ITEM 1. BUSINESS
General
The Geodyne Energy Income Limited Partnership I-B (the "I-B Partnership"), Geodyne Energy Income Limited Partnership I-C (the "I-C Partnership"), Geodyne Energy Income Limited Partnership I-D (the "I-D Partnership"), Geodyne Energy Income Limited Partnership I-E (the "I-E Partnership"), and Geodyne Energy Income Limited Partnership I-F (the "I-F Partnership") (collectively, the "Partnerships") are limited partnerships formed under the Oklahoma Revised Uniform Limited Partnership Act. Each Partnership is composed of public investors as limited partners (the "Limited Partners") and Geodyne Resources, Inc. ("Geodyne"), a Delaware corporation, as the general partner. The Partnerships commenced operations on the dates set forth below:
Date of Partnership Activation ----------- ------------------
I-B July 12, 1985 I-C December 20, 1985 I-D March 4, 1986 I-E September 10, 1986 I-F December 16, 1986
Immediately following activation, each Partnership invested as a general partner in a separate Oklahoma general partnership which actually conducts the Partnerships' production operations. Geodyne serves as managing partner of such general partnerships. Unless the context indicates otherwise, all references to any single Partnership or all of the Partnerships in this Annual Report on Form 10-K405 ("Annual Report") are references to the Partnership and its related general partnership, collectively. In addition, unless the context indicates otherwise, all references to the "General Partner" in this Annual Report are references to Geodyne as the general partner of the Partnerships, and as the managing partner of the related general partnerships.
The General Partner currently serves as general partner of 29 limited partnerships, including the Partnerships. The General Partner is a wholly-owned subsidiary of Samson Investment Company. Samson Investment Company and its various corporate subsidiaries, including the General Partner (collectively, the "Samson Companies"), are primarily engaged in the production and development of and exploration for oil and gas reserves and the acquisition and operation of producing properties. At December 31, 1997, the Samson Companies owned interests in approximately 13,000 oil and gas wells located in 19 states of the United States and the countries of Canada, Venezuela, and Russia. At
December 31, 1997, the Samson Companies operated approximately 2,500 oil and gas wells located in 15 states of the United States, as well as Canada, Venezuela, and Russia.
The Partnerships are currently engaged in the business of owning interests in producing oil and gas properties located in the continental United States. The Partnerships may also engage to a limited extent in development drilling on producing oil and gas properties as required for the prudent management of the Partnerships.
As limited partnerships, the Partnerships have no officers, directors, or employees. They rely instead on the personnel of the General Partner and the other Samson Companies. As of February 15, 1998, the Samson Companies employed approximately 820 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.
Pursuant to the terms of the Partnerships' partnership agreements (the "Partnership Agreements"), the Partnerships will terminate on December 31, 1999. However, the Partnership Agreements provide that the General Partner may extend the term of each Partnership for up to five periods of two years each. As of the date of this Annual Report, the General Partner has not determined whether to extend the term of any Partnership.
Funding
Although the Partnership Agreements permit each Partnership 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 volatile for a number of years. For the past ten years, such average prices have generally been in the $1.40 to $2.40 per Mcf range, significantly below prices received in the early 1980s. Average gas prices in the latter part of 1996 and parts of 1997, however, were somewhat higher than those yearly averages. Gas prices are currently in the higher end of the 10-year average price range described above.
Substantially all of the Partnerships' gas reserves are being sold on the "spot market." Prices on the spot market are subject to wide seasonal and regional pricing fluctuations due to the highly competitive nature of the spot market. In addition, such spot market sales are generally short-term in nature and are dependent upon the obtaining of transportation services provided by pipelines. Spot prices for the Partnerships' gas decreased from approximately $3.57 per Mcf at December 31, 1996 to approximately $2.32 per Mcf at December 31, 1997. Such prices were on an MMBTU basis and differ from the prices actually received by the Partnerships due to transportation and marketing costs, BTU adjustments, and regional price and quality differences.
For the past ten years, average oil prices have generally been in the $16.00 to $24.00 per barrel range. Due to global consumption and supply trends over the last several months as well as expectations of at least a short-term slowdown in Asian energy demand, oil prices have recently been in the mid to
lower portions of this pricing range, and in early 1998 dropped to as low as approximately $13.75 per barrel. It is not known whether this trend will continue. Prices for the Partnerships' oil decreased from approximately $23.75 per barrel at December 31, 1996 to approximately $16.25 per barrel at December 31, 1997.
Future prices for both oil and gas will likely be different from (and may be lower than) the prices in effect on December 31, 1997. 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. 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, 1997:
Partnership Customer Percentage ----------- -------- ----------
I-B Williams Energy Services Co. 24.4% Byrd Operating Company 18.7% El Paso Energy Marketing Company ("El Paso") 12.6%
I-C Hallwood Petroleum ("Hallwood") 36.2% Conoco, Inc. ("Conoco") 30.3% Koch Oil Company 12.8%
I-D El Paso 35.5% Hallwood 24.9% Conoco 19.6%
I-E El Paso 51.3%
I-F El Paso 33.9%
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. The provisions of these laws and regulations are complex and affect all who produce, resell, transport, or purchase gas, including the Partnerships. Although virtually all of the Partnerships' gas production is not subject to price regulation, other regulations affect the availability of gas transportation services and the ability of gas consumers to continue to purchase or use gas at current levels. Accordingly, such regulations may have a material effect on the Partnerships' operations and projections of future oil and gas production and revenues.
Future Legislation -- Legislation affecting the oil and gas industry is under constant review for amendment or expansion. Because such laws and regulations are frequently amended or reinterpreted, management is unable to predict what additional energy legislation may be proposed or enacted or the future cost and impact of complying with existing or future regulations.
Regulation of the Environment -- The Partnerships' operations are subject to numerous laws and regulations governing the discharge of materials into the environment or otherwise relating to environmental protection. Compliance with such laws and regulations, together with any penalties resulting from noncompliance may increase the cost of the Partnerships' operations or may affect the Partnerships' ability to timely complete existing or future activities. Management anticipates that various local, state, and federal environmental control agencies will have an increasing impact on oil and gas operations.
Insurance Coverage
The Partnerships are subject to all of the risks inherent in the exploration for and production of oil and gas, including blowouts, pollution, fires, and other casualties. The Partnerships maintain insurance coverage as is customary for entities of a similar size engaged in operations similar to that of the Partnerships, but losses can occur from uninsurable risks or in amounts in excess of existing insurance coverage. The occurrence of an event which is not fully covered by insurance could have a material adverse effect on the Partnerships' financial 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, 1997.
Well Statistics(1) As of December 31, 1997
P/ship Number of Gross Wells(2) Number of Net Wells(3) - ------ ----------------------------- ------------------------------- Total Oil Gas N/A(4) Total Oil Gas N/A(4) ----- ----- ----- ------ ----- ----- ----- ------
I-B 79 2 77 - 3.31 .19 3.12 - I-C 82 8 73 1 5.20 4.10 1.10 - I-D 535 6 528 1 3.96 .15 3.81 - I-E 851 269 581 1 33.32 12.57 20.58 .17 I-F 842 269 572 1 14.82 5.38 9.32 .12
- ----------
(1) The designation of a well as an oil well or gas well is made by the General Partner based on the relative amount of oil and gas reserves for the well. Regardless of a well's oil or gas designation, it may produce oil, gas, or both oil and gas. (2) As used in this Annual Report, "gross well" refers to a well in which a working interest is owned, accordingly, the number of gross wells is the total number of wells in which a working interest is owned. (3) As used in this Annual Report, "net well" refers to the sum of the fractional working interests owned in gross wells. For example, a 15% working interest in a well represents one gross well, but 0.15 net well. (4) Wells which have not been designated as oil or gas.
Drilling Activities
During 1997, the I-E and I-F Partnerships participated in the drilling of the Willamar Community E No. 9 well located in Willacy County, Texas. This well was completed as a producing oil well on June 11, 1997. The I-E and I-F Partnerships have an approximate 10.0% and 3.5% working interest, respectively, in this well. The I-B, I-C, and I-D Partnerships did not participate in any drilling activities during the year ended December 31, 1997.
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
I-B Partnership --------------
Year Ended December 31, -------------------------------- 1997 1996 1995 -------- -------- -------- Production: Oil (Bbls) 2,277 2,297 4,628 Gas (Mcf) 129,776 150,543 150,238
Oil and gas sales: Oil $ 43,243 $ 48,565 $ 77,717 Gas 315,039 315,487 176,333 ------- ------- ------- Total $358,282 $364,052 $254,050 ======= ======= ======= Total direct operating expenses $136,300 $131,335 $161,109 ======= ======= ======= Direct operating expenses as a percentage of oil and gas sales 38.0% 36.1% 63.4%
Average sales price: Per barrel of oil $18.99 $21.14 $16.79 Per Mcf of gas 2.43 2.10 1.17
Direct operating expenses per equivalent Bbl of oil $ 5.70 $ 4.80 $ 5.43
Net Production Data
I-C Partnership ---------------
Year Ended December 31, ------------------------------------ 1997 1996 1995 ---------- ---------- -------- Production: Oil (Bbls) 25,122 27,537 27,843 Gas (Mcf) 178,180 226,820 207,207
Oil and gas sales: Oil $469,154 $ 554,281 $464,952 Gas 482,524 626,815 343,483 ------- --------- ------- Total $951,678 $1,181,096 $808,435 ======= ========= ======= Total direct operating expenses $311,741 $ 241,698 $275,197 ======= ========= =======
Direct operating expenses as a percentage of oil and gas sales 32.8% 20.5% 34.0%
Average sales price: Per barrel of oil $18.68 $20.13 $16.70 Per Mcf of gas 2.71 2.76 1.66
Direct operating expenses per equivalent Bbl of oil $ 5.69 $ 3.70 $ 4.41
Net Production Data
I-D Partnership ---------------
Year Ended December 31, -------------------------------------- 1997 1996 1995 ---------- ---------- ---------- Production: Oil (Bbls) 18,760 21,291 22,427 Gas (Mcf) 510,113 577,657 577,969
Oil and gas sales: Oil $ 355,605 $ 429,150 $ 368,704 Gas 1,189,492 1,383,418 868,715 --------- --------- --------- Total $1,545,097 $1,812,568 $1,237,419 ========= ========= ========= Total direct operating expenses $ 294,350 $ 290,848 $ 236,591 ========= ========= =========
Direct operating expenses as a percentage of oil and gas sales 19.1% 16.0% 19.1%
Average sales price: Per barrel of oil $18.96 $20.16 $16.44 Per Mcf of gas 2.33 2.39 1.50
Direct operating expenses per equivalent Bbl of oil $ 2.84 $ 2.47 $ 1.99
Net Production Data
I-E Partnership ---------------
Year Ended December 31, -------------------------------------- 1997 1996 1995 ---------- ---------- ---------- Production: Oil (Bbls) 77,648 70,998 89,117 Gas (Mcf) 2,139,704 2,206,082 2,412,342
Oil and gas sales: Oil $1,462,528 $1,407,716 $1,490,590 Gas 4,541,724 4,598,715 3,287,291 --------- --------- --------- Total $6,004,252 $6,006,431 $4,777,881 ========= ========= ========= Total direct operating expenses $1,771,150 $1,706,319 $1,481,529 ========= ========= =========
Direct operating expenses as a percentage of oil and gas sales 29.5% 28.4% 31.0%
Average sales price: Per barrel of oil $18.84 $19.83 $16.73 Per Mcf of gas 2.12 2.08 1.36
Direct operating expenses per equivalent Bbl of oil $ 4.08 $ 3.89 $ 3.02
Net Production Data
I-F Partnership ---------------
Year Ended December 31, -------------------------------------- 1997 1996 1995 ---------- ---------- ---------- Production: Oil (Bbls) 38,725 35,577 45,101 Gas (Mcf) 571,101 652,692 711,486
Oil and gas sales: Oil $ 730,010 $ 704,023 $ 749,300 Gas 1,291,795 1,417,313 1,013,669 --------- --------- --------- Total $2,021,805 $2,121,336 $1,762,969 ========= ========= ========= Total direct operating expenses $ 683,800 $ 758,392 $ 695,041 ========= ========= =========
Direct operating expenses as a percentage of oil and gas sales 33.8% 35.8% 39.4%
Average sales price: Per barrel of oil $18.85 $19.79 $16.61 Per Mcf of gas 2.26 2.17 1.42
Direct operating expenses per equivalent Bbl of oil $ 5.11 $ 5.25 $ 4.25
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, 1997. 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, 1997. 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. Year-end prices have generally been higher than prices during the rest of the year. There can be no assurance that the prices used in calculating the net present value of the Partnerships' proved reserves at December 31, 1997 will actually be realized for such production.
The process of estimating oil and gas reserves is complex, requiring significant subjective decisions in the evaluation of available geological, engineering, and economic data for each reservoir. The data for a given reservoir may change substantially over time as a result of, among other things, additional development activity, production history, and viability of production under varying economic conditions; consequently, it is reasonably possible that material revisions to existing reserve estimates may occur in the near future. Although every reasonable effort has been made to ensure that these reserve estimates represent the most accurate assessment possible, the significance of the subjective decisions required and variances in available data for various reservoirs make these estimates generally less precise than other estimates presented in connection with financial statement disclosures.
Proved Reserves and Net Present Values From Proved Reserves As of December 31, 1997(1)
I-B Partnership: - --------------- Estimated proved reserves: Gas (Mcf) 712,042 Oil and liquids (Bbls) 10,646
Net present value (discounted at 10% per annum) $ 949,667
I-C Partnership: - --------------- Estimated proved reserves: Gas (Mcf) 793,819 Oil and liquids (Bbls) 60,907
Net present value (discounted at 10% per annum) $ 1,175,670
I-D Partnership: - --------------- Estimated proved reserves: Gas (Mcf) 1,939,247 Oil and liquids (Bbls) 40,998
Net present value (discounted at 10% per annum) $ 2,775,789
I-E Partnership: - --------------- Estimated proved reserves: Gas (Mcf) 10,551,009 Oil and liquids (Bbls) 399,673
Net present value (discounted at 10% per annum) $14,571,458
I-F Partnership: - --------------- Estimated proved reserves: Gas (Mcf) 3,330,621 Oil and liquids (Bbls) 197,431
Net present value (discounted at 10% per annum) $ 4,697,742 - ----------
(1) Includes certain gas balancing adjustments which cause the gas volumes and net present values to differ from the reserve reports prepared by the General Partner and reviewed by Ryder Scott.
No estimates of the proved reserves of the Partnerships comparable to those included herein have been included in reports to any federal agency other than the SEC. Additional information relating to the Partnerships' proved reserves is contained in Note 4 to the Partnerships' financial statements, included in Item 8 of this Annual Report.
