 572,690) 27,083 ( 545,607) Cash distributions ( 1,020,000) ( 47,500) ( 1,067,500) --------- ------ ---------
Balance, Dec. 31, 1994 $6,485,985 ($26,102) $6,459,883 Net income (loss) ( 1,024,258) 15,638 ( 1,008,620) Cash distributions ( 325,000) ( 16,500) ( 341,500) --------- ------ ---------
Balance, Dec. 31, 1995 $5,136,727 ($26,964) $5,109,763 Net income 380,060 47,089 427,149 Cash distributions ( 721,000) ( 78,794) ( 799,794) --------- ------ ---------
Balance, Dec. 31, 1996 $4,795,787 ($58,669) $4,737,118 ========= ====== =========
The accompanying notes are an integral part of these financial statements.
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-G Statements of Cash Flows For the Years Ended December 31, 1996, 1995, and 1994
1996 1995 1994 ------------ ------------ ------------ CASH FLOWS FROM OPERATING ACTIVITIES: Net income (loss) $427,149 ($1,008,620) ($ 545,607) Adjustments to reconcile net income (loss) to net cash provided by operating activities: Depreciation, deple- tion, and amortiza- tion of oil and gas properties 653,459 974,725 1,359,088 Impairment provision - 677,010 - (Gain) loss on sale of oil and gas properties ( 61,146) ( 29,096) 54,482 (Increase) decrease in accounts receivable ( 149,791) 37,429 215,384 (Increase) decrease in deferred charge 45,459 ( 21,476) ( 54,866) Increase (decrease) in accounts payable ( 38) ( 96,281) 109,922 Increase in gas imbalance payable 5,619 11,132 10,015 Increase (decrease) in accrued liability ( 70,481) ( 7,007) 44,758 ------- --------- ---------
Net cash provided by operating activities $850,230 $ 537,816 $1,193,176 ------- --------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES: Capital expenditures ($ 19,668) ($ 203,544) ($ 196,483) Proceeds from sale of oil and gas properties 96,713 37,861 2,786 ------- --------- ---------
Net cash provided (used) by investing activities $ 77,045 ($ 165,683) ($ 193,697) ------- --------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES: Cash distributions ($799,794) ($ 341,500) ($1,067,500) ------- --------- --------- Net cash used by financing activities ($799,794) ($ 341,500) ($1,067,500) ------- --------- --------- NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS $127,481 $ 30,633 ($ 68,021)
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 188,474 157,841 225,862 ------- --------- --------- CASH AND CASH EQUIVALENTS AT END OF PERIOD $315,955 $ 188,474 $ 157,841 ======= ========= =========
The accompanying notes are an integral part of these financial statements.
GEODYNE ENERGY INCOME PROGRAM III LIMITED PARTNERSHIPS Notes to Financial Statements For the Years Ended December 31, 1996, 1995, and 1994
1. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Organization and Nature of Operations
The Geodyne Energy Income Limited Partnerships (the "Partner- ships") were formed pursuant to a public offering of depositary units ("Units"). Upon formation, investors became limited partners (the "Limited Partners") and held Units issued by each Partnership. Geodyne Resources, Inc. (the "General Partner") is the general partner of each Partnership. Limited Partner capital contributions were invested in producing oil and gas properties. The Partnerships were activated on the following dates with the following Limited Partner capital contributions.
Limited Partner Date of Capital Partnership Activation Contributions ----------- ------------------ ---------------
III-A November 21, 1989 $26,397,600 III-B January 24, 1990 13,833,600 III-C February 27, 1990 24,453,600 III-D September 5, 1990 13,100,800 III-E December 26, 1990 41,826,600 III-F March 7, 1991 22,148,400 III-G September 20, 1991 12,192,500
An affiliate of the General Partner owned the following Units at December 31, 1996:
Number of Percent of Partnership Units Owned Outstanding ----------- ----------- -----------
III-A 25,500.0 9.7% III-B 14,198.0 10.3% III-C 27,019.0 11.1% III-D 19,119.5 14.6% III-E 47,868.0 11.4% III-F 27,925.0 12.6% III-G 13,563.0 11.1%
The Partnerships' sole business is the development and production of oil and gas. Substantially all of the Partnerships' gas reserves are being sold regionally in 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 the obtaining of transportation services provided by pipelines.
Allocation of Costs and Revenues
The terms of each Partnership's Limited Partnership Agreement (the "Partnership Agreement") allocate costs and income between the Limited Partners and the General Partner as follows:
Before Payout After Payout ------------------ ------------------ General Limited General Limited Partner Partners Partner Partners -------- -------- -------- -------- Costs(1) - ------------------------ Sales commissions, pay- ment for organization and offering costs and management fee 1% 99% - - Property acquisition costs 1% 99% 1% 99% Identified development drilling 1% 99% 1% 99% Development drilling(1) 5% 95% 15% 85% General and administra- tive costs, direct administrative costs and operating costs(1) 5% 95% 15% 85%
Income(1) - ------------------------ Temporary investments of Limited Partners' subscriptions 1% 99% 1% 99% Income from oil and gas production(1) 5% 95% 15% 85% Gain on sale of producing properties(1) 5% 95% 15% 85% All other income(1) 5% 95% 15% 85%
- ----------
(1) If, at payout, the Limited Partners have received distributions at an annual rate less than 12% of their subscriptions, the percentage of income and costs allocated to the General Partner will increase to only 10% and the Limited Partners will be allocated 90%. Thereafter, if the distribution to Limited Partners reaches an average annual rate of 12% the allocation will change to 15% to the General Partner and 85% to the Limited Partners.
