ITEM 1. BUSINESS
General
The Geodyne Energy Income Limited Partnership III-A (the "III-A Partnership"), Geodyne Energy Income Limited Partnership III-B (the "III-B Partnership"), Geodyne Energy Income Limited Partnership III-C (the "III-C Partnership"), Geodyne Energy Income Limited Partnership III-D (the "III-D Partnership"), Geodyne Energy Income Limited Partnership III-E (the "III-E Partnership"), Geodyne Energy Income Limited Partnership III-F (the "III-F Partnership"), and Geodyne Energy Income Limited Partnership III-G (the "III-G Partnership") (collectively, the "Partnerships") are limited partnerships formed under the Oklahoma Revised Uniform Limited Partnership Act. Each Partnership is composed of Geodyne Resources, Inc., a Delaware corporation, as general partner ("Geodyne" or the "General Partner"), Geodyne Depositary Company, a Delaware corporation, as the sole initial limited partner, and public investors as substitute limited partners (the "Limited Partners"). The Partnerships commenced operations on the dates set forth below:
Date of Partnership Activation ----------- ------------------
III-A November 21, 1989 III-B January 24, 1990 III-C February 27, 1990 III-D September 5, 1990 III-E December 26, 1990 III-F March 7, 1991 III-G September 20, 1991
The General Partner currently serves as general partner of 29 limited partnerships and is a wholly-owned subsidiary of Samson Investment Company. Samson Investment Company and its various corporate subsidiaries, including the General Partner (collectively, the "Samson Companies"), are 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 partnership agreements for the Partnerships (the "Partnership Agreements") the Partnerships will terminate on the following dates:
Partnership Termination Date ----------- ------------------ III-A November 28, 1999 III-B January 24, 2000 III-C February 28, 2000 III-D September 5, 2000 III-E December 26, 2000 III-F March 7, 2001 III-G September 20, 2001
However, the Partnership Agreements provide that the General Partner may extend the term of each Partnership for up to five periods of two years each. As of the date of this Annual Report on Form 10-K405 ("Annual Report"), the General Partner has not determined whether to extend the term of any Partnership.
Funding
Although the Partnership Agreements permit the Partnerships to incur borrowings, operations and expenses are currently funded out of each Partnership's revenues from oil and gas sales. The General Partner may, but is not required to, advance funds to a Partnership for the same purposes for which Partnership borrowings are authorized.
Principal Products Produced and Services Rendered
The Partnerships' sole business is the production of, and related incidental development of, oil and gas. The Partnerships do not refine or otherwise process crude oil and condensate. The Partnerships do not hold any patents, trademarks, licenses, or concessions and are not a party to any government contracts. The Partnerships have no backlog of orders and do not participate in research and development activities. The Partnerships are not presently encountering shortages of oilfield tubular goods, compressors, production material, or other equipment.
Competition and Marketing
The 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 Purchaser Percentage ----------- ------------------------ ----------
III-A El Paso Energy Marketing Company ("El Paso") 47.2% Valero Industrial Gas L.P. ("Valero") 14.4%
III-B El Paso 37.9% Sun Refining & Marketing Company 13.1% Phibro Energy, Inc. 12.7% Valero 11.4%
III-C El Paso 49.8%
III-D El Paso 45.6% Eaglwing Trading, Inc. ("Eaglwing") 18.3%
III-E Eaglwing 33.3% El Paso 12.4%
III-F El Paso 28.5%
III-G El Paso 23.9%
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
Number of Gross Wells(2) Number of Net Wells(3) ------------------------------ -------------------------------- P/ship Total Oil Gas N/A(4) Total Oil Gas N/A(4) - -------- ----- ----- --- ------ ------ ------ ----- ------ III-A 209 103 105 1 11.35 2.94 8.38 .03 III-B 155 71 83 1 7.58 3.17 4.40 .01 III-C 189 71 116 2 21.75 12.12 9.45 .18 III-D 204 138 63 3 14.57 8.48 5.91 .18 III-E 263 117 143 3 48.60 22.97 25.32 .31 III-F 626 487 138 1 27.07 15.21 11.82 .04 III-G 2,198 1,761 436 1 18.15 11.36 6.77 .02
- ---------- (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
The following Partnerships participated in developmental drilling activities during 1997: Working P/ship Name Location Type Interest - ------ --------------- --------------- ---- -------- III-A Schwarz No. 8 Webb County, TX Dry 9.99% III-B Schwarz No. 8 Webb County, TX Dry 4.65% III-C Schwarz No. 8 Webb County, TX Dry 1.94% III-G Goldsmith Adobe Ector, TX Oil .01% Unit III-G Plains Unit Yoakum, TX Oil .04%
The III-D, III-E, and III-F Partnerships participated in no drilling activities during 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
III-A Partnership -----------------
Year Ended December 31, ----------------------------------- 1997 1996 1995 ---------- ---------- ---------- Production: Oil (Bbls) 40,468 46,923 58,590 Gas (Mcf) 1,031,152 1,268,943 1,798,692 Oil and gas sales: Oil $ 796,356 $ 975,701 $1,026,724 Gas 2,532,278 2,658,303 2,620,883 --------- --------- --------- Total $3,328,634 $3,634,004 $3,647,607 ========= ========= ========= Total direct operating expenses $ 719,090 $ 899,073 $1,129,096 ========= ========= ========= Direct operating expenses as a percentage of oil and gas sales 21.6% 24.7% 31.0%
Average sales price: Per barrel of oil $19.68 $20.79 $17.52 Per Mcf of gas 2.46 2.09 1.46
Direct operating expenses per equivalent Bbl of oil $ 3.39 $ 3.48 $ 3.15
Net Production Data
III-B Partnership -----------------
Year Ended December 31, ----------------------------------- 1997 1996 1995 ---------- ---------- ---------- Production: Oil (Bbls) 37,216 37,849 42,818 Gas (Mcf) 518,891 642,152 900,882 Oil and gas sales: Oil $ 735,310 $ 794,186 $ 752,820 Gas 1,236,812 1,319,321 1,310,287 --------- --------- --------- Total $1,972,122 $2,113,507 $2,063,107 ========= ========= ========= Total direct operating expenses $ 419,217 $ 497,491 $ 617,474 ========= ========= ========= Direct operating expenses as a percentage of oil and gas sales 21.3% 23.5% 29.9%
Average sales price: Per barrel of oil $19.76 $20.98 $17.58 Per Mcf of gas 2.38 2.05 1.45
Direct operating expenses per equivalent Bbl of oil $ 3.39 $ 3.43 $ 3.20
Net Production Data
III-C Partnership -----------------
Year Ended December 31, ------------------------------------- 1997 1996 1995 ---------- ---------- ---------- Production: Oil (Bbls) 27,069 27,429 26,926 Gas (Mcf) 1,124,237 1,351,525 1,662,411 Oil and gas sales: Oil $ 534,386 $ 567,261 $ 466,779 Gas 2,537,465 2,692,354 2,293,709 --------- --------- --------- Total $3,071,851 $3,259,615 $2,760,488 ========= ========= ========= Total direct operating expenses $ 749,102 $ 781,115 $ 819,583 ========= ========= ========= Direct operating expenses as a percentage of oil and gas sales 24.4% 24.0% 29.7%
Average sales price: Per barrel of oil $19.74 $20.68 $17.34 Per Mcf of gas 2.26 1.99 1.38
Direct operating expenses per equivalent Bbl of oil $ 3.49 $ 3.09 $ 2.70
Net Production Data
III-D Partnership -----------------
Year Ended December 31, ------------------------------------- 1997 1996 1995 ---------- ---------- ---------- Production: Oil (Bbls) 40,758 41,351 42,166 Gas (Mcf) 708,262 760,593 1,000,561 Oil and gas sales: Oil $ 778,978 $ 832,109 $ 699,885 Gas 1,556,567 1,504,599 1,387,597 --------- --------- --------- Total $2,335,545 $2,336,708 $2,087,482 ========= ========= ========= Total direct operating expenses $ 867,060 $ 928,670 $ 743,746 ========= ========= ========= Direct operating expenses as a percentage of oil and gas sales 37.1% 39.7% 35.6%
Average sales price: Per barrel of oil $19.11 $20.12 $16.60 Per Mcf of gas 2.20 1.98 1.39
Direct operating expenses per equivalent Bbl of oil $ 5.46 $ 5.52 $ 3.56
Net Production Data
III-E Partnership -----------------
Year Ended December 31, ------------------------------------- 1997 1996 1995 ---------- ---------- ---------- Production: Oil (Bbls) 235,152 229,226 256,992 Gas (Mcf) 2,189,619 2,152,599 3,030,077 Oil and gas sales: Oil $4,460,740 $4,572,097 $4,235,397 Gas 4,581,069 4,458,018 4,440,650 --------- --------- --------- Total $9,041,809 $9,030,115 $8,676,047 ========= ========= ========= Total direct operating expenses $4,513,216 $4,418,264 $4,755,568 ========= ========= ========= Direct operating expenses as a percentage of oil and gas sales 49.9% 48.9% 54.8%
Average sales price: Per barrel of oil $18.97 $19.95 $16.48 Per Mcf of gas 2.09 2.07 1.47
Direct operating expenses per equivalent Bbl of oil $ 7.52 $ 7.51 $ 6.24
Net Production Data
III-F Partnership -----------------
Year Ended December 31, ------------------------------------- 1997 1996 1995 ---------- ---------- ---------- Production: Oil (Bbls) 65,787 74,064 78,456 Gas (Mcf) 898,447 924,827 1,107,951 Oil and gas sales: Oil $1,240,058 $1,494,695 $1,291,617 Gas 1,751,392 1,600,043 1,406,199 --------- --------- --------- Total $2,991,450 $3,094,738 $2,697,816 ========= ========= ========= Total direct operating expenses $1,332,931 $1,237,607 $1,472,070 ========= ========= ========= Direct operating expenses as a percentage of oil and gas sales 44.6% 40.0% 54.6%
Average sales price: Per barrel of oil $18.85 $20.18 $16.46 Per Mcf of gas 1.95 1.73 1.27
Direct operating expenses per equivalent Bbl of oil $ 6.18 $ 5.42 $ 5.59
Net Production Data
III-G Partnership -----------------
Year Ended December 31, ------------------------------------- 1997 1996 1995 ---------- ---------- ---------- Production: Oil (Bbls) 47,493 54,083 56,567 Gas (Mcf) 500,966 499,884 596,184 Oil and gas sales: Oil $ 897,536 $1,091,687 $ 932,457 Gas 947,728 870,868 762,390 --------- --------- --------- Total $1,845,264 $1,962,555 $1,694,847 ========= ========= ========= Total direct operating expenses $ 854,673 $ 804,410 $ 937,989 ========= ========= ========= Direct operating expenses as a percentage of oil and gas sales 46.3% 41.0% 55.3%
Average sales price: Per barrel of oil $18.90 $20.19 $16.48 Per Mcf of gas 1.89 1.74 1.28
Direct operating expenses per equivalent Bbl of oil $ 6.52 $ 5.85 $ 6.02
Proved Reserves and Net Present Value
The following table sets forth each Partnership's estimated proved oil and gas reserves and net present value therefrom as of December 31, 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, 1997. 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)
III-A Partnership: - ----------------- Estimated proved reserves: Gas (Mcf) 5,231,840 Oil and liquids (Bbls) 112,863
Net present value (discounted at 10% per annum) $ 7,515,082
III-B Partnership: - ----------------- Estimated proved reserves: Gas (Mcf) 2,533,853 Oil and liquids (Bbls) 93,543
Net present value (discounted at 10% per annum) $ 3,944,494
III-C Partnership: - ----------------- Estimated proved reserves: Gas (Mcf) 7,179,593 Oil and liquids (Bbls) 153,312
Net present value (discounted at 10% per annum) $ 8,080,660
III-D Partnership: - ----------------- Estimated proved reserves: Gas (Mcf) 3,804,550 Oil and liquids (Bbls) 478,395
Net present value (discounted at 10% per annum) $ 5,140,532
III-E Partnership: - ----------------- Estimated proved reserves: Gas (Mcf) 10,133,149 Oil and liquids (Bbls) 3,011,540
Net present value (discounted at 10% per annum) $18,082,732
III-F Partnership: - ----------------- Estimated proved reserves: Gas (Mcf) 5,603,809 Oil and liquids (Bbls) 399,746
Net present value (discounted at 10% per annum) $ 7,081,731
III-G Partnership: - ----------------- Estimated proved reserves: Gas (Mcf) 2,996,317 Oil and liquids (Bbls) 302,928
Net present value (discounted at 10% per annum) $ 4,174,021
- ----------
(1) Includes certain gas balancing adjustments which cause the gas volumes and net present values to differ from the reserve reports which were prepared by the General Partner and reviewed by Ryder Scott.