Significant Properties
The following table sets forth the basins in which the Partnerships own a significant amount of properties. The table contains the following information for each significant basin: (i) the number of gross 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 and percentage 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 Gulf Coast Basin is located in southern Louisiana and southeast Texas. The Mid-Gulf Coast Basin is located in southern Alabama and Mississippi, while the Permian Basin straddles west Texas and southeast New Mexico. The Williston Basin is located in North Dakota, South Dakota, and eastern Montana.
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 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' units of limited partnership interest ("Units") 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 "PaineWebber Partnership Class Action"). The PaineWebber 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 PaineWebber 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 settlement agreements to settle with (i) the plaintiffs in the pending PaineWebber Partnership Class Action and another class action matter involving certain other partnerships sponsored by Geodyne, (ii) the SEC, and (iii) 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 Action, 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. According to the Notice, since the I-D, I-E, and I-F Partnerships have already achieved "payout," substantially all of the Limited Partners in those Partnerships will not be entitled to payments under the Settlement Fund. It is currently expected that payments from the Settlement Fund will be made some time in 1998.
In addition, eligible Limited Partners in the I-B and I-C 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.
On March 20, 1997 the settlement described above was confirmed by the federal court. Certain limited partners in partnerships that were not sponsored by the General Partner appeal the confirmation; however, all such appeals were denied by the United States Second Circuit Court of Appeals and the settlement order is now final. The parties are currently awaiting a ruling by the federal district judge as to the amount of attorneys' fees to be awarded to the plaintiffs' attorneys from the Settlement Fund. The General Partner expects that the Settlement Fund will be distributed to eligible class members within a few months following the entry of a final order on the attorneys' fees.
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 1997.
PART II.
ITEM 5.
ITEM 5. MARKET FOR UNITS AND RELATED LIMITED PARTNER MATTERS
As of January 31, 1998, the number of Units outstanding and the approximate number of Limited Partners of record in the Partnerships were as follows:
Number of Number of Limited Partnership Units Partners ----------- --------- ------------ I-B 11,958 831 I-C 8,885 773 I-D 7,195 759 I-E 41,839 2,872 I-F 14,321 933
Units were initially sold for a price of $1,000. The Units are not traded on any exchange and there is no public trading market for them. The General Partner is aware of certain transfers of Units between unrelated parties, some of which are facilitated by secondary trading firms and matching services. In addition, as further described below, the General Partner is aware of certain "4.9% tender offers" which have been made for the Units. The General Partner believes that the transfers between unrelated parties have been limited and sporadic in number and volume. Other than trades facilitated by certain secondary trading firms and matching services, no organized trading market for Units exists and none is expected to develop. Due to the nature of these transactions, the General Partner has no verifiable information regarding prices at which Units have been transferred. Further, a transferee may not become a substitute Limited Partner without the consent of the General Partner.
Pursuant to the terms of the Partnership Agreements, the General Partner is obligated to annually issue a repurchase offer which is based on the estimated future net revenues from the Partnerships' reserves and is calculated pursuant to the terms of the Partnership Agreements. Such repurchase offer is recalculated monthly in order to reflect cash distributions to the Limited Partners and extraordinary events. The following table sets forth the General Partner's repurchase offer per Unit as of the periods indicated. For purpose of this Annual Report, a Unit represents an initial subscription of $1,000 to a Partnership.
Repurchase Offer Prices -----------------------
1996 1997 1998 -------------------------- ------------------------- ---- 1st 2nd 3rd 4th 1st 2nd 3rd 4th 1st P/ship Qtr. Qtr. Qtr. Qtr. Qtr. Qtr. Qtr. Qtr. Qtr. - ------ ---- ---- ---- ---- ---- ---- ---- ---- ---- I-B $ 45 $ 43 $ 52 $ 51 $ 50 $ 49 $ 46 $ 44 $ 38 I-C 68 49 55 38 13 94 79 79 63 I-D 165 133 182 138 94 210 177 155 122 I-E 139 126 184 160 141 183 166 151 134 I-F 132 117 169 148 127 180 163 148 133
The Partnership Agreements also provide for a right of presentment ("Right of Presentment") whereby the General Partner is required, upon request, to purchase up to 10% of a Partnership's outstanding Units at a price calculated pursuant to the terms of the Partnership Agreements and based on the liquidation value of the limited partnership interest, with a reduction for 70% of cash distributions that have been received prior to the transfer of the partnership interest. The following table sets forth the Right of Presentment price per Unit as of the periods indicated.
Right of Presentment Prices ---------------------------
1996 1997 1998 -------------------------- -------------------------- ---- 1st 2nd 3rd 4th 1st 2nd 3rd 4th 1st P/ship Qtr. Qtr. Qtr. Qtr. Qtr. Qtr. Qtr. Qtr. Qtr. - ------ ---- ---- ---- ---- ---- ---- ---- ---- ---- I-B $ 53 $ 51 $ 56 $ 55 $ 55 $ 52 $ 48 $ 46 $ 42 I-C 90 76 74 62 45 120 94 94 83 I-D 208 186 215 184 153 267 206 191 168 I-E 166 156 203 186 173 212 178 168 156 I-F 158 148 188 173 159 209 176 166 155
In addition to the repurchase offer and Right of Presentment described above, the Partnerships have been subject to "4.9% tender offers" from several third parties during 1997. The General Partner does not know the terms of these offers or the prices received by the Limited Partners who accepted these offers.
Cash Distributions
Cash distributions are primarily dependent upon a Partnership's cash receipts from the sale of oil and gas production and cash requirements of the Partnership. Distributable cash is determined by the General Partner at the end of each calendar quarter and distributed to the Limited Partners within 45 days after the end of the quarter. Distributions are restricted to cash on hand less amounts required to be retained out of such cash as determined in the sole judgment of the General Partner to pay costs, expenses, or other Partnership obligations whether accrued or anticipated to accrue. In certain instances, the General Partner may not distribute the full amount of cash receipts which might otherwise be available for distribution in an effort to equalize or stabilize the amounts of quarterly distributions. Any available amounts not distributed are invested and the interest or income thereon is for the accounts of the Limited Partners.
The following is a summary of cash distributions paid to the Limited Partners during 1996 and 1997 and the first quarter of 1998:
Cash Distributions ------------------
----------------------------------------- 1st 2nd 3rd 4th P/ship Qtr. Qtr. Qtr. Qtr. ------ ------ ------ ------ --------- I-B $ 1.84 $ 2.01 $ 1.76 $ .92 I-C 12.27 19.13 26.22 17.00(1) I-D 26.41 32.11 41.56 43.78(1) I-E 13.10 13.27 17.66 24.16(1) I-F 14.87 14.80 15.50 21.93(1)
1997 1998 --------------------------------------------- --------- 1st 2nd 3rd 4th 1st P/ship Qtr. Qtr. Qtr. Qtr.(1) Qtr.(1) ------ -------- ------ -------- --------- ---------
I-B $ .84 $ 3.60 $ 3.26 $ 1.84 $ 6.10 I-C 24.54(1) 22.29(1) 14.29(1) - 15.87 I-D 43.50(1) 54.48 35.52(1) 21.68 33.22 I-E 18.71(1) 31.43 17.23(1) 15.32 16.92 I-F 20.11(1) 30.10 17.18(1) 14.52 14.66
- -------------------------- (1) Amount of cash distribution includes proceeds from the sale of certain 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 volatile for a number of years. For the past ten years, such average prices have generally been in the $1.40 to $2.40 per Mcf range, significantly below prices received in the early 1980s. Average gas prices in the latter part of 1996 and part of 1997, however, were somewhat higher than those yearly averages.
Substantially all of the Partnerships' gas reserves are being sold on the "spot market." Prices on the spot market are subject to wide seasonal and regional pricing fluctuations due to the highly competitive nature of the spot market. In addition, such spot market sales are generally short-term in nature
and are dependent upon the obtaining of transportation services provided by pipelines. Spot prices for the Partnerships' gas decreased from approximately $3.57 per Mcf at December 31, 1996 to approximately $2.32 per Mcf at December 31, 1997. Such prices were on an MMBTU basis and differ from the prices actually received by the Partnerships due to transportation and marketing costs, BTU adjustments, and regional price and quality differences.
For the past ten years, average oil prices have generally been in the $16.00 to $24.00 per barrel range. Due to global consumption and supply trends over the last several months as well as expectations of at least a short-term slow down in Asian energy demand, oil prices have recently been in the mid to lower portions of this pricing range and in early 1998 dropped to as low as approximately $13.75 per barrel. It is not known whether this trend will continue. Prices for the Partnerships' oil decreased from approximately $23.75 per barrel at December 31, 1996 to approximately $16.25 per barrel at December 31, 1997.
Future prices for both oil and gas will likely be different from (and may be lower than) the prices in effect on December 31, 1997. 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. Management is unable to predict whether future oil and gas prices will (i) stabilize, (ii) increase, or (iii) decrease.
As discussed in the "Results of Operations" section below, volumes of oil and gas sold also significantly affect the Partnerships' revenues. Oil and gas wells generally produce the most oil or gas in the earlier years of their lives and, as production continues, the rate of production naturally declines. At some point, production physically ceases or becomes no longer economic. The Partnerships are not acquiring additional oil and gas properties, and the existing properties are not experiencing significant additional production through drilling or other capital projects. Therefore, volumes of oil and gas produced naturally decline from year to year. While it is difficult for management to predict future production from these properties, it is likely that this general trend of declining production will continue.
Despite this general trend of declining production, several factors can cause the volumes of oil and gas sold to increase or decrease at an even greater rate over a given period. These factors include, but are not limited to, (i) geophysical conditions which cause an acceleration of the decline in production, (ii) the shutting in of wells (or the opening of previously shut-in wells) due to low oil and gas prices, mechanical difficulties, loss of a market or transportation, or performance of workovers, recompletions, or other operations
in the well, (iii) prior period volume adjustments (either positive or negative) made by purchasers of the production, (iv) ownership adjustments in accordance with agreements governing the operation or ownership of the well (such as adjustments that occur at payout), and (v) completion of enhanced recovery projects which increase production for the well. Many of these factors are very significant as related to a single well or as related to many wells over a short period of time. However, due to the large number of wells owned by the Partnerships, these factors are generally not material as compared to the normal decline in production experienced on all remaining wells.
Results of Operations
An analysis of the change in net oil and gas operations (oil and gas sales, less lease operating expenses and production taxes) is presented in the tables following "Results of Operations" under the heading "Average Sales Prices, Production Volumes, and Average Production Costs." Following is a discussion of each Partnership's results of operations for the year ended December 31, 1997 as compared to the year ended December 31, 1996 and for the year ended December 31, 1996 as compared to the year ended December 31, 1995.
I-B Partnership ---------------
Year Ended December 31, 1997 Compared to Year Ended December 31, 1996 -------------------------------------
Total oil and gas sales remained relatively constant in 1997 as compared to 1996. Any decrease in oil and gas sales caused by decreases of approximately $44,000 and $5,000, respectively, related to decreases in volumes of gas sold and the average price of oil sold was substantially offset by an increase of approximately $43,000 related to an increase in the average price of gas sold. Volumes of oil and gas sold decreased 20 barrels and 20,767 Mcf, respectively, in 1997 as compared to 1996. Average oil prices decreased to $18.99 per barrel in 1997 from $21.14 per barrel in 1996. Average gas prices increased to $2.43 per Mcf in 1997 from $2.10 per Mcf in 1996.
Oil and gas production expenses (including lease operating expenses and production taxes) increased $4,965 (3.8%) in 1997 as compared to 1996. This increase resulted primarily from recompletion expenses incurred on one well during 1997, partially offset by the decrease in volumes of gas sold in 1997. As a percentage of oil and gas sales, these expenses increased to 38.0% in 1997 from 36.1% in 1996. This percentage increase was primarily due to the fixed nature of certain lease operating expenses.
Depreciation, depletion, and amortization of oil and gas properties increased $6,363 (10.0%) in 1997 as compared to 1996. This increase resulted primarily from a downward revision in the estimate of remaining gas reserves at December 31, 1997, partially offset by the decrease in volumes of oil and gas sold in 1997. As a percentage of oil and gas sales, this expense increased to 19.5% in 1997 from 17.4% in 1996. This percentage increase was primarily due to the dollar decrease in depreciation, depletion, and amortization discussed above.
The I-B Partnership recognized a non-cash charge against earnings of $19,726 in the first quarter of 1997. Of this amount, $17,233 was related to the decline in oil and gas prices used to determine the recoverability of proved oil and gas reserves at March 31, 1997 and $2,493 was related to the writing-off of unproved properties. These unproved properties were written off based on the General Partner's determination that it is unlikely that such properties would be developed due to the low oil and gas prices received over the last several years and provisions in the I-B Partnership's Partnership Agreement which limit the level of permissible drilling activity. No similar charges were necessary in 1996.
General and administrative expenses remained relatively constant in 1997 as compared to 1996. As a percentage of oil and gas sales, these expenses also remained relatively constant at 17.4% in 1997 and 17.3% in 1996.
The Limited Partners have received cash distributions through December 31, 1997 totaling $6,544,527 or 54.73% of the Limited Partners' capital contributions.
Year Ended December 31, 1996 Compared to Year Ended December 31, 1995 -------------------------------------
Total oil and gas sales increased $110,002 (43.3%) in 1996 as compared to 1995. Of this increase, approximately $140,000 was related to an increase in the average price of gas sold, partially offset by a decrease of approximately $39,000 related to a decrease in volumes of oil sold. Volumes of oil sold decreased 2,331 barrels, while volumes of gas sold increased 305 Mcf for 1996 as compared to 1995. The decrease in volumes of oil sold resulted primarily from (i) the shutting-in of two wells during 1996 in order to increase production capabilities and (ii) normal declines in production due to diminished oil reserves on three wells. Average oil and gas prices increased to $21.14 per barrel and $2.10 per Mcf, respectively, for 1996 from $16.79 per barrel and $1.17 per Mcf, respectively, for 1995.
Oil and gas production expenses (including lease operating expenses and production taxes) decreased $29,774 (18.5%) in 1996 as compared to 1995. This decrease resulted primarily from (i) the decreases in volumes of oil sold during 1996 and (ii) workover expenses incurred on one well during 1995, partially offset by workover expenses incurred on another well during 1996. Workover expenses are incurred in order to improve the recovery of reserves on a particular well. As a percentage of oil and gas sales, these expenses decreased to 36.1% for 1996 from 63.4% for 1995. This percentage decrease was primarily due to the decrease in workover expenses and the increases in the average prices of oil and gas sold during 1996.
Depreciation, depletion, and amortization of oil and gas properties decreased $240,187 (79.1%) in 1996 as compared to 1995. Approximately three-fourths of this decrease was related to five significant wells which were fully depleted in 1995 due to a lack of remaining reserves. The remaining portion of this decrease resulted primarily from (i) an upward revision in the estimate of remaining gas reserves at December 31, 1996, (ii) the decrease in volumes of oil sold during 1996 and (iii) a decrease in capitalized costs due to an impairment provision recognized in the fourth quarter of 1995. As a percentage of oil and gas sales, this expense decreased to 17.4% for 1996 from 119.5% for 1995. This percentage decrease was primarily due to the dollar decrease in depreciation, depletion, and amortization and the increases in the average prices of oil and gas sold during 1996.
