FORM 10-K405
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 1997
Commission File Number:
I-B: 0-14657 I-C: 0-14658 I-D: 0-15831 I-E: 0-15832
I-F: 0-15833
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP I-B
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP I-C
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP I-D
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP I-E
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP I-F
---------------------------------------------
(Exact name of Registrant as specified in its Articles)
I-B 73-1231998
I-C 73-1252536
I-D 73-1265223
I-E 73-1270110
Oklahoma I-F 73-1292669
- --------------------------------- ----------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
Two West Second Street, Tulsa, Oklahoma 74103
---------------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (918) 583-1791
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act:
Depositary Units in Geodyne Energy Income Limited Partnerships I-B through
I-F
Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
Registrant was required to file such reports) and (2) has been subject to the
filing requirements for the past 90 days. Yes X No
----- -----
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K (Sec. 229.405 of this chapter) is not contained herein,
and will not be contained, to the best of registrant's knowledge, in definitive
proxy or information statements incorporated by reference in Part III of this
Form 10-K405 or any amendment to this Form 10-K405.
X Disclosure is not contained herein.
-----
Disclosure is contained herein.
-----
The Registrants are limited partnerships and there is no public market for
trading in the partnership interests.
DOCUMENTS INCORPORATED BY REFERENCE: None
<PAGE>
FORM 10-K405
TABLE OF CONTENTS
PART I.......................................................................1
ITEM 1. BUSINESS...................................................1
ITEM 2. PROPERTIES.................................................6
ITEM 3. LEGAL PROCEEDINGS.........................................17
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF LIMITED PARTNERS.......19
PART II.....................................................................20
ITEM 5. MARKET FOR UNITS AND RELATED LIMITED PARTNER MATTERS......20
ITEM 6. SELECTED FINANCIAL DATA...................................23
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS.......................28
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA...............47
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL DISCLOSURE.......................47
PART III....................................................................47
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE GENERAL
PARTNER...................................................47
ITEM 11. EXECUTIVE COMPENSATION....................................48
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT................................................55
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS............56
PART IV.....................................................................58
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS
ON FORM 8-K...............................................58
SIGNATURES..................................................................62
<PAGE>
PART I.
ITEM 1. BUSINESS
General
The Geodyne Energy Income Limited Partnership I-B (the "I-B Partnership"),
Geodyne Energy Income Limited Partnership I-C (the "I-C Partnership"), Geodyne
Energy Income Limited Partnership I-D (the "I-D Partnership"), Geodyne Energy
Income Limited Partnership I-E (the "I-E Partnership"), and Geodyne Energy
Income Limited Partnership I-F (the "I-F Partnership") (collectively, the
"Partnerships") are limited partnerships formed under the Oklahoma Revised
Uniform Limited Partnership Act. Each Partnership is composed of public
investors as limited partners (the "Limited Partners") and Geodyne Resources,
Inc. ("Geodyne"), a Delaware corporation, as the general partner. The
Partnerships commenced operations on the dates set forth below:
Date of
Partnership Activation
----------- ------------------
I-B July 12, 1985
I-C December 20, 1985
I-D March 4, 1986
I-E September 10, 1986
I-F December 16, 1986
Immediately following activation, each Partnership invested as a general
partner in a separate Oklahoma general partnership which actually conducts the
Partnerships' production operations. Geodyne serves as managing partner of such
general partnerships. Unless the context indicates otherwise, all references to
any single Partnership or all of the Partnerships in this Annual Report on Form
10-K405 ("Annual Report") are references to the Partnership and its related
general partnership, collectively. In addition, unless the context indicates
otherwise, all references to the "General Partner" in this Annual Report are
references to Geodyne as the general partner of the Partnerships, and as the
managing partner of the related general partnerships.
The General Partner currently serves as general partner of 29 limited
partnerships, including the Partnerships. The General Partner is a wholly-owned
subsidiary of Samson Investment Company. Samson Investment Company and its
various corporate subsidiaries, including the General Partner (collectively, the
"Samson Companies"), are primarily engaged in the production and development of
and exploration for oil and gas reserves and the acquisition and operation of
producing properties. At December 31, 1997, the Samson Companies owned interests
in approximately 13,000 oil and gas wells located in 19 states of the United
States and the countries of Canada, Venezuela, and Russia. At
1
<PAGE>
December 31, 1997, the Samson Companies operated approximately 2,500 oil and gas
wells located in 15 states of the United States, as well as Canada, Venezuela,
and Russia.
The Partnerships are currently engaged in the business of owning interests
in producing oil and gas properties located in the continental United States.
The Partnerships may also engage to a limited extent in development drilling on
producing oil and gas properties as required for the prudent management of the
Partnerships.
As limited partnerships, the Partnerships have no officers, directors, or
employees. They rely instead on the personnel of the General Partner and the
other Samson Companies. As of February 15, 1998, the Samson Companies employed
approximately 820 persons. No employees are covered by collective bargaining
agreements, and management believes that the Samson Companies provide a sound
employee relations environment. For information regarding the executive officers
of the General Partner, see "Item 10. Directors and Executive Officers of the
General Partner."
The General Partner's and the Partnerships' principal place of business is
located at Samson Plaza, Two West Second Street, Tulsa, Oklahoma 74103, and
their telephone number is (918) 583-1791 or (800) 283-1791.
Pursuant to the terms of the Partnerships' partnership agreements (the
"Partnership Agreements"), the Partnerships will terminate on December 31, 1999.
However, the Partnership Agreements provide that the General Partner may extend
the term of each Partnership for up to five periods of two years each. As of the
date of this Annual Report, the General Partner has not determined whether to
extend the term of any Partnership.
Funding
Although the Partnership Agreements permit each Partnership to incur
borrowings, operations and expenses are currently funded out of each
Partnership's revenues from oil and gas sales. The General Partner may, but is
not required to, advance funds to a Partnership for the same purposes for which
Partnership borrowings are authorized.
Principal Products Produced and Services Rendered
The Partnerships' sole business is the production of, and related
incidental development of, oil and gas. The Partnerships do not refine or
otherwise process crude oil and condensate. The Partnerships do not hold any
patents, trademarks, licenses, or concessions and are not a party to any
government contracts. The Partnerships have no backlog of orders and do not
2
<PAGE>
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
3
<PAGE>
lower portions of this pricing range, and in early 1998 dropped to as low as
approximately $13.75 per barrel. It is not known whether this trend will
continue. Prices for the Partnerships' oil decreased from approximately $23.75
per barrel at December 31, 1996 to approximately $16.25 per barrel at December
31, 1997.
Future prices for both oil and gas will likely be different from (and may
be lower than) the prices in effect on December 31, 1997. Primarily due to
heating season demand, year-end prices in many past years have tended to be
higher, and in some cases significantly higher, than the yearly average price
actually received by the Partnerships for at least the following year.
Management is unable to predict whether future oil and gas prices will (i)
stabilize, (ii) increase, or (iii) decrease.
Significant Customers
The following customers accounted for ten percent or more of the
Partnerships' oil and gas sales during the year ended December 31, 1997:
Partnership Customer Percentage
----------- -------- ----------
I-B Williams Energy Services Co. 24.4%
Byrd Operating Company 18.7%
El Paso Energy Marketing
Company ("El Paso") 12.6%
I-C Hallwood Petroleum ("Hallwood") 36.2%
Conoco, Inc. ("Conoco") 30.3%
Koch Oil Company 12.8%
I-D El Paso 35.5%
Hallwood 24.9%
Conoco 19.6%
I-E El Paso 51.3%
I-F El Paso 33.9%
In the event of interruption of purchases by one or more of the
Partnerships' significant customers or the cessation or material change in
availability of open access transportation by the Partnerships' pipeline
transporters, the Partnerships may encounter difficulty in marketing their gas
and in maintaining historic sales levels. Management does not expect any of its
open access transporters to seek authorization to terminate their transportation
services. Even if the services were terminated, management believes that
alternatives would be available whereby the Partnerships would be able to
continue to market their gas.
4
<PAGE>
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.
5
<PAGE>
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. PROPERTIES
Well Statistics
The following table sets forth the number of productive wells of the
Partnerships as of December 31, 1997.
Well Statistics(1)
As of December 31, 1997
P/ship Number of Gross Wells(2) Number of Net Wells(3)
- ------ ----------------------------- -------------------------------
Total Oil Gas N/A(4) Total Oil Gas N/A(4)
----- ----- ----- ------ ----- ----- ----- ------
I-B 79 2 77 - 3.31 .19 3.12 -
I-C 82 8 73 1 5.20 4.10 1.10 -
I-D 535 6 528 1 3.96 .15 3.81 -
I-E 851 269 581 1 33.32 12.57 20.58 .17
I-F 842 269 572 1 14.82 5.38 9.32 .12
- ----------
(1) The designation of a well as an oil well or gas well is made by the
General Partner based on the relative amount of oil and gas reserves for
the well. Regardless of a well's oil or gas designation, it may produce
oil, gas, or both oil and gas.
(2) As used in this Annual Report, "gross well" refers to a well in which a
working interest is owned, accordingly, the number of gross wells is the
total number of wells in which a working interest is owned.
(3) As used in this Annual Report, "net well" refers to the sum of the
fractional working interests owned in gross wells. For example, a 15%
working interest in a well represents one gross well, but 0.15 net well.
(4) Wells which have not been designated as oil or gas.
6
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Drilling Activities
During 1997, the I-E and I-F Partnerships participated in the drilling of
the Willamar Community E No. 9 well located in Willacy County, Texas. This well
was completed as a producing oil well on June 11, 1997. The I-E and I-F
Partnerships have an approximate 10.0% and 3.5% working interest, respectively,
in this well. The I-B, I-C, and I-D Partnerships did not participate in any
drilling activities during the year ended December 31, 1997.
Oil and Gas Production, Revenue, and Price History
The following tables set forth certain historical information concerning
the oil (including condensates) and gas production, net of all royalties,
overriding royalties, and other third party interests, of the Partnerships,
revenues attributable to such production, and certain price and cost
information. As used in the following tables, direct operating expenses include
lease operating expenses and production taxes. In addition, gas production is
converted to oil equivalents at the rate of six Mcf per barrel, representing the
estimated relative energy content of gas and oil, which rate is not necessarily
indicative of the relationship of oil and gas prices. The respective prices of
oil and gas are affected by market and other factors in addition to relative
energy content.
7
<PAGE>
Net Production Data
I-B Partnership
--------------
Year Ended December 31,
--------------------------------
1997 1996 1995
-------- -------- --------
Production:
Oil (Bbls) 2,277 2,297 4,628
Gas (Mcf) 129,776 150,543 150,238
Oil and gas sales:
Oil $ 43,243 $ 48,565 $ 77,717
Gas 315,039 315,487 176,333
------- ------- -------
Total $358,282 $364,052 $254,050
======= ======= =======
Total direct operating
expenses $136,300 $131,335 $161,109
======= ======= =======
Direct operating expenses
as a percentage of oil
and gas sales 38.0% 36.1% 63.4%
Average sales price:
Per barrel of oil $18.99 $21.14 $16.79
Per Mcf of gas 2.43 2.10 1.17
Direct operating expenses
per equivalent Bbl of
oil $ 5.70 $ 4.80 $ 5.43
8
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Net Production Data
I-C Partnership
---------------
Year Ended December 31,
------------------------------------
1997 1996 1995
---------- ---------- --------
Production:
Oil (Bbls) 25,122 27,537 27,843
Gas (Mcf) 178,180 226,820 207,207
Oil and gas sales:
Oil $469,154 $ 554,281 $464,952
Gas 482,524 626,815 343,483
------- --------- -------
Total $951,678 $1,181,096 $808,435
======= ========= =======
Total direct operating
expenses $311,741 $ 241,698 $275,197
======= ========= =======
Direct operating expenses
as a percentage of oil
and gas sales 32.8% 20.5% 34.0%
Average sales price:
Per barrel of oil $18.68 $20.13 $16.70
Per Mcf of gas 2.71 2.76 1.66
Direct operating expenses
per equivalent Bbl of
oil $ 5.69 $ 3.70 $ 4.41
9
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Net Production Data
I-D Partnership
---------------
Year Ended December 31,
--------------------------------------
1997 1996 1995
---------- ---------- ----------
Production:
Oil (Bbls) 18,760 21,291 22,427
Gas (Mcf) 510,113 577,657 577,969
Oil and gas sales:
Oil $ 355,605 $ 429,150 $ 368,704
Gas 1,189,492 1,383,418 868,715
--------- --------- ---------
Total $1,545,097 $1,812,568 $1,237,419
========= ========= =========
Total direct operating
expenses $ 294,350 $ 290,848 $ 236,591
========= ========= =========
Direct operating expenses
as a percentage of oil
and gas sales 19.1% 16.0% 19.1%
Average sales price:
Per barrel of oil $18.96 $20.16 $16.44
Per Mcf of gas 2.33 2.39 1.50
Direct operating expenses
per equivalent Bbl of
oil $ 2.84 $ 2.47 $ 1.99
10
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Net Production Data
I-E Partnership
---------------
Year Ended December 31,
--------------------------------------
1997 1996 1995
---------- ---------- ----------
Production:
Oil (Bbls) 77,648 70,998 89,117
Gas (Mcf) 2,139,704 2,206,082 2,412,342
Oil and gas sales:
Oil $1,462,528 $1,407,716 $1,490,590
Gas 4,541,724 4,598,715 3,287,291
--------- --------- ---------
Total $6,004,252 $6,006,431 $4,777,881
========= ========= =========
Total direct operating
expenses $1,771,150 $1,706,319 $1,481,529
========= ========= =========
Direct operating expenses
as a percentage of oil
and gas sales 29.5% 28.4% 31.0%
Average sales price:
Per barrel of oil $18.84 $19.83 $16.73
Per Mcf of gas 2.12 2.08 1.36
Direct operating expenses
per equivalent Bbl of
oil $ 4.08 $ 3.89 $ 3.02
11
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Net Production Data
I-F Partnership
---------------
Year Ended December 31,
--------------------------------------
1997 1996 1995
---------- ---------- ----------
Production:
Oil (Bbls) 38,725 35,577 45,101
Gas (Mcf) 571,101 652,692 711,486
Oil and gas sales:
Oil $ 730,010 $ 704,023 $ 749,300
Gas 1,291,795 1,417,313 1,013,669
--------- --------- ---------
Total $2,021,805 $2,121,336 $1,762,969
========= ========= =========
Total direct operating
expenses $ 683,800 $ 758,392 $ 695,041
========= ========= =========
Direct operating expenses
as a percentage of oil
and gas sales 33.8% 35.8% 39.4%
Average sales price:
Per barrel of oil $18.85 $19.79 $16.61
Per Mcf of gas 2.26 2.17 1.42
Direct operating expenses
per equivalent Bbl of
oil $ 5.11 $ 5.25 $ 4.25
Proved Reserves and Net Present Value
The following table sets forth each Partnership's estimated proved oil and
gas reserves and net present value therefrom as of December 31, 1997. The
schedule of quantities of proved oil and gas reserves was prepared by the
General Partner in accordance with the rules prescribed by the Securities and
Exchange Commission (the "SEC"). Certain reserve information was reviewed by
Ryder Scott Company Petroleum Engineers ("Ryder Scott"), an independent
petroleum engineering firm. As used throughout this Annual Report, "proved
reserves" refers to those estimated quantities of crude oil, gas, and gas
liquids which geological and engineering data demonstrate with reasonable
certainty to be recoverable in future years from known oil and gas reservoirs
under existing economic and operating conditions.
12
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Net present value represents estimated future gross cash flow from the
production and sale of proved reserves, net of estimated oil and gas production
costs (including production taxes, ad valorem taxes, and operating expenses) and
estimated future development costs, discounted at 10% per annum. Net present
value attributable to the Partnerships' proved reserves was calculated on the
basis of current costs and prices at December 31, 1997. Such prices were not
escalated except in certain circumstances where escalations were fixed and
readily determinable in accordance with applicable contract provisions. The
prices used in calculating the net present value attributable to the
Partnerships' proved reserves do not necessarily reflect market prices for oil
and gas production subsequent to December 31, 1996. Year-end prices have
generally been higher than prices during the rest of the year. There can be no
assurance that the prices used in calculating the net present value of the
Partnerships' proved reserves at December 31, 1997 will actually be realized for
such production.
The process of estimating oil and gas reserves is complex, requiring
significant subjective decisions in the evaluation of available geological,
engineering, and economic data for each reservoir. The data for a given
reservoir may change substantially over time as a result of, among other things,
additional development activity, production history, and viability of production
under varying economic conditions; consequently, it is reasonably possible that
material revisions to existing reserve estimates may occur in the near future.
Although every reasonable effort has been made to ensure that these reserve
estimates represent the most accurate assessment possible, the significance of
the subjective decisions required and variances in available data for various
reservoirs make these estimates generally less precise than other estimates
presented in connection with financial statement disclosures.
13
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Proved Reserves and
Net Present Values
From Proved Reserves
As of December 31, 1997(1)
I-B Partnership:
- ---------------
Estimated proved reserves:
Gas (Mcf) 712,042
Oil and liquids (Bbls) 10,646
Net present value (discounted at 10% per annum) $ 949,667
I-C Partnership:
- ---------------
Estimated proved reserves:
Gas (Mcf) 793,819
Oil and liquids (Bbls) 60,907
Net present value (discounted at 10% per annum) $ 1,175,670
I-D Partnership:
- ---------------
Estimated proved reserves:
Gas (Mcf) 1,939,247
Oil and liquids (Bbls) 40,998
Net present value (discounted at 10% per annum) $ 2,775,789
I-E Partnership:
- ---------------
Estimated proved reserves:
Gas (Mcf) 10,551,009
Oil and liquids (Bbls) 399,673
Net present value (discounted at 10% per annum) $14,571,458
I-F Partnership:
- ---------------
Estimated proved reserves:
Gas (Mcf) 3,330,621
Oil and liquids (Bbls) 197,431
Net present value (discounted at 10% per annum) $ 4,697,742
- ----------
(1) Includes certain gas balancing adjustments which cause the gas volumes and
net present values to differ from the reserve reports prepared by the
General Partner and reviewed by Ryder Scott.