No estimates of the proved reserves of the Partnerships comparable to those included herein have been included in reports to any federal agency other than the SEC. Additional information relating to the Partnerships' proved reserves is contained in Note 4 to the Partnerships' financial statements, included in Item 8 of this Annual Report.
Significant Properties
The following tables set forth certain well and reserves information for the basins in which the Partnerships own a significant amount of oil and gas properties. The tables contain the following information for each significant basin: (i) the number of gross wells and net wells, (ii) the number of wells in which only a non-working interest is owned, (iii) the Partnership's total number of wells, (iv) the number of wells operated by the Partnership's affiliates, (v) estimated proved oil reserves, (vi) estimated proved gas reserves, and (vii) the present value (discounted at 10% per annum) of estimated future net cash flow.
The Anadarko Basin is located in western Oklahoma and the Texas panhandle, while the Arkla Basin is located in southern Arkansas and northern Louisiana. The Gulf Coast Basin is located in southern Louisiana and southeast Texas, while the Permian Basin straddles west Texas and southeast New Mexico. Southern Oklahoma contains the Southern Oklahoma Folded Belt Basin. The Jay-Little Escambia Creek Field Unit is located in Santa Rosa County, Florida, while the Green River Basin is located in southern Wyoming and Northwest Colorado.
Title to Oil and Gas Properties
Management believes that the Partnerships have satisfactory title to their oil and gas properties. Record title to all of the Partnerships' properties is held by either the Partnerships or Geodyne Nominee Corporation, an affiliate of the General Partner.
Title to the Partnerships' properties is subject to customary royalty, overriding royalty, carried, working, and other similar interests and contractual arrangements customary in the oil and gas industry, to liens for current taxes not yet due, and to other encumbrances. Management believes that such burdens do not materially detract from the value of such properties or from the Partnerships' interest therein or materially interfere with their use in the operation of the Partnerships' business.
ITEM 3.
ITEM 3. LEGAL PROCEEDINGS
On October 26, 1994 Geodyne and the Partnerships, among other parties, were named as defendants in a lawsuit alleging causes of action based on fraud, negligent misrepresentation, breach of fiduciary duty, breach of implied covenant, and breach of contract in connection with the offer and sale of limited partnership interests ("Units") in the Partnerships (Sidney Neidick et al. v. Geodyne Resources, Inc., et al., Case No. 94-052860, District Court of Harris County, Texas). The plaintiffs' petition alleged that the lawsuit was being brought as a class action on behalf of investors who purchased Units in the Partnerships. On June 7, 1995, Geodyne and the Partnerships were dismissed without prejudice as defendants in the matter. In addition, on June 7, 1995, the matter was certified as a class action.
On November 23 and 25, 1994, Geodyne, PaineWebber Incorporated ("PaineWebber"), and certain other parties were named as defendants in two related lawsuits alleging misrepresentations made to induce investments in the Partnerships and asserting causes of action for common law fraud and deceit and unjust enrichment (Romine v. PaineWebber, Inc., et al, Case No. 94-CIV-8558, U. S. District Court, Southern District of New York and Romine v. PaineWebber, Inc., et al, Case No. 94-132844, Supreme Court of the State of New York, County of New York). The federal court case was later consolidated with other similar actions (to which Geodyne is not a party) under the title In Re: PaineWebber Limited Partnerships' Litigation and was certified as a class action on May 30, 1995 (the "Federal Partnership Class Action"). The Federal Partnership Class Action also alleges violations of 18 U.S.C. Section 1962(c) and the Securities Exchange Act of 1934. Compensatory and punitive damages, interest, and costs have been requested in both matters. The amended complaint in the Federal Partnership Class Action no longer asserts any claim directly against Geodyne.
On January 18, 1996, PaineWebber issued a press release indicating that it had reached an agreement to settle the pending Federal Partnership Class Action along with the Neidick matter referred to above (collectively, the "PaineWebber Partnership Class Actions"), along with a settlement with the SEC and an agreement to settle with various state securities regulators. On that date, PaineWebber paid $125 million into an interest bearing account as part of a memorandum of understanding in connection with the proposed settlement (the "Settlement Fund"). The Settlement Fund applies to claims related to both the Partnerships and certain other investment programs sold by PaineWebber. In addition, PaineWebber agreed to a SEC administrative order creating a capped $40 million fund (the "SEC Claims Fund"), which is to be distributed to eligible Limited Partners by an independent administrator (the "Claims Administrator"); a civil penalty of $5 million leveled by the SEC; and payments aggregating $5 million to state securities administrators. Such settlement is not an obligation of either the Partnerships or Geodyne and, accordingly, would not affect the financial statements of the Partnerships.
In connection with the PaineWebber Partnership Class Actions, on July 17, 1996 the federal court entered a preliminary order regarding the settlement proceedings referred to above. Pursuant to that order, plaintiffs' counsel mailed to class members the Class Settlement Notice (the "Notice") and Proof of Claim. Eligible class members are generally those who purchased their Units through PaineWebber on or before December 31, 1992 and who have not (i) previously opted out of the Class, (ii) previously released PaineWebber, or (iii) finally adjudicated their claims against PaineWebber.
Plaintiffs' counsel will be responsible for allocating payments from the $125 million Settlement Fund previously funded by PaineWebber among eligible Limited Partners and investors in other unrelated PaineWebber partnerships in accordance with the settlement. The amount and date of any payment will vary depending upon many factors set forth in the Notice. It is currently expected that payments from the Settlement Fund will be made some time in 1998.
In addition, eligible Limited Partners in the Partnerships who held their Units on June 3, 1996 may be entitled to certain additional payments from an escrow fund to which PaineWebber will make payments through May 30, 2001 if spot market oil and natural gas prices as reported by the New York Mercantile Exchange fall below certain thresholds set forth in the Notice (the "Pricing Guarantee"). The threshold prices used in the Pricing Guarantee are $18.00 per barrel of oil and $1.80 per Mcf of gas. Under the Notice, PaineWebber payments, if any, made pursuant to the Pricing Guarantee will be paid to Limited Partners of record on June 30, 1996 irrespective of whether they subsequently sell/dispose of their Units to third parties. The Pricing
Guarantee does NOT attach to the Units as an attribute of ownership in the Partnerships and is not an obligation of either Geodyne or the Partnerships.
A look back provision is also included in the settlement which may provide additional funds as of January 1, 2001 for eligible Limited Partners. Class members who sold their Units prior to June 30, 1996 will not be eligible for payments, if any, under the Pricing Guarantee or the look back provision.
Eligible Limited Partners were required to timely execute and return a proof of claim by January 17, 1997 in order to participate in the settlement.
In connection with the SEC Claims Fund, on April 17, 1996, PaineWebber mailed a Notice and Claim Form to each Limited Partner who purchased Units in the Partnerships through PaineWebber from January 1, 1986 to December 31, 1992. Limited Partners are not eligible to participate in the claims process if they (i) previously reached a settlement with PaineWebber or (ii) had their direct investment claim resolved by a court or in arbitration. Participation in the claims process is optional, and does not prevent a Limited Partner from pursuing any other remedy against PaineWebber that may be available. Limited Partners had until October 22, 1996 to complete the claim form and return it to the Claims Administrator. The determination of whether a Limited Partner is entitled to a recovery under the SEC Claims Fund will be based on whether or not the Claims Administrator determines that the Limited Partner's investment in the Partnerships was suitable for him at the time of purchase. In addition, if the Limited Partner has opted out of the PaineWebber Partnership Class Action and has not already settled with PaineWebber or has had a claim resolved by a court or in arbitration, the Claims Administrator will also consider allegations that misrepresentations were made in connection with the sale of the Units.
On March 20, 1997 the settlement described above was confirmed by the Federal District Court. Certain limited partners in partnerships that were not sponsored by the General Partner appealed 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 Partnership Units Limited Partners ----------- --------- ----------------
III-A 263,976 1,421 III-B 138,336 804 III-C 244,536 1,334 III-D 131,008 722 III-E 418,266 2,312 III-F 221,484 1,192 III-G 121,925 623
Units were initially sold for a price of $100. Units are not traded on any exchange and there is no public trading market for them. The General Partner is aware of certain transfers of Units between unrelated parties, some of which are facilitated by secondary trading firms and matching services. In addition, as further described below, the General Partner is aware of certain "4.9% Tender Offers" which have been made for the Units. The General Partner believes that the transfers between unrelated parties have been limited and sporadic in number and volume. Other than trades facilitated by certain secondary trading firms and matching services, no organized trading market for Units exists and none is expected to develop. Due to the nature of these transactions, the General Partner has no verifiable information regarding prices at which Units have been transferred. Further, a transferee may not become a substitute Limited Partner without the consent of the General Partner.
Pursuant to the terms of the Partnership Agreements, the General Partner is obligated to annually issue a repurchase offer which is based on the estimated future net revenues from the Partnerships' reserves and is calculated pursuant to the terms of the Partnership Agreements. Such repurchase offer is recalculated monthly in order to reflect cash distributions to the Limited Partners and extraordinary events. The following table sets forth the General Partner's repurchase offer per Unit as of the periods indicated. For purpose of this Annual Report, a Unit represents an initial subscription of $100 to a Partnership.
Repurchase Offer Prices -----------------------
1996 1997 1998 ------------------------- ------------------------- ---- 1st 2nd 3rd 4th 1st 2nd 3rd 4th 1st P/ship Qtr. Qtr. Qtr. Qtr. Qtr. Qtr. Qtr. Qtr. Qtr. - ------ ---- ---- ---- ---- ---- ---- ---- ---- ---- III-A $15 $12 $18 $14 $12 $16 $12 $10 $ 8 III-B 15 12 18 15 12 16 12 10 8 III-C 16 14 19 16 14 19 17 15 13 III-D 22 20 28 25 23 26 24 22 20 III-E 32 30 36 34 31 32 30 28 26 III-F 24 23 23 21 20 22 20 19 17 III-G 25 24 25 23 22 25 23 22 20
In addition to this repurchase offer, 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, 1997, and 1998:
Cash Distributions -----------------
--------------------------------------------- 1st 2nd 3rd 4th P/ship Qtr. Qtr. Qtr. Qtr.(1) ------- ------- ------- ------- -------
III-A $1.97 $2.33 $2.08 $3.09 III-B 2.20 2.65 2.23 3.07 III-C 1.25 1.73 1.93 2.35 III-D 1.45 2.07 2.14 2.67 III-E 1.56 2.48 2.27 2.36 III-F 1.13 1.13 1.21 1.76 III-G 1.23 1.23 1.29 2.17
1997 1998 ------------------------------------------ ------ 1st 2nd 3rd 4th 1st P/ship Qtr(1). Qtr. Qtr.(1) Qtr.(1) Qtr.(1) ------ ------ --------- ------- ------- ------
III-A $2.01 $3.24 $4.11 $1.75 $1.83 III-B 2.49 3.57 4.32 1.97 2.15 III-C 2.05 3.26(1) 2.39 1.36 2.09 III-D 2.31 3.68(1) 2.42 1.92 2.27 III-E 2.55 3.59 2.34 1.81 1.70 III-F 1.55 2.98 1.50 1.12 1.68 III-G 1.55 3.20 1.82 1.23 2.18
- ------------------- (1) Amount of cash distributions 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 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 in the "spot market." Prices on the spot market are subject to wide seasonal and regional pricing fluctuations due to the highly competitive nature of the spot market. In addition, such spot market sales are generally short-term in nature and are dependent upon the obtaining of transportation services provided by pipelines. Spot prices for the Partnerships' gas 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.
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 Partnerships' 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.
III-A Partnership -----------------
Year Ended December 31, 1997 Compared to Year Ended December 31, 1996 -------------------------------------
Total oil and gas sales decreased $305,370 (8.4%) in 1997 as compared to 1996. Of this decrease, approximately $134,000 and $497,000, respectively, were related to decreases in volumes of oil and gas sold and $45,000 was related to a decrease in the average price of oil sold, which decreases were partially offset by an increase of approximately $382,000 related to an increase in the average price of gas sold. Volumes of oil and gas sold decreased 6,455 barrels and 237,791 Mcf, respectively, in 1997 as compared to 1996. The decrease in volumes of oil sold resulted primarily from (i) normal declines in production and (ii) a negative prior period volume adjustment made by a purchaser on one significant well in 1997. 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 significant well in 1996. Average oil prices decreased to $19.68 per barrel in 1997 from $20.79 per barrel in 1996. Average gas prices increased to $2.46 per Mcf in 1997 from $2.09 per Mcf in 1996.