The I-B Partnership recognized a non-cash charge against earnings of $125,159 in 1995. This impairment provision was necessary due to the unamortized costs of proved oil and gas properties exceeding the expected undiscounted future net revenues from such oil and gas properties. No similar charge was necessary during 1996.
General and administrative expenses increased $14,995 (31.2%) in 1996 as compared to 1995. This increase resulted primarily from an increase in both professional fees and printing and postage expenses in 1996 as compared to 1995. As a percentage of oil and gas sales, these expenses decreased to 17.3% for 1996 from 18.9% for 1995. This percentage decrease was primarily due to the increase in oil and gas sales discussed above.
I-C Partnership ---------------
Year Ended December 31, 1997 Compared to Year Ended December 31, 1996 -------------------------------------
Total oil and gas sales decreased $229,418 (19.4%) in 1997 as compared to 1996. Of this decrease, approximately $49,000 and $134,000, respectively, related to decreases in volumes of oil and gas sold and approximately $36,000 and $9,000, respectively, related to decreases in the average price of oil and gas sold. Volumes of oil and gas sold decreased 2,415 barrels and 48,640 Mcf, respectively, in 1997 as compared to 1996. The decrease in volumes of gas sold resulted primarily from (i) normal declines in production and (ii) a positive prior period volume adjustment made by a purchaser on one well in 1996. Average prices of oil and gas sold decreased to $18.68 per barrel and $2.71 per Mcf, respectively, in 1997 from $20.13 per barrel and $2.76 per Mcf, respectively in 1996.
Oil and gas production expenses (including lease operating expenses and production taxes) increased $70,043 (29.0%) in 1997 as compared to 1996. This increase resulted primarily from workover expenses incurred on three wells in 1997 in order to improve the recovery of reserves, which increase was partially offset by (i) the decreases in volumes of oil and gas sold in 1997 and (ii) a decrease in production taxes associated with the decrease in oil and gas sales discussed above. As a percentage of oil and gas sales, these expenses increased to 32.8% in 1997 from 20.5% in 1996. This percentage increase was primarily due to the increase in workover expenses discussed above and the decrease in oil and gas sales in 1997.
Depreciation, depletion, and amortization of oil and gas properties remained relatively constant in 1997 as compared to 1996. As a percentage of oil and gas sales, this expense increased to 6.1% in 1997 from 4.9% in 1996. This percentage increase was primarily due to the decrease in the average price of gas sold in 1997.
Capital expenditures incurred by the I-C Partnership increased $99,534 in 1997 as compared to 1996. This increase resulted primarily from the recompletion in 1997 of the Ratzlaff No. 2 well located in Major County, Oklahoma. The I-C Partnership has a 100% well interest in the Ratzlaff No. 2 well.
The I-C Partnership recognized a non-cash charge against earnings of $4,679 in the first quarter of 1997 primarily related to the decline in oil and gas prices used to determine the recoverability of proved oil and gas reserves at March 31, 1997. No similar charge was necessary in 1996.
General and administrative expenses remained relatively constant in 1997 as compared to 1996. As a percentage of oil and gas sales, these expenses increased to 11.2% in 1997 from 9.1% in 1996. This percentage increase resulted from the decrease in oil and gas sales discussed above.
The Limited Partners have received cash distributions through December 31, 1997 totaling $7,881,300 or 88.70% of the Limited Partners' capital contributions.
Year Ended December 31, 1996 Compared to Year Ended December 31, 1995 -------------------------------------
Total oil and gas sales increased $372,661 (46.1%) in 1996 as compared to 1995. Of this increase, approximately $94,000 and $250,000, respectively, were related to increases in the average prices of oil and gas sold and approximately $33,000 was related to an increase in volumes of gas sold. Volumes of oil sold decreased 306 barrels, while volumes of gas sold increased 19,613 Mcf in 1996 as compared to 1995. Average oil and gas prices increased to $20.13 per barrel and $2.76 per Mcf, respectively, for 1996 from $16.70 per barrel and $1.66 per Mcf, respectively, for 1995.
Oil and gas production expenses (including lease operating expenses and production taxes) decreased $33,499 (12.2%) in 1996 as compared to 1995. This decrease resulted primarily from (i) a decrease in workover expenses during 1996 and (ii) a decrease in production expenses due to the sale of several wells during 1996. These decreases were partially offset by (i) an increase in production taxes associated with the increase in oil and gas sales in 1996 and (ii) higher general repair and maintenance expenses incurred on one well during 1996 as compared to 1995. As a percentage of oil and gas sales, these expenses decreased to 20.5% for 1996 from 34.0% for 1995. This percentage decrease was primarily due to the dollar decrease in workover expenses and the increases in the average prices of oil and gas sold during 1996.
Depreciation, depletion, and amortization of oil and gas properties decreased $123,500 (67.9%) in 1996 as compared to 1995. Approximately one-fourth of this decrease was related to two significant wells which were fully depleted in 1995 due to a lack of remaining reserves. The remaining portion of this decrease resulted primarily from (i) upward revisions in the estimates of remaining oil and gas reserves at December 31, 1996 and (ii) a decrease in capitalized costs due to an impairment provision recognized in the fourth quarter of 1995. As a percentage of oil and gas sales, this expense decreased to 4.9% for 1996 from 22.5% for 1995. This percentage decrease was primarily due to the dollar decrease in depreciation, depletion, and amortization and the increases in the average prices of oil and gas sold during 1996.
The I-C Partnership recognized a non-cash charge against earnings of $155,698 in 1995. This impairment provision was necessary due to the unamortized costs of proved oil and gas properties exceeding the expected undiscounted future net revenues from such oil and gas properties. No similar charge was necessary during 1996.
General and administrative expenses increased $6,564 (6.5%) in 1996 as compared to 1995. This increase resulted primarily from an increase in both professional fees and printing and postage expenses in 1996 as compared to 1995. As a percentage of oil and gas sales, these expenses decreased to 9.1% for 1996 from 12.4% for 1995. This percentage decrease was primarily due to the increase in oil and gas sales discussed above.
I-D Partnership ---------------
Year Ended December 31, 1997 Compared to Year Ended December 31, 1996 -------------------------------------
Total oil and gas sales decreased $267,471 (14.8%) in 1997 as compared to 1996. Of this decrease, approximately $51,000 and $161,000, respectively, were related to decreases in volumes of oil and gas sold and approximately $23,000 and $31,000, respectively, were related to decreases in the average prices of oil and gas sold. Volumes of oil and gas sold decreased 2,531 barrels and 67,544 Mcf, respectively, in 1997 as compared to 1996. The decreases in volumes of oil and gas sold resulted primarily from the shutting-in of two significant wells due to workovers during 1997. Average oil and gas prices decreased to $18.96 per barrel and $2.33 per Mcf, respectively, in 1997 from $20.16 per barrel and $2.39 per Mcf, respectively, in 1996.
Oil and gas production expenses (including lease operating expenses and production taxes) increased $3,502 (1.2%) in 1997 as compared to 1996. This increase resulted primarily from workover expenses incurred on two wells during 1997 in order to improve the recovery of reserves, which increase was partially offset by (i) the decreases in volumes of oil and gas sold in 1997 and (ii) a decrease in production taxes associated with the decrease in oil and gas sales discussed above. As a percentage of oil and gas sales, these expenses increased to 19.1% in 1997 from 16.0% in 1996. This percentage increase was primarily due to the decrease in the average price of oil and gas sold in 1997.
Depreciation, depletion, and amortization of oil and gas properties decreased $35,605 (24.0%) in 1997 as compared to 1996. This decrease resulted primarily from (i) the decrease in volumes of oil and gas sold in 1997 and (ii)
an upward revision in the estimate of remaining oil reserves at December 31, 1997. As a percentage of oil and gas sales, this expense decreased to 7.3% in 1997 from 8.2% in 1996. This percentage decrease was primarily due to the dollar decrease in depreciation, depletion, and amortization discussed above.
The I-D Partnership recognized a non-cash charge against earnings of $61,790 in the first quarter of 1997. Of this amount, $12,290 was related to the decline in oil and gas prices used to determine the recoverability of proved oil and gas reserves at March 31, 1997 and $49,500 was related to the writing off of unproved properties. These unproved properties were written off based on the General Partner's determination that it is unlikely that such properties would be developed due to the low oil and gas prices received over the last several years and provisions in the I-D Partnership's Partnership Agreement which limit the level of permissible drilling activity. No similar charges were necessary in 1996.
General and administrative expenses remained relatively constant in 1997 as compared to 1996. As a percentage of oil and gas sales, these expenses remained relatively constant at 5.9% in 1997 and 5.1% in 1996.
The Limited Partners have received cash distributions through December 31, 1997 totaling $12,914,175 or 179.50% of the Limited Partners' capital contributions.
Year Ended December 31, 1996 Compared to Year Ended December 31, 1995 -------------------------------------
Total oil and gas sales increased $575,149 (46.5%) in 1996 as compared to 1995. Of this increase, approximately $79,000 and $514,000, respectively, were related to increases in the average prices of oil and gas sold. Volumes of oil and gas sold decreased 1,136 barrels and 312 Mcf, respectively, in 1996 as compared to 1995. Average oil and gas prices increased to $20.16 per barrel and $2.39 per Mcf, respectively, for 1996 from $16.44 per barrel and $1.50 per Mcf, respectively, for 1995.
Oil and gas production expenses (including lease operating expenses and production taxes) increased $54,257 (22.9%) in 1996 as compared to 1995. This increase resulted primarily from (i) an increase in production taxes associated with the increase in oil and gas sales discussed above, (ii) a lease operating expense adjustment recognized during 1996 associated with changes in estimates by third party operators of gas balancing positions on certain wells, and (iii) higher general repairs and maintenance expenses incurred on one well in 1996 as compared to 1995, partially offset by a decrease in production expenses due to the sale of one well during 1996. As a percentage of oil and gas sales, these
expenses decreased to 16.0% for 1996 from 19.1% for 1995. This percentage decrease was primarily due to the increases in the average prices of oil and gas sold during 1996, partially offset by the dollar increase in production expenses associated with the lease operating expense adjustment discussed above.
Depreciation, depletion, and amortization of oil and gas properties decreased $101,447 (40.6%) in 1996 as compared to 1995. Approximately 40% of this decrease was related to two significant wells which were fully depleted in 1995 due to a lack of remaining reserves. The remaining portion of this decrease resulted primarily from upward revisions in the estimates of remaining oil and gas reserves at December 31, 1996. As a percentage of oil and gas sales, this expense decreased to 8.2% for 1996 from 20.2% for 1995. This percentage decrease was primarily due to the dollar decrease in depreciation, depletion, and amortization and the increases in the average prices of oil and gas sold during 1996.
The I-D Partnership recognized a non-cash charge against earnings of $19,510 in 1995. This impairment provision was necessary due to the unamortized costs of proved oil and gas properties exceeding the expected undiscounted future net revenues from such oil and gas properties. No similar charge was necessary during 1996.
General and administrative expenses remained relatively constant in 1996 as compared to 1995. As a percentage of oil and gas sales, these expenses decreased to 5.1% for 1996 from 7.2% for 1995. This percentage decrease was primarily due to the increase in oil and gas sales discussed above.
I-E Partnership ---------------
Year Ended December 31, 1997 Compared to Year Ended December 31, 1996 -------------------------------------
Total oil and gas sales remained relatively constant in 1997 as compared to 1996. Decreases of approximately $138,000 and $77,000, respectively, related to decreases in volumes of gas sold and the average price of oil sold were substantially offset by increases of approximately $132,000 and $86,000, respectively, related to increases in volumes of oil sold and the average price of gas sold. Volumes of oil sold increased 6,650 barrels while volumes of gas sold decreased 66,378 Mcf in 1997 as compared to 1996. Average oil prices decreased to $18.84 per barrel in 1997 from $19.83 per barrel in 1996. Average gas prices increased to $2.12 per Mcf in 1997 from $2.08 per Mcf in 1996.
Oil and gas production expenses (including lease operating expenses and production taxes) increased $64,831 (3.8%) in 1997 as compared to 1996. This increase resulted primarily from workover or recompletion expenses incurred on four wells during 1997 in order to improve the recovery of reserves. As a percentage of oil and gas sales, these expenses increased to 29.5% in 1997 from 28.4% in 1996. This percentage increase was primarily due to the dollar increase in oil and gas production expenses discussed above and the decrease in the average price of oil sold in 1997.
Depreciation, depletion, and amortization of oil and gas properties decreased $112,826 (13.4%) in 1997 as compared to 1996. This decrease resulted primarily from upward revisions in the estimates of remaining gas reserves at December 31, 1997. As a percentage of oil and gas sales, this expense decreased to 12.1% in 1997 from 14.0% in 1996. This percentage decrease was primarily due to the dollar decrease in depreciation, depletion, and amortization discussed above and the increase in the average price gas sold in 1997.
The I-E Partnership recognized a non-cash charge against earnings of $291,690 in the first quarter of 1997. Of this amount, $59,728 was related to the decline in oil and gas prices used to determine the recoverability of proved oil and gas reserves at March 31, 1997 and $231,962 was related to the writing-off of unproved properties. These unproved properties were written off based on the General Partner's determination that it is unlikely that such properties would be developed due to the low oil and gas prices received over the last several years and provisions in the I-E Partnership's Partnership Agreement which limit the level of permissible drilling activity. No similar charges were necessary in 1996.
General and administrative expenses remained relatively constant in 1997 as compared to 1996. As a percentage of oil and gas sales, these expenses remained relatively constant at 8.8% in both 1997 and 1996.
The Limited Partners have received cash distributions through December 31, 1997 totaling $49,736,552 or 118.87% of the Limited Partners' capital contributions.
Year Ended December 31, 1996 Compared to Year Ended December 31, 1995 -------------------------------------
Total oil and gas sales increased $1,228,550 (25.7%) in 1996 as compared to 1995. Of this increase, approximately $220,000 and $1,588,000, respectively, were related to increases in the average prices of oil and gas sold, partially offset by decreases of approximately $303,000 and $281,000, respectively, related to decreases in volumes of oil and gas sold. Volumes of oil and gas
sold decreased 18,119 barrels and 206,260 Mcf, respectively, in 1996 as compared to 1995. The decrease in the volumes of oil sold resulted primarily from (i) the sale of two significant oil producing wells during 1996, (ii) an ownership adjustment on one well during 1996, (iii) the shutting-in of one well during 1996 due to mechanical difficulties, (iv) the shutting-in of another well during a portion of 1996 in order to increase production capabilities, and (v) normal declines in production due to diminished oil reserves on several wells. Average oil and gas prices increased to $19.83 per barrel and $2.08 per Mcf, respectively, for 1996 from $16.73 per barrel and $1.36 per Mcf, respectively, for 1995.