Cash and Cash Equivalents
The Partnerships consider all highly liquid investments with a maturity of three months or less when purchased to be cash equivalents. Cash equivalents are not insured, which cause the Partnerships to be subject to risk.
Credit Risks
Accrued oil and gas sales which are due from a variety of oil and gas purchasers subject the Partnerships to a concentration of credit risk. Some of these purchasers are discussed in Note 3 - Major Customers. Subsequent to year-end, all oil and gas sales accrued as of December 31, 1996 have been collected.
Receivable from General Partner
The receivable from the General Partner at December 31, 1996 for the III-C Partnership represents proceeds due to the III-C Partnership for the sale of oil and gas properties. Subsequent to December 31, 1996 such receivable was collected by the III-C Partnership.
Oil and Gas Properties
The Partnerships follow the successful efforts method of accounting for their oil and gas properties. Under the successful efforts method, the Partnerships capitalize all property acquisition costs and development costs incurred in connection with the further development of oil and gas reserves. Property acquisition costs include costs incurred by the Partnerships or the General Partner to acquire producing properties, including related title insurance or examination costs, commissions, engineering, legal and accounting fees, and similar costs directly related to the acquisitions, plus an allocated portion of the General Partner's property screening costs. The acquisition cost to the Partnerships of properties acquired by the General Partner is adjusted to reflect the net cash results of operations, including interest incurred to finance the acquisition, for the period of time the properties are held by the General Partner. Leasehold impairment of unproved properties is recognized based upon an individual property assessment and exploratory experience. Upon discovery of commercial reserves, leasehold costs are transferred to producing properties.
Depletion of the costs of producing oil and gas properties, amortization of related intangible drilling and development costs, and depreciation of tangible lease and well equipment are computed on the units-of-production method. The Partnerships' calculation of depreciation, depletion, and amortization includes estimated dismantlement and abandonment costs, net of estimated salvage values. The depreciation, depletion, and amortization rates per equivalent barrel of oil produced during the years ended December 31, 1996, 1995, and 1994 were as follows:
Partnership 1996 1995 1994 ----------- ----- ----- -----
III-A $4.40 $5.89 $8.11 III-B 4.37 5.45 8.31 III-C 3.68 5.22 8.84 III-D 2.63 4.25 7.56 III-E 2.96 4.53 4.71 III-F 4.95 5.74 7.67 III-G 4.76 6.25 7.38
When complete units of depreciable property are retired or sold, the asset cost and related accumulated depreciation are eliminated with any gain or loss reflected in income. When less than complete units of depreciable property are retired or sold, the difference between asset cost and salvage value is charged or credited to accumulated depreciation.
Effective October 1, 1995, the Partnerships adopted the requirements of Statement of Financial Accounting Standards ("SFAS") No. 121, "Accounting for the Impairment of Long Lived Assets and Assets Held for Disposal," which is intended to establish more consistent accounting standards for measuring the recoverability of long-lived assets. SFAS No. 121 requires successful efforts companies, like the Partnerships, to evaluate the recoverability of the carrying costs of their proved oil and gas properties at the lowest level for which there are identifiable cash flows that are largely independent of the cash flows of other groups of oil and gas properties. With respect to the Partnerships' oil and gas properties, this evaluation was performed for each field, rather than for the Partnerships' properties as a whole as previously allowed by the Securities and Exchange Commission ("SEC"). SFAS No. 121 provides that if the unamortized costs of oil and gas properties exceed the expected undiscounted future cash flows from such properties, the cost of the properties is written down to fair value, which is determined by using the discounted future cash flows from the properties. The Partnerships recorded a non-cash charge against earnings (impairment provision) during the fourth quarter of 1995 pursuant to SFAS No. 121 and during the year ended December 31, 1994 pursuant to the Partnerships' prior impairment policy as follows:
Partnership 1995 1994 ----------- ---------- ----------
III-A $1,267,185 $ - III-B 480,618 - III-C 1,338,693 1,232,000 III-D 495,810 1,986,000 III-E 210,152 1,573,000 III-F 998,811 - III-G 677,010 -
No such charge was recorded for any Partnership during the year ended 1996.
Subsequent to December 31, 1996, the oil and gas industry has seen a drop in oil and gas prices. The Partnerships' reserves were determined at December 31, 1996 using oil and gas prices of $23.75 per barrel and $3.57 per Mcf, respectively. As of the date of this Annual Report on Form 10-K, oil and gas prices received by the Partnerships have decreased to approximately $19.00 per barrel and $1.60 per Mcf, respectively (the "Filing Date Prices"). If the Filing Date Prices, as opposed to December 31, 1996 prices, were used to determine the recoverability of the Partnerships' oil and gas reserves, impairment provisions of the following approximate amounts would have been required at December 31, 1996:
Partnership Amount ----------- ---------- III-A $ 185,000 III-B 78,000 III-C 235,000 III-D 486,000 III-E 2,043,000 III-F 2,079,000 III-G 1,011,000
If the Filing Date Prices are in effect on March 31, 1997, the above impairment provisions will be reflected in the Partnerships' financial statements as of March 31, 1997. Impairment provisions do not impact the Partnerships' cash flows from operating activities; however, they do impact the amount of General Partner and Limited Partner capital. The risk that the Partnerships will be required to record further impairment provisions in the future, beyond those noted above, increases when oil and gas prices are depressed. Accordingly, the III-A Partnership has three fields, the III-B Partnership has two fields, the III-C and III-F Partnerships have six fields, the III-D Partnership has four fields, the III-E Partnership has five fields, and the III-G Partnership has eight fields in which it is reasonably possible that impairment provisions will be recorded in the near term if gas prices decrease below the Filing Date Prices.