14
<PAGE>
No estimates of the proved reserves of the Partnerships comparable to
those included herein have been included in reports to any federal agency other
than the SEC. Additional information relating to the Partnerships' proved
reserves is contained in Note 4 to the Partnerships' financial statements,
included in Item 8 of this Annual Report.
Significant Properties
The following table sets forth the basins in which the Partnerships own a
significant amount of properties. The table contains the following information
for each significant basin: (i) the number of gross and net wells, (ii) the
number of wells in which only a non-working interest is owned, (iii) the
Partnership's total number of wells, (iv) the number and percentage of wells
operated by the Partnership's affiliates, (v) estimated proved oil reserves,
(vi) estimated proved gas reserves, and (vii) the present value (discounted at
10% per annum) of estimated future net cash flow.
The Anadarko Basin is located in western Oklahoma and the Texas Panhandle,
while the Gulf Coast Basin is located in southern Louisiana and southeast Texas.
The Mid-Gulf Coast Basin is located in southern Alabama and Mississippi, while
the Permian Basin straddles west Texas and southeast New Mexico. The Williston
Basin is located in North Dakota, South Dakota, and eastern Montana.
15
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<TABLE>
<CAPTION>
Significant Properties
----------------------
Wells
Operated by
Affiliates Oil Gas
Gross Net Other Total ------------ Reserves Reserves Present
Basin Wells Wells Wells(1) Wells Number % (Bbl) (Mcf) Value
- ------------------ ------ ------- ------ ------ ------ ---- -------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
I-B Partnership:
Mid-Gulf Coast 7 .17 - 7 - - % 1,374 297,365 $ 410,625
Permian 62 2.39 5 67 2 3% 1,560 283,454 305,919
Gulf Coast 9 .73 6 15 1 7% 7,511 126,150 225,530
I-C Partnership:
Anadarko 6 3.56 - 6 5 83% 29,221 530,330 $ 625,506
Gulf Coast 7 .14 4 11 - - 10,992 136,543 368,665
I-D Partnership:
Anadarko 94 2.47 54 148 20 14% 10,303 998,302 $1,276,475
Permian 408 .66 3 411 - - 15,981 589,999 851,071
Gulf Coast 2 .06 - 2 - - % 10,986 152,084 397,914
I-E Partnership:
Anadarko 139 13.62 54 193 25 13% 53,927 4,803,909 $5,998,366
Permian 419 4.27 3 422 6 1% 110,344 3,470,546 5,029,342
Gulf Coast 241 10.30 - 241 - - 139,758 952,383 1,730,144
I-F Partnership:
Anadarko 139 6.34 54 193 25 13% 24,679 2,150,777 $2,665,034
Gulf Coast 241 3.70 - 241 - - % 49,677 345,755 628,523
- ---------------------
(1) Wells in which only a non-working (e.g. royalty) interest is owned.
</TABLE>
16
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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. LEGAL PROCEEDINGS
On November 23 and 25, 1994, Geodyne, PaineWebber Incorporated
("PaineWebber"), and certain other parties were named as defendants in two
related lawsuits alleging misrepresentations made to induce investments in the
Partnerships' units of limited partnership interest ("Units") and asserting
causes of action for common law fraud and deceit and unjust enrichment (Romine
v. PaineWebber, Inc., et al, Case No. 94-CIV-8558, U. S. District Court,
Southern District of New York and Romine v. PaineWebber, Inc., et al, Case No.
94-132844, Supreme Court of the State of New York, County of New York). The
federal court case was later consolidated with other similar actions (to which
Geodyne is not a party) under the title In Re: PaineWebber Limited Partnerships'
Litigation and was certified as a class action on May 30, 1995 (the "PaineWebber
Partnership Class Action"). The PaineWebber Partnership Class Action also
alleges violations of 18 U.S.C. Section 1962(c) and the Securities Exchange Act
of 1934. Compensatory and punitive damages, interest, and costs have been
requested in both matters. The amended complaint in the PaineWebber Partnership
Class Action no longer asserts any claim directly against Geodyne.
On January 18, 1996, PaineWebber issued a press release indicating that it
had reached settlement agreements to settle with (i) the plaintiffs in the
pending PaineWebber Partnership Class Action and another class action matter
involving certain other partnerships sponsored by Geodyne, (ii) the SEC, and
(iii) various state securities regulators. On that date, PaineWebber paid $125
million into an interest bearing account as part of a memorandum of
understanding in connection with the proposed settlement (the "Settlement
Fund"). The Settlement Fund applies to claims related to both the Partnerships
and certain other investment programs sold by PaineWebber. In addition,
PaineWebber agreed to a SEC administrative order creating a capped $40 million
17
<PAGE>
fund (the "SEC Claims Fund"), which is to be distributed to eligible Limited
Partners by an independent administrator (the "Claims Administrator"); a civil
penalty of $5 million leveled by the SEC; and payments aggregating $5 million to
state securities administrators. Such settlement is not an obligation of either
the Partnerships or Geodyne and, accordingly, would not affect the financial
statements of the Partnerships.
In connection with the PaineWebber Partnership Class Action, on July 17,
1996 the federal court entered a preliminary order regarding the settlement
proceedings referred to above. Pursuant to that order, plaintiffs' counsel
mailed to class members the Class Settlement Notice (the "Notice") and Proof of
Claim. Eligible class members are generally those who purchased their Units
through PaineWebber on or before December 31, 1992 and who have not (i)
previously opted out of the Class, (ii) previously released PaineWebber, or
(iii) finally adjudicated their claims against PaineWebber.
Plaintiffs' counsel will be responsible for allocating payments from the
$125 million Settlement Fund previously funded by PaineWebber among eligible
Limited Partners and investors in other unrelated PaineWebber partnerships in
accordance with the settlement. The amount and date of any payment will vary
depending upon many factors set forth in the Notice. According to the Notice,
since the I-D, I-E, and I-F Partnerships have already achieved "payout,"
substantially all of the Limited Partners in those Partnerships will not be
entitled to payments under the Settlement Fund. It is currently expected that
payments from the Settlement Fund will be made some time in 1998.
In addition, eligible Limited Partners in the I-B and I-C Partnerships who
held their Units on June 3, 1996 may be entitled to certain additional payments
from an escrow fund to which PaineWebber will make payments through May 30, 2001
if spot market oil and natural gas prices as reported by the New York Mercantile
Exchange fall below certain thresholds set forth in the Notice (the "Pricing
Guarantee"). The threshold prices used in the Pricing Guarantee are $18.00 per
barrel of oil and $1.80 per Mcf of gas. Under the Notice, PaineWebber payments,
if any, made pursuant to the Pricing Guarantee will be paid to Limited Partners
of record on June 30, 1996 irrespective of whether they subsequently
sell/dispose of their Units to third parties. The Pricing Guarantee does NOT
attach to the Units as an attribute of ownership in the Partnerships and is not
an obligation of either Geodyne or the Partnerships.
A look back provision is also included in the settlement which may provide
additional funds as of January 1, 2001 for eligible Limited Partners. Class
members who sold their Units prior to June 30, 1996 will not be eligible for
payments, if any, under the Pricing Guarantee or the look back provision.
18
<PAGE>
Eligible Limited Partners were required to timely execute and return a
proof of claim by January 17, 1997 in order to participate in the settlement.
In connection with the SEC Claims Fund, on April 17, 1996, PaineWebber
mailed a Notice and Claim Form to each Limited Partner who purchased Units in
the Partnerships through PaineWebber from January 1, 1986 to December 31, 1992.
Limited Partners are not eligible to participate in the claims process if they
(i) previously reached a settlement with PaineWebber or (ii) had their direct
investment claim resolved by a court or in arbitration. Participation in the
claims process is optional, and does not prevent a Limited Partner from pursuing
any other remedy against PaineWebber that may be available. Limited Partners had
until October 22, 1996 to complete the claim form and return it to the Claims
Administrator. The determination of whether a Limited Partner is entitled to a
recovery under the SEC Claims Fund will be based on whether or not the Claims
Administrator determines that the Limited Partner's investment in the
Partnerships was suitable for him at the time of purchase. In addition, if the
Limited Partner has opted out of the PaineWebber Partnership Class Action and
has not already settled with PaineWebber or has had a claim resolved by a court
or in arbitration, the Claims Administrator will also consider allegations that
misrepresentations were made in connection with the sale of the Units.
On March 20, 1997 the settlement described above was confirmed by the
federal court. Certain limited partners in partnerships that were not sponsored
by the General Partner appeal the confirmation; however, all such appeals were
denied by the United States Second Circuit Court of Appeals and the settlement
order is now final. The parties are currently awaiting a ruling by the federal
district judge as to the amount of attorneys' fees to be awarded to the
plaintiffs' attorneys from the Settlement Fund. The General Partner expects that
the Settlement Fund will be distributed to eligible class members within a few
months following the entry of a final order on the attorneys' fees.
To the knowledge of the General Partner, neither the General Partner nor
the Partnerships or their properties are subject to any litigation, the results
of which would have a material effect on the Partnerships' or the General
Partner's financial condition or operations.
ITEM 4. 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.
19
<PAGE>
PART II.
ITEM 5. MARKET FOR UNITS AND RELATED LIMITED PARTNER MATTERS
As of January 31, 1998, the number of Units outstanding and the
approximate number of Limited Partners of record in the Partnerships were as
follows:
Number of
Number of Limited
Partnership Units Partners
----------- --------- ------------
I-B 11,958 831
I-C 8,885 773
I-D 7,195 759
I-E 41,839 2,872
I-F 14,321 933
Units were initially sold for a price of $1,000. The Units are not traded
on any exchange and there is no public trading market for them. The General
Partner is aware of certain transfers of Units between unrelated parties, some
of which are facilitated by secondary trading firms and matching services. In
addition, as further described below, the General Partner is aware of certain
"4.9% tender offers" which have been made for the Units. The General Partner
believes that the transfers between unrelated parties have been limited and
sporadic in number and volume. Other than trades facilitated by certain
secondary trading firms and matching services, no organized trading market for
Units exists and none is expected to develop. Due to the nature of these
transactions, the General Partner has no verifiable information regarding prices
at which Units have been transferred. Further, a transferee may not become a
substitute Limited Partner without the consent of the General Partner.
Pursuant to the terms of the Partnership Agreements, the General Partner
is obligated to annually issue a repurchase offer which is based on the
estimated future net revenues from the Partnerships' reserves and is calculated
pursuant to the terms of the Partnership Agreements. Such repurchase offer is
recalculated monthly in order to reflect cash distributions to the Limited
Partners and extraordinary events. The following table sets forth the General
Partner's repurchase offer per Unit as of the periods indicated. For purpose of
this Annual Report, a Unit represents an initial subscription of $1,000 to a
Partnership.
20
<PAGE>
Repurchase Offer Prices
-----------------------
1996 1997 1998
-------------------------- ------------------------- ----
1st 2nd 3rd 4th 1st 2nd 3rd 4th 1st
P/ship Qtr. Qtr. Qtr. Qtr. Qtr. Qtr. Qtr. Qtr. Qtr.
- ------ ---- ---- ---- ---- ---- ---- ---- ---- ----
I-B $ 45 $ 43 $ 52 $ 51 $ 50 $ 49 $ 46 $ 44 $ 38
I-C 68 49 55 38 13 94 79 79 63
I-D 165 133 182 138 94 210 177 155 122
I-E 139 126 184 160 141 183 166 151 134
I-F 132 117 169 148 127 180 163 148 133
The Partnership Agreements also provide for a right of presentment ("Right
of Presentment") whereby the General Partner is required, upon request, to
purchase up to 10% of a Partnership's outstanding Units at a price calculated
pursuant to the terms of the Partnership Agreements and based on the liquidation
value of the limited partnership interest, with a reduction for 70% of cash
distributions that have been received prior to the transfer of the partnership
interest. The following table sets forth the Right of Presentment price per Unit
as of the periods indicated.
Right of Presentment Prices
---------------------------
1996 1997 1998
-------------------------- -------------------------- ----
1st 2nd 3rd 4th 1st 2nd 3rd 4th 1st
P/ship Qtr. Qtr. Qtr. Qtr. Qtr. Qtr. Qtr. Qtr. Qtr.
- ------ ---- ---- ---- ---- ---- ---- ---- ---- ----
I-B $ 53 $ 51 $ 56 $ 55 $ 55 $ 52 $ 48 $ 46 $ 42
I-C 90 76 74 62 45 120 94 94 83
I-D 208 186 215 184 153 267 206 191 168
I-E 166 156 203 186 173 212 178 168 156
I-F 158 148 188 173 159 209 176 166 155
In addition to the repurchase offer and Right of Presentment described
above, the Partnerships have been subject to "4.9% tender offers" from several
third parties during 1997. The General Partner does not know the terms of these
offers or the prices received by the Limited Partners who accepted these offers.
21
<PAGE>
Cash Distributions
Cash distributions are primarily dependent upon a Partnership's cash
receipts from the sale of oil and gas production and cash requirements of the
Partnership. Distributable cash is determined by the General Partner at the end
of each calendar quarter and distributed to the Limited Partners within 45 days
after the end of the quarter. Distributions are restricted to cash on hand less
amounts required to be retained out of such cash as determined in the sole
judgment of the General Partner to pay costs, expenses, or other Partnership
obligations whether accrued or anticipated to accrue. In certain instances, the
General Partner may not distribute the full amount of cash receipts which might
otherwise be available for distribution in an effort to equalize or stabilize
the amounts of quarterly distributions. Any available amounts not distributed
are invested and the interest or income thereon is for the accounts of the
Limited Partners.
The following is a summary of cash distributions paid to the Limited
Partners during 1996 and 1997 and the first quarter of 1998:
Cash Distributions
------------------
1996
-----------------------------------------
1st 2nd 3rd 4th
P/ship Qtr. Qtr. Qtr. Qtr.
------ ------ ------ ------ ---------
I-B $ 1.84 $ 2.01 $ 1.76 $ .92
I-C 12.27 19.13 26.22 17.00(1)
I-D 26.41 32.11 41.56 43.78(1)
I-E 13.10 13.27 17.66 24.16(1)
I-F 14.87 14.80 15.50 21.93(1)
1997 1998
--------------------------------------------- ---------
1st 2nd 3rd 4th 1st
P/ship Qtr. Qtr. Qtr. Qtr.(1) Qtr.(1)
------ -------- ------ -------- --------- ---------
I-B $ .84 $ 3.60 $ 3.26 $ 1.84 $ 6.10
I-C 24.54(1) 22.29(1) 14.29(1) - 15.87
I-D 43.50(1) 54.48 35.52(1) 21.68 33.22
I-E 18.71(1) 31.43 17.23(1) 15.32 16.92
I-F 20.11(1) 30.10 17.18(1) 14.52 14.66
- --------------------------
(1) Amount of cash distribution includes proceeds from the sale of certain oil
and gas properties.
22
<PAGE>
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."