Oil and gas production expenses (including lease operating expenses and production taxes) increased $224,790 (15.2%) in 1996 as compared to 1995. This increase resulted primarily from (i) an increase in production taxes associated with the increase in oil and gas sales discussed above and (ii) a lease operating expense adjustment recognized during 1996 associated with changes in estimates by third party operators of gas balancing positions on certain wells. As a percentage of oil and gas sales, these expenses decreased to 28.4% for 1996 from 31.0% for 1995. This percentage decrease was primarily due to the increases in the average prices of oil and gas sold during 1996, partially offset by the dollar increase in production expenses associated with the lease operating expense adjustment discussed above.
Depreciation, depletion, and amortization of oil and gas properties decreased $543,031 (39.2%) in 1996 as compared to 1995. This decrease resulted primarily from (i) upward revisions in the estimates of remaining oil and gas reserves at December 31, 1996, (ii) the decreases in volumes of oil and gas sold during 1996, and (iii) a decrease in capitalized costs due to an impairment provision recognized in the fourth quarter of 1995. As a percentage of oil and gas sales, this expense decreased to 14.0% for 1996 from 29.0% for 1995. This percentage decrease was primarily due to the dollar decrease in depreciation, depletion, and amortization and the increases in the average prices of oil and gas sold during 1996.
The I-E Partnership recognized a non-cash charge against earnings of $748,728 in 1995. This impairment provision was necessary due to the unamortized costs of proved oil and gas properties exceeding the expected undiscounted future net revenues from such oil and gas properties. No similar charge was necessary during 1996.
General and administrative expenses remained relatively constant in 1996 as compared to 1995. As a percentage of oil and gas sales, these expenses decreased to 8.8% for 1996 from 10.7% for 1995. This percentage decrease was primarily due to the increase in oil and gas sales discussed above.
I-F Partnership ---------------
Year Ended December 31, 1997 Compared to Year Ended December 31, 1996 -------------------------------------
Total oil and gas sales decreased $99,531 (4.7%) in 1997 as compared to 1996. Of this decrease, approximately $177,000 was related to a decrease in volumes of gas sold and $36,000 was related to a decrease in the average price of oil sold, which decreases were partially offset by increases of approximately $62,000 related to an increase in volumes of oil sold and $51,000 related to an increase in the average price of gas sold. Volumes of oil sold increased 3,148 barrels in 1997 as compared to 1996 while volumes of gas sold decreased 81,591 Mcf in 1997 as compared to 1996. Average oil prices decreased to $18.85 per barrel in 1997 from $19.79 per barrel in 1996. Average gas prices increased to $2.26 per Mcf in 1997 from $2.17 per Mcf in 1996.
Oil and gas production expenses (including lease operating expenses and production taxes) decreased $74,592 (9.8%) in 1997 as compared to 1996. This decrease resulted primarily from (i) the decrease in volumes of gas sold in 1997 and (ii) a decrease in production taxes associated with the decrease in oil and gas sales discussed above. As a percentage of oil and gas sales, these expenses decreased to 33.8% in 1997 from 35.8% in 1996. This percentage decrease was primarily due to the decrease in oil and gas production expenses discussed above and the increase in the average price of gas sold in 1997.
Depreciation, depletion, and amortization of oil and gas properties decreased $13,158 (4.9%) in 1997 as compared to 1996. This decrease resulted primarily from (i) the decrease in volumes of gas sold in 1997 and (ii) upward revisions in the estimates of remaining gas reserves at December 31, 1997. As a percentage of oil and gas sales, this expense remained constant in 1997 as compared to 1996.
The I-F Partnership recognized a non-cash charge against earnings of $114,631 in the first quarter of 1997. Of this amount, $20,908 was related to the decline in oil and gas prices used to determine the recoverability of proved oil and gas reserves at March 31, 1997 and $93,723 was related to the writing off of unproved properties. These unproved properties were written off based on the General Partner's determination that it is unlikely that such properties would be developed due to the low oil and gas prices received over the last several years and provisions in the I-F Partnership's Partnership Agreement which limit the level of permissible drilling activity. No similar charges were necessary in 1996.
General and administrative expenses remained relatively constant in 1997 as compared to 1996. As a percentage of oil and gas sales, these expenses remained relatively constant at 8.9% in 1997 and 8.6% in 1996.
The Limited Partners have received cash distributions through December 31, 1997 totaling $16,762,664 or 117.05% of the Limited Partners' capital contributions.
Year Ended December 31, 1996 Compared to Year Ended December 31, 1995 -------------------------------------
Total oil and gas sales increased $358,367 (20.3%) in 1996 as compared to 1995. Of this increase, approximately $113,000 and $490,000, respectively, were related to increases in the average prices of oil and gas sold, partially offset by decreases of approximately $158,000 and $83,000, respectively, related to decreases in volumes of oil and gas sold. Volumes of oil and gas sold decreased 9,524 barrels and 58,794 Mcf, respectively, in 1996 as compared to 1995. The decrease in volumes of oil sold resulted primarily from (i) the sale of two significant oil producing wells during 1996, (ii) an ownership adjustment on one well during 1996, (iii) the shutting-in of one well during 1996 due to mechanical difficulties, (iv) the shutting-in of another well during a portion of 1996 in order to increase production capabilities, and (v) the normal declines in production due to diminished oil reserves on several wells. Average oil and gas prices increased to $19.79 per barrel and $2.17 per Mcf, respectively, for 1996 from $16.61 per barrel and $1.42 per Mcf, respectively, for 1995.
Oil and gas production expenses (including lease operating expenses and production taxes) increased $63,351 (9.1%) in 1996 as compared to 1995. This increase resulted primarily from (i) an increase in production taxes associated with the increase in oil and gas sales discussed above and (ii) a lease operating expense adjustment recognized during 1996 associated with changes in estimates by third party operators of gas balancing positions on certain wells. These increases were partially offset by (i) workover expenses incurred on several wells during 1995, (ii) a decrease in production expenses due to the sale of one well during 1996, and (iii) the decreases in volumes of oil and gas sold during 1996. As a percentage of oil and gas sales, these expenses decreased to 35.8% for 1996 from 39.4% for 1995. This percentage decrease was primarily due to the increases in the average prices of oil and gas sold during 1996, partially offset by the dollar increases associated with the lease operating adjustment discussed above.
Depreciation, depletion, and amortization of oil and gas properties decreased $221,767 (45.0%) in 1996 as compared to 1995. Approximately one-fourth of this decrease was related to two significant wells which were fully depleted in 1995 due to a lack of remaining reserves. The remaining portion of this decrease resulted primarily from (i) upward revisions in the estimates of remaining oil and gas reserves at December 31, 1996, (ii) the decreases in volumes of oil and gas sold during 1996, and (iii) a decrease in capitalized costs due to an impairment provision recognized in the fourth quarter of 1995. As a percentage of oil and gas sales, this expense decreased to 12.8% for 1996 from 27.9% for 1995. This percentage decrease was primarily due to the dollar decrease in depreciation, depletion, and amortization discussed above and the increases in the average prices of oil and gas sold during 1996.
The I-F Partnership recognized a non-cash charge against earnings of $258,913 in 1995. This impairment provision was necessary due to the unamortized costs of oil and gas properties exceeding the expected undiscounted future net revenues from such oil and gas properties. No similar charge was necessary during the year ended December 31, 1996.
General and administrative expenses remained relatively constant in 1996 as compared to 1995. As a percentage of oil and gas sales, these expenses decreased to 8.6% for 1996 from 10.0% for 1995. This percentage decrease was primarily due to the increase in oil and gas sales discussed above.
Average Sales Prices, Production Volumes and Average Production Costs
The following tables are comparisons of the annual average oil and gas sales prices, production volumes, and average production costs (lease operating expenses and production taxes) per equivalent unit (one barrel of oil or six Mcf of gas) for 1997, 1996, and 1995. These factors comprise the change in net oil and gas operations discussed in the "Results of Operations" section above.
1997 Compared to 1996 ---------------------
Average Sales Prices ---------------------------------------------------------- P/ship 1997 1996 % Change - ------ ------------------ ------------------ ----------- Oil Gas Oil Gas ($/Bbl) ($/Mcf) ($/Bbl) ($/Mcf) Oil Gas ------- ------- ------- ------- --- -----
I-B $18.99 $2.43 $21.14 $2.10 (10%) 16% I-C 18.68 2.71 20.13 2.76 ( 7%) ( 2%) I-D 18.96 2.33 20.16 2.39 ( 6%) ( 3%) I-E 18.84 2.12 19.83 2.08 ( 5%) 2% I-F 18.85 2.26 19.79 2.17 ( 5%) 4%
Production Volumes ---------------------------------------------------------------- P/ship 1997 1996 % Change - -------- -------------------- --------------------- --------------- Oil Gas Oil Gas Oil Gas (Bbls) (Mcf) (Bbls) (Mcf) (Bbls) (Mcf) ------- --------- ------- --------- ------ -----
I-B 2,277 129,776 2,297 150,543 ( 1%) (14%) I-C 25,122 178,180 27,537 226,820 ( 9%) (21%) I-D 18,760 510,113 21,291 577,657 (12%) (12%) I-E 77,648 2,139,704 70,998 2,206,082 9% ( 3%) I-F 38,725 571,101 35,577 652,692 9% (13%)
Average Production Costs per Equivalent Barrel of Oil -------------------------------------- P/ship 1997 1996 % Change ------ ----- ----- --------
I-B $5.70 $4.80 19% I-C 5.69 3.70 54% I-D 2.84 2.47 15% I-E 4.08 3.89 5% I-F 5.11 5.25 ( 3%)
1996 Compared to 1995 ---------------------
Average Sales Prices ---------------------------------------------------------- P/ship 1996 1995 % Change - ------ ------------------ ------------------ ----------- Oil Gas Oil Gas ($/Bbl) ($/Mcf) ($/Bbl) ($/Mcf) Oil Gas ------- ------- ------- ------- --- -----
I-B $21.14 $2.10 $16.79 $1.17 26% 79% I-C 20.13 2.76 16.70 1.66 21% 66% I-D 20.16 2.39 16.44 1.50 23% 59% I-E 19.83 2.08 16.73 1.36 19% 53% I-F 19.79 2.17 16.61 1.42 19% 53%
Production Volumes --------------------------------------------------------------- P/ship 1996 1995 % Change - -------- -------------------- --------------------- --------------- Oil Gas Oil Gas Oil Gas (Bbls) (Mcf) (Bbls) (Mcf) (Bbls) (Mcf) ------- --------- ------- --------- ------ -----
I-B 2,297 150,543 4,628 150,238 (50%) - % I-C 27,537 226,820 27,843 207,207 ( 1%) 9% I-D 21,291 577,657 22,427 577,969 ( 5%) - % I-E 70,998 2,206,082 89,117 2,412,342 (20%) (9%) I-F 35,577 652,692 45,101 711,486 (21%) (8%)
Average Production Costs per Equivalent Barrel of Oil -------------------------------------- P/ship 1996 1995 % Change ------ ----- ----- --------
I-B $4.80 $5.43 (12%) I-C 3.70 4.41 (16%) I-D 2.47 1.99 24% I-E 3.89 3.02 29% I-F 5.25 4.25 24%
Liquidity and Capital Resources
Net proceeds from operations less necessary operating capital are distributed to the Limited Partners on a quarterly basis. See "Item 5. Market for Units and Related Limited Partner Matters." The net proceeds from production are not reinvested in productive assets, except to the extent that producing
wells are improved, or where methods are employed to permit more efficient recovery of reserves, thereby resulting in a positive economic impact. Assuming production levels for 1997, the Partnerships' proved reserve quantities at December 31, 1997 would have the following remaining lives:
Partnership Gas-Years Oil-Years ----------- --------- ---------
I-B 5.5 4.7 I-C 4.5 2.4 I-D 3.8 2.2 I-E 4.9 5.1 I-F 5.8 5.1
The Partnerships' available capital from the Limited Partners' subscriptions has been spent on oil and gas properties. The I-C Partnership incurred capital expenditures of $100,573 in 1997 primarily related to the recompletion of the Ratzlaff No. 2 well located in Major County, Oklahoma. The I-C Partnership has a 100% working interest in the Ratzlaff No. 2 well. There should be no further material capital resource commitments for any of the Partnerships in the future. Occasional expenditures by the Partnerships for new wells or well completions or workovers, however, may reduce or eliminate cash available for a particular quarterly cash distribution. The Partnerships have no debt commitments. Cash for operational purposes will be provided by current oil and gas production.
The Partnerships sold certain oil and gas properties during 1997. The sale of a property owned by one or more Partnerships was made by the General Partner after giving due consideration to the offer price and the General Partner's estimate of both the property's remaining proved reserves and future operating costs. Net proceeds from the sale of any such properties were included in the calculation of the Partnerships' cash distributions for the quarter immediately following the Partnerships' receipt of the proceeds. The amount of such proceeds from the sale of oil and gas properties during 1997 were as follows:
Partnership Amount ----------- ------
I-B $ 21,848 I-C 45,422 I-D 25,350 I-E 156,744 I-F 97,288
The sale of these properties reduced the quantity of the Partnerships' proved reserves. It is also possible that the Partnerships' repurchase values
and future cash distributions could decline as a result of a reduction of the Partnerships' reserve base. The General Partner believes that the sale of these properties will be beneficial to the Partnerships since the properties sold generally had a higher ratio of future operating expenses as compared to reserves than the properties not sold.
There can be no assurance as to the amount of the Partnerships' future cash distributions. The Partnerships' ability to make cash distributions depends primarily upon the level of available cash flow generated by the Partnerships' operating activities, which will be affected (either positively or negatively) by many factors beyond the control of the Partnerships, including the price of and demand for oil and gas and other market and economic conditions. Even if prices and costs remain stable, the amount of cash available for distributions will decline over time (as the volume of production from producing properties declines) since the Partnerships are not replacing production through acquisitions of producing properties and drilling. The Partnerships' quantity of proved reserves has been reduced by the sale of oil and gas properties as described above; therefore, it is possible that the Partnerships' future cash distributions could decline as a result of a reduction of the Partnerships' reserve base.
The Partnerships will terminate on December 31, 1999 in accordance with the Partnership Agreements. However, the Partnership Agreements provide that the General Partner may extend the term of each Partnership for up to five periods of two years each. As of the date of this Annual Report, the General Partner has not determined whether to extend the term of any Partnership.
Inflation and Changing Prices
Prices obtained for oil and gas production depend upon numerous factors, including the extent of domestic and foreign production, foreign imports of oil, market demand, domestic and foreign economic conditions in general, and governmental regulations and tax laws. The general level of inflation in the economy did not have a material effect on the operations of the Partnerships in 1997. Oil and gas prices have fluctuated during recent years and generally have not followed the same pattern as inflation. See "Item 2. Properties - Oil and Gas Production, Revenue, and Price History."