Oil and gas production expenses (including lease operating expenses and production taxes) decreased $179,983 (20.0%) in 1997 as compared to 1996. This decrease resulted primarily from (i) the decreases in volumes of oil and gas sold in 1997 as compared to 1996, (ii) workover expenses incurred on two significant wells during 1996 in order to improve the recovery of reserves, and (iii) 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 21.6% in 1997 from 24.7% in 1996. This percentage decrease was primarily due to the dollar 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 $410,230 (36.1%) in 1997 as compared to 1996. This decrease resulted primarily from (i) a reduction in the depletable base of oil and gas properties due to the impairment provision recorded in the first quarter of 1997 as discussed below, (ii) the decreases in volumes of oil and gas sold in 1997, and (iii) upward revisions in the estimates of remaining oil and gas reserves at December 31, 1997. As a percentage of oil and gas sales, this expense decreased to 21.8% in 1997 from 31.3% in 1996. This percentage decrease resulted primarily from (i) the dollar decrease in depreciation, depletion, and amortization discussed above and (ii) the increases in the average prices of gas sold in 1997.
The III-A Partnership recognized a non-cash charge against earnings of $1,617,006 in the first quarter of 1997. Of this amount, $184,644 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 $1,432,362 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 III-A Partnership's Partnership Agreement which limit the level of permissible drilling activity. No similar charges were necessary in 1996.
General and administrative expenses decreased $12,979 (4.0%) in 1997 as compared to 1996. This decrease resulted primarily from the reversal of a prior charge which was recorded in error. As a percentage of oil and gas sales, these expenses remained relatively constant at 9.4% in 1997 and 8.9% in 1996.
The Limited Partners have received cash distributions through December 31, 1997 totaling $23,564,701 or 89.27% of the Limited Partners' capital contributions.
Year Ended December 31, 1996 Compared to Year Ended December 31, 1995 -------------------------------------
Total oil and gas sales remained relatively constant for 1996 as compared to 1995. Any decrease related to decreases in volumes of oil and gas sold were offset by increases related to increases in the average prices of oil and gas sold. Volumes of oil and gas sold decreased 11,667 barrels and 529,749 Mcf, respectively, for 1996 as compared to 1995. The decrease in volumes of oil sold resulted primarily from (i) the shutting-in of one well during 1996 in order to perform a workover to improve the recovery of reserves and (ii) normal declines in production due to diminished oil reserves on several wells. The decrease in volumes of gas sold resulted primarily from (i) normal declines in production due to diminished gas reserves on several wells during 1996 as compared to 1995, (ii) a positive prior period volume adjustment made by the purchaser on one well during 1995, and (iii) the sale of several gas producing wells during 1996. Average oil and gas prices increased to $20.79 per barrel and $2.09 per Mcf, respectively, for 1996 from $17.52 per barrel and $1.46 per Mcf, respectively, for 1995.
Oil and gas production expenses (including lease operating expenses and production taxes) decreased $230,023 (20.4%) for 1996 as compared to 1995. This decrease resulted primarily from the decrease in volumes of oil and gas sold during 1996. As a percentage of oil and gas sales, these expenses decreased to 24.7% 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 as compared to 1995.
Depreciation, depletion, and amortization of oil and gas properties decreased $975,909 (46.2%) for 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 31.3% for 1996 from 57.9% 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 III-A Partnership recognized a non-cash charge against earnings of $1,267,185 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 $15,705 (5.1%) for 1996 as compared to 1995. This increase was primarily due to an increase in professional fees and printing and postage expenses during 1996 as compared to 1995. As a percentage of oil and gas sales, these expenses remained relatively constant at 8.9% for 1996 as compared to 8.5% for 1995.
III-B Partnership -----------------
Year Ended December 31, 1997 Compared to Year Ended December 31, 1996 -------------------------------------
Total oil and gas sales decreased $141,385 (6.7%) in 1997 as compared to 1996. Of this decrease approximately $13,000 and $293,000, respectively, related to decreases in volumes of oil and gas sold and $46,000 related to a decrease in the average price of oil sold, which decreases were partially offset by an increase of approximately $212,000 related to an increase in the average price of gas sold in 1997. Volumes of oil and gas sold decreased 633 barrels and 123,261 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 the purchaser on one significant well in 1996. Average oil prices decreased to $19.76 per barrel in 1997 from $20.98 per barrel in 1996. Average gas prices increased to $2.38 per Mcf in 1997 from $2.05 per Mcf in 1996.
Oil and gas production expenses (including lease operating expenses and production taxes) decreased $78,274 (15.7%) in 1997 as compared to 1996. This decrease resulted primarily from (i) the decrease in volumes of gas sold in 1997 and (ii) workover expenses incurred on two wells during 1996 in order to improve the recovery of reserves. As a percentage of oil and gas sales, these expenses decreased to 21.3% in 1997 from 23.5% in 1996. This percentage decrease was primarily due to the dollar 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 $188,404 (29.7%) in 1997 as compared to 1996. This decrease resulted primarily from (i) a reduction in the depletable base of oil and gas properties due to the impairment provision recorded in the first quarter of 1997 as discussed below, (ii) the decreases in volumes of oil and gas sold in 1997, and (iii) upward revisions in the estimates of remaining oil and gas reserves at December 31, 1997. As a percentage of oil and gas sales, this expense decreased to 22.6% in 1997 from 30.0% in 1996. This percentage decrease resulted
primarily from (i) the dollar decrease in depreciation, depletion, and amortization discussed above and (ii) the increases in the average prices of gas sold in 1997.
The III-B Partnership recognized a non-cash charge against earnings of $738,122 in the first quarter of 1997. Of this amount, $77,653 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 $660,469 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 III-B Partnership's Partnership Agreement which limit the level of permissible drilling activity. No similar charges were necessary in 1996.
General and administrative expenses decreased $7,728 (4.5%) in 1997 as compared to 1996. This decrease resulted primarily from the reversal of a prior charge which was recorded in error. As a percentage of oil and gas sales, these expenses remained relatively constant at 8.3% in 1997 and 8.1% in 1996.
The Limited Partners have received cash distributions through December 31, 1997 totaling $13,717,353 or 99.16% of the Limited Partners' capital contributions. During the first quarter of 1998, the Limited Partners have received cash distributions totalling in excess of their capital contributions. Therefore, beginning in the first quarter of 1998, operations will be allocated using after payout percentages. See Note 1 to the financial statements included in Item 8
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The financial statements and supplementary data are indexed in Item 14 hereof.
ITEM 9.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
None.
PART III
ITEM 10.
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE GENERAL PARTNER
The Partnerships have no directors or executive officers. The following individuals are directors and executive officers of the General Partner. The business address of such director and executive officers is Two West Second Street, Tulsa, Oklahoma 74103.
Name Age Position with Geodyne ---------------- --- -------------------------------- Dennis R. Neill 45 President and Director
Judy K. Fox 46 Secretary
The director will hold office until the next annual meeting of shareholders of Geodyne and until his successor has been duly elected and qualified. All executive officers serve at the discretion of the Board of Directors.
Dennis R. Neill joined the Samson Companies in 1981, was named Senior Vice President and Director of Geodyne on March 3, 1993, and was named President of Geodyne 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 best knowledge of the Partnerships and the General Partner, there were no officers, directors, or ten percent owners who were delinquent filers of reports required under Section 16 of the Securities Exchange Act of 1934 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 during 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 amounts charged to the Partnerships have not fluctuated due to expense limitations imposed by the Partnership Agreements.
Partnership 1997 1996 1995 ----------- -------- -------- --------
III-A $277,872 $277,872 $277,872 III-B 145,620 145,620 145,620 III-C 257,412 257,412 257,412 III-D 137,904 137,904 137,904 III-E 440,280 440,280 440,280 III-F 233,136 233,136 233,136 III-G 128,340 128,340 128,340
None of the officers or directors of the General Partner receive compensation directly from the Partnerships. The Partnerships reimburse the General Partner or its affiliates for that portion of such officers' and directors' salaries and expenses attributable to time devoted by such individuals to the Partnerships' activities. 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 ----------- ----------
III-A $1,811,755 III-B 863,111 III-C 1,325,188 III-D 849,298 III-E 2,128,723 III-F 847,849 III-G 446,378
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 (i) each beneficial owner of more than five
percent of the issued and outstanding Units, (ii) the directors and officers of the General Partner, and (iii) the General Partner and its affiliates. The address of each of such persons is Samson Plaza, Two West Second Street, Tulsa, Oklahoma 74103.
Number of Units Beneficially Owned (Percent Beneficial Owner of Outstanding) - ------------------------------------ ------------------
III-A Partnership: - ----------------- Samson Resources Company 27,010 (10.2%)
All affiliates, directors, and officers of the General Partner as a group and the General Partner (4 persons) 27,010 (10.2%)
III-B Partnership: - ----------------- Samson Resources Company 15,206 (11.0%)
All affiliates, directors, and officers of the General Partner as a group and the General Partner (4 persons) 15,206 (11.0%)
III-C Partnership: - ----------------- Samson Resources Company 30,371 (12.4%)
All affiliates, directors, and officers of the General Partner as a group and the General Partner (4 persons) 30,371 (12.4%)
III-D Partnership: - ----------------- Samson Resources Company 19,505 (14.9%)
All affiliates, directors, and officers of the General Partner as a group and the General Partner (4 persons) 19,505 (14.9%)
III-E Partnership: - ----------------- Samson Resources Company 53,068 (12.7%)
All affiliates, directors, and officers of the General Partner as a group and the General Partner (4 persons) 53,068 (12.7%)
III-F Partnership: - ----------------- Samson Resources Company 29,898 (13.5%)
All affiliates, directors, and officers of the General Partner as a group and the General Partner (4 persons) 29,898 (13.5%)
III-G Partnership: - ----------------- Samson Resources Company 15,898 (13.0%)
All affiliates, directors, and officers of the General Partner as a group and the General Partner (4 persons) 15,898 (13.0%)
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 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 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) Samson will maintain an "800" investor services telephone number; and (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 other relationships and related transactions see "Item 11. Executive Compensation."
PART IV
ITEM 14.
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K
(a) Financial Statements, Financial Statement Schedules, and Exhibits.
(1) Financial Statements: The following financial statements for the
Geodyne Energy Income Limited Partnership III-A Geodyne Energy Income Limited Partnership III-B Geodyne Energy Income Limited Partnership III-C Geodyne Energy Income Limited Partnership III-D Geodyne Energy Income Limited Partnership III-E Geodyne Energy Income Limited Partnership III-F Geodyne Energy Income Limited Partnership III-G
as of December 31, 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 Balance Sheets Statements of Operations Statements of Changes in Partners' Capital (Deficit) Statements of Cash Flows Notes to Financial Statements
(2) Financial Statement Schedules:
None.
(3) Exhibits:
4.1 The Certificate and Agreements of Limited Partnership for the following Partnerships have been previously filed with the Securities and Exchange Commission as Exhibit 2.1 to Form 8-A filed by each Partnership on the dates shown below and are hereby incorporated by reference.
Partnership Filing Date File No. ----------- ----------- --------
III-A February 20, 1990 0-18302 III-B March 30, 1990 0-18636 III-C March 30, 1990 0-18634 III-D November 14, 1990 0-18936 III-E January 22, 1991 0-19010 III-F March 25, 1991 0-19102 III-G September 30, 1991 0-19563
4.2 Advisory Agreement dated as of November 24, 1992 between Samson, PaineWebber, Geodyne Resources, Geodyne Properties, Inc., Geodyne Production Company, and Geodyne Energy Company filed as Exhibit 28.3 to Registrant's Current Report on Form 8-K on December 24, 1992 and is hereby incorporated by reference.
4.3 Second Amendment to Agreement of Limited Partnership of Geodyne Energy Income Limited Partnership III-A, filed as Exhibit 4.1 to Registrant's Current Report on Form 8-K dated August 2, 1993 filed with the SEC on August 10, 1993 and is hereby incorporated by reference.
4.4 Second Amendment to Agreement of Limited Partnership of Geodyne Energy Income Limited Partnership III-B, filed as Exhibit 4.2 to Registrant's Current Report on Form 8-K dated August 2, 1993 filed with the SEC on August 10, 1993 and is hereby incorporated by reference.