Deferred Charge
Deferred Charge represents costs deferred for lease operating expenses incurred in connection with the Partnerships' underproduced gas imbalance positions. At December 31, 1996 and 1995, cumulative total gas sales volumes for underproduced wells were less than the Partnerships' pro-rata share of total gas production from these wells by the following amounts:
1996 1995 ----------------- ----------------- Partnership Mcf Amount Mcf Amount ----------- ------- -------- ------- --------
III-A 501,788 $244,220 604,966 $278,829 III-B 282,024 144,819 338,856 169,089 III-C 186,401 76,014 170,168 67,846 III-D 28,310 26,139 56,324 41,578 III-E 169,483 298,358 253,930 351,769 III-F 132,118 159,453 192,745 237,269 III-G 70,539 102,775 101,384 148,234
Accrued Liability
Accrued liability represents charges accrued for lease operating expenses incurred in connection with the Partnerships' overproduced gas imbalance positions. At December 31, 1996 and 1995, cumulative total gas sales volumes for overproduced wells exceeded the Partnerships' pro-rata share of total gas production from these wells by the following amounts:
1996 1995 ----------------- ----------------- Partnership Mcf Amount Mcf Amount ----------- ------- -------- ------- --------
III-A 165,186 $ 80,396 190,114 $ 87,624 III-B 75,346 38,690 94,910 47,360 III-C 346,723 141,394 350,663 139,809 III-D 238,585 220,286 236,430 174,533 III-E 201,792 355,235 297,541 412,184 III-F 118,225 142,686 212,357 261,411 III-G 59,611 86,853 107,608 157,334
Oil and Gas Sales and Gas Imbalance Payable
The Partnerships' oil and condensate production is sold, title passed, and revenue recognized at or near the Partnerships' wells under short-term purchase contracts at prevailing prices in accordance with arrangements which are customary in the oil industry. Sales of gas applicable to the Partnerships' interest in producing oil and gas leases are recorded as revenue when the gas is metered and title transferred pursuant to the gas sales contracts covering the Partnerships' interest in gas reserves. During such times as a Partnership's sales of gas exceed its pro rata ownership in a well, such sales are recorded as revenue unless total sales from the well have exceeded the Partnership's share of estimated total gas reserves underlying the property, at which time such excess is recorded as a liability. At December 31, 1996 and 1995 total sales exceeded the Partnerships' share of estimated total gas reserves as follows:
1996 1995 ----------------- ----------------- Partnership Mcf Amount Mcf Amount ----------- ------- -------- ------- --------
III-A 51,198 $ 76,797 21,818 $ 43,854 III-B 17,823 26,735 3,148 6,202 III-C 20,499 30,749 11,626 22,554 III-D 3,796 5,694 4,941 9,437 III-E 104,331 156,497 62,317 120,272 III-F 72,696 109,044 51,446 97,233 III-G 36,146 54,219 25,579 48,600
These amounts were recorded as gas imbalance payables in accordance with the sales method.
General and Administrative Overhead
The General Partner and its affiliates are reimbursed for actual general and administrative costs incurred and attributable to the conduct of the business affairs and operations of the Partnerships.
Use of Estimates in Financial Statements
The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Further, the deferred charge, the gas imbalance payable, and the accrued liability all involve estimates which could materially differ from the actual amounts ultimately realized or incurred in the near term. Oil and gas reserves (see Note 4) also involve significant estimates which could materially differ from the actual amounts ultimately realized.
Income Taxes
Income or loss for income tax purposes is includable in the income tax returns of the partners. Accordingly, no recognition has been given to income taxes in these financial statements.
2. TRANSACTIONS WITH RELATED PARTIES
The Partnerships reimburse the General Partner for the general and administrative overhead applicable to the Partnerships, based on an allocation of actual costs incurred. The following is a summary of payments made to the General Partner or its affiliates by the Partnerships for general and administrative costs for the years ended December 31, 1996, 1995, and 1994:
Partnership 1996 1995 1994 ----------- -------- -------- --------
III-A $277,872 $277,872 $277,869 III-B 145,620 145,620 145,617 III-C 257,412 257,412 257,406 III-D 137,904 137,904 137,903 III-E 440,280 440,280 440,280 III-F 233,136 233,136 233,141 III-G 128,340 128,340 128,342
Affiliates of the Partnerships operate certain of the Partnerships' properties and their policy is to bill the Partnerships for all customary charges and cost reimbursements associated with these activities, together with any compressor rentals, consulting, or other services provided.