<TABLE>
<CAPTION>
Selected Financial Data
I-B Partnership
---------------
1997 1996 1995 1994 1993
------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
Oil and Gas Sales $358,282 $364,052 $254,050 $ 453,021 $ 451,266
Net Income (Loss):
Limited Partners 81,083 99,324 ( 376,689) ( 53,126) ( 295,280)
General Partner 7,989 7,877 ( 1,776) 9,616 6,284
Total 89,072 107,201 ( 378,465) ( 43,510) ( 288,996)
Limited Partners' Net
Income (Loss) per Unit 6.78 8.31 ( 31.50) ( 4.44) ( 24.69)
Limited Partners' Cash
Distributions per
Unit 9.54 6.53 11.12 20.82 13.54
Total Assets 556,816 609,137 648,040 1,126,318 1,400,428
Partners' Capital
(Deficit):
Limited Partners 625,356 658,273 636,949 1,146,638 1,448,764
General Partner ( 103,542) ( 102,526) ( 104,724) ( 95,948) ( 93,546)
Number of Units
Outstanding 11,958 11,958 11,958 11,958 11,958
</TABLE>
23
<PAGE>
<TABLE>
<CAPTION>
Selected Financial Data
I-C Partnership
---------------
1997 1996 1995 1994 1993
------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
Oil and Gas Sales $951,678 $1,181,096 $808,435 $1,042,630 $1,032,753
Net Income:
Limited Partners 471,807 699,745 118,612 321,969 257,176
General Partner 27,253 38,944 20,456 27,850 27,641
Total 499,060 738,689 139,068 349,819 284,817
Limited Partners' Net
Income per Unit 53.10 78.76 13.35 36.24 28.94
Limited Partners' Cash
Distributions per
Unit 61.12 74.62 48.96 61.34 74.27
Total Assets 717,731 781,470 780,070 1,096,208 1,313,037
Partners' Capital
(Deficit):
Limited Partners 766,496 837,689 800,944 1,117,332 1,340,363
General Partner ( 89,189) ( 85,499) ( 66,308) ( 63,764) ( 63,314)
Number of Units
Outstanding 8,885 8,885 8,885 8,885 8,885
</TABLE>
24
<PAGE>
<TABLE>
<CAPTION>
Selected Financial Data
I-D Partnership
---------------
1997 1996 1995 1994 1993
------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
Oil and Gas Sales $1,545,097 $1,812,568 $1,237,419 $1,738,315 $1,422,035
Net Income:
Limited Partners 845,470 1,114,924 516,300 780,423 406,159
General Partner 173,924 219,180 135,487 193,738 148,907
Total 1,019,394 1,334,104 651,787 974,161 555,066
Limited Partners' Net
Income per Unit 117.51 154.96 71.76 108.47 56.45
Limited Partners' Cash
Distributions per
Unit 155.18 143.86 100.77 139.69 146.60
Total Assets 1,349,059 1,605,063 1,594,441 1,833,702 2,315,093
Partners' Capital
(Deficit):
Limited Partners 1,290,993 1,540,523 1,460,599 1,669,299 1,893,876
General Partner ( 27,560) ( 4,248) 17,993 9,506 ( 4,232)
Number of Units
Outstanding 7,195 7,195 7,195 7,195 7,195
</TABLE>
25
<PAGE>
<TABLE>
<CAPTION>
Selected Financial Data
I-E Partnership
---------------
1997 1996 1995 1994 1993
------------- ------------- ------------- ------------- -------------
<S> <C> <C> <C> <C> <C>
Oil and Gas Sales $6,004,252 $6,006,431 $4,777,881 $ 6,455,258 $ 5,714,015
Net Income:
Limited Partners 2,342,934 2,660,067 316,558 1,400,859 461,455
General Partner 568,504 602,481 368,023 369,587 284,492
Total 2,911,438 3,262,548 684,581 1,770,446 745,947
Limited Partners' Net
Income per Unit 56.00 63.58 7.57 33.48 11.03
Limited Partners' Cash
Distributions per
Unit 82.69 68.19 51.15 73.03 89.88
Total Assets 7,486,793 8,572,514 8,957,340 11,037,156 13,464,874
Partners' Capital
(Deficit):
Limited Partners 7,183,463 8,300,529 8,493,462 10,316,904 11,971,045
General Partner ( 228,434) ( 113,140) ( 54,687) ( 115,710) ( 145,297)
Number of Units
Outstanding 41,839 41,839 41,839 41,839 41,839
</TABLE>
26
<PAGE>
<TABLE>
<CAPTION>
Selected Financial Data
I-F Partnership
---------------
1997 1996 1995 1994 1993
------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
Oil and Gas Sales $2,021,805 $2,121,336 $1,762,969 $2,402,053 $1,992,506
Net Income:
Limited Partners 737,319 883,367 37,379 540,094 65,189
General Partner 183,677 198,724 117,455 138,915 83,769
Total 920,996 1,082,091 154,834 679,009 148,958
Limited Partners' Net
Income per Unit 51.49 61.68 2.61 37.71 4.55
Limited Partners' Cash
Distributions per
Unit 81.91 67.10 55.51 71.91 68.31
Total Assets 2,566,820 2,982,983 3,124,394 3,878,707 4,681,419
Partners' Capital
(Deficit):
Limited Partners 2,409,979 2,845,660 2,923,293 3,680,914 4,170,820
General Partner ( 59,811) ( 59,110) ( 25,679) ( 33,134) ( 58,049
Number of Units
Outstanding 14,321 14,321 14,321 14,321 14,321
</TABLE>
27
<PAGE>
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
Use of Forward-Looking Statements and Estimates
This Annual Report contains certain forward-looking statements. The words
"anticipate," "believe," "expect," "plan," "intend," "estimate," "project,"
"could," "may," and similar expressions are intended to identify forward-looking
statements. Such statements reflect management's current views with respect to
future events and financial performance. This Annual Report also includes
certain information which is, or is based upon, estimates and assumptions. Such
estimates and assumptions are management's efforts to accurately reflect the
condition and operation of the Partnerships.
Use of forward-looking statements and estimates and assumptions involve
risks and uncertainties which include, but are not limited to, the volatility of
oil and gas prices, the uncertainty of reserve information, the operating risk
associated with oil and gas properties (including the risk of personal injury,
death, property damage, damage to the well or producing reservoir, environmental
contamination, and other operating risks), the prospect of changing tax and
regulatory laws, the availability and capacity of processing and transportation
facilities, the general economic climate, the supply and price of foreign
imports of oil and gas, the level of consumer product demand, and the price and
availability of alternative fuels. Should one or more of these risks or
uncertainties occur or should estimates or underlying assumptions prove
incorrect, actual conditions or results may vary materially and adversely from
those stated, anticipated, believed, estimated, or otherwise indicated.
General Discussion
The following general discussion should be read in conjunction with the
analysis of results of operations provided below. The most important variable
affecting the Partnerships' revenues is the prices received for the sale of oil
and gas. Predicting future prices is very difficult. Concerning past trends,
average yearly wellhead gas prices in the United States have been volatile for a
number of years. For the past ten years, such average prices have generally been
in the $1.40 to $2.40 per Mcf range, significantly below prices received in the
early 1980s. Average gas prices in the latter part of 1996 and part of 1997,
however, were somewhat higher than those yearly averages.
Substantially all of the Partnerships' gas reserves are being sold on the
"spot market." Prices on the spot market are subject to wide seasonal and
regional pricing fluctuations due to the highly competitive nature of the spot
market. In addition, such spot market sales are generally short-term in nature
28
<PAGE>
and are dependent upon the obtaining of transportation services provided by
pipelines. Spot prices for the Partnerships' gas decreased from approximately
$3.57 per Mcf at December 31, 1996 to approximately $2.32 per Mcf at December
31, 1997. Such prices were on an MMBTU basis and differ from the prices actually
received by the Partnerships due to transportation and marketing costs, BTU
adjustments, and regional price and quality differences.
For the past ten years, average oil prices have generally been in the
$16.00 to $24.00 per barrel range. Due to global consumption and supply trends
over the last several months as well as expectations of at least a short-term
slow down in Asian energy demand, oil prices have recently been in the mid to
lower portions of this pricing range and in early 1998 dropped to as low as
approximately $13.75 per barrel. It is not known whether this trend will
continue. Prices for the Partnerships' oil decreased from approximately $23.75
per barrel at December 31, 1996 to approximately $16.25 per barrel at December
31, 1997.
Future prices for both oil and gas will likely be different from (and may
be lower than) the prices in effect on December 31, 1997. Primarily due to
heating season demand, year-end prices in many past years have tended to be
higher, and in some cases significantly higher, than the yearly average price
actually received by the Partnerships for at least the following year.
Management is unable to predict whether future oil and gas prices will (i)
stabilize, (ii) increase, or (iii) decrease.
As discussed in the "Results of Operations" section below, volumes of oil
and gas sold also significantly affect the Partnerships' revenues. Oil and gas
wells generally produce the most oil or gas in the earlier years of their lives
and, as production continues, the rate of production naturally declines. At some
point, production physically ceases or becomes no longer economic. The
Partnerships are not acquiring additional oil and gas properties, and the
existing properties are not experiencing significant additional production
through drilling or other capital projects. Therefore, volumes of oil and gas
produced naturally decline from year to year. While it is difficult for
management to predict future production from these properties, it is likely that
this general trend of declining production will continue.
Despite this general trend of declining production, several factors can
cause the volumes of oil and gas sold to increase or decrease at an even greater
rate over a given period. These factors include, but are not limited to, (i)
geophysical conditions which cause an acceleration of the decline in production,
(ii) the shutting in of wells (or the opening of previously shut-in wells) due
to low oil and gas prices, mechanical difficulties, loss of a market or
transportation, or performance of workovers, recompletions, or other operations
29
<PAGE>
in the well, (iii) prior period volume adjustments (either positive or negative)
made by purchasers of the production, (iv) ownership adjustments in accordance
with agreements governing the operation or ownership of the well (such as
adjustments that occur at payout), and (v) completion of enhanced recovery
projects which increase production for the well. Many of these factors are very
significant as related to a single well or as related to many wells over a short
period of time. However, due to the large number of wells owned by the
Partnerships, these factors are generally not material as compared to the normal
decline in production experienced on all remaining wells.
Results of Operations
An analysis of the change in net oil and gas operations (oil and gas
sales, less lease operating expenses and production taxes) is presented in the
tables following "Results of Operations" under the heading "Average Sales
Prices, Production Volumes, and Average Production Costs." Following is a
discussion of each Partnership's results of operations for the year ended
December 31, 1997 as compared to the year ended December 31, 1996 and for the
year ended December 31, 1996 as compared to the year ended December 31, 1995.
I-B Partnership
---------------
Year Ended December 31, 1997 Compared
to Year Ended December 31, 1996
-------------------------------------
Total oil and gas sales remained relatively constant in 1997 as compared
to 1996. Any decrease in oil and gas sales caused by decreases of approximately
$44,000 and $5,000, respectively, related to decreases in volumes of gas sold
and the average price of oil sold was substantially offset by an increase of
approximately $43,000 related to an increase in the average price of gas sold.
Volumes of oil and gas sold decreased 20 barrels and 20,767 Mcf, respectively,
in 1997 as compared to 1996. Average oil prices decreased to $18.99 per barrel
in 1997 from $21.14 per barrel in 1996. Average gas prices increased to $2.43
per Mcf in 1997 from $2.10 per Mcf in 1996.
Oil and gas production expenses (including lease operating expenses and
production taxes) increased $4,965 (3.8%) in 1997 as compared to 1996. This
increase resulted primarily from recompletion expenses incurred on one well
during 1997, partially offset by the decrease in volumes of gas sold in 1997. As
a percentage of oil and gas sales, these expenses increased to 38.0% in 1997
from 36.1% in 1996. This percentage increase was primarily due to the fixed
nature of certain lease operating expenses.
30
<PAGE>
Depreciation, depletion, and amortization of oil and gas properties
increased $6,363 (10.0%) in 1997 as compared to 1996. This increase resulted
primarily from a downward revision in the estimate of remaining gas reserves at
December 31, 1997, partially offset by the decrease in volumes of oil and gas
sold in 1997. As a percentage of oil and gas sales, this expense increased to
19.5% in 1997 from 17.4% in 1996. This percentage increase was primarily due to
the dollar decrease in depreciation, depletion, and amortization discussed
above.
The I-B Partnership recognized a non-cash charge against earnings of
$19,726 in the first quarter of 1997. Of this amount, $17,233 was related to the
decline in oil and gas prices used to determine the recoverability of proved oil
and gas reserves at March 31, 1997 and $2,493 was related to the writing-off of
unproved properties. These unproved properties were written off based on the
General Partner's determination that it is unlikely that such properties would
be developed due to the low oil and gas prices received over the last several
years and provisions in the I-B Partnership's Partnership Agreement which limit
the level of permissible drilling activity. No similar charges were necessary in
1996.
General and administrative expenses remained relatively constant in 1997
as compared to 1996. As a percentage of oil and gas sales, these expenses also
remained relatively constant at 17.4% in 1997 and 17.3% in 1996.
The Limited Partners have received cash distributions through December 31,
1997 totaling $6,544,527 or 54.73% of the Limited Partners' capital
contributions.
Year Ended December 31, 1996 Compared
to Year Ended December 31, 1995
-------------------------------------
Total oil and gas sales increased $110,002 (43.3%) in 1996 as compared to
1995. Of this increase, approximately $140,000 was related to an increase in the
average price of gas sold, partially offset by a decrease of approximately
$39,000 related to a decrease in volumes of oil sold. Volumes of oil sold
decreased 2,331 barrels, while volumes of gas sold increased 305 Mcf for 1996 as
compared to 1995. The decrease in volumes of oil sold resulted primarily from
(i) the shutting-in of two wells during 1996 in order to increase production
capabilities and (ii) normal declines in production due to diminished oil
reserves on three wells. Average oil and gas prices increased to $21.14 per
barrel and $2.10 per Mcf, respectively, for 1996 from $16.79 per barrel and
$1.17 per Mcf, respectively, for 1995.
31
<PAGE>
Oil and gas production expenses (including lease operating expenses and
production taxes) decreased $29,774 (18.5%) in 1996 as compared to 1995. This
decrease resulted primarily from (i) the decreases in volumes of oil sold during
1996 and (ii) workover expenses incurred on one well during 1995, partially
offset by workover expenses incurred on another well during 1996. Workover
expenses are incurred in order to improve the recovery of reserves on a
particular well. As a percentage of oil and gas sales, these expenses decreased
to 36.1% for 1996 from 63.4% for 1995. This percentage decrease was primarily
due to the decrease in workover expenses and the increases in the average prices
of oil and gas sold during 1996.
Depreciation, depletion, and amortization of oil and gas properties
decreased $240,187 (79.1%) in 1996 as compared to 1995. Approximately
three-fourths of this decrease was related to five significant wells which were
fully depleted in 1995 due to a lack of remaining reserves. The remaining
portion of this decrease resulted primarily from (i) an upward revision in the
estimate of remaining gas reserves at December 31, 1996, (ii) the decrease in
volumes of oil sold during 1996 and (iii) a decrease in capitalized costs due to
an impairment provision recognized in the fourth quarter of 1995. As a
percentage of oil and gas sales, this expense decreased to 17.4% for 1996 from
119.5% for 1995. This percentage decrease was primarily due to the dollar
decrease in depreciation, depletion, and amortization and the increases in the
average prices of oil and gas sold during 1996.
The I-B Partnership recognized a non-cash charge against earnings of
$125,159 in 1995. This impairment provision was necessary due to the unamortized
costs of proved oil and gas properties exceeding the expected undiscounted
future net revenues from such oil and gas properties. No similar charge was
necessary during 1996.
General and administrative expenses increased $14,995 (31.2%) in 1996 as
compared to 1995. This increase resulted primarily from an increase in both
professional fees and printing and postage expenses in 1996 as compared to 1995.
As a percentage of oil and gas sales, these expenses decreased to 17.3% for 1996
from 18.9% for 1995. This percentage decrease was primarily due to the increase
in oil and gas sales discussed above.
32
<PAGE>
I-C Partnership
---------------
Year Ended December 31, 1997 Compared
to Year Ended December 31, 1996
-------------------------------------
Total oil and gas sales decreased $229,418 (19.4%) in 1997 as compared to
1996. Of this decrease, approximately $49,000 and $134,000, respectively,
related to decreases in volumes of oil and gas sold and approximately $36,000
and $9,000, respectively, related to decreases in the average price of oil and
gas sold. Volumes of oil and gas sold decreased 2,415 barrels and 48,640 Mcf,
respectively, in 1997 as compared to 1996. The decrease in volumes of gas sold
resulted primarily from (i) normal declines in production and (ii) a positive
prior period volume adjustment made by a purchaser on one well in 1996. Average
prices of oil and gas sold decreased to $18.68 per barrel and $2.71 per Mcf,
respectively, in 1997 from $20.13 per barrel and $2.76 per Mcf, respectively in
1996.
Oil and gas production expenses (including lease operating expenses and
production taxes) increased $70,043 (29.0%) in 1997 as compared to 1996. This
increase resulted primarily from workover expenses incurred on three wells in
1997 in order to improve the recovery of reserves, which increase was partially
offset by (i) the decreases in volumes of oil and gas sold in 1997 and (ii) a
decrease in production taxes associated with the decrease in oil and gas sales
discussed above. As a percentage of oil and gas sales, these expenses increased
to 32.8% in 1997 from 20.5% in 1996. This percentage increase was primarily due
to the increase in workover expenses discussed above and the decrease in oil and
gas sales in 1997.
Depreciation, depletion, and amortization of oil and gas properties
remained relatively constant in 1997 as compared to 1996. As a percentage of oil
and gas sales, this expense increased to 6.1% in 1997 from 4.9% in 1996. This
percentage increase was primarily due to the decrease in the average price of
gas sold in 1997.
Capital expenditures incurred by the I-C Partnership increased $99,534 in
1997 as compared to 1996. This increase resulted primarily from the recompletion
in 1997 of the Ratzlaff No. 2 well located in Major County, Oklahoma. The I-C
Partnership has a 100% well interest in the Ratzlaff No. 2 well.
The I-C Partnership recognized a non-cash charge against earnings of
$4,679 in the first quarter of 1997 primarily related to the decline in oil and
gas prices used to determine the recoverability of proved oil and gas reserves
at March 31, 1997. No similar charge was necessary in 1996.
33
<PAGE>
General and administrative expenses remained relatively constant in 1997
as compared to 1996. As a percentage of oil and gas sales, these expenses
increased to 11.2% in 1997 from 9.1% in 1996. This percentage increase resulted
from the decrease in oil and gas sales discussed above.
The Limited Partners have received cash distributions through December 31,
1997 totaling $7,881,300 or 88.70% of the Limited Partners' capital
contributions.
Year Ended December 31, 1996 Compared
to Year Ended December 31, 1995
-------------------------------------
Total oil and gas sales increased $372,661 (46.1%) in 1996 as compared to
1995. Of this increase, approximately $94,000 and $250,000, respectively, were
related to increases in the average prices of oil and gas sold and approximately
$33,000 was related to an increase in volumes of gas sold. Volumes of oil sold
decreased 306 barrels, while volumes of gas sold increased 19,613 Mcf in 1996 as
compared to 1995. Average oil and gas prices increased to $20.13 per barrel and
$2.76 per Mcf, respectively, for 1996 from $16.70 per barrel and $1.66 per Mcf,
respectively, for 1995.
Oil and gas production expenses (including lease operating expenses and
production taxes) decreased $33,499 (12.2%) in 1996 as compared to 1995. This
decrease resulted primarily from (i) a decrease in workover expenses during 1996
and (ii) a decrease in production expenses due to the sale of several wells
during 1996. These decreases were partially offset by (i) an increase in
production taxes associated with the increase in oil and gas sales in 1996 and
(ii) higher general repair and maintenance expenses incurred on one well during
1996 as compared to 1995. As a percentage of oil and gas sales, these expenses
decreased to 20.5% for 1996 from 34.0% for 1995. This percentage decrease was
primarily due to the dollar decrease in workover expenses and the increases in
the average prices of oil and gas sold during 1996.
Depreciation, depletion, and amortization of oil and gas properties
decreased $123,500 (67.9%) in 1996 as compared to 1995. Approximately one-fourth
of this decrease was related to two significant wells which were fully depleted
in 1995 due to a lack of remaining reserves. The remaining portion of this
decrease resulted primarily from (i) upward revisions in the estimates of
remaining oil and gas reserves at December 31, 1996 and (ii) a decrease in
capitalized costs due to an impairment provision recognized in the fourth
quarter of 1995. As a percentage of oil and gas sales, this expense decreased to
4.9% for 1996 from 22.5% for 1995. This percentage decrease was primarily due to
the dollar decrease in depreciation, depletion, and amortization and the
increases in the average prices of oil and gas sold during 1996.