Year 2000 Computer Issues
The General Partnership has reviewed its computer systems and hardware to locate potential operational problems associated with the year 2000. Such review will continue until all potential problems are located and resolved. The General Partner believes that all year 2000 problems in its computer system have been or
will be resolved in a timely manner and have not caused and will not cause disruption of the partnerships' operations or a material effect on the partnerships' financial condition or results of operations. However, it is possible that the Partnerships cash flows could be disrupted by year-2000 problems experienced by operators of the Partnerships' wells, buyers of the Partnerships' oil and gas, financial institutions or other persons. The General Partner is unable to quantify the effect, if any, on the Partnerships of year-2000 computer problems experienced by these third parties.
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 and its subsidiaries 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 and as President and Director of
Samson Properties Incorporated, Samson Hydrocarbons Company, Dyco Petroleum Corporation, Berry Gas Company, Circle L Drilling Company, and Compression, Inc.
Judy K. Fox joined the Samson Companies in 1990 and was named Secretary of Geodyne and its subsidiaries 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, Samson Hydrocarbons Company, and Samson Properties Incorporated.
Section 16(a) Beneficial Ownership Reporting Compliance
To the 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 during 1997.
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 which was charged to each Partnership for 1997, 1996, and 1995 is set forth in the table below. Although the actual costs incurred by the General Partner and its affiliates have fluctuated during the three years presented, the amount charged to the Partnerships have not fluctuated due to expense limitations imposed by the Partnership Agreements.
Partnership 1997 1996 1995 ----------- -------- -------- -------- I-B $ 45,252 $ 45,252 $ 41,178 I-C 93,058 93,550 93,550 I-D 79,944 79,944 79,944 I-E 464,880 464,880 464,880 I-F 159,120 159,120 159,120
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 during 1997, 1996, and 1995:
During 1995 El Paso Energy Marketing Company, formerly known as Premier Gas Company ("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 during 1995.
Partnership 1995 ----------- ----------
I-B $ 43,625 I-C 2,521 I-D 362,560 I-E 2,099,338 I-F 481,355
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, 1997, 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 January 31, 1998 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) - ------------------------------------ ------------------
I-B Partnership: - --------------- Samson Resources Company 2,727 (22.8%)
All affiliates, directors, and officers of the General Partner as a group and the General Partner (4 persons) 2,727 (22.8%)
I-C Partnership: - --------------- Samson Resources Company 959 (10.8%)
All affiliates, directors, and officers of the General Partner as a group and the General Partner (4 persons) 959 (10.8%)
I-D Partnership: - --------------- Samson Resources Company 745 (10.4%)
All affiliates, directors, and officers of the General Partner as a group and the General Partner (4 persons) 745 (10.4%)
I-E Partnership: - --------------- Samson Resources Company 6,073 (14.5%)
All affiliates, directors, and officers of the General Partner as a group and the General Partner (4 persons) 6,073 (14.5%)
I-F Partnership: - --------------- Samson Resources Company 2,352 (16.4%)
All affiliates, directors, and officers of the General Partner as a group and the General Partner (4 persons) 2,352 (16.4%)
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 consistent 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 (the dealer manager of the original offering of Units), and the General Partner entered into an
advisory agreement which relates primarily to the Partnerships. The Advisory Agreement became effective on March 3, 1993 and will expire on March 3, 1998. The Advisory Agreement provides, among other things, that: (i) Samson will review periodically with PaineWebber the general operations and performance of the Partnerships and the terms of any material transaction involving a Partnership; (ii) Samson will allow PaineWebber to advise Samson and to comment on any General Partner-initiated amendment to a Partnership Agreement which requires a vote of the Limited Partners of such Partnership and any proposal initiated by the General Partner that would involve a reorganization, merger, or consolidation of a Partnership, a sale of all or substantially all of the assets of a Partnership, the liquidation or dissolution of a Partnership, or the exchange of cash, securities, or other assets for all or any outstanding Units; (iii) the General Partner will maintain an "800" investor services telephone number; (iv) 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.
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 of the 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 I-B Geodyne Energy Income Limited Partnership I-C Geodyne Energy Income Limited Partnership I-D Geodyne Energy Income Limited Partnership I-E Geodyne Energy Income Limited Partnership I-F
as of December 31, 1997 and 1996 and for each of the three years in the period ended December 31, 1997 are filed as part of this report:
Report of Independent Accountants Combined Balance Sheets Combined Statements of Operations Combined Statements of Changes in Partners' Capital (Deficit) Combined Statements of Cash Flows Notes to Combined Financial Statements
(2) Financial Statement Schedules:
None.
(3) Exhibits:
4.1 The Certificate and Agreements of Limited Partnership for the following Partnerships have been previously filed with the SEC 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. ----------- ------------ -------- I-B May 23, 1986 0-14657 I-C May 23, 1986 0-14658 I-D May 5, 1987 0-15831 I-E May 5, 1987 0-15832 I-F May 5, 1987 0-15833
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 Amended and Restated Agreement and Certificate of Limited Partnership of Geodyne Energy Income Limited Partnership I-B, 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 Amended and Restated Agreement and Certificate of Limited Partnership of Geodyne Energy Income Limited Partnership I-C, 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 Amended and Restated Agreement and Certificate of Limited Partnership of Geodyne Energy Income Limited Partnership I-D, 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 Amended and Restated Agreement and Certificate of Limited Partnership of Geodyne Energy Income Limited Partnership I-E, 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 Amended and Restated Agreement and Certificate of Limited Partnership of Geodyne Energy Income Limited Partnership I-F, 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.
*23.1 Consent of Ryder Scott Company Petroleum Engineers for Geodyne Energy Income Limited Partnership I-B.
*23.2 Consent of Ryder Scott Company Petroleum Engineers for Geodyne Energy Income Limited Partnership I-C.
*23.3 Consent of Ryder Scott Company Petroleum Engineers for Geodyne Energy Income Limited Partnership I-D.
*23.4 Consent of Ryder Scott Company Petroleum Engineers for Geodyne Energy Income Limited Partnership I-E.
*23.5 Consent of Ryder Scott Company Petroleum Engineers for Geodyne Energy Income Limited Partnership I-F.
*27.1 Financial Data Schedule containing summary financial information extracted from the Geodyne Energy Income Limited Partnership I-B's financial statements as of December 31, 1997 and for the year ended December 31, 1997.
*27.2 Financial Data Schedule containing summary financial information extracted from the Geodyne Energy Income Limited Partnership I-C's financial statements as of December 31, 1997 and for the year ended December 31, 1997.
*27.3 Financial Data Schedule containing summary financial information extracted from the Geodyne Energy Income Limited Partnership I-D's financial statements as of December 31, 1997 and for the year ended December 31, 1997.
*27.4 Financial Data Schedule containing summary financial information extracted from the Geodyne Energy Income Limited Partnership I-E's financial statements as of December 31, 1997 and for the year ended December 31, 1997.
*27.5 Financial Data Schedule containing summary financial information extracted from the Geodyne Energy Income Limited Partnership I-F's financial statements as of December 31, 1997 and for the year ended December 31, 1997.
All other Exhibits are omitted as inapplicable.
----------------------
*Filed herewith.
(b) Reports on Form 8-K filed during the fourth quarter of 1997:
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 I-B
By: GEODYNE RESOURCES, INC. General Partner
February 19, 1998
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 February 19, 1998 ------------------- Director (Principal Dennis R. Neill Executive Officer)
/s/Patrick M. Hall (Principal February 19, 1998 ------------------- Financial and Patrick M. Hall Accounting Officer)
/s/Judy K. Fox Secretary February 19, 1998 ------------------- 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 I-C
By: GEODYNE RESOURCES, INC. General Partner
February 19, 1998
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 February 19, 1998 ------------------- Director (Principal Dennis R. Neill Executive Officer)
/s/Patrick M. Hall (Principal February 19, 1998 ------------------- Financial and Patrick M. Hall Accounting Officer)
/s/Judy K. Fox Secretary February 19, 1998 ------------------- 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 I-D
By: GEODYNE RESOURCES, INC. General Partner
February 19, 1998
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 February 19, 1998 ------------------- Director (Principal Dennis R. Neill Executive Officer)
/s/Patrick M. Hall (Principal February 19, 1998 ------------------- Financial and Patrick M. Hall Accounting Officer)
/s/Judy K. Fox Secretary February 19, 1998 ------------------- 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 I-E
By: GEODYNE RESOURCES, INC. General Partner
February 19, 1998
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 February 19, 1998 ------------------- Director (Principal Dennis R. Neill Executive Officer)
/s/Patrick M. Hall (Principal February 19, 1998 ------------------- Financial and Patrick M. Hall Accounting Officer)
/s/Judy K. Fox Secretary February 19, 1998 ------------------- 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 I-F
By: GEODYNE RESOURCES, INC. General Partner February 19, 1998
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 February 19, 1998 ------------------- Director (Principal Dennis R. Neill Executive Officer)
/s/Patrick M. Hall (Principal February 19, 1998 ------------------- Financial and Patrick M. Hall Accounting Officer)
/s/Judy K. Fox Secretary February 19, 1998 ------------------- Judy K. Fox
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
REPORT OF INDEPENDENT ACCOUNTANTS
TO THE PARTNERS
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP I-B GEODYNE PRODUCTION PARTNERSHIP I-B
We have audited the combined balance sheets of the Geodyne Energy Income Limited Partnership I-B, an Oklahoma limited partnership, and Geodyne Production Partnership I-B, an Oklahoma general partnership, as of December 31, 1997 and 1996 and the related combined statements of operations, changes in partners' capital (deficit), and cash flows for the years ended December 31, 1997, 1996, and 1995. These financial statements are the responsibility of the Partnerships' management. Our responsibility is to express an opinion on these financial statements based on our audits.
We conducted our audits 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 combined financial statements referred to above present fairly, in all material respects, the combined financial position of the Geodyne Energy Income Limited Partnership I-B and Geodyne Production Partnership I-B at December 31, 1997 and 1996 and the combined results of their operations and cash flows for the years ended December 31, 1997, 1996, and 1995, in conformity with generally accepted accounting principles.
//s// Coopers & Lybrand L.L.P.
COOPERS & LYBRAND L.L.P.
Tulsa, Oklahoma February 10, 1998
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP I-B GEODYNE ENERGY INCOME PRODUCTION PARTNERSHIP I-B Combined Balance Sheets December 31, 1997 and 1996
ASSETS ------ 1997 1996 ------------ ---------
CURRENT ASSETS: Cash and cash equivalents $ 77,028 $ 13,805 Accounts receivable: Oil and gas sales 53,389 54,636 ------- ------- Total current assets $130,417 $ 68,441
NET OIL AND GAS PROPERTIES, utilizing the successful efforts method 327,137 419,346
DEFERRED CHARGE 99,262 121,350 ------- --------- $556,816 $609,137 ======= =======
LIABILITIES AND PARTNERS' CAPITAL (DEFICIT) -------------------------------------------
CURRENT LIABILITIES: Accounts payable $ 9,366 $ 17,298 Gas imbalance payable 3,116 4,982 ------- ------- Total current liabilities $ 12,482 $ 22,280
ACCRUED LIABILITY $ 22,520 $ 31,110
PARTNERS' CAPITAL (DEFICIT): General Partner ($103,542) ($102,526) Limited Partners, issued and outstanding, 11,958 Units 625,356 658,273 ------- ------- Total Partners' capital $521,814 $555,747 ------- ------- $556,816 $609,137 ======= =======
The accompanying notes are an integral part of these combined financial statements.
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP I-B GEODYNE ENERGY INCOME PRODUCTION PARTNERSHIP I-B Combined Statements of Operations For the Years Ended December 31, 1997, 1996, and 1995
1997 1996 1995 ---------- ---------- ----------
REVENUES: Oil and gas sales, including $43,625 of sales to related parties in 1995 $358,282 $364,052 $254,050 Interest income 824 327 614 Gain on sale of oil and gas properties 17,912 598 4,772 ------- ------- ------- $377,018 $364,977 $259,436 COSTS AND EXPENSES: Lease operating $111,961 $112,778 $143,112 Production tax 24,339 18,557 17,997 Depreciation, depletion, and amortization of oil and gas properties 69,696 63,333 303,520 Impairment provision 19,726 - 125,159 General and administrative 62,224 63,108 48,113 ------- ------- ------- $287,946 $257,776 $637,901 ------- ------- ------- NET INCOME (LOSS) $ 89,072 $107,201 ($378,465) ======= ======= =======
GENERAL PARTNER - NET INCOME (LOSS) $ 7,989 $ 7,877 ($ 1,776) ======= ======= =======
LIMITED PARTNERS - NET INCOME (LOSS) $ 81,083 $ 99,324 ($376,689) ======= ======= =======
NET INCOME (LOSS) per Unit $ 6.78 $ 8.31 ($ 31.50) ======= ======= =======
UNITS OUTSTANDING 11,958 11,958 11,958 ======= ======= =======
The accompanying notes are an integral part of these combined financial statements.
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP I-B GEODYNE ENERGY INCOME PRODUCTION PARTNERSHIP I-B Combined Statements of Changes in Partners' Capital (Deficit) For the Years Ended December 31, 1997, 1996, and 1995
Limited General Partners Partner Total ------------ --------- ------------
Balance, Dec. 31, 1994 $1,146,638 ($ 95,948) $1,050,690 Net loss ( 376,689) ( 1,776) ( 378,465) Cash distributions ( 133,000) ( 7,000) ( 140,000) --------- ------- ---------
Balance, Dec. 31, 1995 $ 636,949 ($104,724) $ 532,225 Net income 99,324 7,877 107,201 Cash distributions ( 78,000) ( 5,679) ( 83,679) --------- ------- ---------
Balance, Dec. 31, 1996 $ 658,273 ($102,526) $ 555,747 Net income 81,083 7,989 89,072 Cash distributions ( 114,000) ( 9,005) ( 123,005) --------- ------- ---------
Balance, Dec. 31, 1997 $ 625,356 ($103,542) $ 521,814 ========= ======= =========
The accompanying notes are an integral part of these combined financial statements.
The accompanying notes are an integral part of these combined financial statements.
REPORT OF INDEPENDENT ACCOUNTANTS
TO THE PARTNERS
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP I-C GEODYNE PRODUCTION PARTNERSHIP I-C
We have audited the combined balance sheets of the Geodyne Energy Income Limited Partnership I-C, an Oklahoma limited partnership, and Geodyne Production Partnership I-C, an Oklahoma general partnership, as of December 31, 1997 and 1996 and the related combined statements of operations, changes in partners' capital (deficit), and cash flows for the years ended December 31, 1997, 1996, and 1995. These financial statements are the responsibility of the Partnerships' management. Our responsibility is to express an opinion on these financial statements based on our audits.