During 1994 and 1995 the Partnerships sold gas to El Paso Energy Marketing Company, formerly known as Premier Gas Company ("El Paso"). El Paso, like other similar gas marketing firms, resold such gas to third parties at market prices. El Paso was an affiliate of the Partnerships until December 6, 1995. The following table summarizes the total amount of the Partnerships' sales to El Paso during 1995 and 1994:
Partnership 1995 1994 ----------- ---------- ----------
III-A $1,811,755 $2,523,522 III-B 863,111 1,148,530 III-C 1,325,188 1,994,570 III-D 849,298 1,042,455 III-E 2,128,723 2,131,890 III-F 847,849 1,297,252 III-G 446,378 672,645
The following table summarizes the amount of the Partnerships' accrued oil and gas sales due from El Paso at December 31, 1995:
Partnership 1995 ----------- --------
III-A $349,181 III-B 169,725 III-C 232,323 III-D 186,231 III-E 574,916 III-F 131,943 III-G 69,792
3. MAJOR CUSTOMERS
The following table sets forth purchasers who individually accounted for more than ten percent of the Partnerships' combined oil and gas sales for the years ended December 31, 1996, 1995, and 1994:
Partnership Purchaser Percentage ----------- ------------------------ ------------------- 1996 1995 1994 ----- ----- -----
III-A El Paso 59.2% 49.7% 50.0% Mesa Operating Ltd. Partnership ("Mesa") 19.4% 19.7% 16.1% Snyder Oil Corp. - % - % 10.6%
III-B El Paso 47.9% 41.8% 42.3% Mesa 22.0% 23.0% 20.0% Sun Refining & Marketing Company 10.3% - % - %
III-C El Paso 51.2% 48.0% 61.8%
III-D El Paso 44.4% 40.7% 51.7% Oryx Energy Company ("Oryx") 19.9% 20.8% 21.1%
III-E Oryx 36.5% 33.9% 32.3% El Paso 12.3% 24.5% 22.5% Hunt Energy Corp. 10.0% - % 10.0%
III-F El Paso 25.9% 31.4% 36.9% Eland Energy, Inc. ("Eland") - % - % 11.9% Amoco Production Company ("Amoco") 10.4% - % - %
III-G El Paso 21.6% 26.3% 31.5% Eland - % - % 10.0% Amoco 10.9% - % - %
In the event of interruption of purchases by one or more of these significant customers or the cessation or material change in availability of open access transportation by the Partnerships' pipeline transporters, the Partnerships may encounter difficulty in marketing their gas and in maintaining historic sales levels. Alternative purchasers or transporters may not be readily available.
4. SUPPLEMENTAL OIL AND GAS INFORMATION
The following supplemental information regarding the oil and gas activities of the Partnerships is presented pursuant to the disclosure requirements promulgated by the SEC.
Capitalized Costs
Capitalized costs and accumulated depreciation, depletion, amortization, and valuation allowance at December 31, 1996 and 1995 were as follows:
III-A Partnership -----------------
1996 1995 ------------- -------------
Proved properties $18,399,090 $22,281,826 Unproved properties, not subject to depreciation, depletion, and amortization 1,575,589 1,575,589 ---------- ---------- $19,974,679 $23,857,415 Less accumulated depreciation, depletion, amorti- zation, and valua- tion allowance ( 14,614,023) ( 16,983,019) ---------- ---------- Net oil and gas properties $ 5,360,656 $ 6,874,396 ========== ==========
III-B Partnership -----------------
1996 1995 ------------- ------------- Proved properties $10,461,319 $12,017,231 Unproved properties, not subject to depreciation, depletion, and amortization 754,938 754,938 ---------- ----------
$11,216,257 $12,772,169 Less accumulated depreciation, depletion, amorti- zation, and valua- tion allowance ( 8,361,737) ( 9,123,775) ---------- ---------- Net oil and gas properties $ 2,854,520 $ 3,648,394 ========== ==========
III-C Partnership -----------------
1996 1995 ------------- ------------- Proved properties $20,126,262 $21,235,884 Unproved properties, not subject to depreciation, depletion, and amortization 1,464,473 1,464,473 ---------- ----------
$21,590,735 $22,700,357 Less accumulated depreciation, depletion, amorti- zation, and valua- tion allowance ( 15,862,837) ( 15,977,065) ---------- ----------
Net oil and gas properties $ 5,727,898 $ 6,723,292 ========== ==========
III-D Partnership -----------------
1996 1995 ------------- ------------- Proved properties $12,203,296 $12,380,592 Unproved properties, not subject to depreciation, depletion, and amortization 446,756 446,756 ---------- ----------
$12,650,052 $12,827,348 Less accumulated depreciation, depletion, amorti- zation, and valua- tion allowance ( 9,179,558) ( 8,939,432) ---------- ----------
Net oil and gas properties $ 3,470,494 $ 3,887,916 ========== ==========
III-E Partnership -----------------
1996 1995 ------------- ------------- Proved properties $35,818,810 $36,379,471 Unproved properties, not subject to depreciation, depletion, and amortization 850,663 850,663 ---------- ----------
$36,669,473 $37,230,134 Less accumulated depreciation, depletion, amorti- zation, and valua- tion allowance ( 23,847,364) ( 22,708,152) ---------- ----------
Net oil and gas properties $12,822,109 $14,521,982 ========== ==========