34
<PAGE>
The I-C Partnership recognized a non-cash charge against earnings of
$155,698 in 1995. This impairment provision was necessary due to the unamortized
costs of proved oil and gas properties exceeding the expected undiscounted
future net revenues from such oil and gas properties. No similar charge was
necessary during 1996.
General and administrative expenses increased $6,564 (6.5%) in 1996 as
compared to 1995. This increase resulted primarily from an increase in both
professional fees and printing and postage expenses in 1996 as compared to 1995.
As a percentage of oil and gas sales, these expenses decreased to 9.1% for 1996
from 12.4% for 1995. This percentage decrease was primarily due to the increase
in oil and gas sales discussed above.
I-D Partnership
---------------
Year Ended December 31, 1997 Compared
to Year Ended December 31, 1996
-------------------------------------
Total oil and gas sales decreased $267,471 (14.8%) in 1997 as compared to
1996. Of this decrease, approximately $51,000 and $161,000, respectively, were
related to decreases in volumes of oil and gas sold and approximately $23,000
and $31,000, respectively, were related to decreases in the average prices of
oil and gas sold. Volumes of oil and gas sold decreased 2,531 barrels and 67,544
Mcf, respectively, in 1997 as compared to 1996. The decreases in volumes of oil
and gas sold resulted primarily from the shutting-in of two significant wells
due to workovers during 1997. Average oil and gas prices decreased to $18.96 per
barrel and $2.33 per Mcf, respectively, in 1997 from $20.16 per barrel and $2.39
per Mcf, respectively, in 1996.
Oil and gas production expenses (including lease operating expenses and
production taxes) increased $3,502 (1.2%) in 1997 as compared to 1996. This
increase resulted primarily from workover expenses incurred on two wells during
1997 in order to improve the recovery of reserves, which increase was partially
offset by (i) the decreases in volumes of oil and gas sold in 1997 and (ii) a
decrease in production taxes associated with the decrease in oil and gas sales
discussed above. As a percentage of oil and gas sales, these expenses increased
to 19.1% in 1997 from 16.0% in 1996. This percentage increase was primarily due
to the decrease in the average price of oil and gas sold in 1997.
Depreciation, depletion, and amortization of oil and gas properties
decreased $35,605 (24.0%) in 1997 as compared to 1996. This decrease resulted
primarily from (i) the decrease in volumes of oil and gas sold in 1997 and (ii)
35
<PAGE>
an upward revision in the estimate of remaining oil reserves at December 31,
1997. As a percentage of oil and gas sales, this expense decreased to 7.3% in
1997 from 8.2% in 1996. This percentage decrease was primarily due to the dollar
decrease in depreciation, depletion, and amortization discussed above.
The I-D Partnership recognized a non-cash charge against earnings of
$61,790 in the first quarter of 1997. Of this amount, $12,290 was related to the
decline in oil and gas prices used to determine the recoverability of proved oil
and gas reserves at March 31, 1997 and $49,500 was related to the writing off of
unproved properties. These unproved properties were written off based on the
General Partner's determination that it is unlikely that such properties would
be developed due to the low oil and gas prices received over the last several
years and provisions in the I-D Partnership's Partnership Agreement which limit
the level of permissible drilling activity. No similar charges were necessary in
1996.
General and administrative expenses remained relatively constant in 1997
as compared to 1996. As a percentage of oil and gas sales, these expenses
remained relatively constant at 5.9% in 1997 and 5.1% in 1996.
The Limited Partners have received cash distributions through December 31,
1997 totaling $12,914,175 or 179.50% of the Limited Partners' capital
contributions.
Year Ended December 31, 1996 Compared
to Year Ended December 31, 1995
-------------------------------------
Total oil and gas sales increased $575,149 (46.5%) in 1996 as compared to
1995. Of this increase, approximately $79,000 and $514,000, respectively, were
related to increases in the average prices of oil and gas sold. Volumes of oil
and gas sold decreased 1,136 barrels and 312 Mcf, respectively, in 1996 as
compared to 1995. Average oil and gas prices increased to $20.16 per barrel and
$2.39 per Mcf, respectively, for 1996 from $16.44 per barrel and $1.50 per Mcf,
respectively, for 1995.
Oil and gas production expenses (including lease operating expenses and
production taxes) increased $54,257 (22.9%) in 1996 as compared to 1995. This
increase resulted primarily from (i) an increase in production taxes associated
with the increase in oil and gas sales discussed above, (ii) a lease operating
expense adjustment recognized during 1996 associated with changes in estimates
by third party operators of gas balancing positions on certain wells, and (iii)
higher general repairs and maintenance expenses incurred on one well in 1996 as
compared to 1995, partially offset by a decrease in production expenses due to
the sale of one well during 1996. As a percentage of oil and gas sales, these
36
<PAGE>
expenses decreased to 16.0% for 1996 from 19.1% for 1995. This percentage
decrease was primarily due to the increases in the average prices of oil and gas
sold during 1996, partially offset by the dollar increase in production expenses
associated with the lease operating expense adjustment discussed above.
Depreciation, depletion, and amortization of oil and gas properties
decreased $101,447 (40.6%) in 1996 as compared to 1995. Approximately 40% of
this decrease was related to two significant wells which were fully depleted in
1995 due to a lack of remaining reserves. The remaining portion of this decrease
resulted primarily from upward revisions in the estimates of remaining oil and
gas reserves at December 31, 1996. As a percentage of oil and gas sales, this
expense decreased to 8.2% for 1996 from 20.2% for 1995. This percentage decrease
was primarily due to the dollar decrease in depreciation, depletion, and
amortization and the increases in the average prices of oil and gas sold during
1996.
The I-D Partnership recognized a non-cash charge against earnings of
$19,510 in 1995. This impairment provision was necessary due to the unamortized
costs of proved oil and gas properties exceeding the expected undiscounted
future net revenues from such oil and gas properties. No similar charge was
necessary during 1996.
General and administrative expenses remained relatively constant in 1996
as compared to 1995. As a percentage of oil and gas sales, these expenses
decreased to 5.1% for 1996 from 7.2% for 1995. This percentage decrease was
primarily due to the increase in oil and gas sales discussed above.
I-E Partnership
---------------
Year Ended December 31, 1997 Compared
to Year Ended December 31, 1996
-------------------------------------
Total oil and gas sales remained relatively constant in 1997 as compared
to 1996. Decreases of approximately $138,000 and $77,000, respectively, related
to decreases in volumes of gas sold and the average price of oil sold were
substantially offset by increases of approximately $132,000 and $86,000,
respectively, related to increases in volumes of oil sold and the average price
of gas sold. Volumes of oil sold increased 6,650 barrels while volumes of gas
sold decreased 66,378 Mcf in 1997 as compared to 1996. Average oil prices
decreased to $18.84 per barrel in 1997 from $19.83 per barrel in 1996. Average
gas prices increased to $2.12 per Mcf in 1997 from $2.08 per Mcf in 1996.
37
<PAGE>
Oil and gas production expenses (including lease operating expenses and
production taxes) increased $64,831 (3.8%) in 1997 as compared to 1996. This
increase resulted primarily from workover or recompletion expenses incurred on
four wells during 1997 in order to improve the recovery of reserves. As a
percentage of oil and gas sales, these expenses increased to 29.5% in 1997 from
28.4% in 1996. This percentage increase was primarily due to the dollar increase
in oil and gas production expenses discussed above and the decrease in the
average price of oil sold in 1997.
Depreciation, depletion, and amortization of oil and gas properties
decreased $112,826 (13.4%) in 1997 as compared to 1996. This decrease resulted
primarily from upward revisions in the estimates of remaining gas reserves at
December 31, 1997. As a percentage of oil and gas sales, this expense decreased
to 12.1% in 1997 from 14.0% in 1996. This percentage decrease was primarily due
to the dollar decrease in depreciation, depletion, and amortization discussed
above and the increase in the average price gas sold in 1997.
The I-E Partnership recognized a non-cash charge against earnings of
$291,690 in the first quarter of 1997. Of this amount, $59,728 was related to
the decline in oil and gas prices used to determine the recoverability of proved
oil and gas reserves at March 31, 1997 and $231,962 was related to the
writing-off of unproved properties. These unproved properties were written off
based on the General Partner's determination that it is unlikely that such
properties would be developed due to the low oil and gas prices received over
the last several years and provisions in the I-E Partnership's Partnership
Agreement which limit the level of permissible drilling activity. No similar
charges were necessary in 1996.
General and administrative expenses remained relatively constant in 1997
as compared to 1996. As a percentage of oil and gas sales, these expenses
remained relatively constant at 8.8% in both 1997 and 1996.
The Limited Partners have received cash distributions through December 31,
1997 totaling $49,736,552 or 118.87% of the Limited Partners' capital
contributions.
Year Ended December 31, 1996 Compared
to Year Ended December 31, 1995
-------------------------------------
Total oil and gas sales increased $1,228,550 (25.7%) in 1996 as compared
to 1995. Of this increase, approximately $220,000 and $1,588,000, respectively,
were related to increases in the average prices of oil and gas sold, partially
offset by decreases of approximately $303,000 and $281,000, respectively,
related to decreases in volumes of oil and gas sold. Volumes of oil and gas
38
<PAGE>
sold decreased 18,119 barrels and 206,260 Mcf, respectively, in 1996 as compared
to 1995. The decrease in the volumes of oil sold resulted primarily from (i) the
sale of two significant oil producing wells during 1996, (ii) an ownership
adjustment on one well during 1996, (iii) the shutting-in of one well during
1996 due to mechanical difficulties, (iv) the shutting-in of another well during
a portion of 1996 in order to increase production capabilities, and (v) normal
declines in production due to diminished oil reserves on several wells. Average
oil and gas prices increased to $19.83 per barrel and $2.08 per Mcf,
respectively, for 1996 from $16.73 per barrel and $1.36 per Mcf, respectively,
for 1995.
Oil and gas production expenses (including lease operating expenses and
production taxes) increased $224,790 (15.2%) in 1996 as compared to 1995. This
increase resulted primarily from (i) an increase in production taxes associated
with the increase in oil and gas sales discussed above and (ii) a lease
operating expense adjustment recognized during 1996 associated with changes in
estimates by third party operators of gas balancing positions on certain wells.
As a percentage of oil and gas sales, these expenses decreased to 28.4% for 1996
from 31.0% for 1995. This percentage decrease was primarily due to the increases
in the average prices of oil and gas sold during 1996, partially offset by the
dollar increase in production expenses associated with the lease operating
expense adjustment discussed above.
Depreciation, depletion, and amortization of oil and gas properties
decreased $543,031 (39.2%) in 1996 as compared to 1995. This decrease resulted
primarily from (i) upward revisions in the estimates of remaining oil and gas
reserves at December 31, 1996, (ii) the decreases in volumes of oil and gas sold
during 1996, and (iii) a decrease in capitalized costs due to an impairment
provision recognized in the fourth quarter of 1995. As a percentage of oil and
gas sales, this expense decreased to 14.0% for 1996 from 29.0% for 1995. This
percentage decrease was primarily due to the dollar decrease in depreciation,
depletion, and amortization and the increases in the average prices of oil and
gas sold during 1996.
The I-E Partnership recognized a non-cash charge against earnings of
$748,728 in 1995. This impairment provision was necessary due to the unamortized
costs of proved oil and gas properties exceeding the expected undiscounted
future net revenues from such oil and gas properties. No similar charge was
necessary during 1996.
General and administrative expenses remained relatively constant in 1996
as compared to 1995. As a percentage of oil and gas sales, these expenses
decreased to 8.8% for 1996 from 10.7% for 1995. This percentage decrease was
primarily due to the increase in oil and gas sales discussed above.
39
<PAGE>
I-F Partnership
---------------
Year Ended December 31, 1997 Compared
to Year Ended December 31, 1996
-------------------------------------
Total oil and gas sales decreased $99,531 (4.7%) in 1997 as compared to
1996. Of this decrease, approximately $177,000 was related to a decrease in
volumes of gas sold and $36,000 was related to a decrease in the average price
of oil sold, which decreases were partially offset by increases of approximately
$62,000 related to an increase in volumes of oil sold and $51,000 related to an
increase in the average price of gas sold. Volumes of oil sold increased 3,148
barrels in 1997 as compared to 1996 while volumes of gas sold decreased 81,591
Mcf in 1997 as compared to 1996. Average oil prices decreased to $18.85 per
barrel in 1997 from $19.79 per barrel in 1996. Average gas prices increased to
$2.26 per Mcf in 1997 from $2.17 per Mcf in 1996.
Oil and gas production expenses (including lease operating expenses and
production taxes) decreased $74,592 (9.8%) in 1997 as compared to 1996. This
decrease resulted primarily from (i) the decrease in volumes of gas sold in 1997
and (ii) a decrease in production taxes associated with the decrease in oil and
gas sales discussed above. As a percentage of oil and gas sales, these expenses
decreased to 33.8% in 1997 from 35.8% in 1996. This percentage decrease was
primarily due to the decrease in oil and gas production expenses discussed above
and the increase in the average price of gas sold in 1997.
Depreciation, depletion, and amortization of oil and gas properties
decreased $13,158 (4.9%) in 1997 as compared to 1996. This decrease resulted
primarily from (i) the decrease in volumes of gas sold in 1997 and (ii) upward
revisions in the estimates of remaining gas reserves at December 31, 1997. As a
percentage of oil and gas sales, this expense remained constant in 1997 as
compared to 1996.
The I-F Partnership recognized a non-cash charge against earnings of
$114,631 in the first quarter of 1997. Of this amount, $20,908 was related to
the decline in oil and gas prices used to determine the recoverability of proved
oil and gas reserves at March 31, 1997 and $93,723 was related to the writing
off of unproved properties. These unproved properties were written off based on
the General Partner's determination that it is unlikely that such properties
would be developed due to the low oil and gas prices received over the last
several years and provisions in the I-F Partnership's Partnership Agreement
which limit the level of permissible drilling activity. No similar charges were
necessary in 1996.
40
<PAGE>
General and administrative expenses remained relatively constant in 1997
as compared to 1996. As a percentage of oil and gas sales, these expenses
remained relatively constant at 8.9% in 1997 and 8.6% in 1996.
The Limited Partners have received cash distributions through December 31,
1997 totaling $16,762,664 or 117.05% of the Limited Partners' capital
contributions.
Year Ended December 31, 1996 Compared
to Year Ended December 31, 1995
-------------------------------------
Total oil and gas sales increased $358,367 (20.3%) in 1996 as compared to
1995. Of this increase, approximately $113,000 and $490,000, respectively, were
related to increases in the average prices of oil and gas sold, partially offset
by decreases of approximately $158,000 and $83,000, respectively, related to
decreases in volumes of oil and gas sold. Volumes of oil and gas sold decreased
9,524 barrels and 58,794 Mcf, respectively, in 1996 as compared to 1995. The
decrease in volumes of oil sold resulted primarily from (i) the sale of two
significant oil producing wells during 1996, (ii) an ownership adjustment on one
well during 1996, (iii) the shutting-in of one well during 1996 due to
mechanical difficulties, (iv) the shutting-in of another well during a portion
of 1996 in order to increase production capabilities, and (v) the normal
declines in production due to diminished oil reserves on several wells. Average
oil and gas prices increased to $19.79 per barrel and $2.17 per Mcf,
respectively, for 1996 from $16.61 per barrel and $1.42 per Mcf, respectively,
for 1995.
Oil and gas production expenses (including lease operating expenses and
production taxes) increased $63,351 (9.1%) in 1996 as compared to 1995. This
increase resulted primarily from (i) an increase in production taxes associated
with the increase in oil and gas sales discussed above and (ii) a lease
operating expense adjustment recognized during 1996 associated with changes in
estimates by third party operators of gas balancing positions on certain wells.
These increases were partially offset by (i) workover expenses incurred on
several wells during 1995, (ii) a decrease in production expenses due to the
sale of one well during 1996, and (iii) the decreases in volumes of oil and gas
sold during 1996. As a percentage of oil and gas sales, these expenses decreased
to 35.8% for 1996 from 39.4% for 1995. This percentage decrease was primarily
due to the increases in the average prices of oil and gas sold during 1996,
partially offset by the dollar increases associated with the lease operating
adjustment discussed above.
41
<PAGE>
Depreciation, depletion, and amortization of oil and gas properties
decreased $221,767 (45.0%) in 1996 as compared to 1995. Approximately one-fourth
of this decrease was related to two significant wells which were fully depleted
in 1995 due to a lack of remaining reserves. The remaining portion of this
decrease resulted primarily from (i) upward revisions in the estimates of
remaining oil and gas reserves at December 31, 1996, (ii) the decreases in
volumes of oil and gas sold during 1996, and (iii) a decrease in capitalized
costs due to an impairment provision recognized in the fourth quarter of 1995.
As a percentage of oil and gas sales, this expense decreased to 12.8% for 1996
from 27.9% for 1995. This percentage decrease was primarily due to the dollar
decrease in depreciation, depletion, and amortization discussed above and the
increases in the average prices of oil and gas sold during 1996.
The I-F Partnership recognized a non-cash charge against earnings of
$258,913 in 1995. This impairment provision was necessary due to the unamortized
costs of oil and gas properties exceeding the expected undiscounted future net
revenues from such oil and gas properties. No similar charge was necessary
during the year ended December 31, 1996.
General and administrative expenses remained relatively constant in 1996
as compared to 1995. As a percentage of oil and gas sales, these expenses
decreased to 8.6% for 1996 from 10.0% for 1995. This percentage decrease was
primarily due to the increase in oil and gas sales discussed above.