4.5 Second Amendment to Agreement of Limited Partnership of Geodyne Energy Income Limited Partnership III-C, filed as Exhibit 4.3 to Registrant's Current Report on Form 8-K dated August 2, 1993 filed with the SEC on August 10, 1993 and is hereby incorporated by reference.
4.6 Second Amendment to Agreement of Limited Partnership of Geodyne Energy Income Limited Partnership III-D, filed as Exhibit 4.4 to Registrant's Current Report on Form 8-K dated August 2, 1993 filed with the SEC on August 10, 1993 and is hereby incorporated by reference.
4.7 Second Amendment to Agreement of Limited Partnership of Geodyne Energy Income Limited Partnership III-E, filed as Exhibit 4.5 to Registrant's Current Report on Form 8-K dated August 2, 1993 filed with the SEC on August 10, 1993 and is hereby incorporated by reference.
4.8 Second Amendment to Agreement of Limited Partnership of Geodyne Energy Income Limited Partnership III-F, filed as Exhibit 4.6 to Registrant's Current Report on Form 8-K dated August 2, 1993 filed with the SEC on August 10, 1993 and is hereby incorporated by reference.
4.9 Second Amendment to Agreement of Limited Partnership of Geodyne Energy Income Limited Partnership III-G, filed as Exhibit 4.7 to Registrant's Current Report on Form 8-K dated August 2, 1993 filed with the SEC on August 10, 1993 and is hereby incorporated by reference.
4.10 Third Amendment to Agreement of Limited Partnership of Geodyne Energy Income Limited Partnership III-A, filed as Exhibit 4.10 to Registrant's Annual Report on Form 10-K for the year ended December 31, 1995 filed with the SEC on April 1, 1996 and is hereby incorporated by reference.
4.11 Third Amendment to Agreement of Limited Partnership of Geodyne Energy Income Limited Partnership III-B, filed as Exhibit 4.11 to Registrant's Annual Report on Form 10-K for the year ended December 31, 1995 filed with the SEC on April 1, 1996 and is hereby incorporated by reference.
4.12 Third Amendment to Agreement of Limited Partnership of Geodyne Energy Income Limited Partnership III-C, filed as Exhibit 4.12 to Registrant's Annual Report on Form 10-K for the year ended December 31, 1995 filed with the SEC on April 1, 1996 and is hereby incorporated by reference.
4.13 Third Amendment to Agreement of Limited Partnership of Geodyne Energy Income Limited Partnership III-D, filed as Exhibit 4.13 to Registrant's Annual Report on Form 10-K for the year ended December 31, 1995 filed with the SEC on April 1, 1996 and is hereby incorporated by reference.
4.14 Third Amendment to Agreement of Limited Partnership of Geodyne Energy Income Limited Partnership III-E, filed as Exhibit 4.14 to Registrant's Annual Report on Form 10-K for the year ended December 31, 1995 filed with the SEC on April 1, 1996 and is hereby incorporated by reference.
4.15 Third Amendment to Agreement of Limited Partnership of Geodyne Energy Income Limited Partnership III-F, filed as Exhibit 4.15 to Registrant's Annual Report on Form 10-K for the year ended December 31, 1995 filed with the SEC on April 1, 1996 and is hereby incorporated by reference.
4.16 Third Amendment to Agreement of Limited Partnership of Geodyne Energy Income Limited Partnership III-G, filed as Exhibit 4.16 to Registrant's Annual Report on Form 10-K for the year ended December 31, 1995 filed with the SEC on April 1, 1996 and is hereby incorporated by reference.
*23.1 Consent of Ryder Scott Company, Petroleum Engineers for Geodyne Energy Income Limited Partnership III-A.
*23.2 Consent of Ryder Scott Company, Petroleum Engineers for Geodyne Energy Income Limited Partnership III-B.
*23.3 Consent of Ryder Scott Company, Petroleum Engineers for Geodyne Energy Income Limited Partnership III-C.
*23.4 Consent of Ryder Scott Company, Petroleum Engineers for Geodyne Energy Income Limited Partnership III-D.
*23.5 Consent of Ryder Scott Company, Petroleum Engineers for Geodyne Energy Income Limited Partnership III-E.
*23.6 Consent of Ryder Scott Company, Petroleum Engineers for Geodyne Energy Income Limited Partnership III-F.
*23.7 Consent of Ryder Scott Company, Petroleum Engineers for Geodyne Energy Income Limited Partnership III-G.
*27.1 Financial Data Schedule containing summary financial information extracted from the Geodyne Energy Income Limited Partnership III-A's financial statements as of December 31, 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 III-B'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 III-C'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 III-D'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 III-E's financial statements as of December 31, 1997 and for the year ended December 31, 1997.
*27.6 Financial Data Schedule containing summary financial information extracted from the Geodyne Energy Income Limited Partnership III-F's financial statements as of December 31, 1997 and for the year ended December 31, 1997.
*27.7 Financial Data Schedule containing summary financial information extracted from the Geodyne Energy Income Limited Partnership III-G's financial statements as of December 31, 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 III-A
By: GEODYNE RESOURCES, INC. General Partner February 20, 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 20, 1998 ------------------- Director (Principal Dennis R. Neill Executive Officer)
/s/Patrick M. Hall (Principal February 20, 1998 ------------------- Financial and Patrick M. Hall Accounting Officer)
/s/Judy K. Fox Secretary February 20, 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 III-B
By: GEODYNE RESOURCES, INC. General Partner February 20, 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 20, 1998 ------------------- Director (Principal Dennis R. Neill Executive Officer)
/s/Patrick M. Hall (Principal February 20, 1998 ------------------- Financial and Patrick M. Hall Accounting Officer)
/s/Judy K. Fox Secretary February 20, 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 III-C
By: GEODYNE RESOURCES, INC. General Partner February 20, 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 20, 1998 ------------------- Director (Principal Dennis R. Neill Executive Officer)
/s/Patrick M. Hall (Principal February 20, 1998 ------------------- Financial and Patrick M. Hall Accounting Officer)
/s/Judy K. Fox Secretary February 20, 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 III-D
By: GEODYNE RESOURCES, INC. General Partner February 20, 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 20, 1998 ------------------- Director (Principal Dennis R. Neill Executive Officer)
/s/Patrick M. Hall (Principal February 20, 1998 ------------------- Financial and Patrick M. Hall Accounting Officer)
/s/Judy K. Fox Secretary February 20, 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 III-E
By: GEODYNE RESOURCES, INC. General Partner February 20, 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 20, 1998 ------------------- Director (Principal Dennis R. Neill Executive Officer)
/s/Patrick M. Hall (Principal February 20, 1998 ------------------- Financial and Patrick M. Hall Accounting Officer)
/s/Judy K. Fox Secretary February 20, 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 III-F
By: GEODYNE RESOURCES, INC. General Partner February 20, 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 20, 1998 ------------------- Director (Principal Dennis R. Neill Executive Officer)
/s/Patrick M. Hall (Principal February 20, 1998 ------------------- Financial and Patrick M. Hall Accounting Officer)
/s/Judy K. Fox Secretary February 20, 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 III-G
By: GEODYNE RESOURCES, INC. General Partner February 20, 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 20, 1998 ------------------- Director (Principal Dennis R. Neill Executive Officer)
/s/Patrick M. Hall (Principal February 20, 1998 ------------------- Financial and Patrick M. Hall Accounting Officer)
/s/Judy K. Fox Secretary February 20, 1998 ------------------- Judy K. Fox
Item 8: Financial Statements and Supplementary Data
REPORT OF INDEPENDENT ACCOUNTANTS
TO THE PARTNERS
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-A
We have audited the balance sheets of the Geodyne Energy Income Limited Partnership III-A, an Oklahoma limited partnership, as of December 31, 1997 and 1996 and the related 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 Partnership's management. Our responsibility is to express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the Geodyne Energy Income Limited Partnership III-A at December 31, 1997 and 1996 and the results of its 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 13, 1998
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-A Balance Sheets December 31, 1997 and 1996
ASSETS ------ 1997 1996 ------------- ----------- CURRENT ASSETS: Cash and cash equivalents $ 522,371 $ 610,116 Accounts receivable: Oil and gas sales 524,541 680,167 Other 308 - --------- --------- Total current assets $1,047,220 $1,290,283
NET OIL AND GAS PROPERTIES, utilizing the successful efforts method 2,669,949 5,360,656
DEFERRED CHARGE 199,722 244,220 --------- --------- $3,916,891 $6,895,159 ========= =========
LIABILITIES AND PARTNERS' CAPITAL (DEFICIT) -------------------------------------------
CURRENT LIABILITIES: Accounts payable $ 39,622 $ 50,726 Gas imbalance payable 38,418 76,797 --------- ---------
Total current liabilities $ 78,040 $ 127,523
ACCRUED LIABILITY $ 51,905 $ 80,396
PARTNERS' CAPITAL (DEFICIT): General Partner ($ 198,271) ($ 198,911) Limited Partners, issued and outstanding, 263,976 Units 3,985,217 6,886,151 --------- --------- Total Partners' capital $3,786,946 $6,687,240 --------- --------- $3,916,891 $6,895,159 ========= =========
The accompanying notes are an integral part of these financial statements.
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-A Statements of Operations For the Years Ended December 31, 1997, 1996, and 1995
1997 1996 1995 ------------ ------------ ---------- REVENUES: Oil and gas sales, including $1,811,755 of sales to related parties in 1995 $3,328,634 $3,634,004 $3,647,607 Interest and other income 27,613 23,840 24,119 Gain (loss) on sale of oil and gas properties 148,602 ( 84,561) ( 22,260) --------- --------- --------- $3,504,849 $3,573,283 $3,649,466
COSTS AND EXPENSES: Lease operating $ 463,734 $ 644,998 $ 846,401 Production tax 255,356 254,075 282,695 Depreciation, deple- tion, and amorti- zation of oil and gas properties 725,515 1,135,745 2,111,654 Impairment provision 1,617,006 - 1,267,185 General and administrative 311,253 324,232 308,527 --------- --------- --------- $3,372,864 $2,359,050 $4,816,462 --------- --------- ---------
NET INCOME (LOSS) $ 131,985 $1,214,233 ($1,166,996) ========= ========= =========
GENERAL PARTNER - NET INCOME $ 98,919 $ 104,949 $ 76,804 ========= ========= =========
LIMITED PARTNERS - NET INCOME (LOSS) $ 33,066 $1,109,284 ($1,243,800) ========= ========= ========= NET INCOME (LOSS) per Unit $ .13 $ 4.20 ($ 4.71) ========= ========= ========= UNITS OUTSTANDING 263,976 263,976 263,976 ========= ========= =========
The accompanying notes are an integral part of these financial statements.
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-A Statements of Partners' Capital (Deficit) For the Years Ended December 31, 1997, 1996, and 1995
Limited General Partners Partner Total ------------- ---------- -------------
Balance, Dec. 31, 1994 $11,679,667 ($111,727) $11,567,940 Net income (loss) ( 1,243,800) 76,804 ( 1,166,996) Cash distributions ( 2,160,000) ( 109,000) ( 2,269,000) ---------- ------- ----------
Balance, Dec. 31, 1995 $ 8,275,867 ($143,923) $ 8,131,944 Net income 1,109,284 104,949 1,214,233 Cash distributions ( 2,499,000) ( 159,937) ( 2,658,937) ---------- ------- ----------
Balance, Dec. 31, 1996 $ 6,886,151 ($198,911) $ 6,687,240 Net income (loss) 33,066 98,919 131,985 Cash distributions ( 2,934,000) ( 98,279) ( 3,032,279) ---------- ------- ----------
Balance, Dec. 31, 1997 $ 3,985,217 ($198,271) $ 3,786,946 ========== ======= ==========
The accompanying notes are an integral part of these financial statements.
The accompanying notes are an integral part of these financial statements.