III-F Partnership -----------------
1996 1995 ------------- ------------- Proved properties $17,692,891 $18,262,346 Unproved properties, not subject to depreciation, depletion, and amortization 806,386 806,386 ----------- ----------
$18,499,277 $19,068,732 Less accumulated depreciation, depletion, amorti- zation, and valua- tion allowance ( 11,191,790) ( 10,605,697) ---------- ----------
Net oil and gas properties $ 7,307,487 $ 8,463,035 ========== ==========
III-G Partnership -----------------
1996 1995 ------------- ------------- Proved properties $10,155,073 $10,574,994 Unproved properties, not subject to depreciation, depletion, and amortization 438,666 438,666 ---------- ----------
$10,593,739 $11,013,660 Less accumulated depreciation, depletion, amorti- zation, and valua- tion allowance ( 6,442,854) ( 6,193,417) ---------- ----------
Net oil and gas properties $ 4,150,885 $ 4,820,243 ========== ==========
Costs Incurred
The Partnerships incurred no costs in connection with oil and gas acquisition or exploration activities during the years ended December 31, 1996, 1995, and 1994. Costs incurred by the Partnerships in connection with their oil and gas property development activities for the years ended December 31, 1996, 1995, and 1994 were as follows:
Partnership 1996 1995 1994 ----------- -------- -------- --------
III-A $ 4,548 $ 36,695 $ 29,172 III-B 21,881 48,179 16,478 III-C 24,068 98,870 103,486 III-D 24,953 26,512 36,474 III-E 37,987 339,148 342,965 III-F 12,107 363,847 333,934 III-G 19,668 203,544 196,483
Quantities of Proved Oil and Gas Reserves - Unaudited
The following tables summarize changes in net quantities of the Partnerships' proved reserves, all of which are located in the United States, for the periods indicated. The proved reserves at December 31, 1996, 1995 and 1994 were estimated by petroleum engineers employed by affiliates of the Partnerships. Certain reserve information was reviewed by Ryder Scott Company Petroleum Engineers, an independent petroleum engineering firm.
III-A Partnership -----------------
Crude Natural Oil Gas (Barrels) (Mcf) --------- ------------
Proved reserves, Dec. 31, 1993 244,822 10,038,548 Production ( 70,278) ( 2,208,657) Sale of minerals in place ( 28) ( 1,630) Revision of previous estimates 18,691 ( 3,803) ------- ----------
Proved reserves, Dec. 31, 1994 193,207 7,824,458 Production ( 58,590) ( 1,798,692) Sale of minerals in place ( 169) ( 50,765) Revision of previous estimates 38,553 1,021,351 ------- ----------
Proved reserves, Dec. 31, 1995 173,001 6,996,352 Production ( 46,923) ( 1,268,943) Sale of minerals in place ( 1,434) ( 417,113) Revision of previous estimates 29,255 871,973 ------- ----------
Proved reserves, Dec. 31, 1996 153,899 6,182,269 ======= ==========
PROVED DEVELOPED RESERVES: December 31, 1994 192,575 7,714,354 ======= ========== December 31, 1995 157,697 5,821,594 ======= ========== December 31, 1996 142,520 5,999,778 ======= ==========
III-B Partnership -----------------
Crude Natural Oil Gas (Barrels) (Mcf) --------- ------------
Proved reserves, Dec. 31, 1993 179,321 4,857,292 Production ( 52,083) (1,077,009) Sale of minerals in place ( 8) ( 528) Revision of previous estimates ( 171) 105,530 ------- ---------
Proved reserves, Dec. 31, 1994 127,059 3,885,285 Production ( 42,818) ( 900,882) Sale of minerals in place ( 67) ( 21,437) Extensions and discoveries 78 87,619 Revision of previous estimates 38,664 414,386 ------- ---------
Proved reserves, Dec. 31, 1995 122,916 3,464,971 Production ( 37,849) ( 642,152) Sale of minerals in place ( 624) ( 186,418) Revision of previous estimates 36,520 331,501 ------- ---------
Proved reserves, Dec. 31, 1996 120,963 2,967,902 ======= =========
PROVED DEVELOPED RESERVES: December 31, 1994 126,766 3,834,018 ======= ========= December 31, 1995 113,317 2,787,785 ======= ========= December 31, 1996 117,345 2,906,514 ======= =========
III-C Partnership -----------------
Crude Natural Oil Gas (Barrels) (Mcf) --------- ------------
Proved reserves, Dec. 31, 1993 157,954 10,464,900 Production ( 29,891) ( 1,734,781) Sale of minerals in place ( 173) ( 2,192) Revision of previous estimates ( 14,682) 144,823 ------- ----------
Proved reserves, Dec. 31, 1994 113,208 8,872,750 Production ( 26,926) ( 1,662,411) Sale of minerals in place ( 720) ( 14,529) Extensions and discoveries 14,324 248,512 Revision of previous estimates 8,582 457,888 ------- ----------
Proved reserves, Dec. 31, 1995 108,468 7,902,210 Production ( 27,429) ( 1,351,525) Sale of minerals in place ( 1,266) ( 132,327) Extensions and discoveries 10,541 157,345 Revision of previous estimates 72,173 1,144,100 ------- ----------
Proved reserves, Dec. 31, 1996 162,487 7,719,803 ======= ==========
PROVED DEVELOPED RESERVES: December 31, 1994 92,848 8,510,434 ======= ========== December 31, 1995 83,178 6,615,797 ======= ========== December 31, 1996 162,235 7,673,323 ======= ==========