Average Sales Prices, Production Volumes and Average Production Costs
The following tables are comparisons of the annual average oil and gas
sales prices, production volumes, and average production costs (lease operating
expenses and production taxes) per equivalent unit (one barrel of oil or six Mcf
of gas) for 1997, 1996, and 1995. These factors comprise the change in net oil
and gas operations discussed in the "Results of Operations" section above.
42
<PAGE>
1997 Compared to 1996
---------------------
Average Sales Prices
----------------------------------------------------------
P/ship 1997 1996 % Change
- ------ ------------------ ------------------ -----------
Oil Gas Oil Gas
($/Bbl) ($/Mcf) ($/Bbl) ($/Mcf) Oil Gas
------- ------- ------- ------- --- -----
I-B $18.99 $2.43 $21.14 $2.10 (10%) 16%
I-C 18.68 2.71 20.13 2.76 ( 7%) ( 2%)
I-D 18.96 2.33 20.16 2.39 ( 6%) ( 3%)
I-E 18.84 2.12 19.83 2.08 ( 5%) 2%
I-F 18.85 2.26 19.79 2.17 ( 5%) 4%
Production Volumes
----------------------------------------------------------------
P/ship 1997 1996 % Change
- -------- -------------------- --------------------- ---------------
Oil Gas Oil Gas Oil Gas
(Bbls) (Mcf) (Bbls) (Mcf) (Bbls) (Mcf)
------- --------- ------- --------- ------ -----
I-B 2,277 129,776 2,297 150,543 ( 1%) (14%)
I-C 25,122 178,180 27,537 226,820 ( 9%) (21%)
I-D 18,760 510,113 21,291 577,657 (12%) (12%)
I-E 77,648 2,139,704 70,998 2,206,082 9% ( 3%)
I-F 38,725 571,101 35,577 652,692 9% (13%)
Average Production Costs per
Equivalent Barrel of Oil
--------------------------------------
P/ship 1997 1996 % Change
------ ----- ----- --------
I-B $5.70 $4.80 19%
I-C 5.69 3.70 54%
I-D 2.84 2.47 15%
I-E 4.08 3.89 5%
I-F 5.11 5.25 ( 3%)
43
<PAGE>
1996 Compared to 1995
---------------------
Average Sales Prices
----------------------------------------------------------
P/ship 1996 1995 % Change
- ------ ------------------ ------------------ -----------
Oil Gas Oil Gas
($/Bbl) ($/Mcf) ($/Bbl) ($/Mcf) Oil Gas
------- ------- ------- ------- --- -----
I-B $21.14 $2.10 $16.79 $1.17 26% 79%
I-C 20.13 2.76 16.70 1.66 21% 66%
I-D 20.16 2.39 16.44 1.50 23% 59%
I-E 19.83 2.08 16.73 1.36 19% 53%
I-F 19.79 2.17 16.61 1.42 19% 53%
Production Volumes
---------------------------------------------------------------
P/ship 1996 1995 % Change
- -------- -------------------- --------------------- ---------------
Oil Gas Oil Gas Oil Gas
(Bbls) (Mcf) (Bbls) (Mcf) (Bbls) (Mcf)
------- --------- ------- --------- ------ -----
I-B 2,297 150,543 4,628 150,238 (50%) - %
I-C 27,537 226,820 27,843 207,207 ( 1%) 9%
I-D 21,291 577,657 22,427 577,969 ( 5%) - %
I-E 70,998 2,206,082 89,117 2,412,342 (20%) (9%)
I-F 35,577 652,692 45,101 711,486 (21%) (8%)
Average Production Costs per
Equivalent Barrel of Oil
--------------------------------------
P/ship 1996 1995 % Change
------ ----- ----- --------
I-B $4.80 $5.43 (12%)
I-C 3.70 4.41 (16%)
I-D 2.47 1.99 24%
I-E 3.89 3.02 29%
I-F 5.25 4.25 24%
Liquidity and Capital Resources
Net proceeds from operations less necessary operating capital are
distributed to the Limited Partners on a quarterly basis. See "Item 5. Market
for Units and Related Limited Partner Matters." The net proceeds from production
are not reinvested in productive assets, except to the extent that producing
44
<PAGE>
wells are improved, or where methods are employed to permit more efficient
recovery of reserves, thereby resulting in a positive economic impact. Assuming
production levels for 1997, the Partnerships' proved reserve quantities at
December 31, 1997 would have the following remaining lives:
Partnership Gas-Years Oil-Years
----------- --------- ---------
I-B 5.5 4.7
I-C 4.5 2.4
I-D 3.8 2.2
I-E 4.9 5.1
I-F 5.8 5.1
The Partnerships' available capital from the Limited Partners'
subscriptions has been spent on oil and gas properties. The I-C Partnership
incurred capital expenditures of $100,573 in 1997 primarily related to the
recompletion of the Ratzlaff No. 2 well located in Major County, Oklahoma. The
I-C Partnership has a 100% working interest in the Ratzlaff No. 2 well. There
should be no further material capital resource commitments for any of the
Partnerships in the future. Occasional expenditures by the Partnerships for new
wells or well completions or workovers, however, may reduce or eliminate cash
available for a particular quarterly cash distribution. The Partnerships have no
debt commitments. Cash for operational purposes will be provided by current oil
and gas production.
The Partnerships sold certain oil and gas properties during 1997. The sale
of a property owned by one or more Partnerships was made by the General Partner
after giving due consideration to the offer price and the General Partner's
estimate of both the property's remaining proved reserves and future operating
costs. Net proceeds from the sale of any such properties were included in the
calculation of the Partnerships' cash distributions for the quarter immediately
following the Partnerships' receipt of the proceeds. The amount of such proceeds
from the sale of oil and gas properties during 1997 were as follows:
Partnership Amount
----------- ------
I-B $ 21,848
I-C 45,422
I-D 25,350
I-E 156,744
I-F 97,288
The sale of these properties reduced the quantity of the Partnerships'
proved reserves. It is also possible that the Partnerships' repurchase values
45
<PAGE>
and future cash distributions could decline as a result of a reduction of the
Partnerships' reserve base. The General Partner believes that the sale of these
properties will be beneficial to the Partnerships since the properties sold
generally had a higher ratio of future operating expenses as compared to
reserves than the properties not sold.
There can be no assurance as to the amount of the Partnerships' future
cash distributions. The Partnerships' ability to make cash distributions depends
primarily upon the level of available cash flow generated by the Partnerships'
operating activities, which will be affected (either positively or negatively)
by many factors beyond the control of the Partnerships, including the price of
and demand for oil and gas and other market and economic conditions. Even if
prices and costs remain stable, the amount of cash available for distributions
will decline over time (as the volume of production from producing properties
declines) since the Partnerships are not replacing production through
acquisitions of producing properties and drilling. The Partnerships' quantity of
proved reserves has been reduced by the sale of oil and gas properties as
described above; therefore, it is possible that the Partnerships' future cash
distributions could decline as a result of a reduction of the Partnerships'
reserve base.
The Partnerships will terminate on December 31, 1999 in accordance with
the Partnership Agreements. However, the Partnership Agreements provide that the
General Partner may extend the term of each Partnership for up to five periods
of two years each. As of the date of this Annual Report, the General Partner has
not determined whether to extend the term of any Partnership.
Inflation and Changing Prices
Prices obtained for oil and gas production depend upon numerous factors,
including the extent of domestic and foreign production, foreign imports of oil,
market demand, domestic and foreign economic conditions in general, and
governmental regulations and tax laws. The general level of inflation in the
economy did not have a material effect on the operations of the Partnerships in
1997. Oil and gas prices have fluctuated during recent years and generally have
not followed the same pattern as inflation. See "Item 2. Properties - Oil and
Gas Production, Revenue, and Price History."
Year 2000 Computer Issues
The General Partnership has reviewed its computer systems and hardware to
locate potential operational problems associated with the year 2000. Such review
will continue until all potential problems are located and resolved. The General
Partner believes that all year 2000 problems in its computer system have been or
46
<PAGE>
will be resolved in a timely manner and have not caused and will not cause
disruption of the partnerships' operations or a material effect on the
partnerships' financial condition or results of operations. However, it is
possible that the Partnerships cash flows could be disrupted by year-2000
problems experienced by operators of the Partnerships' wells, buyers of the
Partnerships' oil and gas, financial institutions or other persons. The General
Partner is unable to quantify the effect, if any, on the Partnerships of
year-2000 computer problems experienced by these third parties.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The financial statements and supplementary data are indexed in Item 14
hereof.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL DISCLOSURE
None.
PART III.
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
47
<PAGE>
Samson Properties Incorporated, Samson Hydrocarbons Company, Dyco Petroleum
Corporation, Berry Gas Company, Circle L Drilling Company, and Compression, Inc.
Judy K. Fox joined the Samson Companies in 1990 and was named Secretary of
Geodyne and its subsidiaries on June 30, 1996. Prior to joining the Samson
Companies, she served as Gas Contract Manager for Ely Energy Company. Ms. Fox is
also Secretary of Berry Gas Company, Circle L Drilling Company, Compression,
Inc., Dyco Petroleum Corporation, Samson Hydrocarbons Company, and Samson
Properties Incorporated.
Section 16(a) Beneficial Ownership Reporting Compliance
To the knowledge of the Partnerships and the General Partner, there were
no officers, directors, or ten percent owners who were delinquent filers of
reports required under Section 16 of the Securities Exchange Act of 1934 during
1997.
ITEM 11. EXECUTIVE COMPENSATION
The General Partner and its affiliates are reimbursed for actual general
and administrative costs and operating costs incurred and attributable to the
conduct of the business affairs and operations of the Partnerships, computed on
a cost basis, determined in accordance with generally accepted accounting
principles. Such reimbursed costs and expenses allocated to the Partnerships
include office rent, secretarial, employee compensation and benefits, travel and
communication costs, fees for professional services, and other items generally
classified as general or administrative expense. The amount of general and
administrative expense allocated to the General Partner and its affiliates which
was charged to each Partnership for 1997, 1996, and 1995 is set forth in the
table below. Although the actual costs incurred by the General Partner and its
affiliates have fluctuated during the three years presented, the amount charged
to the Partnerships have not fluctuated due to expense limitations imposed by
the Partnership Agreements.
Partnership 1997 1996 1995
----------- -------- -------- --------
I-B $ 45,252 $ 45,252 $ 41,178
I-C 93,058 93,550 93,550
I-D 79,944 79,944 79,944
I-E 464,880 464,880 464,880
I-F 159,120 159,120 159,120
None of the officers or directors of the General Partner receive
compensation directly from the Partnerships. The Partnerships reimburse the
General Partner or its affiliates for that portion of such officers' and
directors' salaries and expenses attributable to time devoted by such
individuals to the Partnerships' activities. The following tables indicate the
approximate amount of general and administrative expense reimbursement
attributable to the salaries of the directors, officers, and employees of the
General Partner and its affiliates during 1997, 1996, and 1995:
48
<PAGE>
<TABLE>
<CAPTION>
Salary Reimbursement
I-B Partnership
---------------
Three Years Ended December 31, 1997
Long Term Compensation
------------------------------------
Annual Compensation Awards Payouts
------------------------- ------------------------ -------
Securi-
Other ties All
Name Annual Restricted Under- Other
and Compen- Stock lying LTIP Compen-
Principal Salary Bonus sation Award(s) Options/ Payouts sation
Position Year ($) ($) ($) ($) SARs(#) ($) ($)
- --------------- ---- ------- ------- ------- ---------- -------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
C. Philip
Tholen,
President,
Chief Executive
Officer(1)(2) 1995 - - - - - - -
1996 - - - - - - -
Dennis R. Neill,
President(2)(3) 1996 - - - - - - -
1997 - - - - - - -
All Executive
Officers,
Directors,
and Employees
as a group(4) 1995 $22,483 - - - - - -
1996 $26,472 - - - - - -
1997 $27,034 - - - - - -
- ----------
(1) Mr. Tholen served as President and Chief Executive Officer of Geodyne until
July 1, 1996.
(2) The general and administrative expenses paid by the I-B Partnership and
attributable to salary reimbursements do not include any salary or other
compensation attributable to Mr. Tholen or Mr. Neill.
(3) Mr. Neill became President of Geodyne on July 1, 1996.
(4) No officer or director of Geodyne or its affiliates provides full-time
services to the I-B Partnership and no individual's salary or other
compensation reimbursement from the I-B Partnership equals or exceeds
$100,000 per annum.
</TABLE>
49
<PAGE>
<TABLE>
<CAPTION>
Salary Reimbursement
I-C Partnership
---------------
Three Years Ended December 31, 1997
Long Term Compensation
------------------------------------
Annual Compensation Awards Payouts
------------------------- ------------------------ -------
Securi-
Other ties All
Name Annual Restricted Under- Other
and Compen- Stock lying LTIP Compen-
Principal Salary Bonus sation Award(s) Options/ Payouts sation
Position Year ($) ($) ($) ($) SARs(#) ($) ($)
- --------------- ---- ------- ------- ------- ---------- -------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
C. Philip
Tholen,
President,
Chief Executive
Officer(1)(2) 1995 - - - - - - -
1996 - - - - - - -
Dennis R. Neill,
President(2)(3) 1996 - - - - - - -
1997 - - - - - - -
All Executive
Officers,
Directors,
and Employees
as a group(4) 1995 $51,078 - - - - - -
1996 $54,727 - - - - - -
1997 $55,593 - - - - - -
- ----------
(1) Mr. Tholen served as President and Chief Executive Officer of Geodyne until
July 1, 1996.
(2) The general and administrative expenses paid by the I-C Partnership and
attributable to salary reimbursements do not include any salary or other
compensation attributable to Mr. Tholen or Mr. Neill.
(3) Mr. Neill became President of Geodyne on July 1, 1996.
(4) No officer or director of Geodyne or its affiliates provides full-time
services to the I-C Partnership and no individual's salary or other
compensation reimbursement from the I-C Partnership equals or exceeds
$100,000 per annum.
</TABLE>
50
<PAGE>
<TABLE>
<CAPTION>
Salary Reimbursement
I-D Partnership
---------------
Three Years Ended December 31, 1997
Long Term Compensation
------------------------------------
Annual Compensation Awards Payouts
------------------------- ------------------------ -------
Securi-
Other ties All
Name Annual Restricted Under- Other
and Compen- Stock lying LTIP Compen-
Principal Salary Bonus sation Award(s) Options/ Payouts sation
Position Year ($) ($) ($) ($) SARs(#) ($) ($)
- --------------- ---- ------- ------- ------- ---------- -------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
C. Philip
Tholen,
President,
Chief Executive
Officer(1)(2) 1995 - - - - - - -
1996 - - - - - - -
Dennis R. Neill,
President(2)(3) 1996 - - - - - - -
1997 - - - - - - -
All Executive
Officers,
Directors,
and Employees
as a group(4) 1995 $43,649 - - - - - -
1996 $46,767 - - - - - -
1997 $47,759 - - - - - -
- ----------
(1) Mr. Tholen served as President and Chief Executive Officer of Geodyne until
July 1, 1996.
(2) The general and administrative expenses paid by the I-D Partnership and
attributable to salary reimbursements do not include any salary or other
compensation attributable to Mr. Tholen or Mr. Neill.
(3) Mr. Neill became President of Geodyne on July 1, 1996.
(4) No officer or director of Geodyne or its affiliates provides full-time
services to the I-D Partnership and no individual's salary or other
compensation reimbursement from the I-D Partnership equals or exceeds
$100,000 per annum.
</TABLE>
51
<PAGE>
<TABLE>
<CAPTION>
Salary Reimbursement
I-E Partnership
---------------
Three Years Ended December 31, 1997
Long Term Compensation
------------------------------------
Annual Compensation Awards Payouts
------------------------- ------------------------ -------
Securi-
Other ties All
Name Annual Restricted Under- Other
and Compen- Stock lying LTIP Compen-
Principal Salary Bonus sation Award(s) Options/ Payouts sation
Position Year ($) ($) ($) ($) SARs(#) ($) ($)
- --------------- ---- ------- ------- ------- ---------- -------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
C. Philip
Tholen,
President,
Chief Executive
Officer(1)(2) 1995 - - - - - - -
1996 - - - - - - -
Dennis R. Neill,
President(2)(3) 1996 - - - - - - -
1997 - - - - - - -
All Executive
Officers,
Directors,
and Employees
as a group(4) 1995 $253,824 - - - - - -
1996 $271,955 - - - - - -
1997 $277,719 - - - - - -
- ----------
(1) Mr. Tholen served as President and Chief Executive Officer of Geodyne until
July 1, 1996.
(2) The general and administrative expenses paid by the I-E Partnership and
attributable to salary reimbursements do not include any salary or other
compensation attributable to Mr. Tholen or Mr. Neill.
(3) Mr. Neill became President of Geodyne on July 1, 1996.
(4) No officer or director of Geodyne or its affiliates provides full-time
services to the I-E Partnership and no individual's salary or other
compensation reimbursement from the I-E Partnership equals or exceeds
$100,000 per annum.
</TABLE>
52
<PAGE>
<TABLE>
<CAPTION>
Salary Reimbursement
I-F Partnership
---------------
Three Years Ended December 31, 1997
Long Term Compensation
------------------------------------
Annual Compensation Awards Payouts
------------------------- ------------------------ -------
Securi-
Other ties All
Name Annual Restricted Under- Other
and Compen- Stock lying LTIP Compen-
Principal Salary Bonus sation Award(s) Options/ Payouts sation
Position Year ($) ($) ($) ($) SARs(#) ($) ($)
- --------------- ---- ------- ------- ------- ---------- -------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
C. Philip
Tholen,
President,
Chief Executive
Officer(1)(2) 1995 - - - - - - -
1996 - - - - - - -
Dennis R. Neill,
President(2)(3) 1996 - - - - - - -
1997 - - - - - - -
All Executive
Officers,
Directors,
and Employees
as a group(4) 1995 $86,880 - - - - - -
1996 $93,085 - - - - - -
1997 $95,058 - - - - - -
- ----------
(1) Mr. Tholen served as President and Chief Executive Officer of Geodyne until
July 1, 1996.