REPORT OF INDEPENDENT ACCOUNTANTS
TO THE PARTNERS
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-B
We have audited the balance sheets of the Geodyne Energy Income Limited Partnership III-B, an Oklahoma limited partnership, as of December 31, 1997 and 1996 and the related 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 Partnership's management. Our responsibility is to express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the Geodyne Energy Income Limited Partnership III-B at December 31, 1997 and 1996 and the results of its 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 13, 1998
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-B Balance Sheets December 31, 1997 and 1996
ASSETS ------ 1997 1996 ------------ ------------ CURRENT ASSETS: Cash and cash equivalents $ 305,288 $ 376,603 Accounts receivable: Oil and gas sales 307,724 396,970 Other 130 - --------- --------- Total current assets $ 613,142 $ 773,573
NET OIL AND GAS PROPERTIES, utilizing the successful efforts method 1,499,148 2,854,520
DEFERRED CHARGE 136,296 144,819 --------- --------- $2,248,586 $3,772,912 ========= =========
LIABILITIES AND PARTNERS' CAPITAL (DEFICIT) -------------------------------------------
CURRENT LIABILITIES: Accounts payable $ 19,432 $ 27,983 Gas imbalance payable 6,676 26,735 --------- ---------
Total current liabilities $ 26,108 $ 54,718
ACCRUED LIABILITY $ 28,494 $ 38,690
PARTNERS' CAPITAL (DEFICIT): General Partner ($ 97,840) ($ 97,092) Limited Partners, issued and outstanding, 138,336 Units 2,291,824 3,776,596 --------- --------- Total Partners' capital $2,193,984 $3,679,504 --------- ---------
$2,248,586 $3,772,912 ========= =========
The accompanying notes are an integral part of these financial statements.
The accompanying notes are an integral part of these financial statements.
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-B Statements of Partners' Capital (Deficit) For the Years Ended December 31, 1997, 1996, and 1995
Limited General Partners Partner Total ------------ ---------- -------------
Balance, Dec. 31, 1994 $5,987,928 ($52,952) $5,934,976 Net income (loss) ( 296,132) 48,956 ( 247,176) Cash distributions ( 1,225,000) ( 63,000) ( 1,288,000) --------- ------ ---------
Balance, Dec. 31, 1995 $4,466,796 ($66,996) $4,399,800 Net income 712,800 63,531 776,331 Cash distributions ( 1,403,000) ( 93,627) ( 1,496,627) --------- ------ ---------
Balance, Dec. 31, 1996 $3,776,596 ($97,092) $3,679,504 Net income (loss) 223,228 60,762 283,990 Cash distributions ( 1,708,000) ( 61,510) ( 1,769,510) --------- ------ ---------
Balance, Dec. 31, 1997 $2,291,824 ($97,840) $2,193,984 ========= ====== =========
The accompanying notes are an integral part of these financial statements.
The accompanying notes are an integral part of these financial statements.
REPORT OF INDEPENDENT ACCOUNTANTS
TO THE PARTNERS
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-C
We have audited the balance sheets of the Geodyne Energy Income Limited Partnership III-C, an Oklahoma limited partnership, as of December 31, 1997 and 1996 and the related 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 Partnership's management. Our responsibility is to express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the Geodyne Energy Income Limited Partnership III-C at December 31, 1997 and 1996 and the results of its 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 13, 1998
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-C Balance Sheets December 31, 1997 and 1996
ASSETS ------
1997 1996 ------------ ------------ CURRENT ASSETS: Cash and cash equivalents $ 540,911 $ 537,233 Accounts receivable: Oil and gas sales 497,683 627,697 General partner - 40,940 Other 54 - --------- --------- Total current assets $1,038,648 $1,205,870
NET OIL AND GAS PROPERTIES, utilizing the successful efforts method $3,442,631 $5,727,898
DEFERRED CHARGE 86,649 76,014 --------- --------- $4,567,928 $7,009,782 ========= =========
LIABILITIES AND PARTNERS' CAPITAL (DEFICIT) -------------------------------------------
CURRENT LIABILITIES: Accounts payable $ 53,049 $ 57,357 Gas imbalance payable 30,493 30,749 --------- ---------
Total current liabilities $ 83,542 $ 88,106
ACCRUED LIABILITY $ 142,828 $ 141,394
PARTNERS' CAPITAL (DEFICIT): General Partner ($ 171,438) ($ 143,741) Limited Partners, issued and outstanding, 244,536 Units 4,512,996 6,924,023 --------- --------- Total Partners' capital $4,341,558 $6,780,282 --------- --------- $4,567,928 $7,009,782 ========= =========
The accompanying notes are an integral part of these financial statements.
The accompanying notes are an integral part of these financial statements.
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-C Statements of Partners' Capital (Deficit) For the Years Ended December 31, 1997, 1996, and 1995
Limited General Partners Partner Total ------------- ---------- -------------
Balance, Dec. 31, 1994 $10,183,585 ($107,521) $10,076,064 Net income (loss) ( 1,322,234) 53,608 ( 1,268,626) Cash distributions ( 1,410,000) ( 72,000) ( 1,482,000) ---------- ------- ----------
Balance, Dec. 31, 1995 $ 7,451,351 ($125,913) $ 7,325,438 Net income 1,247,672 103,933 1,351,605 Cash distributions ( 1,775,000) ( 121,761) ( 1,896,761) ---------- ------- ----------
Balance, Dec. 31, 1996 $ 6,924,023 ($143,741) $ 6,780,282 Net income (loss) ( 196,027) 86,436 ( 109,591) Cash distributions ( 2,215,000) ( 114,133) ( 2,329,133) ---------- ------- ----------
Balance, Dec. 31, 1997 $ 4,512,996 ($171,438) $ 4,341,558 ========== ======= ==========
The accompanying notes are an integral part of these financial statements.
The accompanying notes are an integral part of these financial statements.
REPORT OF INDEPENDENT ACCOUNTANTS
TO THE PARTNERS
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-D
We have audited the balance sheets of the Geodyne Energy Income Limited Partnership III-D, an Oklahoma limited partnership, as of December 31, 1997 and 1996 and the related 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 Partnership's management. Our responsibility is to express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the Geodyne Energy Income Limited Partnership III-D at December 31, 1997 and 1996 and the results of its 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 13, 1998
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-D Balance Sheets December 31, 1997 and 1996
ASSETS ------
1997 1996 ------------ ------------ CURRENT ASSETS: Cash and cash equivalents $ 298,964 $ 319,245 Accounts receivable: Oil and gas sales 361,775 425,312 --------- --------- Total current assets $ 660,739 $ 744,557
NET OIL AND GAS PROPERTIES, utilizing the successful efforts method $2,211,248 3,470,494
DEFERRED CHARGE 18,875 26,139 --------- --------- $2,890,862 $4,241,190 ========= =========
LIABILITIES AND PARTNERS' CAPITAL (DEFICIT) -------------------------------------------
CURRENT LIABILITIES: Accounts payable $ 114,286 $ 112,221 Gas imbalance payable - 5,694 --------- ---------
Total current liabilities $ 114,286 $ 117,915
ACCRUED LIABILITY $ 201,934 $ 220,286
PARTNERS' CAPITAL (DEFICIT): General Partner ($ 62,091) ($ 50,214) Limited Partners, issued and outstanding, 131,008 Units 2,636,733 3,953,203 --------- --------- Total Partners' capital $2,574,642 $3,902,989 --------- --------- $2,890,862 $4,241,190 ========= =========
The accompanying notes are an integral part of these financial statements.
The accompanying notes are an integral part of these financial statements.
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-D Statements of Partners' Capital (Deficit) For the Years Ended December 31, 1997, 1996, and 1995
Limited General Partners Partner Total ------------ --------- ------------
Balance, Dec. 31, 1994 $5,308,383 ($39,142) $5,269,241 Net income (loss) ( 234,478) 45,966 ( 188,512) Cash distributions ( 825,000) ( 43,000) ( 868,000) --------- ------ ---------
Balance, Dec. 31, 1995 $4,248,905 ($36,176) $4,212,729 Net income 795,298 59,929 855,227 Cash distributions ( 1,091,000) ( 73,967) ( 1,164,967) --------- ------ ---------
Balance, Dec. 31, 1996 $3,953,203 ($50,214) $3,902,989 Net income 35,530 54,213 89,743 Cash distributions ( 1,352,000) ( 66,090) ( 1,418,090) ---------- ------ ---------
Balance, Dec. 31, 1997 $2,636,733 ($62,091) $2,574,642 ========= ====== =========
The accompanying notes are an integral part of these financial statements.
The accompanying notes are an integral part of these financial statements.
REPORT OF INDEPENDENT ACCOUNTANTS
TO THE PARTNERS
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-E
We have audited the balance sheets of the Geodyne Energy Income Limited Partnership III-E, an Oklahoma limited partnership, as of December 31, 1997 and 1996 and the related 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 Partnership's management. Our responsibility is to express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the Geodyne Energy Income Limited Partnership III-E at December 31, 1997 and 1996 and the results of its 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 13, 1998
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-E Balance Sheets December 31, 1997 and 1996
ASSETS ------
1997 1996 ------------- ------------- CURRENT ASSETS: Cash and cash equivalents $ 1,114,574 $ 1,243,143 Accounts receivable: Oil and gas sales 1,361,797 1,554,748 ---------- ---------- Total current assets $ 2,476,371 $ 2,797,891
NET OIL AND GAS PROPERTIES, utilizing the successful efforts method $ 8,716,929 12,822,109
DEFERRED CHARGE 204,087 298,358 ---------- ---------- $11,397,387 $15,918,358 ========== ==========
LIABILITIES AND PARTNERS' CAPITAL (DEFICIT) -------------------------------------------
CURRENT LIABILITIES: Accounts payable $ 693,518 $ 623,087 Gas imbalance payable 142,749 156,497 ---------- ---------- Total current liabilities $ 836,267 $ 779,584
ACCRUED LIABILITY $ 320,943 $ 355,235
PARTNERS' CAPITAL (DEFICIT): General Partner ($ 209,050) ($ 187,947) Limited Partners, issued and outstanding, 418,266 Units 10,449,227 14,971,486 ---------- ---------- Total Partners' capital $10,240,177 $14,783,539 ---------- ---------- $11,397,387 $15,918,358 ========== ==========
The accompanying notes are an integral part of these financial statements.
The accompanying notes are an integral part of these financial statements.
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-E Statements of Partners' Capital (Deficit) For the Years Ended December 31, 1997, 1996, and 1995
Limited General Partners Partner Total ------------- ---------- -------------
Balance, Dec. 31, 1994 $19,348,701 ($124,952) $19,223,749 Net income (loss) ( 338,913) 136,202 ( 202,711) Cash distributions ( 2,690,000) ( 139,000) ( 2,829,000) ---------- ------- ----------
Balance, Dec. 31, 1995 $16,319,788 ($127,750) $16,192,038 Net income 2,275,698 191,012 2,466,710 Cash distributions ( 3,624,000) ( 251,209) ( 3,875,209) ---------- ------- -----------
Balance, Dec. 31, 1996 $14,971,486 ($187,947) $14,783,539 Net income (loss) ( 219,259) 158,394 ( 60,865) Cash distributions ( 4,303,000) ( 179,497) ( 4,482,497) ---------- ------- ----------
Balance, Dec. 31, 1997 $10,449,227 ($209,050) $10,240,177 ========== ======= ==========
The accompanying notes are an integral part of these financial statements.
The accompanying notes are an integral part of these financial statements.
REPORT OF INDEPENDENT ACCOUNTANTS
TO THE PARTNERS
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-F
We have audited the balance sheets of the Geodyne Energy Income Limited Partnership III-F, an Oklahoma limited partnership, as of December 31, 1997 and 1996 and the related 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 Partnership's management. Our responsibility is to express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the Geodyne Energy Income Limited Partnership III-F at December 31, 1997 and 1996 and the results of its 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 13, 1998
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-F Balance Sheets December 31, 1997 and 1996
ASSETS ------ 1997 1996 ------------ ------------- CURRENT ASSETS: Cash and cash equivalents $ 541,382 $ 504,658 Accounts receivable: Oil and gas sales 472,746 661,215 Other 9,631 - --------- --------- Total current assets $1,023,759 $1,165,873
NET OIL AND GAS PROPERTIES, utilizing the successful efforts method $3,604,665 $7,307,487
DEFERRED CHARGE 124,393 159,453 --------- --------- $4,752,817 $8,632,813 ========= =========
LIABILITIES AND PARTNERS' CAPITAL (DEFICIT) -------------------------------------------
CURRENT LIABILITIES: Accounts payable $ 165,963 $ 168,316 Gas imbalance payable 119,864 109,044 --------- ---------
Total current liabilities $ 285,827 $ 277,360
ACCRUED LIABILITY $ 159,275 $ 142,686
PARTNERS' CAPITAL (DEFICIT): General Partner ($ 146,427) ($ 97,523) Limited Partners, issued and outstanding, 221,484 Units 4,454,142 8,310,290 --------- --------- Total Partners' capital $4,307,715 $8,212,767 --------- ---------
$4,752,817 $8,632,813 ========= =========
The accompanying notes are an integral part of these financial statements.