III-D Partnership -----------------
Crude Natural Oil Gas (Barrels) (Mcf) --------- ------------
Proved reserves, Dec. 31, 1993 220,403 4,972,565 Production ( 46,995) ( 852,068) Sale of minerals in place - ( 218) Improved recovery(1) 301,633 15,128 Revision of previous estimates 11,820 116,870 ------- ---------
Proved reserves, Dec. 31, 1994 486,861 4,252,277 Production ( 42,166) (1,000,561) Sale of minerals in place ( 171) ( 102) Extensions and discoveries 1,829 25,326 Revision of previous estimates ( 24,439) 693,067 ------- ---------
Proved reserves, Dec. 31, 1995 421,914 3,970,007 Production ( 41,351) ( 760,593) Sale of minerals in place ( 427) ( 25,031) Extensions and discoveries 1,509 27,059 Revision of previous estimates 48,985 558,104 ------- ---------
Proved reserves, Dec. 31, 1996 430,630 3,769,546 ======= ========= PROVED DEVELOPED RESERVES: December 31, 1994 470,213 3,997,203 ======= ========= December 31, 1995 385,895 3,728,713 ======= ========= December 31, 1996 430,606 3,764,539 ======= ========= - ---------- (1) The III-D Partnership's reserve estimates increased significantly during 1994 primarily due to the operator of the Jay-Little Escambia Creek Field Unit (i) expanding its nitrogen injection program to a portion of the field which was being waterflooded and (ii) completing other projects to enhance the recovery of reserves.
III-E Partnership -----------------
Crude Natural Oil Gas (Barrels) (Mcf) ----------- ------------
Proved reserves, Dec. 31, 1993 994,041 15,038,064 Production ( 292,902) ( 2,961,361) Sale of minerals in place - - Improved recovery(1) 2,152,677 107,974 Revision of previous estimates 106,840 2,579,806 --------- ----------
Proved reserves, Dec. 31, 1994 2,960,656 14,764,483 Production ( 256,992) ( 3,030,077) Sale of minerals in place ( 260) ( 9,472) Extensions and discoveries 18,780 178,518 Revision of previous estimates ( 134,705) 917,407 --------- ----------
Proved reserves, Dec. 31, 1995 2,587,479 12,820,859 Production ( 229,226) ( 2,152,599) Sale of minerals in place ( 3,259) ( 190) Extensions and discoveries 4,252 30,349 Revision of previous estimates 258,393 ( 922,682) --------- ----------
Proved reserves, Dec. 31, 1996 2,617,639 9,775,737 ========= ========== PROVED DEVELOPED RESERVES: December 31, 1994 2,960,656 14,764,483 ========= ========== December 31, 1995 2,581,872 12,516,938 ========= ========== December 31, 1996 2,617,639 9,775,737 ========= ========== - ---------- (1) The III-E Partnership's reserve estimates increased significantly during 1994 primarily due to the operator of the Jay-Little Escambia Creek Field Unit (i) expanding its nitrogen injection program to a portion of the field which was being waterflooded and (ii) completing other projects to enhance the recovery of reserves.
III-F Partnership -----------------
Crude Natural Oil Gas (Barrels) (Mcf) --------- ------------
Proved reserves, Dec. 31, 1993 475,414 9,101,392 Production ( 88,759) (1,331,546) Sale of minerals in place - - Revision of previous estimates 1,924 756,688 ------- ---------
Proved reserves, Dec. 31, 1994 388,579 8,526,534 Production ( 78,456) (1,107,951) Sale of minerals in place ( 5,270) ( 12,450) Extensions and discoveries - 153,983 Revision of previous estimates 162,213 ( 505,430) ------- ---------
Proved reserves, Dec. 31, 1995 467,066 7,054,686 Production ( 74,064) ( 924,827) Sale of minerals in place ( 14,255) ( 8,294) Extensions and discoveries 3,560 - Revision of previous estimates 109,006 ( 454,833) ------- ---------
Proved reserves, Dec. 31, 1996 491,313 5,666,732 ======= =========
PROVED DEVELOPED RESERVES: December 31, 1994 388,579 8,526,534 ======= ========= December 31, 1995 462,819 6,849,368 ======= ========= December 31, 1996 491,313 5,666,732 ======= =========
III-G Partnership -----------------
Crude Natural Oil Gas (Barrels) (Mcf) --------- ------------
Proved reserves, Dec. 31, 1993 361,961 4,967,008 Production ( 63,776) ( 722,688) Sale of minerals in place - - Revision of previous estimates ( 123) 385,472 ------- ---------
Proved reserves, Dec. 31, 1994 298,062 4,629,792 Production ( 56,567) ( 596,184) Sale of minerals in place ( 3,487) ( 8,770) Extensions and discoveries - 84,220 Revision of previous estimates 114,302 ( 243,507) ------- ----------
Proved reserves, Dec. 31, 1995 352,310 3,865,551 Production ( 54,083) ( 499,884) Sale of minerals in place ( 11,160) ( 10,142) Extensions and discoveries 5,358 3,275 Revision of previous estimates 77,164 ( 321,474) ------- ---------
Proved reserves, Dec. 31, 1996 369,589 3,037,326 ======= =========
PROVED DEVELOPED RESERVES: December 31, 1994 291,553 4,524,712 ======= ========= December 31, 1995 339,240 3,621,356 ======= ========= December 31, 1996 369,589 3,037,326 ======= =========
Standardized Measure of Discounted Future Net Cash Flows of Proved Oil and Gas Reserves - Unaudited