(2) The general and administrative expenses paid by the I-F Partnership and
attributable to salary reimbursements do not include any salary or other
compensation attributable to Mr. Tholen or Mr. Neill.
(3) Mr. Neill became President of Geodyne on July 1, 1996.
(4) No officer or director of Geodyne or its affiliates provides full-time
services to the I-F Partnership and no individual's salary or other
compensation reimbursement from the I-F Partnership equals or exceeds
$100,000 per annum.
</TABLE>
53
<PAGE>
During 1995 El Paso Energy Marketing Company, formerly known as Premier
Gas Company ("El Paso"), an affiliate of the Partnerships until December 6,
1995, purchased a portion of the Partnerships' gas at market prices and resold
such gas at market prices directly to end-users and local distribution
companies. The table below summarizes the dollar amount of gas sold by the
Partnerships to El Paso during 1995.
Partnership 1995
----------- ----------
I-B $ 43,625
I-C 2,521
I-D 362,560
I-E 2,099,338
I-F 481,355
After December 6, 1995 the Partnerships' gas was marketed by the General Partner
and its affiliates, who were reimbursed for such activities as general and
administrative expenses. See "Item 13. Certain Relationships and Related
Transactions."
Affiliates of the Partnerships serve as operator of some of the
Partnerships' wells. The General Partner contracts with such affiliates for
services as operator of the wells. As operator, such affiliates are compensated
at rates provided in the operating agreements in effect and charged to all
parties to such agreement. Such compensation may occur both prior and subsequent
to the commencement of commercial marketing of production of oil or gas. The
dollar amount of such compensation paid by the Partnerships to the affiliates is
impossible to quantify as of the date of this Annual Report.
In addition to the compensation/reimbursements noted above, during the
three years ended December 31, 1997, the Samson Companies were in the business
of supplying field and drilling equipment and services to affiliated and
unaffiliated parties in the industry. These companies may have provided
equipment and services for wells in which the Partnerships have an interest.
These equipment and services were provided at prices or rates equal to or less
than those normally charged in the same or comparable geographic area by
unaffiliated persons or companies dealing at arm's length. The operators of
these wells billed the Partnerships for a portion of such costs based upon the
Partnerships' interest in the well.
54
<PAGE>
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
AND MANAGEMENT
The following table provides information as to the beneficial ownership of
the Units as of January 31, 1998 by (i) each beneficial owner of more than five
percent of the issued and outstanding Units, (ii) the directors and officers of
the General Partner, and (iii) the General Partner and its affiliates. The
address of each of such persons is Samson Plaza, Two West Second Street, Tulsa,
Oklahoma 74103.
Number of Units
Beneficially
Owned (Percent
Beneficial Owner of Outstanding)
- ------------------------------------ ------------------
I-B Partnership:
- ---------------
Samson Resources Company 2,727 (22.8%)
All affiliates, directors,
and officers of the General
Partner as a group and
the General Partner (4 persons) 2,727 (22.8%)
I-C Partnership:
- ---------------
Samson Resources Company 959 (10.8%)
All affiliates, directors,
and officers of the General
Partner as a group and
the General Partner (4 persons) 959 (10.8%)
I-D Partnership:
- ---------------
Samson Resources Company 745 (10.4%)
All affiliates, directors,
and officers of the General
Partner as a group and
the General Partner (4 persons) 745 (10.4%)
I-E Partnership:
- ---------------
Samson Resources Company 6,073 (14.5%)
All affiliates, directors,
and officers of the General
Partner as a group and
the General Partner (4 persons) 6,073 (14.5%)
55
<PAGE>
I-F Partnership:
- ---------------
Samson Resources Company 2,352 (16.4%)
All affiliates, directors,
and officers of the General
Partner as a group and
the General Partner (4 persons) 2,352 (16.4%)
ITEM 13. 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
56
<PAGE>
advisory agreement which relates primarily to the Partnerships. The Advisory
Agreement became effective on March 3, 1993 and will expire on March 3, 1998.
The Advisory Agreement provides, among other things, that: (i) Samson will
review periodically with PaineWebber the general operations and performance of
the Partnerships and the terms of any material transaction involving a
Partnership; (ii) Samson will allow PaineWebber to advise Samson and to comment
on any General Partner-initiated amendment to a Partnership Agreement which
requires a vote of the Limited Partners of such Partnership and any proposal
initiated by the General Partner that would involve a reorganization, merger, or
consolidation of a Partnership, a sale of all or substantially all of the assets
of a Partnership, the liquidation or dissolution of a Partnership, or the
exchange of cash, securities, or other assets for all or any outstanding Units;
(iii) the General Partner will maintain an "800" investor services telephone
number; (iv) if Samson proposes a consolidation, merger, or exchange offer
involving any limited partnership managed by Samson, it will propose to include
all of the Partnerships in such transaction or provide a statement to
PaineWebber as to the reasons why some or all of the Partnerships are not
included in such transaction.
Affiliates of the Partnerships are solely responsible for the negotiation,
administration, and enforcement of oil and gas sales agreements covering the
Partnerships' leasehold interests. Because affiliates of the Partnerships who
provide services to the Partnerships have fiduciary or other duties to other
members of the Samson Companies, contract amendments and negotiating positions
taken by them in their effort to enforce contracts with purchasers may not
necessarily represent the positions that the Partnerships would take if they
were to administer their own contracts without involvement with other members of
the Samson Companies. On the other hand, management believes that the
Partnerships' negotiating strength and contractual positions have been enhanced
by virtue of their affiliation with the Samson Companies. For a description of
certain of the relationships and related transactions see "Item 11. Executive
Compensation."
57
<PAGE>
PART IV.
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS
ON FORM 8-K
(a) Financial Statements, Financial Statement Schedules, and
Exhibits.
(1) Financial Statements: The following financial statements for
the
Geodyne Energy Income Limited Partnership I-B
Geodyne Energy Income Limited Partnership I-C
Geodyne Energy Income Limited Partnership I-D
Geodyne Energy Income Limited Partnership I-E
Geodyne Energy Income Limited Partnership I-F
as of December 31, 1997 and 1996 and for each of the three
years in the period ended December 31, 1997 are filed as
part of this report:
Report of Independent Accountants
Combined Balance Sheets
Combined Statements of Operations
Combined Statements of Changes in
Partners' Capital (Deficit)
Combined Statements of Cash Flows
Notes to Combined Financial Statements
(2) Financial Statement Schedules:
None.
(3) Exhibits:
4.1 The Certificate and Agreements of Limited Partnership
for the following Partnerships have been previously
filed with the SEC as Exhibit 2.1 to Form 8-A filed by
each Partnership on the dates shown below and are
hereby incorporated by reference.
Partnership Filing Date File No.
----------- ------------ --------
I-B May 23, 1986 0-14657
I-C May 23, 1986 0-14658
I-D May 5, 1987 0-15831
I-E May 5, 1987 0-15832
I-F May 5, 1987 0-15833
58
<PAGE>
4.2 Advisory Agreement dated as of November 24, 1992
between Samson, PaineWebber, Geodyne Resources, Geodyne
Properties, Inc., Geodyne Production Company, and
Geodyne Energy Company filed as Exhibit 28.3 to
Registrant's Current Report on Form 8-K on December 24,
1992 and is hereby incorporated by reference.
4.3 Second Amendment to Amended and Restated Agreement and
Certificate of Limited Partnership of Geodyne Energy
Income Limited Partnership I-B, filed as Exhibit 4.1 to
Registrant's Current Report on Form 8-K dated August 2,
1993 filed with the SEC on August 10, 1993 and is
hereby incorporated by reference.
4.4 Second Amendment to Amended and Restated Agreement and
Certificate of Limited Partnership of Geodyne Energy
Income Limited Partnership I-C, filed as Exhibit 4.2 to
Registrant's Current Report on Form 8-K dated August 2,
1993 filed with the SEC on August 10, 1993 and is
hereby incorporated by reference.
4.5 Second Amendment to Amended and Restated Agreement and
Certificate of Limited Partnership of Geodyne Energy
Income Limited Partnership I-D, filed as Exhibit 4.3 to
Registrant's Current Report on Form 8-K dated August 2,
1993 filed with the SEC on August 10, 1993 and is
hereby incorporated by reference.
4.6 Second Amendment to Amended and Restated Agreement and
Certificate of Limited Partnership of Geodyne Energy
Income Limited Partnership I-E, filed as Exhibit 4.4 to
Registrant's Current Report on Form 8-K dated August 2,
1993 filed with the SEC on August 10, 1993 and is
hereby incorporated by reference.
4.7 Second Amendment to Amended and Restated Agreement and
Certificate of Limited Partnership of Geodyne Energy
Income Limited Partnership I-F, filed as Exhibit 4.5 to
Registrant's Current Report on Form 8-K dated August 2,
1993 filed with the SEC on August 10, 1993 and is
hereby incorporated by reference.
59
<PAGE>
*23.1 Consent of Ryder Scott Company Petroleum Engineers for
Geodyne Energy Income Limited Partnership I-B.
*23.2 Consent of Ryder Scott Company Petroleum Engineers for
Geodyne Energy Income Limited Partnership I-C.
*23.3 Consent of Ryder Scott Company Petroleum Engineers for
Geodyne Energy Income Limited Partnership I-D.
*23.4 Consent of Ryder Scott Company Petroleum Engineers for
Geodyne Energy Income Limited Partnership I-E.
*23.5 Consent of Ryder Scott Company Petroleum Engineers for
Geodyne Energy Income Limited Partnership I-F.
*27.1 Financial Data Schedule containing summary financial
information extracted from the Geodyne Energy Income
Limited Partnership I-B's financial statements as of
December 31, 1997 and for the year ended December 31,
1997.
*27.2 Financial Data Schedule containing summary financial
information extracted from the Geodyne Energy Income
Limited Partnership I-C's financial statements as of
December 31, 1997 and for the year ended December 31,
1997.
*27.3 Financial Data Schedule containing summary financial
information extracted from the Geodyne Energy Income
Limited Partnership I-D's financial statements as of
December 31, 1997 and for the year ended December 31,
1997.
*27.4 Financial Data Schedule containing summary financial
information extracted from the Geodyne Energy Income
Limited Partnership I-E's financial statements as of
December 31, 1997 and for the year ended December 31,
1997.
*27.5 Financial Data Schedule containing summary financial
information extracted from the Geodyne Energy Income
Limited Partnership I-F's financial statements as of
December 31, 1997 and for the year ended December 31,
1997.
60
<PAGE>
All other Exhibits are omitted as inapplicable.
----------------------
*Filed herewith.
(b) Reports on Form 8-K filed during the fourth quarter of 1997:
None.
61
<PAGE>
SIGNATURES
Pursuant to the requirements of Sections 13 or 15(d) of the Securities Exchange
Act of 1934, the registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly organized.
GEODYNE ENERGY INCOME LIMITED
PARTNERSHIP I-B
By: GEODYNE RESOURCES, INC.
General Partner
February 19, 1998
By: /s/Dennis R. Neill
------------------------------
Dennis R. Neill
President
Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following persons on behalf of the registrant and
in the capacities on the dates indicated.
By: /s/Dennis R. Neill President and February 19, 1998
------------------- Director (Principal
Dennis R. Neill Executive Officer)
/s/Patrick M. Hall (Principal February 19, 1998
------------------- Financial and
Patrick M. Hall Accounting Officer)
/s/Judy K. Fox Secretary February 19, 1998
-------------------
Judy K. Fox
62
<PAGE>
SIGNATURES
Pursuant to the requirements of Sections 13 or 15(d) of the Securities Exchange
Act of 1934, the registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly organized.
GEODYNE ENERGY INCOME LIMITED
PARTNERSHIP I-C
By: GEODYNE RESOURCES, INC.
General Partner
February 19, 1998
By: /s/Dennis R. Neill
------------------------------
Dennis R. Neill
President
Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following persons on behalf of the registrant and
in the capacities on the dates indicated.
By: /s/Dennis R. Neill President and February 19, 1998
------------------- Director (Principal
Dennis R. Neill Executive Officer)
/s/Patrick M. Hall (Principal February 19, 1998
------------------- Financial and
Patrick M. Hall Accounting Officer)
/s/Judy K. Fox Secretary February 19, 1998
-------------------
Judy K. Fox
63
<PAGE>
SIGNATURES
Pursuant to the requirements of Sections 13 or 15(d) of the Securities Exchange
Act of 1934, the registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly organized.
GEODYNE ENERGY INCOME LIMITED
PARTNERSHIP I-D
By: GEODYNE RESOURCES, INC.
General Partner
February 19, 1998
By: /s/Dennis R. Neill
------------------------------
Dennis R. Neill
President
Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following persons on behalf of the registrant and
in the capacities on the dates indicated.
By: /s/Dennis R. Neill President and February 19, 1998
------------------- Director (Principal
Dennis R. Neill Executive Officer)
/s/Patrick M. Hall (Principal February 19, 1998
------------------- Financial and
Patrick M. Hall Accounting Officer)
/s/Judy K. Fox Secretary February 19, 1998
-------------------
Judy K. Fox
64
<PAGE>
SIGNATURES
Pursuant to the requirements of Sections 13 or 15(d) of the Securities Exchange
Act of 1934, the registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly organized.
GEODYNE ENERGY INCOME LIMITED
PARTNERSHIP I-E
By: GEODYNE RESOURCES, INC.
General Partner
February 19, 1998
By: /s/Dennis R. Neill
------------------------------
Dennis R. Neill
President
Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following persons on behalf of the registrant and
in the capacities on the dates indicated.
By: /s/Dennis R. Neill President and February 19, 1998
------------------- Director (Principal
Dennis R. Neill Executive Officer)
/s/Patrick M. Hall (Principal February 19, 1998
------------------- Financial and
Patrick M. Hall Accounting Officer)
/s/Judy K. Fox Secretary February 19, 1998
-------------------
Judy K. Fox
65
<PAGE>
SIGNATURES
Pursuant to the requirements of Sections 13 or 15(d) of the Securities Exchange
Act of 1934, the registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly organized.
GEODYNE ENERGY INCOME LIMITED
PARTNERSHIP I-F
By: GEODYNE RESOURCES, INC.
General Partner
February 19, 1998
By: /s/Dennis R. Neill
------------------------------
Dennis R. Neill
President
Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following persons on behalf of the registrant and
in the capacities on the dates indicated.
By: /s/Dennis R. Neill President and February 19, 1998
------------------- Director (Principal
Dennis R. Neill Executive Officer)
/s/Patrick M. Hall (Principal February 19, 1998
------------------- Financial and
Patrick M. Hall Accounting Officer)
/s/Judy K. Fox Secretary February 19, 1998
-------------------
Judy K. Fox
66
<PAGE>
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
REPORT OF INDEPENDENT ACCOUNTANTS
TO THE PARTNERS
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP I-B
GEODYNE PRODUCTION PARTNERSHIP I-B
We have audited the combined balance sheets of the Geodyne Energy Income
Limited Partnership I-B, an Oklahoma limited partnership, and Geodyne Production
Partnership I-B, an Oklahoma general partnership, as of December 31, 1997 and
1996 and the related combined statements of operations, changes in partners'
capital (deficit), and cash flows for the years ended December 31, 1997, 1996,
and 1995. These financial statements are the responsibility of the Partnerships'
management. Our responsibility is to express an opinion on these financial
statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the combined financial statements referred to above
present fairly, in all material respects, the combined financial position of the
Geodyne Energy Income Limited Partnership I-B and Geodyne Production Partnership
I-B at December 31, 1997 and 1996 and the combined results of their operations
and cash flows for the years ended December 31, 1997, 1996, and 1995, in
conformity with generally accepted accounting principles.
//s// Coopers & Lybrand L.L.P.
COOPERS & LYBRAND L.L.P.
Tulsa, Oklahoma
February 10, 1998
F-1
<PAGE>
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP I-B
GEODYNE ENERGY INCOME PRODUCTION PARTNERSHIP I-B
Combined Balance Sheets
December 31, 1997 and 1996
ASSETS
------
1997 1996
------------ ---------
CURRENT ASSETS:
Cash and cash equivalents $ 77,028 $ 13,805
Accounts receivable:
Oil and gas sales 53,389 54,636
------- -------
Total current assets $130,417 $ 68,441
NET OIL AND GAS PROPERTIES, utilizing
the successful efforts method 327,137 419,346
DEFERRED CHARGE 99,262 121,350
------- ---------
$556,816 $609,137
======= =======
LIABILITIES AND PARTNERS' CAPITAL (DEFICIT)
-------------------------------------------
CURRENT LIABILITIES:
Accounts payable $ 9,366 $ 17,298
Gas imbalance payable 3,116 4,982
------- -------
Total current liabilities $ 12,482 $ 22,280
ACCRUED LIABILITY $ 22,520 $ 31,110
PARTNERS' CAPITAL (DEFICIT):
General Partner ($103,542) ($102,526)
Limited Partners, issued and
outstanding, 11,958 Units 625,356 658,273
------- -------
Total Partners' capital $521,814 $555,747
------- -------
$556,816 $609,137
======= =======
The accompanying notes are an integral part of these
combined financial statements.
F-2
<PAGE>
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP I-B
GEODYNE ENERGY INCOME PRODUCTION PARTNERSHIP I-B
Combined Statements of Operations
For the Years Ended December 31, 1997, 1996, and 1995
1997 1996 1995
---------- ---------- ----------
REVENUES:
Oil and gas sales, including
$43,625 of sales to
related parties in 1995 $358,282 $364,052 $254,050
Interest income 824 327 614
Gain on sale of oil and
gas properties 17,912 598 4,772
------- ------- -------
$377,018 $364,977 $259,436
COSTS AND EXPENSES:
Lease operating $111,961 $112,778 $143,112
Production tax 24,339 18,557 17,997
Depreciation, depletion,
and amortization of oil
and gas properties 69,696 63,333 303,520
Impairment provision 19,726 - 125,159
General and administrative 62,224 63,108 48,113
------- ------- -------
$287,946 $257,776 $637,901
------- ------- -------
NET INCOME (LOSS) $ 89,072 $107,201 ($378,465)
======= ======= =======
GENERAL PARTNER -
NET INCOME (LOSS) $ 7,989 $ 7,877 ($ 1,776)
======= ======= =======
LIMITED PARTNERS - NET
INCOME (LOSS) $ 81,083 $ 99,324 ($376,689)
======= ======= =======
NET INCOME (LOSS) per Unit $ 6.78 $ 8.31 ($ 31.50)
======= ======= =======
UNITS OUTSTANDING 11,958 11,958 11,958
======= ======= =======
The accompanying notes are an integral part of these
combined financial statements.