The accompanying notes are an integral part of these financial statements.
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-F Statements of Partners' Capital (Deficit) For the Years Ended December 31, 1997, 1996, and 1995
Limited General Partners Partner Total ------------- ---------- -------------
Balance, Dec. 31, 1994 $10,963,281 ($ 72,812) $10,890,469 Net income (loss) ( 1,521,469) 25,536 ( 1,495,933) Cash distributions ( 455,000) ( 23,300) ( 478,300) ---------- ------- ----------
Balance, Dec. 31, 1995 $ 8,986,812 ($ 70,576) $ 8,916,236 Net income 483,478 72,299 555,777 Cash distributions ( 1,160,000) ( 99,246) ( 1,259,246) ---------- ------- ----------
Balance, Dec. 31, 1996 $ 8,310,290 ($ 97,523) $ 8,212,767 Net income (loss) ( 2,273,148) 32,514 ( 2,240,634) Cash distributions ( 1,583,000) ( 81,418) ( 1,664,418) ---------- ------- ----------
Balance, Dec. 31, 1997 $ 4,454,142 ($146,427) $ 4,307,715 ========== ======= ==========
The accompanying notes are an integral part of these financial statements.
The accompanying notes are an integral part of these financial statements.
REPORT OF INDEPENDENT ACCOUNTANTS
TO THE PARTNERS
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-G
We have audited the balance sheets of the Geodyne Energy Income Limited Partnership III-G, an Oklahoma limited partnership, as of December 31, 1997 and 1996 and the related 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 Partnership's management. Our responsibility is to express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the Geodyne Energy Income Limited Partnership III-G at December 31, 1997 and 1996 and the results of its 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 13, 1998
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-G Balance Sheets December 31, 1997 and 1996
ASSETS ------ 1997 1996 ------------ ------------- CURRENT ASSETS: Cash and cash equivalents $ 351,163 $ 315,955 Accounts receivable: Oil and gas sales 285,689 408,115 General Partner 13,140 - Other 6,369 - --------- --------- Total current assets $ 656,361 $ 724,070
NET OIL AND GAS PROPERTIES, utilizing the successful efforts method $2,141,289 4,150,885
DEFERRED CHARGE 75,406 102,775 --------- --------- $2,873,056 $4,977,730 ========= =========
LIABILITIES AND PARTNERS' CAPITAL (DEFICIT) -------------------------------------------
CURRENT LIABILITIES: Accounts payable $ 101,925 $ 99,540 Gas imbalance payable 59,607 54,219 --------- ---------
Total current liabilities $ 161,532 $ 153,759
ACCRUED LIABILITY $ 89,310 $ 86,853
PARTNERS' CAPITAL (DEFICIT): General Partner ($ 85,608) ($ 58,669) Limited Partners, issued and outstanding, 121,925 Units 2,707,822 4,795,787 --------- --------- Total Partners' capital $2,622,214 $4,737,118 --------- ---------
$2,873,056 $4,977,730 ========= =========
The accompanying notes are an integral part of these financial statements.
The accompanying notes are an integral part of these financial statements.
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-G Statements of Partners' Capital (Deficit) For the Years Ended December 31, 1997, 1996, and 1995
Limited General Partners Partner Total ------------- ---------- ------------
Balance, Dec. 31, 1994 $6,485,985 ($26,102) $6,459,883 Net income (loss) ( 1,024,258) 15,638 ( 1,008,620) Cash distributions ( 325,000) ( 16,500) ( 341,500) --------- ------ ---------
Balance, Dec. 31, 1995 $5,136,727 ($26,964) $5,109,763 Net income 380,060 47,089 427,149 Cash distributions ( 721,000) ( 78,794) ( 799,794) --------- ------ ---------
Balance, Dec. 31, 1996 $4,795,787 ($58,669) $4,737,118 Net income (loss) ( 1,136,965) 22,672 ( 1,114,293) Cash distributions ( 951,000) ( 49,611) ( 1,000,611) --------- ------ ---------
Balance, Dec. 31, 1997 $2,707,822 ($85,608) $2,622,214 ========= ====== =========
The accompanying notes are an integral part of these financial statements.
The accompanying notes are an integral part of these financial statements.
GEODYNE ENERGY INCOME PROGRAM III LIMITED PARTNERSHIPS Notes to Financial Statements For the Years Ended December 31, 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. (the "General Partner") is the general partner of each Partnership. Limited Partner capital contributions were invested in producing oil and gas properties. The Partnerships were activated on the following dates with the following Limited Partner capital contributions.
Limited Partner Date of Capital Partnership Activation Contributions ----------- ------------------ ---------------
III-A November 21, 1989 $26,397,600 III-B January 24, 1990 13,833,600 III-C February 27, 1990 24,453,600 III-D September 5, 1990 13,100,800 III-E December 26, 1990 41,826,600 III-F March 7, 1991 22,148,400 III-G September 20, 1991 12,192,500
Pursuant to the terms of the partnership agreements for the Partnerships, the Partnerships will terminate on the following dates:
Partnerships Termination Date ------------ -----------------
III-A November 28, 1999 III-B January 24, 2000 III-C February 28, 2000 III-D September 5, 2000 III-E December 26, 2000 III-F March 7, 2001 III-G September 20, 2001
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.
An affiliate of the General Partner owned the following Units at December 31, 1997:
Number of Percent of Partnership Units Owned Outstanding ----------- ----------- -----------
III-A 27,010 10.2% III-B 15,206 11.0% III-C 30,371 12.4% III-D 19,505 14.9% III-E 53,068 12.7% III-F 29,898 13.5% III-G 15,898 13.0%
The Partnerships' sole business is the development and production of oil and gas. Substantially all of the Partnerships' gas reserves are being sold regionally on the "spot market." Due to the highly competitive nature of the spot market, prices on the spot market are subject to wide seasonal and regional pricing fluctuations. In addition, such spot market sales are generally short term in nature and are dependent upon the obtaining of transportation services provided by pipelines.
Allocation of Costs and Revenues
The terms of each Partnership's Limited Partnership Agreement (the "Partnership Agreement") allocate costs and income between the Limited Partners and the General Partner as follows:
Before Payout (1) After Payout(1) ------------------ ------------------ General Limited General Limited Partner Partners Partner Partners -------- -------- -------- -------- Costs(2) - ------------------------ Sales commissions, pay- ment for organization and offering costs and management fee 1% 99% - - Property acquisition costs 1% 99% 1% 99% Identified development drilling 1% 99% 1% 99% Development drilling(2) 5% 95% 15% 85% General and administra- tive costs, direct administrative costs and operating costs(2) 5% 95% 15% 85%
Income(2) - ------------------------ Temporary investments of Limited Partners' subscriptions 1% 99% 1% 99% Income from oil and gas production(2) 5% 95% 15% 85% Gain on sale of producing properties(2) 5% 95% 15% 85% All other income(2) 5% 95% 15% 85%
- ---------- (1) Payout occurs when total distributions to Limited Partners equal total original Limited Partner subscriptions. (2) If, at payout, the Limited Partners have received distributions at an annual rate less than 12% of their subscriptions, the percentage of income and costs allocated to the General Partner will increase to only 10% and the Limited Partners will be allocated 90%. Thereafter, if the distribution to Limited Partners reaches an average annual rate of 12% the allocation will change to 15% to the General Partner and 85% to the Limited Partners.
The III-B Partnership achieved payout during the first quarter of 1998. Beginning with the first quarter of 1998, operations for the III-B Partnership will be allocated using after payout percentages.
Cash and Cash Equivalents
The Partnerships consider all highly liquid investments with a maturity of three months or less when purchased to be cash equivalents. Cash equivalents are not insured, which cause the Partnerships to be subject to risk.
Credit Risks
Accrued oil and gas sales which are due from a variety of oil and gas purchasers subject the Partnerships to a concentration of credit risk. Some of these purchasers are discussed in Note 3 - Major Customers.
Receivable from General Partner
The receivable from the General Partner at December 31, 1996 for the III-C Partnership represents proceeds due to the III-C Partnership for the sale of oil and gas properties in the fourth quarter of 1996. Such receivable was collected by the III-C Partnership in the first quarter of 1997. The receivable from the General Partner at December 31, 1997 for the III-G Partnership represents
proceeds due to the III-G Partnership for the sale of oil and gas properties in the fourth quarter of 1997. Such receivable was collected by the III-G Partnership in the first quarter of 1998.
Oil and Gas Properties
The Partnerships follow the successful efforts method of accounting for their oil and gas properties. Under the successful efforts method, the Partnerships capitalize all property acquisition costs and development costs incurred in connection with the further development of oil and gas reserves. Property acquisition costs include costs incurred by the Partnerships or the General Partner to acquire producing properties, including related title insurance or examination costs, commissions, engineering, legal and accounting fees, and similar costs directly related to the acquisitions, plus an allocated portion of the General Partner's property screening costs. The acquisition cost to the Partnerships of properties acquired by the General Partner is adjusted to reflect the net cash results of operations, including interest incurred to finance the acquisition, for the period of time the properties are held by the General Partner. Leasehold impairment of unproved properties is recognized based upon an individual property assessment and exploratory experience. Upon discovery of commercial reserves, leasehold costs are transferred to producing properties.
Depletion of the costs of producing oil and gas properties, amortization of related intangible drilling and development costs, and depreciation of tangible lease and well equipment are computed on the units-of-production method. The Partnerships' calculation of depreciation, depletion, and amortization includes estimated dismantlement and abandonment costs, net of estimated salvage values. The depreciation, depletion, and amortization rates per equivalent barrel of oil produced during the years ended December 31, 1997, 1996, and 1995 were as follows:
Partnership 1997 1996 1995 ----------- ----- ----- -----
III-A $3.42 $4.40 $5.89 III-B 3.60 4.37 5.45 III-C 2.92 3.68 5.22 III-D 2.05 2.63 4.25 III-E 2.00 2.96 4.53 III-F 3.51 4.95 5.74 III-G 3.25 4.76 6.25
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) pursuant to SFAS No. 121:
Partnership 1997 1996 1995 ----------- ---------- ---- ----------
III-A $ 184,644 $ - $1,267,185 III-B 77,653 - 480,618 III-C 234,271 - 1,338,693 III-D 485,820 - 495,810 III-E 2,042,775 - 210,152 III-F 2,078,019 - 998,811 III-G 1,113,114 - 677,010
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 will 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 Partnership recorded the following noncash charges against earnings at March 31, 1997 in order to reflect the writing-off of the Partnerships' unproved properties:
Partnerships Amount ----------- ----------
III-A $1,432,362 III-B 660,469 III-C 1,462,146 III-D 446,423 III-E 850,663 III-F 806,386 III-G 438,666
Deferred Charge
Deferred Charge represents costs deferred for lease operating expenses incurred in connection with the Partnerships' underproduced gas imbalance positions. The rate used in calculating the deferred charge is the average of the annual production costs per Mcf. At December 31, 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 ----------- ------- -------- ------- --------
III-A 469,603 $199,722 501,788 $244,220 III-B 261,654 136,296 282,024 144,819 III-C 188,244 86,649 186,401 76,014 III-D 20,653 18,875 28,310 26,139 III-E 129,793 204,087 169,483 298,358 III-F 101,297 124,393 132,118 159,453 III-G 53,170 75,406 70,539 102,775
Accrued Liability
Accrued liability represents charges accrued for lease operating expenses incurred in connection with the Partnerships' overproduced gas imbalance positions. The rate used in calculating the accrued liability is the average of the annual production costs per Mcf. At December 31, 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 ----------- ------- -------- ------- --------
III-A 122,044 $ 51,905 165,186 $ 80,396 III-B 54,702 28,494 75,346 38,690 III-C 310,293 142,828 346,723 141,394 III-D 220,959 201,934 238,585 220,286 III-E 204,110 320,943 201,792 355,235 III-F 129,703 159,275 118,225 142,686 III-G 62,974 89,310 59,611 86,853
Oil and Gas Sales and Gas Imbalance Payable
The Partnerships' oil and condensate production is sold, title passed, and revenue recognized at or near the Partnerships' wells under short-term purchase contracts at prevailing prices in accordance with arrangements which are customary in the oil and gas industry. Sales of gas applicable to the Partnerships' interest in producing oil and gas leases are recorded as revenue when the gas is metered and title transferred pursuant to the gas sales contracts covering the Partnerships' interest in gas reserves. During such times as a Partnership's sales of gas exceed its pro rata ownership in a well, such sales are recorded as revenue unless total sales from the well have exceeded the Partnership's share of estimated total gas reserves underlying the property, at which time such excess is recorded as a liability. The rates per Mcf used to calculate this liability 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 ----------- ------- -------- ------- --------
III-A 25,612 $ 38,418 51,198 $ 76,797 III-B 4,451 6,676 17,823 26,735 III-C 20,329 30,493 20,499 30,749 III-D - - 3,796 5,694 III-E 95,166 142,749 104,331 156,497 III-F 79,909 119,864 72,696 109,044 III-G 39,738 59,607 36,146 54,219
These amounts were recorded as gas imbalance payables in accordance with the sales method. These gas imbalance payables will be settled by either gas
production by the underproduced party in excess of the current estimates of total gas reserves for the well or by a negotiated or contractual payment to the underproduced party.