The following tables set forth each of the Partnerships' estimated future net cash flows as of December 31, 1996 relating to proved oil and gas reserves based on the standardized measure as pre- scribed in SFAS No. 69:
Partnership ---------------------------- III-A III-B ------------- ------------- Future cash inflows $26,914,255 $14,039,714 Future production and development costs ( 6,216,077) ( 3,231,275) ---------- ----------
Future net cash flows $20,698,178 $10,808,439
10% discount to reflect timing of cash flows ( 6,679,509) ( 3,376,571) ---------- ----------
Standardized measure of discounted future net cash flows $14,018,669 $ 7,431,868 ========== ==========
Partnership ---------------------------- III-C III-D ------------- ------------- Future cash inflows $31,725,251 $23,664,015 Future production and development costs ( 7,918,790) ( 8,778,568) ---------- ----------
Future net cash flows $23,806,461 $14,885,447
10% discount to reflect timing of cash flows ( 8,697,376) ( 5,205,322) ---------- ----------
Standardized measure of discounted future net cash flows $15,109,085 $ 9,680,125 ========== ==========
Partnership ---------------------------- III-E III-F ------------- ------------- Future cash inflows $104,404,661 $33,073,446 Future production and development costs ( 47,153,700) ( 11,396,337) ----------- ----------
Future net cash flows $ 57,250,961 $21,667,109
10% discount to reflect timing of cash flows ( 20,730,342) ( 7,489,836) ----------- ----------
Standardized measure of discounted future net cash flows $ 36,520,619 $14,187,273 =========== ==========
Partnership ------------- III-G ------------- Future cash inflows $20,236,192 Future production and development costs ( 7,349,147) ----------
Future net cash flows $12,887,045
10% discount to reflect timing of cash flows ( 4,521,964) ----------
Standardized measure of discounted future net cash flows $ 8,365,081 ==========
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 the reserve estimates reported herein represent the most accurate assessment possible, the significance of the subjective decisions required and variances in available data for various reservoirs make these estimates generally less precise than other estimates presented in connection with financial statement disclosures. The Partnerships' reserves were determined at December 31, 1996 using oil and gas prices of $23.75 per barrel and $3.57 per Mcf, respectively. As of the date of this Annual Report on Form 10-K, oil and gas prices received by the Partnerships had decreased to approximately $19.00 per barrel and $1.60 per Mcf, respectively. If such prices, as opposed to December 31, 1996 prices, were used in calculating the standardized measure of discounted future net cash flows of the Partnerships' proved oil and gas reserves as of December 31, 1996, such decrease would have had a significant effect on the value of the reserves disclosed herein.
INDEX TO EXHIBITS -----------------
Number Description - ------ -----------
4.1 The Certificate and Agreements of Limited Partnership for the following Partnerships have been previously filed with the Securities and Exchange Commission as Exhibit 2.1 to Form 8-A filed by each Partnership on the dates shown below and are hereby incorporated by reference.
Partnership Filing Date File No. ----------- ----------- --------
III-A February 20, 1990 0-18302 III-B March 30, 1990 0-18636 III-C March 30, 1990 0-18634 III-D November 14, 1990 0-18936 III-E January 22, 1991 0-19010 III-F March 25, 1991 0-19102 III-G September 30, 1991 0-19563
4.2 Advisory Agreement dated as of November 24, 1992 between Samson, PaineWebber, Geodyne Resources, Geodyne Properties, Inc., Geodyne Production Company, and Geodyne Energy Company filed as Exhibit 28.3 to Registrant's Current Report on Form 8-K on December 24, 1992 and is hereby incorporated by reference.
4.3 Second Amendment to Agreement of Limited Partnership of Geodyne Energy Income Limited Partnership III-A, filed as Exhibit 4.1 to Registrant's Current Report on Form 8-K dated August 2, 1993 filed with the SEC on August 10, 1993 and is hereby incorporated by reference.
4.4 Second Amendment to Agreement of Limited Partnership of Geodyne Energy Income Limited Partnership III-B, filed as Exhibit 4.2 to Registrant's Current Report on Form 8-K dated August 2, 1993 filed with the SEC on August 10, 1993 and is hereby incorporated by reference.
4.5 Second Amendment to Agreement of Limited Partnership of Geodyne Energy Income Limited Partnership III-C, filed as Exhibit 4.3 to Registrant's Current Report on Form 8-K dated August 2, 1993 filed with the SEC on August 10, 1993 and is hereby incorporated by reference.
4.6 Second Amendment to Agreement of Limited Partnership of Geodyne Energy Income Limited Partnership III-D, filed as Exhibit 4.4 to Registrant's Current Report on Form 8-K dated August 2, 1993 filed with the SEC on August 10, 1993 and is hereby incorporated by reference.