We conducted our audits 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 combined financial statements referred to above present fairly, in all material respects, the combined financial position of the Geodyne Energy Income Limited Partnership I-C and Geodyne Production Partnership I-C at December 31, 1997 and 1996 and the combined results of their operations and cash flows for the years ended December 31, 1997, 1996, and 1995, in conformity with generally accepted accounting principles.
//s// Coopers & Lybrand L.L.P.
COOPERS & LYBRAND L.L.P.
Tulsa, Oklahoma February 10, 1998
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP I-C GEODYNE ENERGY INCOME PRODUCTION PARTNERSHIP I-C Combined Balance Sheets December 31, 1997 and 1996
ASSETS ------
1997 1996 --------- --------- CURRENT ASSETS: Cash and cash equivalents $141,699 $218,437 Accounts receivable: Oil and gas sales 130,355 163,306 General Partner - 14,922 ------- ------- Total current assets $272,054 $396,665
NET OIL AND GAS PROPERTIES, utilizing the successful efforts method 334,734 317,923
DEFERRED CHARGE 110,943 66,882 ------- ------- $717,731 $781,470 ======= =======
LIABILITIES AND PARTNERS' CAPITAL (DEFICIT) -------------------------------------------
CURRENT LIABILITIES: Accounts payable $ 22,321 $ 16,894
ACCRUED LIABILITY $ 18,103 $ 12,386
PARTNERS' CAPITAL (DEFICIT): General Partner ($ 89,189) ($ 85,499) Limited Partners, issued and outstanding, 8,885 Units 766,496 837,689 ------- ------- Total Partners' capital $677,307 $752,190 ------- ------- $717,731 $781,470 ======= =======
The accompanying notes are an integral part of these combined financial statements.
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP I-C GEODYNE ENERGY INCOME PRODUCTION PARTNERSHIP I-C Combined Statements of Operations For the Years Ended December 31, 1997, 1996, and 1995
1997 1996 1995 ---------- ---------- ----------
REVENUES: Oil and gas sales, including $2,521 of sales to related parties in 1995 $951,678 $1,181,096 $808,435 Interest income 3,737 6,501 4,052 Gain (loss)on sale of oil and gas properties 24,387 ( 41,696) 39,926 ------- --------- -------- $979,802 $1,145,901 $852,413 COSTS AND EXPENSES: Lease operating $249,590 $ 172,009 $219,066 Production tax 62,151 69,689 56,131 Depreciation, depletion, and amortization of oil and gas properties 58,048 58,370 181,870 Impairment provision 4,679 - 155,698 General and administrative 106,274 107,144 100,580 ------- --------- -------- $480,742 $ 407,212 $713,345 ------- --------- -------- NET INCOME $499,060 $ 738,689 $139,068 ======= ========= ========
GENERAL PARTNER - NET INCOME $ 27,253 $ 38,944 $ 20,456 ======= ========= ========
LIMITED PARTNERS - NET INCOME $471,807 $ 699,745 $118,612 ======= ========= ========
NET INCOME per Unit $ 53.10 $ 78.76 $ 13.35 ======= ========= ========
UNITS OUTSTANDING 8,885 8,885 8,885 ======= ========= ========
The accompanying notes are an integral part of these combined financial statements.
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP I-C GEODYNE ENERGY INCOME PRODUCTION PARTNERSHIP I-C Combined Statements of Changes in Partners' Capital (Deficit) For the Years Ended December 31, 1997, 1996, and 1995
Limited General Partners Partner Total ------------ --------- ------------
Balance, Dec. 31, 1994 $1,117,332 ($63,764) $1,053,568 Net income 118,612 20,456 139,068 Cash distributions ( 435,000) ( 23,000) ( 458,000) --------- ------ ---------
Balance, Dec. 31, 1995 $ 800,944 ($66,308) $ 734,636 Net income 699,745 38,944 738,689 Cash distributions ( 663,000) ( 58,135) ( 721,135) --------- ------ ---------
Balance, Dec. 31, 1996 $ 837,689 ($85,499) $ 752,190 Net income 471,807 27,253 499,060 Cash distributions ( 543,000) ( 30,943) ( 573,943) --------- ------ ---------
Balance, Dec. 31, 1997 $ 766,496 ($89,189) $ 677,307 ========= ====== =========
The accompanying notes are an integral part of these combined financial statements.
The accompanying notes are an integral part of these combined financial statements.
REPORT OF INDEPENDENT ACCOUNTANTS
TO THE PARTNERS
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP I-D GEODYNE PRODUCTION PARTNERSHIP I-D
We have audited the combined balance sheets of the Geodyne Energy Income Limited Partnership I-D, an Oklahoma limited partnership, and Geodyne Production Partnership I-D, an Oklahoma general partnership, as of December 31, 1997 and 1996 and the related combined statements of operations, changes in partners' capital (deficit), and cash flows for the years ended December 31, 1997, 1996, and 1995. These financial statements are the responsibility of the Partnerships' management. Our responsibility is to express an opinion on these financial statements based on our audits.
We conducted our audits 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 combined financial statements referred to above present fairly, in all material respects, the combined financial position of the Geodyne Energy Income Limited Partnership I-D and Geodyne Production Partnership I-D at December 31, 1997 and 1996 and the combined results of their operations and cash flows for the years ended December 31, 1997, 1996, and 1995, in conformity with generally accepted accounting principles.
//s// Coopers & Lybrand L.L.P.
COOPERS & LYBRAND L.L.P.
Tulsa, Oklahoma February 10, 1998
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP I-D GEODYNE ENERGY INCOME PRODUCTION PARTNERSHIP I-D Combined Balance Sheets December 31, 1997 and 1996
ASSETS ------
1997 1996 ----------- ---------- CURRENT ASSETS: Cash and cash equivalents $ 274,109 $ 344,951 Accounts receivable: Oil and gas sales 256,001 306,857 --------- ---------- Total current assets $ 530,110 $ 651,808
NET OIL AND GAS PROPERTIES, utilizing the successful efforts method 714,156 855,240
DEFERRED CHARGE 104,793 98,015 --------- ---------- $1,349,059 $1,605,063 ========= ==========
LIABILITIES AND PARTNERS' CAPITAL ---------------------------------
CURRENT LIABILITIES: Accounts payable $ 31,310 $ 15,285 Gas imbalance payable 39,971 36,687 --------- ---------- Total current liabilities $ 71,281 $ 51,972
ACCRUED LIABILITY $ 14,345 $ 16,816
PARTNERS' CAPITAL: General Partner ($ 27,560) ($ 4,248) Limited Partners, issued and outstanding, 7,195 Units 1,290,993 1,540,523 --------- ---------- Total Partners' capital $1,263,433 $1,536,275 --------- ---------- $1,349,059 $1,605,063 ========= ==========
The accompanying notes are an integral part of these combined financial statements.
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP I-D GEODYNE ENERGY INCOME PRODUCTION PARTNERSHIP I-D Combined Statements of Operations For the Years Ended December 31, 1997, 1996, and 1995
1997 1996 1995 ----------- ----------- ---------- REVENUES: Oil and gas sales, including $362,560 of sales to related parties in 1995 $1,545,097 $1,812,568 $1,237,419 Interest income 10,558 11,473 8,358 Gain on sale of oil and gas properties 24,113 41,516 1,377 --------- ---------- --------- $1,579,768 $1,865,557 $1,247,154 COSTS AND EXPENSES: Lease operating $ 183,675 $ 175,311 $ 144,541 Production tax 110,675 115,537 92,050 Depreciation, depletion, and amortization of oil and gas properties 112,862 148,467 249,914 Impairment provision 61,790 - 19,510 General and administrative 91,372 92,138 89,352 --------- ---------- --------- $ 560,374 $ 531,453 $ 595,367 --------- ---------- --------- NET INCOME $1,019,394 $1,334,104 $ 651,787 ========= ========== =========
GENERAL PARTNER - NET INCOME $ 173,924 $ 219,180 $ 135,487 ========= ========== =========
LIMITED PARTNERS - NET INCOME $ 845,470 $1,114,924 $ 516,300 ========= ========== =========
NET INCOME per Unit $ 117.51 $ 154.96 $ 71.76 ========= ========== =========
UNITS OUTSTANDING 7,195 7,195 7,195 ========= ========== =========
The accompanying notes are an integral part of these combined financial statements.
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP I-D GEODYNE ENERGY INCOME PRODUCTION PARTNERSHIP I-D Combined Statements of Changes in Partners' Capital (Deficit) For the Years Ended December 31, 1997, 1996, and 1995
Limited General Partners Partner Total ------------ ---------- ------------
Balance, Dec. 31, 1994 $1,669,299 $ 9,506 $1,678,805 Net income 516,300 135,487 651,787 Cash distributions ( 725,000) ( 127,000) ( 852,000) --------- ------- ---------
Balance, Dec. 31, 1995 $1,460,599 $ 17,993 $1,478,592 Net income 1,114,924 219,180 1,334,104 Cash distributions ( 1,035,000) ( 241,421) ( 1,276,421) --------- ------- ---------
Balance, Dec. 31, 1996 $1,540,523 ($ 4,248) $1,536,275 Net income 845,470 173,924 1,019,394 Cash distributions ( 1,095,000) ( 197,236) ( 1,292,236) --------- ------- ---------
Balance, Dec. 31, 1997 $1,290,993 ($ 27,560) $1,263,433 ========= ======= =========
The accompanying notes are an integral part of these combined financial statements.
The accompanying notes are an integral part of these combined financial statements.
REPORT OF INDEPENDENT ACCOUNTANTS
TO THE PARTNERS
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP I-E GEODYNE PRODUCTION PARTNERSHIP I-E
We have audited the combined balance sheets of the Geodyne Energy Income Limited Partnership I-E, an Oklahoma limited partnership, and Geodyne Production Partnership I-E, an Oklahoma general partnership, as of December 31, 1997 and 1996 and the related combined statements of operations, changes in partners' capital (deficit), and cash flows for the years ended December 31, 1997, 1996, and 1995. These financial statements are the responsibility of the Partnerships' management. Our responsibility is to express an opinion on these financial statements based on our audits.
We conducted our audits 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 combined financial statements referred to above present fairly, in all material respects, the combined financial position of the Geodyne Energy Income Limited Partnership I-E and Geodyne Production Partnership I-E at December 31, 1997 and 1996 and the combined results of their operations and cash flows for the years ended December 31, 1997, 1996, and 1995, in conformity with generally accepted accounting principles.
//s// Coopers & Lybrand L.L.P.
COOPERS & LYBRAND L.L.P.
Tulsa, Oklahoma February 10, 1998
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP I-E GEODYNE ENERGY INCOME PRODUCTION PARTNERSHIP I-E Combined Balance Sheets December 31, 1997 and 1996
ASSETS ------
1997 1996 ------------- ------------
CURRENT ASSETS: Cash and cash equivalents $ 827,775 $ 894,887 Accounts receivable: Oil and gas sales 994,354 1,233,074 Other 69,917 - --------- --------- Total current assets $1,892,046 $2,127,961
NET OIL AND GAS PROPERTIES, utilizing the successful efforts method 4,844,378 5,621,729
DEFERRED CHARGE 750,369 822,824 --------- --------- $7,486,793 $8,572,514 ========= =========
LIABILITIES AND PARTNERS' CAPITAL (DEFICIT) -------------------------------------------
CURRENT LIABILITIES: Accounts payable $ 257,524 $ 118,262 Gas imbalance payable 135,884 124,200 --------- --------- Total current liabilities $ 393,408 $ 242,462
ACCRUED LIABILITY $ 138,356 $ 142,663
PARTNERS' CAPITAL (DEFICIT): General Partner ($ 228,434) ($ 113,140) Limited Partners, issued and outstanding, 41,839 Units 7,183,463 8,300,529 --------- --------- Total Partners' capital $6,955,029 $8,187,389 --------- --------- $7,486,793 $8,572,514 ========= =========
The accompanying notes are an integral part of these combined financial statements.
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP I-E GEODYNE ENERGY INCOME PRODUCTION PARTNERSHIP I-E Combined Statements of Operations For the Years Ended December 31, 1997, 1996, and 1995
1997 1996 1995 ---------- ---------- ----------
REVENUES: Oil and gas sales, including $2,099,338 of sales to related parties in 1995 $6,004,252 $6,006,431 $4,777,881 Interest income 34,723 35,005 28,581 Gain on sale of oil and gas properties 120,840 296,937 3,843 Other income 69,917 - - --------- --------- --------- $6,229,732 $6,338,373 $4,810,305 COSTS AND EXPENSES: Lease operating $1,337,863 $1,303,281 $1,161,941 Production tax 433,287 403,038 319,588 Depreciation, depletion, and amortization of oil and gas properties 729,388 842,214 1,385,245 Impairment provision 291,690 - 748,728 General and administrative 526,066 527,292 510,222 --------- --------- --------- $3,318,294 $3,075,825 $4,125,724 --------- --------- --------- NET INCOME $2,911,438 $3,262,548 $ 684,581 ========= ========= =========
GENERAL PARTNER - NET INCOME $ 568,504 $ 602,481 $ 368,023 ========= ========= =========
LIMITED PARTNERS - NET INCOME $2,342,934 $2,660,067 $ 316,558 ========= ========= =========
NET INCOME per Unit $ 56.00 $ 63.58 $ 7.57 ========= ========= =========
UNITS OUTSTANDING 41,839 41,839 41,839 ========= ========= =========
The accompanying notes are an integral part of these combined financial statements.
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP I-E GEODYNE ENERGY INCOME PRODUCTION PARTNERSHIP I-E Combined Statements of Changes in Partners' Capital (Deficit) For the Years Ended December 31, 1997, 1996, and 1995
Limited General Partners Partner Total ------------- ---------- -------------
Balance, Dec. 31, 1994 $10,316,904 ($115,710) $10,201,194 Net income 316,558 368,023 684,581 Cash distributions ( 2,140,000) ( 307,000) ( 2,447,000) ---------- ------- ----------
Balance, Dec. 31, 1995 $ 8,493,462 ($ 54,687) $ 8,438,775 Net Income 2,660,067 602,481 3,262,548 Cash distributions ( 2,853,000) ( 660,934) ( 3,513,934) ---------- ------- ----------
Balance, Dec. 31, 1996 $ 8,300,529 ($113,140) $ 8,187,389 Net income 2,342,934 568,504 2,911,438 Cash distributions ( 3,460,000) ( 683,798) ( 4,143,798) ---------- ------- ----------
Balance, Dec. 31, 1997 $ 7,183,463 ($228,434) $ 6,955,029 ========== ======= ==========
The accompanying notes are an integral part of these combined financial statements.
The accompanying notes are an integral part of these combined financial statements.