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 in all Partnerships and affiliates. The General Partner believes this allocation method is reasonable. Although the actual costs incurred by the General Partner and its affiliates have fluctuated during the three years presented, the amounts charged to the Partnerships have not fluctuated due to the expense limitations imposed by the Partnership Agreement. The following is a summary of payments made to the
General Partner or its affiliates by the Partnerships for general and administrative overhead costs for the years ended December 31, 1997, 1996, and 1995:
Partnership 1997 1996 1995 ----------- -------- -------- --------
III-A $277,872 $277,872 $277,872 III-B 145,620 145,620 145,620 III-C 257,412 257,412 257,412 III-D 137,904 137,904 137,904 III-E 440,280 440,280 440,280 III-F 233,136 233,136 233,136 III-G 128,340 128,340 128,340
Affiliates of the Partnerships operate certain of the Partnerships' properties and their policy is to bill the Partnerships for all customary charges and cost reimbursements associated with these activities, together with any compressor rentals, consulting, or other services provided. Such charges are comparable to third party charges in the area where the wells are located and are the same as charged to other working interest owners in the wells.
During 1995 the Partnerships sold gas to El Paso Energy Marketing Company, formerly known as Premier Gas Company ("El Paso"). El Paso, like other similar gas marketing firms, resold such gas to third parties at market prices. El Paso was an affiliate of the Partnerships until December 6, 1995. The following table summarizes the total amount of the Partnerships' sales to El Paso during 1995:
Partnership 1995 ----------- ----------
III-A $1,811,755 III-B 863,111 III-C 1,325,188 III-D 849,298 III-E 2,128,723 III-F 847,849 III-G 446,378
There were no sales made by the Partnerships to affiliates or related parties during 1997 or 1996.
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 during 1997, 1996, and 1995:
Partnership Purchaser Percentage ----------- ------------------------ -------------------------- 1997 1996 1995 ----- ----- -----
III-A El Paso 47.2% 59.2% 49.7% Valero Industrial Gas L.P. ("Valero") 14.4% - % - % Mesa Operating Ltd. Partnership ("Mesa") - % 19.4% 19.7% Snyder Oil Corp. - % - % - %
III-B El Paso 37.9% 47.9% 41.8% Sun Refining & Marketing Company 13.1% 10.3% - % Phibro Energy, Inc. 12.7% - % - % Valero 11.4% - % - % Mesa - % 22.0% 23.0%
III-C El Paso 49.8% 51.2% 48.0%
III-D El Paso 45.6% 44.4% 40.7% Eaglwing Trading, Inc. ("Eaglwing") 18.3% - % - % Oryx Energy Company ("Oryx") - % 19.9% 20.8%
III-E Eaglwing 33.3% - % - % El Paso 12.4% 12.3% 24.5% Oryx - 36.5% 33.9% Hunt Energy Corp. - % 10.0% - %
III-F El Paso 28.5% 25.9% 31.4% Amoco Production Company ("Amoco") - % 10.4% - %
III-G El Paso 23.9% 21.6% 26.3% Amoco - % 10.9% - %
In the event of interruption of purchases by one or more of these significant customers or the cessation or material change in availability of open access transportation by the Partnerships' pipeline transporters, the Partnerships may encounter difficulty in marketing their gas and in maintaining historic sales levels. Alternative purchasers or transporters may not be readily available.
4. SUPPLEMENTAL OIL AND GAS INFORMATION
The following supplemental information regarding the oil and gas activities of the Partnerships is presented pursuant to the disclosure requirements promulgated by the SEC.
Capitalized Costs
Capitalized costs and accumulated depreciation, depletion, amortization, and valuation allowance at December 31, 1997 and 1996 were as follows:
III-A Partnership -----------------
1997 1996 ------------- -------------
Proved properties $15,907,665 $18,399,090 Unproved properties, not subject to depreciation, depletion, and amortization - 1,575,589 ---------- ----------
$15,907,665 $19,974,679 Less accumulated depreciation, depletion, amorti- zation, and valua- tion allowance ( 13,237,716) ( 14,614,023) ---------- ---------- Net oil and gas properties $ 2,669,949 $ 5,360,656 ========== ==========
III-B Partnership -----------------
1997 1996 ------------ ------------- Proved properties $9,402,262 $10,461,319 Unproved properties, not subject to depreciation, depletion, and amortization - 754,938 --------- ----------
$9,402,262 $11,216,257 Less accumulated depreciation, depletion, amorti- zation, and valua- tion allowance ( 7,903,114) ( 8,361,737) --------- ---------- Net oil and gas properties $1,499,148 $ 2,854,520 ========= ==========
III-C Partnership -----------------
1997 1996 ------------- ------------- Proved properties $19,627,883 $20,126,262 Unproved properties, not subject to depreciation, depletion, and amortization - 1,464,473 ---------- ----------
$19,627,883 $21,590,735 Less accumulated depreciation, depletion, amorti- zation, and valua- tion allowance ( 16,185,252) ( 15,862,837) ---------- ----------
Net oil and gas properties $ 3,442,631 $ 5,727,898 ========== ==========
III-D Partnership -----------------
1997 1996 ------------- ------------- Proved properties $12,187,201 $12,203,296 Unproved properties, not subject to depreciation, depletion, and amortization - 446,756 ---------- ----------
$12,187,201 $12,650,052 Less accumulated depreciation, depletion, amorti- zation, and valua- tion allowance ( 9,975,953) ( 9,179,558) ---------- ----------
Net oil and gas properties $ 2,211,248 $ 3,470,494 ========== ==========
III-E Partnership -----------------
1997 1996 ------------- ------------- Proved properties $34,159,634 $35,818,810 Unproved properties, not subject to depreciation, depletion, and amortization - 850,663 ---------- ----------
$34,159,634 $36,669,473 Less accumulated depreciation, depletion, amorti- zation, and valua- tion allowance ( 25,442,705) ( 23,847,364) ---------- ----------
Net oil and gas properties $ 8,716,929 $12,822,109 ========== ==========
III-F Partnership -----------------
1997 1996 ------------- ------------- Proved properties $16,673,217 $17,692,891 Unproved properties, not subject to depreciation, depletion, and amortization - 806,386 ----------- ----------
$16,673,217 $18,499,277 Less accumulated depreciation, depletion, amorti- zation, and valua- tion allowance ( 13,068,552) ( 11,191,790) ---------- ----------
Net oil and gas properties $ 3,604,665 $ 7,307,487 ========== ==========
III-G Partnership -----------------
1997 1996 ------------ ------------- Proved properties $9,602,310 $10,155,073 Unproved properties, not subject to depreciation, depletion, and amortization - 438,666 --------- ----------
$9,602,310 $10,593,739 Less accumulated depreciation, depletion, amorti- zation, and valua- tion allowance ( 7,461,021) ( 6,442,854) --------- ----------
Net oil and gas properties $2,141,289 $ 4,150,885 ========= ==========
Costs Incurred
The III-A and III-B Partnerships incurred $35,246 and $23,248, respectively, in acquisition costs for additional acreage underlying the Lebleu No. 4 well. The Partnerships incurred no other costs in connection with oil and gas acquisition or exploration activities during the years ended December 31, 1997, 1996, and 1995. Costs incurred by the Partnerships in connection with oil and gas property development activities for the years ended December 31, 1997, 1996, and 1995 were as follows:
Partnership 1997 1996 1995 ----------- -------- -------- --------
III-A $ 40,203 $ 4,548 $ 36,695 III-B 20,491 21,881 48,179 III-C 104,670 24,068 98,870 III-D 579 24,953 26,512 III-E 65,616 37,987 339,148 III-F 34,952 12,107 363,847 III-G 28,338 19,668 203,544
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 caused the gas volumes to differ from the reserve reports prepared by the General Partner and reviewed by Ryder Scott.
III-A Partnership -----------------
Crude Natural Oil Gas (Barrels) (Mcf) --------- -----------
Proved reserves, Dec. 31, 1994 193,207 7,824,458 Production ( 58,590) (1,798,692) Sale of minerals in place ( 169) ( 50,765) Revision of previous estimates 38,553 1,021,351 ------- ---------
Proved reserves, Dec. 31, 1995 173,001 6,996,352 Production ( 46,923) (1,268,943) Sale of minerals in place ( 1,434) ( 417,113) Revision of previous estimates 29,255 871,973 ------- ---------
Proved reserves, Dec. 31, 1996 153,899 6,182,269 Production ( 40,468) (1,031,152) Sale of minerals in place ( 4,695) ( 661,004) Extensions and discoveries 6 915 Revision of previous estimates 4,121 740,812 ------- ---------
Proved reserves, Dec. 31, 1997 112,863 5,231,840 ======= =========
PROVED DEVELOPED RESERVES: December 31, 1995 173,001 6,996,352 ======= ========= December 31, 1996 142,520 5,999,778 ======= ========= December 31, 1997 101,190 5,027,338 ======= =========
III-B Partnership -----------------
Crude Natural Oil Gas (Barrels) (Mcf) --------- ------------
Proved reserves, Dec. 31, 1994 127,059 3,885,285 Production ( 42,818) ( 900,882) Sale of minerals in place ( 67) ( 21,437) Extensions and discoveries 78 87,619 Revision of previous estimates 38,664 414,386 ------- ---------
Proved reserves, Dec. 31, 1995 122,916 3,464,971 Production ( 37,849) ( 642,152) Sale of minerals in place ( 624) ( 186,418) Revision of previous estimates 36,520 331,501 ------- ---------
Proved reserves, Dec. 31, 1996 120,963 2,967,902 Production ( 37,216) ( 518,891) Sale of minerals in place ( 2,009) ( 285,841) Revision of previous estimates 11,805 370,683 ------- ---------
Proved reserves, Dec. 31, 1997 93,543 2,533,853 ======= =========
PROVED DEVELOPED RESERVES: December 31, 1995 122,916 3,464,971 ======= ========= December 31, 1996 117,345 2,906,514 ======= ========= December 31, 1997 89,784 2,462,219 ======= =========
III-C Partnership -----------------
Crude Natural Oil Gas (Barrels) (Mcf) --------- ------------
Proved reserves, Dec. 31, 1994 113,208 8,872,750 Production ( 26,926) (1,662,411) Sale of minerals in place ( 720) ( 14,529) Extensions and discoveries 14,324 248,512 Revision of previous estimates 8,582 457,888 ------- ---------
Proved reserves, Dec. 31, 1995 108,468 7,902,210 Production ( 27,429) (1,351,525) Sale of minerals in place ( 1,266) ( 132,327) Extensions and discoveries 10,541 157,345 Revision of previous estimates 72,173 1,144,100 ------- ---------
Proved reserves, Dec. 31, 1996 162,487 7,719,803 Production ( 27,069) (1,124,237) Sale of minerals in place ( 4,753) ( 197,339) Extensions and discoveries 447 - Revision of previous estimates 22,200 781,366 ------- ---------
Proved reserves, Dec. 31, 1997 153,312 7,179,593 ======= =========
PROVED DEVELOPED RESERVES: December 31, 1995 108,372 7,856,044 ======= ========= December 31, 1996 162,235 7,673,323 ======= ========= December 31, 1997 153,112 7,157,512 ======= =========
III-D Partnership -----------------
Crude Natural Oil Gas (Barrels) (Mcf) --------- ------------
Proved reserves, Dec. 31, 1994 486,861 4,252,277 Production ( 42,166) (1,000,561) Sale of minerals in place ( 171) ( 102) Extensions and discoveries 1,829 25,326 Revision of previous estimates ( 24,439) 693,067 ------- ---------
Proved reserves, Dec. 31, 1995 421,914 3,970,007 Production ( 41,351) ( 760,593) Sale of minerals in place ( 427) ( 25,031) Extensions and discoveries 1,509 27,059 Revision of previous estimates 48,985 558,104 ------- ---------
Proved reserves, Dec. 31, 1996 430,630 3,769,546 Production ( 40,758) ( 708,262) Sale of minerals in place ( 396) ( 18,762) Extensions and discoveries 94 1,797 Revision of previous estimates 88,825 760,231 ------- ---------
Proved reserves, Dec. 31, 1997 478,395 3,804,550 ======= =========