F-3
<PAGE>
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP I-B
GEODYNE ENERGY INCOME PRODUCTION PARTNERSHIP I-B
Combined Statements of Changes in Partners' Capital (Deficit)
For the Years Ended December 31, 1997, 1996, and 1995
Limited General
Partners Partner Total
------------ --------- ------------
Balance, Dec. 31, 1994 $1,146,638 ($ 95,948) $1,050,690
Net loss ( 376,689) ( 1,776) ( 378,465)
Cash distributions ( 133,000) ( 7,000) ( 140,000)
--------- ------- ---------
Balance, Dec. 31, 1995 $ 636,949 ($104,724) $ 532,225
Net income 99,324 7,877 107,201
Cash distributions ( 78,000) ( 5,679) ( 83,679)
--------- ------- ---------
Balance, Dec. 31, 1996 $ 658,273 ($102,526) $ 555,747
Net income 81,083 7,989 89,072
Cash distributions ( 114,000) ( 9,005) ( 123,005)
--------- ------- ---------
Balance, Dec. 31, 1997 $ 625,356 ($103,542) $ 521,814
========= ======= =========
The accompanying notes are an integral part of these
combined financial statements.
F-4
<PAGE>
<TABLE>
<CAPTION>
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP I-B
GEODYNE ENERGY INCOME PRODUCTION PARTNERSHIP I-B
Combined Statements of Cash Flows
For the Years Ended December 31, 1997, 1996, and 1995
1997 1996 1995
---------- ---------- ----------
CASH FLOWS FROM OPERATING ACTIVITIES:
<S> <C> <C> <C>
Net income (loss) $ 89,072 $107,201 ($378,465)
Adjustments to reconcile net
income (loss) to net cash
provided by operating activities:
Depreciation, depletion, and
amortization of oil and gas
properties 69,696 63,333 303,520
Impairment provision 19,726 - 125,159
Gain on sale of oil
and gas properties ( 17,912) ( 598) ( 4,772)
(Increase) decrease in
accounts receivable
-General Partner - 4,074 ( 4,074)
(Increase) decrease in
accounts receivable
- oil and gas sales 1,247 ( 16,183) 8,015
(Increase) decrease in
deferred charge 22,088 ( 23,072) 21,965
Increase (decrease) in
accounts payable ( 7,932) 9,639 ( 12,323)
Increase (decrease) in
gas imbalance payable ( 1,866) ( 69,001) 55,984
Decrease in accrued
liability ( 8,590) ( 3,063) ( 3,474)
------- ------- -------
Net cash provided by operating
activities $165,529 $ 72,330 $111,535
------- ------- -------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures ($ 1,149) ($ 445) ($ 8,037)
Proceeds from sale of oil and
gas properties 21,848 598 4,954
------- ------- -------
Net cash provided (used) by
investing activities $ 20,699 $ 153 ($ 3,083)
------- ------- -------
CASH FLOWS FROM FINANCING ACTIVITIES:
Cash distributions ($123,005) ($ 83,679) ($140,000)
------- ------- -------
Net cash used by financing
activities ($123,005) ($ 83,679) ($140,000)
------- ------- -------
F-5
<PAGE>
NET INCREASE (DECREASE) IN CASH
AND CASH EQUIVALENTS $ 63,223 ($ 11,196) ($ 31,548)
CASH AND CASH EQUIVALENTS AT
BEGINNING OF PERIOD 13,805 25,001 56,549
------- ------- -------
CASH AND CASH EQUIVALENTS AT
END OF PERIOD $ 77,028 $ 13,805 $ 25,001
======= ======= =======
</TABLE>
The accompanying notes are an integral part of these
combined financial statements.
F-6
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
TO THE PARTNERS
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP I-C
GEODYNE PRODUCTION PARTNERSHIP I-C
We have audited the combined balance sheets of the Geodyne Energy Income
Limited Partnership I-C, an Oklahoma limited partnership, and Geodyne Production
Partnership I-C, an Oklahoma general partnership, as of December 31, 1997 and
1996 and the related combined statements of operations, changes in partners'
capital (deficit), and cash flows for the years ended December 31, 1997, 1996,
and 1995. These financial statements are the responsibility of the Partnerships'
management. Our responsibility is to express an opinion on these financial
statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the combined financial statements referred to above
present fairly, in all material respects, the combined financial position of the
Geodyne Energy Income Limited Partnership I-C and Geodyne Production Partnership
I-C at December 31, 1997 and 1996 and the combined results of their operations
and cash flows for the years ended December 31, 1997, 1996, and 1995, in
conformity with generally accepted accounting principles.
//s// Coopers & Lybrand L.L.P.
COOPERS & LYBRAND L.L.P.
Tulsa, Oklahoma
February 10, 1998
F-7
<PAGE>
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP I-C
GEODYNE ENERGY INCOME PRODUCTION PARTNERSHIP I-C
Combined Balance Sheets
December 31, 1997 and 1996
ASSETS
------
1997 1996
--------- ---------
CURRENT ASSETS:
Cash and cash equivalents $141,699 $218,437
Accounts receivable:
Oil and gas sales 130,355 163,306
General Partner - 14,922
------- -------
Total current assets $272,054 $396,665
NET OIL AND GAS PROPERTIES, utilizing
the successful efforts method 334,734 317,923
DEFERRED CHARGE 110,943 66,882
------- -------
$717,731 $781,470
======= =======
LIABILITIES AND PARTNERS' CAPITAL (DEFICIT)
-------------------------------------------
CURRENT LIABILITIES:
Accounts payable $ 22,321 $ 16,894
ACCRUED LIABILITY $ 18,103 $ 12,386
PARTNERS' CAPITAL (DEFICIT):
General Partner ($ 89,189) ($ 85,499)
Limited Partners, issued and
outstanding, 8,885 Units 766,496 837,689
------- -------
Total Partners' capital $677,307 $752,190
------- -------
$717,731 $781,470
======= =======
The accompanying notes are an integral part of these
combined financial statements.
F-8
<PAGE>
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP I-C
GEODYNE ENERGY INCOME PRODUCTION PARTNERSHIP I-C
Combined Statements of Operations
For the Years Ended December 31, 1997, 1996, and 1995
1997 1996 1995
---------- ---------- ----------
REVENUES:
Oil and gas sales, including
$2,521 of sales to related
parties in 1995 $951,678 $1,181,096 $808,435
Interest income 3,737 6,501 4,052
Gain (loss)on sale of
oil and gas properties 24,387 ( 41,696) 39,926
------- --------- --------
$979,802 $1,145,901 $852,413
COSTS AND EXPENSES:
Lease operating $249,590 $ 172,009 $219,066
Production tax 62,151 69,689 56,131
Depreciation, depletion,
and amortization of oil
and gas properties 58,048 58,370 181,870
Impairment provision 4,679 - 155,698
General and administrative 106,274 107,144 100,580
------- --------- --------
$480,742 $ 407,212 $713,345
------- --------- --------
NET INCOME $499,060 $ 738,689 $139,068
======= ========= ========
GENERAL PARTNER - NET INCOME $ 27,253 $ 38,944 $ 20,456
======= ========= ========
LIMITED PARTNERS - NET INCOME $471,807 $ 699,745 $118,612
======= ========= ========
NET INCOME per Unit $ 53.10 $ 78.76 $ 13.35
======= ========= ========
UNITS OUTSTANDING 8,885 8,885 8,885
======= ========= ========
The accompanying notes are an integral part of these
combined financial statements.
F-9
<PAGE>
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP I-C
GEODYNE ENERGY INCOME PRODUCTION PARTNERSHIP I-C
Combined Statements of Changes in Partners' Capital (Deficit)
For the Years Ended December 31, 1997, 1996, and 1995
Limited General
Partners Partner Total
------------ --------- ------------
Balance, Dec. 31, 1994 $1,117,332 ($63,764) $1,053,568
Net income 118,612 20,456 139,068
Cash distributions ( 435,000) ( 23,000) ( 458,000)
--------- ------ ---------
Balance, Dec. 31, 1995 $ 800,944 ($66,308) $ 734,636
Net income 699,745 38,944 738,689
Cash distributions ( 663,000) ( 58,135) ( 721,135)
--------- ------ ---------
Balance, Dec. 31, 1996 $ 837,689 ($85,499) $ 752,190
Net income 471,807 27,253 499,060
Cash distributions ( 543,000) ( 30,943) ( 573,943)
--------- ------ ---------
Balance, Dec. 31, 1997 $ 766,496 ($89,189) $ 677,307
========= ====== =========
The accompanying notes are an integral part of these
combined financial statements.
F-10
<PAGE>
<TABLE>
<CAPTION>
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP I-C
GEODYNE ENERGY INCOME PRODUCTION PARTNERSHIP I-C
Combined Statements of Cash Flows
For the Years Ended December 31, 1997, 1996, and 1995
1997 1996 1995
---------- ---------- ----------
CASH FLOWS FROM OPERATING ACTIVITIES:
<S> <C> <C> <C>
Net income $499,060 $738,689 $139,068
Adjustments to reconcile net
income to net cash provided
by operating activities:
Depreciation, depletion, and
amortization of oil and gas
properties 58,048 58,370 181,870
Impairment provision 4,679 - 155,698
(Gain) loss on sale of oil
and gas properties ( 24,387) 41,696 ( 39,926)
(Increase) decrease in
accounts receivable
- oil and gas sales 32,951 ( 1,734) ( 18,695)
(Increase) decrease in
accounts receivable
- General Partner 14,922 3,182 ( 18,104)
(Increase) decrease in
deferred charge ( 44,061) ( 27,425) 14,230
Increase (decrease) in
accounts payable 5,427 113 ( 4,578)
Increase (decrease)in gas
imbalance payable - ( 13,021) 10,652
Increase (decrease) in
accrued liability 5,717 ( 3,246) ( 3,280)
------- ------- -------
Net cash provided by operating
activities $552,356 $796,624 $416,935
------- ------- -------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures ($100,573) ($ 1,039) $ -
Proceeds from sale of oil and
gas properties 45,422 28,172 40,368
------- ------- -------
Net cash provided (used) by
investing activities ($ 55,151) $ 27,133 $ 40,368
------- ------- -------
CASH FLOWS FROM FINANCING ACTIVITIES:
Cash distributions ($573,943) ($721,135) ($458,000)
------- ------- -------
Net cash used by financing
activities ($573,943) ($721,135) ($458,000)
------- ------- -------
F-11
<PAGE>
NET INCREASE (DECREASE) IN CASH
AND CASH EQUIVALENTS ($ 76,738) $102,622 ($ 697)
CASH AND CASH EQUIVALENTS AT
BEGINNING OF PERIOD 218,437 115,815 116,512
------- ------- -------
CASH AND CASH EQUIVALENTS AT
END OF PERIOD $141,699 $218,437 $115,815
======= ======= =======
</TABLE>
The accompanying notes are an integral
part of these combined financial statements.
F-12
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
TO THE PARTNERS
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP I-D
GEODYNE PRODUCTION PARTNERSHIP I-D
We have audited the combined balance sheets of the Geodyne Energy Income
Limited Partnership I-D, an Oklahoma limited partnership, and Geodyne Production
Partnership I-D, an Oklahoma general partnership, as of December 31, 1997 and
1996 and the related combined statements of operations, changes in partners'
capital (deficit), and cash flows for the years ended December 31, 1997, 1996,
and 1995. These financial statements are the responsibility of the Partnerships'
management. Our responsibility is to express an opinion on these financial
statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the combined financial statements referred to above
present fairly, in all material respects, the combined financial position of the
Geodyne Energy Income Limited Partnership I-D and Geodyne Production Partnership
I-D at December 31, 1997 and 1996 and the combined results of their operations
and cash flows for the years ended December 31, 1997, 1996, and 1995, in
conformity with generally accepted accounting principles.
//s// Coopers & Lybrand L.L.P.
COOPERS & LYBRAND L.L.P.
Tulsa, Oklahoma
February 10, 1998
F-13
<PAGE>
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP I-D
GEODYNE ENERGY INCOME PRODUCTION PARTNERSHIP I-D
Combined Balance Sheets
December 31, 1997 and 1996
ASSETS
------
1997 1996
----------- ----------
CURRENT ASSETS:
Cash and cash equivalents $ 274,109 $ 344,951
Accounts receivable:
Oil and gas sales 256,001 306,857
--------- ----------
Total current assets $ 530,110 $ 651,808
NET OIL AND GAS PROPERTIES, utilizing
the successful efforts method 714,156 855,240
DEFERRED CHARGE 104,793 98,015
--------- ----------
$1,349,059 $1,605,063
========= ==========
LIABILITIES AND PARTNERS' CAPITAL
---------------------------------
CURRENT LIABILITIES:
Accounts payable $ 31,310 $ 15,285
Gas imbalance payable 39,971 36,687
--------- ----------
Total current liabilities $ 71,281 $ 51,972
ACCRUED LIABILITY $ 14,345 $ 16,816
PARTNERS' CAPITAL:
General Partner ($ 27,560) ($ 4,248)
Limited Partners, issued and
outstanding, 7,195 Units 1,290,993 1,540,523
--------- ----------
Total Partners' capital $1,263,433 $1,536,275
--------- ----------
$1,349,059 $1,605,063
========= ==========
The accompanying notes are an integral part of these
combined financial statements.
F-14
<PAGE>
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP I-D
GEODYNE ENERGY INCOME PRODUCTION PARTNERSHIP I-D
Combined Statements of Operations
For the Years Ended December 31, 1997, 1996, and 1995
1997 1996 1995
----------- ----------- ----------
REVENUES:
Oil and gas sales, including
$362,560 of sales to
related parties in 1995 $1,545,097 $1,812,568 $1,237,419
Interest income 10,558 11,473 8,358
Gain on sale of oil and
gas properties 24,113 41,516 1,377
--------- ---------- ---------
$1,579,768 $1,865,557 $1,247,154
COSTS AND EXPENSES:
Lease operating $ 183,675 $ 175,311 $ 144,541
Production tax 110,675 115,537 92,050
Depreciation, depletion,
and amortization of oil
and gas properties 112,862 148,467 249,914
Impairment provision 61,790 - 19,510
General and administrative 91,372 92,138 89,352
--------- ---------- ---------
$ 560,374 $ 531,453 $ 595,367
--------- ---------- ---------
NET INCOME $1,019,394 $1,334,104 $ 651,787
========= ========== =========
GENERAL PARTNER -
NET INCOME $ 173,924 $ 219,180 $ 135,487
========= ========== =========
LIMITED PARTNERS - NET INCOME $ 845,470 $1,114,924 $ 516,300
========= ========== =========
NET INCOME per Unit $ 117.51 $ 154.96 $ 71.76
========= ========== =========
UNITS OUTSTANDING 7,195 7,195 7,195
========= ========== =========
The accompanying notes are an integral part of these
combined financial statements.
F-15
<PAGE>
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP I-D
GEODYNE ENERGY INCOME PRODUCTION PARTNERSHIP I-D
Combined Statements of Changes in Partners' Capital (Deficit)
For the Years Ended December 31, 1997, 1996, and 1995
Limited General
Partners Partner Total
------------ ---------- ------------
Balance, Dec. 31, 1994 $1,669,299 $ 9,506 $1,678,805
Net income 516,300 135,487 651,787
Cash distributions ( 725,000) ( 127,000) ( 852,000)
--------- ------- ---------
Balance, Dec. 31, 1995 $1,460,599 $ 17,993 $1,478,592
Net income 1,114,924 219,180 1,334,104
Cash distributions ( 1,035,000) ( 241,421) ( 1,276,421)
--------- ------- ---------
Balance, Dec. 31, 1996 $1,540,523 ($ 4,248) $1,536,275
Net income 845,470 173,924 1,019,394
Cash distributions ( 1,095,000) ( 197,236) ( 1,292,236)
--------- ------- ---------
Balance, Dec. 31, 1997 $1,290,993 ($ 27,560) $1,263,433
========= ======= =========
The accompanying notes are an integral part of these
combined financial statements.
F-16
<PAGE>
<TABLE>
<CAPTION>
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP I-D
GEODYNE ENERGY INCOME PRODUCTION PARTNERSHIP I-D
Combined Statements of Cash Flows
For the Years Ended December 31, 1997, 1996, and 1995
1997 1996 1995
------------ ----------- ----------
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING
ACTIVITIES:
Net income $1,019,394 $1,334,104 $651,787
Adjustments to reconcile
net income to net cash
provided by operating
activities:
Depreciation, depletion,
and amortization of oil
and gas properties 112,862 148,467 249,914
Impairment provision 61,790 - 19,510
Gain on sale of oil and
gas properties ( 24,113) ( 41,516) ( 1,377)
(Increase) decrease in
accounts receivable -
oil and gas sales 50,856 ( 82,001) ( 11,276)
(Increase) decrease in
deferred charge ( 6,778) 15,475 ( 15,634)
Increase (decrease) in
accounts payable 16,025 ( 15,464) ( 5,600)
Increase (decrease) in gas
imbalance payable 3,284 ( 30,443) ( 10,210)
Decrease in accrued
liability ( 2,471) ( 1,154) ( 23,238)
--------- --------- -------
Net cash provided by
operating activities $1,230,849 $1,327,468 $853,876
--------- --------- -------
CASH FLOWS FROM INVESTING
ACTIVITIES:
Capital expenditures ($ 34,805) ($ 10,930) ($ 7,434)
Proceeds from sale of
oil and gas properties 25,350 59,168 3,739
--------- --------- -------
Net cash provided (used)
by investing activities ($ 9,455) $ 48,238 ($ 3,695)
--------- --------- -------
CASH FLOWS FROM FINANCING
ACTIVITIES:
Cash distributions ($1,292,236) ($1,276,421) ($852,000)
--------- --------- -------
Net cash used by financing
activities ($1,292,236) ($1,276,421) ($852,000)
--------- --------- -------
<PAGE>
NET INCREASE (DECREASE) IN
CASH AND CASH EQUIVALENTS ($ 70,842) $ 99,285 ($ 1,819)
CASH AND CASH EQUIVALENTS
AT BEGINNING OF PERIOD 344,951 245,666 247,485
--------- --------- -------
CASH AND CASH EQUIVALENTS
AT END OF PERIOD $ 274,109 $ 344,951 $245,666
========= ========= =======
</TABLE>
The accompanying notes are an integral
part of these combined financial statements.