4.7 Second Amendment to Agreement of Limited Partnership of Geodyne Energy Income Limited Partnership III-E, filed as Exhibit 4.5 to Registrant's Current Report on Form 8-K dated August 2, 1993 filed with the SEC on August 10, 1993 and is hereby incorporated by reference.
4.8 Second Amendment to Agreement of Limited Partnership of Geodyne Energy Income Limited Partnership III-F, filed as Exhibit 4.6 to Registrant's Current Report on Form 8-K dated August 2, 1993 filed with the SEC on August 10, 1993 and is hereby incorporated by reference.
4.9 Second Amendment to Agreement of Limited Partnership of Geodyne Energy Income Limited Partnership III-G, filed as Exhibit 4.7 to Registrant's Current Report on Form 8-K dated August 2, 1993 filed with the SEC on August 10, 1993 and is hereby incorporated by reference.
4.10 Third Amendment to Agreement of Limited Partnership of Geodyne Energy Income Limited Partnership III-A, filed as Exhibit 4.10 to Registrant's Annual Report on Form 10-K for the year ended December 31, 1995 filed with the SEC on April 1, 1996 and is hereby incorporated by reference.
4.11 Third Amendment to Agreement of Limited Partnership of Geodyne Energy Income Limited Partnership III-B, filed as Exhibit 4.11 to Registrant's Annual Report on Form 10-K for the year ended December 31, 1995 filed with the SEC on April 1, 1996 and is hereby incorporated by reference.
4.12 Third Amendment to Agreement of Limited Partnership of Geodyne Energy Income Limited Partnership III-C, filed as Exhibit 4.12 to Registrant's Annual Report on Form 10-K for the year ended December 31, 1995 filed with the SEC on April 1, 1996 and is hereby incorporated by reference.
4.13 Third Amendment to Agreement of Limited Partnership of Geodyne Energy Income Limited Partnership III-D, filed as Exhibit 4.13 to Registrant's Annual Report on Form 10-K for the year ended December 31, 1995 filed with the SEC on April 1, 1996 and is hereby incorporated by reference.
4.14 Third Amendment to Agreement of Limited Partnership of Geodyne Energy Income Limited Partnership III-E, filed as Exhibit 4.14 to Registrant's Annual Report on Form 10-K for the year ended December 31, 1995 filed with the SEC on April 1, 1996 and is hereby incorporated by reference.
4.15 Third Amendment to Agreement of Limited Partnership of Geodyne Energy Income Limited Partnership III-F, filed as Exhibit 4.15 to Registrant's Annual Report on Form 10-K for the year ended December 31, 1995 filed with the SEC on April 1, 1996 and is hereby incorporated by reference.
4.16 Third Amendment to Agreement of Limited Partnership of Geodyne Energy Income Limited Partnership III-G, filed as Exhibit 4.16 to Registrant's Annual Report on Form 10-K for the year ended December 31, 1995 filed with the SEC on April 1, 1996 and is hereby incorporated by reference.
*23.1 Consent of Ryder Scott Company, Petroleum Engineers for Geodyne Energy Income Limited Partnership III-A.
*23.2 Consent of Ryder Scott Company, Petroleum Engineers for Geodyne Energy Income Limited Partnership III-B.
*23.3 Consent of Ryder Scott Company, Petroleum Engineers for Geodyne Energy Income Limited Partnership III-C.
*23.4 Consent of Ryder Scott Company, Petroleum Engineers for Geodyne Energy Income Limited Partnership III-D.
*23.5 Consent of Ryder Scott Company, Petroleum Engineers for Geodyne Energy Income Limited Partnership III-E.
*23.6 Consent of Ryder Scott Company, Petroleum Engineers for Geodyne Energy Income Limited Partnership III-F.
*23.7 Consent of Ryder Scott Company, Petroleum Engineers for Geodyne Energy Income Limited Partnership III-G.
*27.1 Financial Data Schedule containing summary financial information extracted from the Geodyne Energy Income Limited Partnership III-A's financial statements as of December 31, 1996 and for the year ended December 31, 1996.
*27.2 Financial Data Schedule containing summary financial information extracted from the Geodyne Energy Income Limited Partnership III-B's financial statements as of December 31, 1996 and for the year ended December 31, 1996.
*27.3 Financial Data Schedule containing summary financial information extracted from the Geodyne Energy Income Limited Partnership III-C's financial statements as of December 31, 1996 and for the year ended December 31, 1996.
*27.4 Financial Data Schedule containing summary financial information extracted from the Geodyne Energy Income Limited Partnership III-D's financial statements as of December 31, 1996 and for the year ended December 31, 1996.
*27.5 Financial Data Schedule containing summary financial information extracted from the Geodyne Energy Income Limited Partnership III-E's financial statements as of December 31, 1996 and for the year ended December 31, 1996.
*27.6 Financial Data Schedule containing summary financial information extracted from the Geodyne Energy Income Limited Partnership III-F's financial statements as of December 31, 1996 and for the year ended December 31, 1996.
*27.7 Financial Data Schedule containing summary financial information extracted from the Geodyne Energy Income Limited Partnership III-G's financial statements as of December 31, 1996 and for the year ended December 31, 1996.
All other Exhibits are omitted as inapplicable.
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* Filed herewith.