REPORT OF INDEPENDENT ACCOUNTANTS
TO THE PARTNERS
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP I-F GEODYNE PRODUCTION PARTNERSHIP I-F
We have audited the combined balance sheets of the Geodyne Energy Income Limited Partnership I-F, an Oklahoma limited partnership, and Geodyne Production Partnership I-F, an Oklahoma general partnership, as of December 31, 1997 and 1996 and the related combined statements of operations, changes in partners' capital (deficit), and cash flows for the years ended December 31, 1997, 1996, and 1995. These financial statements are the responsibility of the Partnerships' management. Our responsibility is to express an opinion on these financial statements based on our audits.
We conducted our audits 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 combined financial statements referred to above present fairly, in all material respects, the combined financial position of the Geodyne Energy Income Limited Partnership I-F and Geodyne Production Partnership I-F at December 31, 1997 and 1996 and the combined results of their operations and cash flows for the years ended December 31, 1997, 1996, and 1995, in conformity with generally accepted accounting principles.
//s// Coopers & Lybrand L.L.P.
COOPERS & LYBRAND L.L.P.
Tulsa, Oklahoma February 10, 1998
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP I-F GEODYNE ENERGY INCOME PRODUCTION PARTNERSHIP I-F Combined Balance Sheets December 31, 1997 and 1996
ASSETS ------
1997 1996 ------------ ------------
CURRENT ASSETS: Cash and cash equivalents $ 251,220 $ 339,064 Accounts receivable: Oil and gas sales 307,734 431,888 Other 48,942 - --------- --------- Total current assets $ 607,896 $ 770,952
NET OIL AND GAS PROPERTIES, utilizing the successful efforts method 1,457,908 1,746,830
DEFERRED CHARGE 501,016 465,201 --------- --------- $2,566,820 $2,982,983 ========= =========
LIABILITIES AND PARTNERS' CAPITAL (DEFICIT) -------------------------------------------
CURRENT LIABILITIES: Accounts payable $ 53,205 $ 47,364 Gas imbalance payable 47,046 45,279 --------- --------- Total current liabilities $ 100,251 $ 92,643
ACCRUED LIABILITY $ 116,401 $ 103,790
PARTNERS' CAPITAL (DEFICIT): General Partner ($ 59,811) ($ 59,110) Limited Partners, issued and outstanding, 14,321 Units 2,409,979 2,845,660 --------- --------- Total Partners' capital $2,350,168 $2,786,550 --------- --------- $2,566,820 $2,982,983 ========= =========
The accompanying notes are an integral part of these combined financial statements.
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP I-F GEODYNE ENERGY INCOME PRODUCTION PARTNERSHIP I-F Combined Statements of Operations For the Years Ended December 31, 1997, 1996, and 1995
1997 1996 1995 ---------- ----------- ---------- REVENUES: Oil and gas sales, including $481,355 of sales to related parties in 1995 $2,021,805 $2,121,336 $1,762,969 Interest income 11,252 12,228 9,438 Gain on sale of oil and gas properties 76,108 160,187 4,726 Other income 48,942 - - --------- ---------- --------- $2,158,107 $2,293,751 $1,777,133 COSTS AND EXPENSES: Lease operating $ 540,388 $ 622,452 $ 579,433 Production tax 143,412 135,940 115,608 Depreciation, depletion, and amortization of oil and gas properties 257,820 270,978 492,745 Impairment provision 114,631 - 258,913 General and administrative 180,860 182,290 175,600 --------- ---------- --------- $1,237,111 $1,211,660 $1,622,299 --------- ---------- --------- NET INCOME $ 920,996 $1,082,091 $ 154,834 ========= ========== =========
GENERAL PARTNER - NET INCOME $ 183,677 $ 198,724 $ 117,455 ========= ========== =========
LIMITED PARTNERS - NET INCOME $ 737,319 $ 883,367 $ 37,379 ========= ========== =========
NET INCOME per Unit $ 51.49 $ 61.68 $ 2.61 ========= ========== =========
UNITS OUTSTANDING 14,321 14,321 14,321 ========= ========== =========
The accompanying notes are an integral part of these combined financial statements.
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP I-F GEODYNE ENERGY INCOME PRODUCTION PARTNERSHIP I-F Combined Statements of Changes in Partners' Capital (Deficit) For the Years Ended December 31, 1997, 1996, and 1995
Limited General Partners Partner Total ------------ ---------- ------------ Balance, Dec. 31, 1994 $3,680,914 ($ 33,134) $3,647,780 Net income 37,379 117,455 154,834 Cash distributions ( 795,000) ( 110,000) ( 905,000) --------- ------- ---------
Balance, Dec. 31, 1995 $2,923,293 ($ 25,679) $2,897,614 Net income 883,367 198,724 1,082,091 Cash distributions ( 961,000) ( 232,155) ( 1,193,155) --------- ------- ---------
Balance, Dec. 31, 1996 $2,845,660 ($ 59,110) $2,786,550 Net income 737,319 183,677 920,996 Cash distributions ( 1,173,000) ( 184,378) ( 1,357,378) --------- ------- ---------
Balance, Dec. 31, 1997 $2,409,979 ($ 59,811) $2,350,168 ========= ======= =========
The accompanying notes are an integral part of these combined financial statements.
The accompanying notes are an integral part of these combined financial statements.
GEODYNE ENERGY INCOME PROGRAM I LIMITED PARTNERSHIPS Notes to the Combined Financial Statements For the Years Ended December 31, 1997, 1996, and 1995
1. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Organization and Nature of Operations
The Geodyne Energy Income Limited Partnerships (the "Partnerships") were formed pursuant to a public offering of depositary units ("Units"). Upon formation, investors became limited partners (the "Limited Partners") and held Units issued by each Partnership. Geodyne Resources, Inc. is the general partner of the Partnerships. Each Partnership is a general partner in the related Geodyne Energy Income Production Partnership (collectively, the "Production Partnership") in which Geodyne Resources, Inc. serves as the managing partner. Limited Partner capital contributions were contributed to the related Production Partnerships for investment 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 ----------- ------------------ --------------
I-B July 12, 1985 $11,957,700 I-C December 20, 1985 8,884,900 I-D March 4, 1986 7,194,700 I-E September 10, 1986 41,839,400 I-F December 16, 1986 14,320,900
The Partnerships will terminate on December 31, 1999. However, the General Partner may extend the term of each Partnership for up to five periods of two years each. As of the date of these financial statements, the General Partner has not determined whether to extend the term of any Partnership.
For purposes of these financial statements, the Partnerships and Production Partnerships are collectively referred to as the "Partnerships" and the general partner and managing partner are collectively referred to as the "General Partner." An affiliate of the General Partner owned the following Units at December 31, 1997:
Number of Percent of Partnership Units Owned Outstanding Units ----------- ----------- ----------------- I-B 2,727 22.8% I-C 959 10.8% I-D 745 10.4% I-E 6,073 14.5% I-F 2,352 16.4%
The Partnerships' sole business is the development and production of oil and gas.
Allocation of Costs and Revenues
The combination of the allocation provisions in each Partnership's limited partnership agreement and each Production Partnership's partnership agreement (collectively, the "Partnership Agreement") results in allocations of costs and income between the Limited Partners and General Partner as follows:
Before Payout(1) After Payout(1) -------------------- -------------------- General Limited General Limited Partner Partners Partner Partners -------- -------- -------- -------- Costs(2) - ------------------------ Sales commissions, 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 10% 90% 15% 85% General and administra- tive costs, direct administrative costs and operating costs(3) 10% 90% 15% 85%
Income(2) - ------------------------ Temporary investments of Limited Partners' capital contributions 1% 99% 1% 99% Income from oil and gas production(3) 10% 90% 15% 85% Sale of producing pro- perties (3) 10% 90% 15% 85% All other income 10% 90% 15% 85% - ----------
(1) Payout occurs when total distributions to Limited Partners equal total original Limited Partner subscriptions. (2) The allocations in the table result generally from the combined effect of the allocation provisions in the Partnership Agreements. For example, the costs incurred in development drilling are allocated 90.9091% to the limited partnership and 9.0909% to the managing partner. The 90.9091% portion of these costs allocated to the limited partnership, when passed through the limited partnership, is further allocated 99% to the limited partners and 1% to the general partner. In this manner the Limited Partners are allocated 90% of such costs and the General Partner is allocated 10% of such costs. (3) Distributions of cash and the above allocation of income and costs of the General Partner are subject to subordination during the first two twelve-month "allocation periods". The first twelve-month "allocation period" commenced on the last day of the first full fiscal quarter after the earlier of (i) the date on which 90% of a limited partnership's capital contribution to a Production Partnership has been expended or (ii) two years after activation of a Production Partnership. The second twelve-month "allocation period" commenced at the end of the first allocation period. To the extent that the amount of cash distributed in the allocation periods is insufficient to permit the Limited Partners to receive a 15% cumulative (but not compounded) twelve-month return on their capital contributions, up to one-half of the managing partners' share of distributable cash after each such allocation period, and a corresponding amount of their allocable share of income and costs, shall thereafter be allocated to permit the Limited Partners to receive, to the extent available, the aggregate amount of such deficiency. After the allocation periods, the managing partner may recoup amounts previously allocated to the Limited Partners pursuant to this subordination provision to the extent income is otherwise sufficient to permit Limited Partners to receive at least a 15% cumulative (but not compounded) twelve-month return since the commencement of the allocation periods.
Currently, the I-B and I-C Partnerships are subject to subordination as discussed above, as the Limited Partners did not receive a 15% cumulative cash distribution; therefore, one-half of the General Partner's income and costs for those Partnerships are being allocated to the Limited Partners.
The I-D Partnership achieved payout late in 1991. Beginning with 1992, operations for the I-D Partnership were allocated using the after payout percentages set forth in the table. The I-E and I-F Partnerships achieved payout during the second quarter of 1995. Beginning with the second quarter of 1995, operations for the I-E and I-F Partnerships were allocated using the after payout percentages.
Basis of Presentation
These financial statements reflect the combined accounts of each Partnership after the elimination of all inter-partnership transactions and balances.
Cash and Cash Equivalents
The Partnerships consider all highly liquid investments with a maturity of three months or less when purchased to be cash equivalents. Cash equivalents are not insured, which cause the Partnerships to be subject to risk.
Credit Risk
Accrued oil and gas sales which are 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.
Receivable from General Partner
The I-C Partnership recorded a receivable from the General Partner at December 31, 1996 in the amount of $14,452 for proceeds due to the I-C Partnership from the sale of oil and gas properties. Such receivable was collected by the I-C Partnership in the first quarter of 1997. The I-C Partnership also recorded a receivable from the General Partner at December 31, 1996 in the amount of $470 due to indirect general and administrative expenses exceeding the reimbursable indirect limit imposed by the Advisory Agreement. Such receivable was collected by the I-C Partnership during the first quarter of 1997.
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 cost 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' depletion, depreciation, and amortization includes dismantlement and abandonment costs, net of estimated salvage value. The depreciation, depletion, and amortization rates per equivalent barrel of oil produced during the years ended December 31, 1997, 1996, and 1995 were as follows:
Partnership 1997 1996 1995 ----------- ------ ------ ------
I-B $2.92 $2.31 $10.23 I-C 1.06 .89 2.92 I-D 1.09 1.26 2.10 I-E 1.68 1.92 2.82 I-F 1.93 1.88 3.01
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.
The Partnerships follow the provisions 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. 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. During 1997, 1996, and 1995, the Partnerships recorded the following non-cash charges against earnings (impairment provisions):
Partnership 1997 1996 1995 ----------- --------- ------- ---------
I-B $17,233 $ - $125,159 I-C 4,679 - 155,698 I-D 12,290 - 19,510 I-E 59,728 - 748,728 I-F 20,908 - 258,913
In addition, during 1997 the General Partner determined that the Partnerships' unproved properties would be uneconomic to develop and, therefore, of little or no value. This determination was based on an evaluation by the General Partner that it is unlikely that these unproved properties would be developed due to the low oil and gas prices received over the last several years and provisions in the Partnership Agreements which limit the level of permissible drilling activity. As a result of this determination, the Partnerships recorded the following non-cash charges against earnings at March 31, 1997 in order to reflect the writing-off of the Partnerships' unproved properties:
Partnership Amount ----------- --------
I-B $ 2,493 I-C - I-D 49,500 I-E 231,962 I-F 93,723
Deferred Charge
The Deferred Charge represents costs deferred for lease operating expenses incurred in connection with the Partnerships' underproduced gas imbalance positions. The rate used in calculating the deferred charge is the average of the annual production costs per Mcf. At December 31, 1997 and 1996, 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:
1997 1996 ---------------------- ---------------------- Partnership Mcf Amount Mcf Amount ----------- --------- -------- --------- --------
I-B 132,544 $ 99,262 131,516 $121,350 I-C 68,009 110,943 74,846 66,882 I-D 308,124 104,793 351,688 98,015 I-E 1,430,637 750,369 1,543,471 822,824 I-F 519,564 501,016 578,968 465,201
Accrued Liability
The Accrued Liability represents charges accrued for lease operating expenses incurred in connection with the Partnerships' overproduced gas imbalance positions. The rate used in calculating the accrued liability is the average of the annual production costs per Mcf. At December 31, 1997 and 1996, 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:
1997 1996 ---------------------- -------------------- Partnership Mcf Amount Mcf Amount ----------- ------- -------- ------- --------
I-B 30,071 $ 22,520 33,716 $ 31,110 I-C 11,097 18,103 13,861 12,386 I-D 42,180 14,345 60,338 16,816 I-E 263,786 138,356 267,610 142,663 I-F 120,710 116,401 129,172 103,790
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. The rates per Mcf used to calculate this liability are based on the average gas prices received for the volumes at the time the overproduction occurred. This also reflects the price for which the
Partnerships are currently settling this liability. At December 31, 1997 and 1996 total sales exceeded the Partnerships' share of estimated total gas reserves as follows:
1997 1996 ------------------- ------------------- Partnership Mcf Amount Mcf Amount ----------- ------- ------- ------- --------
I-B 2,077 $ 3,116 3,321 $ 4,982 I-C - - - - I-D 26,647 39,971 24,458 36,687 I-E 90,589 135,884 82,800 124,200 I-F 31,364 47,046 30,186 45,279
These amounts were recorded as gas imbalance payables in accordance with the sales method. These gas imbalance payables will be settled by either gas production by the underproduced party in excess of current estimates of total gas reserves for the well or by a negotiated or contractual payment to the underproduced party.
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 by the General Partner. When actual costs incurred benefit other Partnerships and affiliates, the allocation of costs is based on the relationship of the Partnerships' reserves to the total reserves owned by all Partnerships and affiliates. The General Partner believes this allocation method is reasonable. Although the actual costs incurred by the General Partner and its affiliates have fluctuated during the three years presented, the amounts charged to the Partnerships have not fluctuated due to expense limitations imposed by the Partnership Agreements. The following is a summary of payments made to the General Partner or its affiliates by the Partnerships for general and administrative overhead costs for the years ended December 31, 1997, 1996, and 1995:
Partnership 1997 1996 1995 ----------- -------- -------- --------
I-B $ 45,252 $ 45,252 $ 41,178 I-C 93,058 93,550 93,550 I-D 79,944 79,944 79,944 I-E 464,880 464,880 464,880 I-F 159,120 159,120 159,120
Affiliates of the Partnerships operate certain of the Partnerships' properties and their policy is to bill the Partnerships for all customary charges and cost reimbursements associated with these activities, together with any compressor rentals, consulting, or other services provided. Such charges are comparable to third party charges in the area where the wells are located and are the same as charged to other working interest owners in the wells.