PROVED DEVELOPED RESERVES: December 31, 1995 421,900 3,963,409 ======= ========= December 31, 1996 430,606 3,764,539 ======= ========= December 31, 1997 478,386 3,803,645 ======= =========
III-E Partnership -----------------
Crude Natural Oil Gas (Barrels) (Mcf) ----------- ------------
Proved reserves, Dec. 31, 1994 2,960,656 14,764,483 Production ( 256,992) ( 3,030,077) Sale of minerals in place ( 260) ( 9,472) Extensions and discoveries 18,780 178,518 Revision of previous estimates ( 134,705) 917,407 --------- ----------
Proved reserves, Dec. 31, 1995 2,587,479 12,820,859 Production ( 229,226) ( 2,152,599) Sale of minerals in place ( 3,259) ( 190) Extensions and discoveries 4,252 30,349 Revision of previous estimates 258,393 ( 922,682) --------- ----------
Proved reserves, Dec. 31, 1996 2,617,639 9,775,737 Production ( 235,152) ( 2,189,619) Sale of minerals in place ( 2,156) ( 245,398) Extensions and discoveries - 11,997 Revision of previous estimates 631,209 2,780,432 --------- ----------
Proved reserves, Dec. 31, 1997 3,011,540 10,133,149 ========= ==========
PROVED DEVELOPED RESERVES: December 31, 1995 2,587,479 12,820,859 ========= ========== December 31, 1996 2,617,639 9,775,737 ========= ========== December 31, 1997 3,011,540 10,133,149 ========= ==========
III-F Partnership -----------------
Crude Natural Oil Gas (Barrels) (Mcf) --------- ------------
Proved reserves, Dec. 31, 1994 388,579 8,526,534 Production ( 78,456) (1,107,951) Sale of minerals in place ( 5,270) ( 12,450) Extensions and discoveries - 153,983 Revision of previous estimates 162,213 ( 505,430) ------- ---------
Proved reserves, Dec. 31, 1995 467,066 7,054,686 Production ( 74,064) ( 924,827) Sale of minerals in place ( 14,255) ( 8,294) Extensions and discoveries 3,560 - Revision of previous estimates 109,006 ( 454,833) ------- ---------
Proved reserves, Dec. 31, 1996 491,313 5,666,732 Production ( 65,787) ( 898,447) Sale of minerals in place ( 5,981) ( 169,022) Extensions and discoveries 10,573 99,305 Revision of previous estimates ( 30,372) 905,241 ------- ---------
Proved reserves, Dec. 31, 1997 399,746 5,603,809 ======= =========
PROVED DEVELOPED RESERVES: December 31, 1995 467,066 7,054,686 ======= ========= December 31, 1996 491,313 5,666,732 ======= ========= December 31, 1997 399,746 5,603,809 ======= =========
III-G Partnership -----------------
Crude Natural Oil Gas (Barrels) (Mcf) --------- ------------
Proved reserves, Dec. 31, 1994 298,062 4,629,792 Production ( 56,567) ( 596,184) Sale of minerals in place ( 3,487) ( 8,770) Extensions and discoveries - 84,220 Revision of previous estimates 114,302 ( 243,507) ------- ----------
Proved reserves, Dec. 31, 1995 352,310 3,865,551 Production ( 54,083) ( 499,884) Sale of minerals in place ( 11,160) ( 10,142) Extensions and discoveries 5,358 3,275 Revision of previous estimates 77,164 ( 321,474) ------- ---------
Proved reserves, Dec. 31, 1996 369,589 3,037,326 Production ( 47,493) ( 500,966) Sale of minerals in place ( 6,363) ( 92,435) Extensions and discoveries 7,164 66,081 Revision of previous estimates ( 19,969) 486,311 ------- ---------
Proved reserves, Dec. 31, 1997 302,928 2,996,317 ======= =========
PROVED DEVELOPED RESERVES: December 31, 1995 345,896 3,761,653 ======= ========= December 31, 1996 369,589 3,037,326 ======= ========= December 31, 1997 302,928 2,996,317 ======= =========
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 -------------------------------- III-A III-B ------------- ------------ Future cash inflows $14,758,282 $7,759,358 Future production and development costs ( 3,849,642) ( 2,108,776) ---------- ---------
Future net cash flows $10,908,640 $5,650,582
10% discount to reflect timing of cash flows ( 3,393,558) ( 1,706,088 ) ---------- ---------
Standardized measure of discounted future net cash flows $ 7,515,082 $3,944,494 ========== =========
Partnership --------------------------------- III-C III-D ------------- ------------- Future cash inflows $18,813,246 $16,760,891 Future production and development costs ( 5,920,122) ( 8,626,380) ---------- ----------
Future net cash flows $12,893,124 $ 8,134,511
10% discount to reflect timing of cash flows ( 4,812,464) ( 2,993,979) ---------- ----------
Standardized measure of discounted future net cash flows $ 8,080,660 $ 5,140,532 ========== ==========
Partnership --------------------------------- III-E III-F ------------- ------------- Future cash inflows $77,924,350 $19,572,116 Future production and development costs ( 47,654,328) ( 8,141,497) ---------- ----------
Future net cash flows $30,270,022 $11,430,619
10% discount to reflect timing of cash flows ( 12,187,290) ( 4,348,888) ---------- ----------
Standardized measure of discounted future net cash flows $18,082,732 $ 7,081,731 ========== ==========
Partnership ------------- III-G ------------- Future cash inflows $11,951,351 Future production and development costs ( 5,206,140) ----------
Future net cash flows $ 6,745,211
10% discount to reflect timing of cash flows ( 2,571,190) ----------
Standardized measure of discounted future net cash flows $ 4,174,021 ==========
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 $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 Partnerships have been previously filed with the Securities and Exchange Commission as Exhibit 2.1 to Form 8-A filed by each Partnership on the dates shown below and are hereby incorporated by reference.
Partnership Filing Date File No. ----------- ----------- --------
III-A February 20, 1990 0-18302 III-B March 30, 1990 0-18636 III-C March 30, 1990 0-18634 III-D November 14, 1990 0-18936 III-E January 22, 1991 0-19010 III-F March 25, 1991 0-19102 III-G September 30, 1991 0-19563
4.2 Advisory Agreement dated as of November 24, 1992 between Samson, PaineWebber, Geodyne Resources, Geodyne Properties, Inc., Geodyne Production Company, and Geodyne Energy Company filed as Exhibit 28.3 to Registrant's Current Report on Form 8-K on December 24, 1992 and is hereby incorporated by reference.
4.3 Second Amendment to Agreement of Limited Partnership of Geodyne Energy Income Limited Partnership III-A, filed as Exhibit 4.1 to Registrant's Current Report on Form 8-K dated August 2, 1993 filed with the SEC on August 10, 1993 and is hereby incorporated by reference.
4.4 Second Amendment to Agreement of Limited Partnership of Geodyne Energy Income Limited Partnership III-B, filed as Exhibit 4.2 to Registrant's Current Report on Form 8-K dated August 2, 1993 filed with the SEC on August 10, 1993 and is hereby incorporated by reference.
4.5 Second Amendment to Agreement of Limited Partnership of Geodyne Energy Income Limited Partnership III-C, filed as Exhibit 4.3 to Registrant's Current Report on Form 8-K dated August 2, 1993 filed with the SEC on August 10, 1993 and is hereby incorporated by reference.
4.6 Second Amendment to Agreement of Limited Partnership of Geodyne Energy Income Limited Partnership III-D, filed as Exhibit 4.4 to Registrant's Current Report on Form 8-K dated August 2, 1993 filed with the SEC on August 10, 1993 and is hereby incorporated by reference.
4.7 Second Amendment to Agreement of Limited Partnership of Geodyne Energy Income Limited Partnership III-E, filed as Exhibit 4.5 to Registrant's Current Report on Form 8-K dated August 2, 1993 filed with the SEC on August 10, 1993 and is hereby incorporated by reference.
4.8 Second Amendment to Agreement of Limited Partnership of Geodyne Energy Income Limited Partnership III-F, filed as Exhibit 4.6 to Registrant's Current Report on Form 8-K dated August 2, 1993 filed with the SEC on August 10, 1993 and is hereby incorporated by reference.
4.9 Second Amendment to Agreement of Limited Partnership of Geodyne Energy Income Limited Partnership III-G, filed as Exhibit 4.7 to Registrant's Current Report on Form 8-K dated August 2, 1993 filed with the SEC on August 10, 1993 and is hereby incorporated by reference.
4.10 Third Amendment to Agreement of Limited Partnership of Geodyne Energy Income Limited Partnership III-A, filed as Exhibit 4.10 to Registrant's Annual Report on Form 10-K for the year ended December 31, 1995 filed with the SEC on April 1, 1996 and is hereby incorporated by reference.
4.11 Third Amendment to Agreement of Limited Partnership of Geodyne Energy Income Limited Partnership III-B, filed as Exhibit 4.11 to Registrant's Annual Report on Form 10-K for the year ended December 31, 1995 filed with the SEC on April 1, 1996 and is hereby incorporated by reference.
4.12 Third Amendment to Agreement of Limited Partnership of Geodyne Energy Income Limited Partnership III-C, filed as Exhibit 4.12 to Registrant's Annual Report on Form 10-K for the year ended December 31, 1995 filed with the SEC on April 1, 1996 and is hereby incorporated by reference.
4.13 Third Amendment to Agreement of Limited Partnership of Geodyne Energy Income Limited Partnership III-D, filed as Exhibit 4.13 to Registrant's Annual Report on Form 10-K for the year ended December 31, 1995 filed with the SEC on April 1, 1996 and is hereby incorporated by reference.
4.14 Third Amendment to Agreement of Limited Partnership of Geodyne Energy Income Limited Partnership III-E, filed as Exhibit 4.14 to Registrant's Annual Report on Form 10-K for the year ended December 31, 1995 filed with the SEC on April 1, 1996 and is hereby incorporated by reference.
4.15 Third Amendment to Agreement of Limited Partnership of Geodyne Energy Income Limited Partnership III-F, filed as Exhibit 4.15 to Registrant's Annual Report on Form 10-K for the year ended December 31, 1995 filed with the SEC on April 1, 1996 and is hereby incorporated by reference.
4.16 Third Amendment to Agreement of Limited Partnership of Geodyne Energy Income Limited Partnership III-G, filed as Exhibit 4.16 to Registrant's Annual Report on Form 10-K for the year ended December 31, 1995 filed with the SEC on April 1, 1996 and is hereby incorporated by reference.
*23.1 Consent of Ryder Scott Company, Petroleum Engineers for Geodyne Energy Income Limited Partnership III-A.
*23.2 Consent of Ryder Scott Company, Petroleum Engineers for Geodyne Energy Income Limited Partnership III-B.
*23.3 Consent of Ryder Scott Company, Petroleum Engineers for Geodyne Energy Income Limited Partnership III-C.
*23.4 Consent of Ryder Scott Company, Petroleum Engineers for Geodyne Energy Income Limited Partnership III-D.
*23.5 Consent of Ryder Scott Company, Petroleum Engineers for Geodyne Energy Income Limited Partnership III-E.
*23.6 Consent of Ryder Scott Company, Petroleum Engineers for Geodyne Energy Income Limited Partnership III-F.
*23.7 Consent of Ryder Scott Company, Petroleum Engineers for Geodyne Energy Income Limited Partnership III-G.
*27.1 Financial Data Schedule containing summary financial information extracted from the Geodyne Energy Income Limited Partnership III-A's financial statements as of December 31, 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 III-B'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 III-C'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 III-D'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 III-E's financial statements as of December 31, 1997 and for the year ended December 31, 1997.
*27.6 Financial Data Schedule containing summary financial information extracted from the Geodyne Energy Income Limited Partnership III-F's financial statements as of December 31, 1997 and for the year ended December 31, 1997.
*27.7 Financial Data Schedule containing summary financial information extracted from the Geodyne Energy Income Limited Partnership III-G's financial statements as of December 31, 1997 and for the year ended December 31, 1997.
All other Exhibits are omitted as inapplicable.
----------
* Filed herewith.