During 1995 the Partnerships sold gas at market prices to El Paso Energy Marketing Company, formerly known as Premier Gas Company ("El Paso"). El Paso, like other similar gas marketing firms, then 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:
Partnership 1995 ----------- ----------
I-B $ 43,625 I-C 2,521 I-D 362,560 I-E 2,099,338 I-F 481,355
3. MAJOR CUSTOMERS
The following table sets forth purchasers who individually accounted for ten percent or more of the Partnerships' combined oil and gas sales for the years ended December 31, 1997, 1996, and 1995:
Partnership Purchaser Percentage - ----------- --------------------- ----------------------- 1997 1996 1995 ----- ----- -----
I-B Williams Energy Services Co. 24.4% - % - % Byrd Operating Company 18.7% 11.6% - % El Paso 12.6% 10.0% 17.2% Parker & Parsley Development Company - 22.7% - % Apache Corporation - - % 22.5% Staley Operating Co. - - % 16.0%
I-C Hallwood Petroleum ("Hallwood") 36.2% 42.8% 31.0% Conoco, Inc. ("Conoco") 30.3% 25.2% 26.4% Koch Oil Company 12.8% 18.3% - % National Cooperative Refinery Association - % - % 10.9%
I-D El Paso 35.5% 27.9% 29.3% Hallwood 24.9% 31.8% 22.5% Conoco 19.6% 23.1% 23.0%
I-E El Paso 51.3% 49.4% 43.9%
I-F El Paso 33.9% 31.9% 27.3%
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, 1997 and 1996 were as follows:
I-B Partnership ---------------
1997 1996 ------------ -----------
Proved properties $6,509,872 $7,009,360 Unproved properties, not subject to depreciation, depletion, and amortization - 2,493 --------- --------- $6,509,872 $7,011,853 Less accumulated depreciation, depletion, amorti- zation, and valua- tion allowance ( 6,182,735) ( 6,592,507) --------- ---------
Net oil and gas properties $ 327,137 $ 419,346 ========= =========
I-C Partnership ---------------
1997 1996 ------------ -----------
Proved properties $3,641,486 $3,904,778 Unproved properties, not subject to depreciation, depletion, and amortization - 455 --------- --------- $3,641,486 $3,905,233 Less accumulated depreciation, depletion, amorti- zation, and valua- tion allowance ( 3,306,752) ( 3,587,310) --------- ---------
Net oil and gas properties $ 334,734 $ 317,923 ========= =========
I-D Partnership ---------------
1997 1996 ------------ ------------
Proved properties $4,869,810 $4,892,664 Unproved properties, not subject to depreciation, depletion, and amortization - 49,914 --------- --------- $4,869,810 $4,942,578 Less accumulated depreciation, depletion, amorti- zation, and valua- tion allowance ( 4,155,654) ( 4,087,338) --------- ---------
Net oil and gas properties $ 714,156 $ 855,240 ========= =========
I-E Partnership ---------------
1997 1996 ------------ ------------
Proved properties $27,408,834 $27,671,041 Unproved properties, not subject to depreciation, depletion, and amortization - 233,294 ---------- ---------- $27,408,834 $27,904,335 Less accumulated depreciation, depletion, amorti- zation, and valua- tion allowance ( 22,564,456) ( 22,282,606) ---------- ----------
Net oil and gas properties $ 4,844,378 $ 5,621,729 ========== ==========
I-F Partnership ---------------
1997 1996 ------------ -----------
Proved properties $ 8,021,051 $8,205,960 Unproved properties, not subject to depreciation, depletion, and amortization - 88,701 ---------- --------- $ 8,021,051 $8,294,661 Less accumulated depreciation, depletion, amorti- zation, and valua- tion allowance ( 6,563,143) ( 6,547,831) ---------- ---------
Net oil and gas properties $ 1,457,908 $1,746,830 ========== =========
Costs Incurred
The Partnerships incurred no costs in connection with oil and gas acquisition or exploration activities during 1997, 1996, and 1995. Costs incurred by the Partnerships in connection with oil and gas property development activities during 1997, 1996, and 1995 were as follows:
Partnership 1997 1996 1995 ----------- -------- ------- -------- I-B $ 1,149 $ 445 $ 8,037 I-C 100,573 1,039 - I-D 34,805 10,930 7,434 I-E 279,631 55,490 105,852 I-F 104,709 27,863 54,383
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, 1997, 1996, and 1995 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. The following information includes certain gas balancing adjustments which cause the gas volume to differ from the reserve reports prepared by the General Partner and reviewed by Ryder Scott.
I-B Partnership ---------------
Crude Natural Oil Gas (Barrels) (Mcf) --------- -----------
Proved reserves, Dec. 31, 1994 25,265 1,061,804 Production ( 4,628) ( 150,238) Sales of minerals in place ( 33) ( 8,103) Extensions and discoveries 156 23,443 Revisions of previous estimates ( 797) ( 24,686) ------ ---------
Proved reserves, Dec. 31, 1995 19,963 902,220 Production ( 2,297) ( 150,543) Revisions of previous estimates ( 4,763) 158,168 ------ ---------
Proved reserves, Dec. 31, 1996 12,903 909,845 Production ( 2,277) ( 129,776) Sales of minerals in place ( 765) ( 21,278) Revisions of previous estimates 785 ( 46,749) ------ ---------
Proved reserves, Dec. 31, 1997 10,646 712,042 ====== =========
PROVED DEVELOPED RESERVES: December 31, 1995 19,963 902,220 ====== ========= December 31, 1996 12,903 909,845 ====== ========= December 31, 1997 10,646 712,042 ====== =========
I-C Partnership ---------------
Crude Natural Oil Gas (Barrels) (Mcf) --------- ---------
Proved reserves, Dec. 31, 1994 95,437 967,562 Production ( 27,843) (207,207) Sales of minerals in place ( 363) ( 14,708) Extensions and discoveries 29 4,374 Revisions of previous estimates 41,535 ( 9,961) ------- -------
Proved reserves, Dec. 31, 1995 108,795 740,060 Production ( 27,537) (226,820) Sales of minerals in place ( 4,934) ( 51,035) Revisions of previous estimates 44,909 340,705 ------- -------
Proved reserves, Dec. 31, 1996 121,233 802,910 Production ( 25,122) (178,180) Sales of minerals in place ( 23,710) ( 4,023) Extensions and discoveries 9,718 138,053 Revisions of previous estimates ( 21,212) 35,059 ------- -------
Proved reserves, Dec. 31, 1997 60,907 793,819 ======= =======
PROVED DEVELOPED RESERVES: December 31, 1995 108,795 740,060 ======= ======= December 31, 1996 121,233 802,910 ======= ======= December 31, 1997 60,907 793,819 ======= =======
I-D Partnership ---------------
Crude Natural Oil Gas (Barrels) (Mcf) --------- -----------
Proved reserves, Dec. 31, 1994 71,457 2,582,099 Production (22,427) ( 577,969) Sales of minerals in place ( 6) ( 2,087) Extensions and discoveries 140 9,656 Revisions of previous estimates 3,810 388,141 ------ ---------
Proved reserves, Dec. 31, 1995 52,974 2,399,840 Production (21,291) ( 577,657) Sales of minerals in place ( 4,935) ( 29,621) Extensions and discoveries 123 5,646 Revisions of previous estimates 28,706 499,715 ------ ---------
Proved reserves, Dec. 31, 1996 55,577 2,297,923 Production (18,760) ( 510,113) Sales of minerals in place ( 168) ( 5,510) Revisions of previous estimates 4,349 156,947 ------ ---------
Proved reserves, Dec. 31, 1997 40,998 1,939,247 ====== =========
PROVED DEVELOPED RESERVES:
December 31, 1995 52,974 2,399,840 ====== ========= December 31, 1996 55,219 2,276,438 ====== ========= December 31, 1997 40,875 1,925,548 ====== =========
I-E Partnership ---------------
Crude Natural Oil Gas (Barrels) (Mcf) --------- ------------
Proved reserves, Dec. 31, 1994 485,418 12,717,229 Production ( 89,117) ( 2,412,342) Sales of minerals in place ( 65) ( 12,013) Extensions and discoveries 10,358 66,844 Revisions of previous estimates 86,214 2,321,612 ------- ----------
Proved reserves, Dec. 31, 1995 492,808 12,681,330 Production ( 70,998) ( 2,206,082) Sales of minerals in place ( 24,754) ( 278,884) Extensions and discoveries 778 73,593 Revisions of previous estimates 123,001 1,483,030 ------- ----------
Proved reserves, Dec. 31, 1996 520,835 11,752,987 Production ( 77,648) ( 2,139,704) Sales of minerals in place ( 14,619) ( 66,444) Extensions and discoveries 29,604 18,612 Revisions of previous estimates ( 58,499) 985,558 ------- ----------
Proved reserves, Dec. 31, 1997 399,673 10,551,009 ======= ==========
PROVED DEVELOPED RESERVES:
December 31, 1995 492,808 12,681,330 ======= ========== December 31, 1996 519,687 11,683,935 ======= ========== December 31, 1997 399,277 10,506,977 ======= ==========
I-F Partnership ---------------
Crude Natural Oil Gas (Barrels) (Mcf) --------- -----------
Proved reserves, Dec. 31, 1994 235,262 3,935,837 Production ( 45,101) ( 711,486) Sales of minerals in place ( 33) ( 5,373) Extensions and discoveries 7,063 36,456 Revisions of previous estimates 49,360 578,157 ------- ---------
Proved reserves, Dec. 31, 1995 246,551 3,833,591 Production ( 35,577) ( 652,692) Sales of minerals in place ( 12,337) ( 132,134) Extensions and discoveries 399 26,335 Revisions of previous estimates 70,126 481,185 ------- ---------
Proved reserves, Dec. 31, 1996 269,162 3,556,285 Production ( 38,725) ( 571,101) Sales of minerals in place ( 8,673) ( 38,629) Extensions and discoveries 10,361 6,514 Revisions of previous estimates ( 34,694) 377,552 ------- ---------
Proved reserves, Dec. 31, 1997 197,431 3,330,621 ======= =========
PROVED DEVELOPED RESERVES:
December 31, 1995 246,551 3,833,591 ======= ========= December 31, 1996 268,768 3,532,534 ======= ========= December 31, 1997 197,297 3,315,478 ======= =========
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, 1997 relating to proved oil and gas reserves based on the standardized measure as prescribed in SFAS No. 69:
Partnership ------------------------------ I-B I-C ------------ ------------- Future cash inflows $1,941,526 $ 2,947,424 Future production and development costs ( 552,823) ( 1,186,744) --------- ----------
Future net cash flows $1,388,703 $ 1,760,680
10% discount to reflect timing of cash flows ( 439,036) ( 585,010) --------- ----------
Standardized measure of discounted future net cash flows $ 949,667 $ 1,175,670 ========= ==========
Partnership ------------------------------ I-D I-E ------------ -------------
Future cash inflows $5,183,042 $30,577,321 Future production and development costs ( 1,335,553) ( 9,611,493) --------- ----------
Future net cash flows $3,847,489 $20,965,828
10% discount to reflect timing of cash flows ( 1,071,700) ( 6,394,370) --------- ----------
Standardized measure of discounted future net cash flows $2,775,789 $14,571,458 ========= ==========
I-F Partnership ---------------
Future cash inflows $11,093,413 Future production and development costs ( 4,114,244) ----------
Future net cash flows $ 6,979,169
10% discount to reflect timing of cash flows ( 2,281,427) ----------
Standardized measure of discounted future net cash flows $ 4,697,742 ==========
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, 1997 using oil and gas prices of approximately $16.25 per barrel and $2.32 per Mcf, respectively.
INDEX TO EXHIBITS -----------------
Number Description - ------ -----------
4.1 The Certificate and Agreements of Limited Partnership for the following Geodyne Energy Income Limited Partnerships have been previously filed with the SEC as Exhibit 2.1 to Form 8-A filed by each Limited Partnership on the dates shown below and are hereby incorporated by reference.
Partnership Filing Date File No. ----------- ------------ --------
I-B May 23, 1986 0-14657 I-C May 23, 1986 0-14658 I-D May 5, 1987 0-15831 I-E May 5, 1987 0-15832 I-F May 5, 1987 0-15833
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 Amended and Restated Agreement and Certificate of Limited Partnership of Geodyne Energy Income Limited Partnership I-B, 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 Amended and Restated Agreement and Certificate of Limited Partnership of Geodyne Energy Income Limited Partnership I-C, 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 Amended and Restated Agreement and Certificate of Limited Partnership of Geodyne Energy Income Limited Partnership I-D, 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 Amended and Restated Agreement and Certificate of Limited Partnership of Geodyne Energy Income Limited Partnership I-E, 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 Amended and Restated Agreement and Certificate of Limited Partnership of Geodyne Energy Income Limited Partnership I-F, 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.
*23.1 Consent of Ryder Scott Company Petroleum Engineers for Geodyne Energy Income Limited Partnership I-B.
*23.2 Consent of Ryder Scott Company Petroleum Engineers for Geodyne Energy Income Limited Partnership I-C.
*23.3 Consent of Ryder Scott Company Petroleum Engineers for Geodyne Energy Income Limited Partnership I-D.
*23.4 Consent of Ryder Scott Company Petroleum Engineers for Geodyne Energy Income Limited Partnership I-E.
*23.5 Consent of Ryder Scott Company Petroleum Engineers for Geodyne Energy Income Limited Partnership I-F.
*27.1 Financial Data Schedule containing summary financial information extracted from the Geodyne Energy Income Limited Partnership I-B's financial statements as of December 31, 1997 and for the year ended December 31, 1997.
*27.2 Financial Data Schedule containing summary financial information extracted from the Geodyne Energy Income Limited Partnership I-C's financial statements as of December 31, 1997 and for the year ended December 31, 1997.
*27.3 Financial Data Schedule containing summary financial information extracted from the Geodyne Energy Income Limited Partnership I-D's financial statements as of December 31, 1997 and for the year ended December 31, 1997.
*27.4 Financial Data Schedule containing summary financial information extracted from the Geodyne Energy Income Limited Partnership I-E's financial statements as of December 31, 1997 and for the year ended December 31, 1997.
*27.5 Financial Data Schedule containing summary financial information extracted from the Geodyne Energy Income Limited Partnership I-F's financial statements as of December 31, 1997 and for the year ended December 31, 1997.
All other Exhibits are omitted as inapplicable.
----------
* Filed herewith.