F-17
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
TO THE PARTNERS
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP I-E
GEODYNE PRODUCTION PARTNERSHIP I-E
We have audited the combined balance sheets of the Geodyne Energy Income
Limited Partnership I-E, an Oklahoma limited partnership, and Geodyne Production
Partnership I-E, an Oklahoma general partnership, as of December 31, 1997 and
1996 and the related combined statements of operations, changes in partners'
capital (deficit), and cash flows for the years ended December 31, 1997, 1996,
and 1995. These financial statements are the responsibility of the Partnerships'
management. Our responsibility is to express an opinion on these financial
statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the combined financial statements referred to above
present fairly, in all material respects, the combined financial position of the
Geodyne Energy Income Limited Partnership I-E and Geodyne Production Partnership
I-E at December 31, 1997 and 1996 and the combined results of their operations
and cash flows for the years ended December 31, 1997, 1996, and 1995, in
conformity with generally accepted accounting principles.
//s// Coopers & Lybrand L.L.P.
COOPERS & LYBRAND L.L.P.
Tulsa, Oklahoma
February 10, 1998
F-18
<PAGE>
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP I-E
GEODYNE ENERGY INCOME PRODUCTION PARTNERSHIP I-E
Combined Balance Sheets
December 31, 1997 and 1996
ASSETS
------
1997 1996
------------- ------------
CURRENT ASSETS:
Cash and cash equivalents $ 827,775 $ 894,887
Accounts receivable:
Oil and gas sales 994,354 1,233,074
Other 69,917 -
--------- ---------
Total current assets $1,892,046 $2,127,961
NET OIL AND GAS PROPERTIES, utilizing
the successful efforts method 4,844,378 5,621,729
DEFERRED CHARGE 750,369 822,824
--------- ---------
$7,486,793 $8,572,514
========= =========
LIABILITIES AND PARTNERS' CAPITAL (DEFICIT)
-------------------------------------------
CURRENT LIABILITIES:
Accounts payable $ 257,524 $ 118,262
Gas imbalance payable 135,884 124,200
--------- ---------
Total current liabilities $ 393,408 $ 242,462
ACCRUED LIABILITY $ 138,356 $ 142,663
PARTNERS' CAPITAL (DEFICIT):
General Partner ($ 228,434) ($ 113,140)
Limited Partners, issued and
outstanding, 41,839 Units 7,183,463 8,300,529
--------- ---------
Total Partners' capital $6,955,029 $8,187,389
--------- ---------
$7,486,793 $8,572,514
========= =========
The accompanying notes are an integral part of these
combined financial statements.
F-19
<PAGE>
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP I-E
GEODYNE ENERGY INCOME PRODUCTION PARTNERSHIP I-E
Combined Statements of Operations
For the Years Ended December 31, 1997, 1996, and 1995
1997 1996 1995
---------- ---------- ----------
REVENUES:
Oil and gas sales, including
$2,099,338 of sales to
related parties in 1995 $6,004,252 $6,006,431 $4,777,881
Interest income 34,723 35,005 28,581
Gain on sale of oil and
gas properties 120,840 296,937 3,843
Other income 69,917 - -
--------- --------- ---------
$6,229,732 $6,338,373 $4,810,305
COSTS AND EXPENSES:
Lease operating $1,337,863 $1,303,281 $1,161,941
Production tax 433,287 403,038 319,588
Depreciation, depletion,
and amortization of oil
and gas properties 729,388 842,214 1,385,245
Impairment provision 291,690 - 748,728
General and administrative 526,066 527,292 510,222
--------- --------- ---------
$3,318,294 $3,075,825 $4,125,724
--------- --------- ---------
NET INCOME $2,911,438 $3,262,548 $ 684,581
========= ========= =========
GENERAL PARTNER -
NET INCOME $ 568,504 $ 602,481 $ 368,023
========= ========= =========
LIMITED PARTNERS - NET INCOME $2,342,934 $2,660,067 $ 316,558
========= ========= =========
NET INCOME per Unit $ 56.00 $ 63.58 $ 7.57
========= ========= =========
UNITS OUTSTANDING 41,839 41,839 41,839
========= ========= =========
The accompanying notes are an integral part of these
combined financial statements.
F-20
<PAGE>
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP I-E
GEODYNE ENERGY INCOME PRODUCTION PARTNERSHIP I-E
Combined Statements of Changes in Partners' Capital (Deficit)
For the Years Ended December 31, 1997, 1996, and 1995
Limited General
Partners Partner Total
------------- ---------- -------------
Balance, Dec. 31, 1994 $10,316,904 ($115,710) $10,201,194
Net income 316,558 368,023 684,581
Cash distributions ( 2,140,000) ( 307,000) ( 2,447,000)
---------- ------- ----------
Balance, Dec. 31, 1995 $ 8,493,462 ($ 54,687) $ 8,438,775
Net Income 2,660,067 602,481 3,262,548
Cash distributions ( 2,853,000) ( 660,934) ( 3,513,934)
---------- ------- ----------
Balance, Dec. 31, 1996 $ 8,300,529 ($113,140) $ 8,187,389
Net income 2,342,934 568,504 2,911,438
Cash distributions ( 3,460,000) ( 683,798) ( 4,143,798)
---------- ------- ----------
Balance, Dec. 31, 1997 $ 7,183,463 ($228,434) $ 6,955,029
========== ======= ==========
The accompanying notes are an integral part of these
combined financial statements.
F-21
<PAGE>
<TABLE>
<CAPTION>
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP I-E
GEODYNE ENERGY INCOME PRODUCTION PARTNERSHIP I-E
Combined Statements of Cash Flows
For the Years Ended December 31, 1997, 1996, and 1995
1997 1996 1995
------------ ------------ ------------
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING
ACTIVITIES:
Net income $2,911,438 $3,262,548 $ 684,581
Adjustments to reconcile
net income to net cash
provided by operating
activities:
Depreciation, depletion,
and amortization of oil
and gas properties 729,388 842,214 1,385,245
Impairment provision 291,690 - 748,728
Gain on sale of oil and
gas properties ( 120,840) ( 296,937) ( 3,843)
Increase (decrease) in
accounts receivable -
oil and gas sales 238,720 ( 457,303) 86,309
Increase in accounts
receivable - other ( 69,917) - -
Decrease in deferred
charge 72,455 119,923 1,722
Increase (decrease) in
accounts payable 139,262 ( 54,626) ( 47,782)
Increase (decrease) in gas
imbalance payable 11,684 ( 86,031) ( 25,446)
Increase (decrease) in
accrued liability ( 4,307) 7,217 ( 244,169)
--------- --------- ---------
Net cash provided by
operating activities $4,199,573 $3,337,005 $2,585,345
--------- --------- ---------
CASH FLOWS FROM INVESTING
ACTIVITIES:
Capital expenditures ($ 279,631) ($ 55,490) ($ 105,852)
Proceeds from sale of
oil and gas properties 156,744 392,990 22,208
--------- --------- ---------
Net cash provided (used)
by investing activities ($ 122,887) $ 337,500 ($ 83,644)
--------- --------- ---------
CASH FLOWS FROM FINANCING
ACTIVITIES:
Cash distributions ($4,143,798) ($3,513,934) ($2,447,000)
--------- --------- ---------
F-22
<PAGE>
Net cash used by financing
activities ($4,143,798) ($3,513,934) ($2,447,000)
--------- --------- ---------
NET INCREASE (DECREASE) IN
CASH AND CASH EQUIVALENTS ($ 67,112) $ 160,571 $ 54,701
CASH AND CASH EQUIVALENTS
AT BEGINNING OF PERIOD 894,887 734,316 679,615
--------- --------- ---------
CASH AND CASH EQUIVALENTS
AT END OF PERIOD $ 827,775 $ 894,887 $ 734,316
========= ========= =========
</TABLE>
The accompanying notes are an integral
part of these combined financial statements.
F-23
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
TO THE PARTNERS
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP I-F
GEODYNE PRODUCTION PARTNERSHIP I-F
We have audited the combined balance sheets of the Geodyne Energy Income
Limited Partnership I-F, an Oklahoma limited partnership, and Geodyne Production
Partnership I-F, an Oklahoma general partnership, as of December 31, 1997 and
1996 and the related combined statements of operations, changes in partners'
capital (deficit), and cash flows for the years ended December 31, 1997, 1996,
and 1995. These financial statements are the responsibility of the Partnerships'
management. Our responsibility is to express an opinion on these financial
statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the combined financial statements referred to above
present fairly, in all material respects, the combined financial position of the
Geodyne Energy Income Limited Partnership I-F and Geodyne Production Partnership
I-F at December 31, 1997 and 1996 and the combined results of their operations
and cash flows for the years ended December 31, 1997, 1996, and 1995, in
conformity with generally accepted accounting principles.
//s// Coopers & Lybrand L.L.P.
COOPERS & LYBRAND L.L.P.
Tulsa, Oklahoma
February 10, 1998
F-24
<PAGE>
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP I-F
GEODYNE ENERGY INCOME PRODUCTION PARTNERSHIP I-F
Combined Balance Sheets
December 31, 1997 and 1996
ASSETS
------
1997 1996
------------ ------------
CURRENT ASSETS:
Cash and cash equivalents $ 251,220 $ 339,064
Accounts receivable:
Oil and gas sales 307,734 431,888
Other 48,942 -
--------- ---------
Total current assets $ 607,896 $ 770,952
NET OIL AND GAS PROPERTIES, utilizing
the successful efforts method 1,457,908 1,746,830
DEFERRED CHARGE 501,016 465,201
--------- ---------
$2,566,820 $2,982,983
========= =========
LIABILITIES AND PARTNERS' CAPITAL (DEFICIT)
-------------------------------------------
CURRENT LIABILITIES:
Accounts payable $ 53,205 $ 47,364
Gas imbalance payable 47,046 45,279
--------- ---------
Total current liabilities $ 100,251 $ 92,643
ACCRUED LIABILITY $ 116,401 $ 103,790
PARTNERS' CAPITAL (DEFICIT):
General Partner ($ 59,811) ($ 59,110)
Limited Partners, issued and
outstanding, 14,321 Units 2,409,979 2,845,660
--------- ---------
Total Partners' capital $2,350,168 $2,786,550
--------- ---------
$2,566,820 $2,982,983
========= =========
The accompanying notes are an integral part of these
combined financial statements.
F-25
<PAGE>
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP I-F
GEODYNE ENERGY INCOME PRODUCTION PARTNERSHIP I-F
Combined Statements of Operations
For the Years Ended December 31, 1997, 1996, and 1995
1997 1996 1995
---------- ----------- ----------
REVENUES:
Oil and gas sales, including
$481,355 of sales to
related parties in 1995 $2,021,805 $2,121,336 $1,762,969
Interest income 11,252 12,228 9,438
Gain on sale of oil and
gas properties 76,108 160,187 4,726
Other income 48,942 - -
--------- ---------- ---------
$2,158,107 $2,293,751 $1,777,133
COSTS AND EXPENSES:
Lease operating $ 540,388 $ 622,452 $ 579,433
Production tax 143,412 135,940 115,608
Depreciation, depletion,
and amortization of oil
and gas properties 257,820 270,978 492,745
Impairment provision 114,631 - 258,913
General and administrative 180,860 182,290 175,600
--------- ---------- ---------
$1,237,111 $1,211,660 $1,622,299
--------- ---------- ---------
NET INCOME $ 920,996 $1,082,091 $ 154,834
========= ========== =========
GENERAL PARTNER -
NET INCOME $ 183,677 $ 198,724 $ 117,455
========= ========== =========
LIMITED PARTNERS - NET INCOME $ 737,319 $ 883,367 $ 37,379
========= ========== =========
NET INCOME per Unit $ 51.49 $ 61.68 $ 2.61
========= ========== =========
UNITS OUTSTANDING 14,321 14,321 14,321
========= ========== =========
The accompanying notes are an integral part of these
combined financial statements.
F-26
<PAGE>
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP I-F
GEODYNE ENERGY INCOME PRODUCTION PARTNERSHIP I-F
Combined Statements of Changes in Partners' Capital (Deficit)
For the Years Ended December 31, 1997, 1996, and 1995
Limited General
Partners Partner Total
------------ ---------- ------------
Balance, Dec. 31, 1994 $3,680,914 ($ 33,134) $3,647,780
Net income 37,379 117,455 154,834
Cash distributions ( 795,000) ( 110,000) ( 905,000)
--------- ------- ---------
Balance, Dec. 31, 1995 $2,923,293 ($ 25,679) $2,897,614
Net income 883,367 198,724 1,082,091
Cash distributions ( 961,000) ( 232,155) ( 1,193,155)
--------- ------- ---------
Balance, Dec. 31, 1996 $2,845,660 ($ 59,110) $2,786,550
Net income 737,319 183,677 920,996
Cash distributions ( 1,173,000) ( 184,378) ( 1,357,378)
--------- ------- ---------
Balance, Dec. 31, 1997 $2,409,979 ($ 59,811) $2,350,168
========= ======= =========
The accompanying notes are an integral part of these
combined financial statements.
F-27
<PAGE>
<TABLE>
<CAPTION>
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP I-F
GEODYNE ENERGY INCOME PRODUCTION PARTNERSHIP I-F
Combined Statements of Cash Flows
For the Years Ended December 31, 1997, 1996, and 1995
1997 1996 1995
------------ ------------ ------------
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING
ACTIVITIES:
Net income $ 920,996 $1,082,091 $ 154,834
Adjustments to reconcile
net income to net cash
provided by operating
activities:
Depreciation, depletion,
and amortization of oil
and gas properties 257,820 270,978 492,745
Impairment provision 114,631 - 258,913
Gain on sale of oil
and gas properties ( 76,108) ( 160,187) ( 4,726)
(Increase) decrease in
accounts receivable -
oil and gas sales 124,154 ( 157,539) 68,655
Increase in accounts
receivable-other ( 48,942) - -
(Increase) decrease in
deferred charge ( 35,815) 73,657 ( 51,233)
Increase (decrease) in
accounts payable 5,841 ( 16,778) ( 14,427)
Increase (decrease) in gas
imbalance payable 1,767 ( 37,924) ( 5,277)
Increase in
accrued liability 12,611 24,355 15,557
--------- --------- ---------
Net cash provided by
operating activities $1,276,955 $1,078,653 $ 915,041
--------- --------- ---------
CASH FLOWS FROM INVESTING
ACTIVITIES:
Capital expenditures ($ 104,709) ($ 27,863) ($ 54,383)
Proceeds from sale of
oil and gas properties 97,288 208,776 11,377
--------- --------- ---------
Net cash provided (used)
by investing activities ($ 7,421) $ 180,913 ($ 43,006)
--------- --------- ---------
CASH FLOWS FROM FINANCING
ACTIVITIES:
Cash distributions ($1,357,378) ($1,193,155) ($ 905,000)
--------- --------- ---------
F-28
<PAGE>
Net cash used by financing
activities ($1,357,378) ($1,193,155) ($ 905,000)
--------- --------- ---------
NET INCREASE (DECREASE) IN
CASH AND CASH EQUIVALENTS ($ 87,844) $ 66,411 ($ 32,965)
CASH AND CASH EQUIVALENTS
AT BEGINNING OF PERIOD 339,064 272,653 305,618
--------- --------- ---------
CASH AND CASH EQUIVALENTS
AT END OF PERIOD $ 251,220 $ 339,064 $ 272,653
========= ========= =========
</TABLE>
The accompanying notes are an integral
part of these combined financial statements.
F-29
<PAGE>
GEODYNE ENERGY INCOME PROGRAM I LIMITED PARTNERSHIPS
Notes to the Combined Financial Statements For the Years Ended
December 31, 1997, 1996, and 1995
1. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Organization and Nature of Operations
The Geodyne Energy Income Limited Partnerships (the "Partnerships") were
formed pursuant to a public offering of depositary units ("Units"). Upon
formation, investors became limited partners (the "Limited Partners") and held
Units issued by each Partnership. Geodyne Resources, Inc. is the general partner
of the Partnerships. Each Partnership is a general partner in the related
Geodyne Energy Income Production Partnership (collectively, the "Production
Partnership") in which Geodyne Resources, Inc. serves as the managing partner.
Limited Partner capital contributions were contributed to the related Production
Partnerships for investment in producing oil and gas properties. The
Partnerships were activated on the following dates with the following Limited
Partner capital contributions:
Limited
Partner
Date of Capital
Partnership Activation Contributions
----------- ------------------ --------------
I-B July 12, 1985 $11,957,700
I-C December 20, 1985 8,884,900
I-D March 4, 1986 7,194,700
I-E September 10, 1986 41,839,400
I-F December 16, 1986 14,320,900
The Partnerships will terminate on December 31, 1999. However, the General
Partner may extend the term of each Partnership for up to five periods of two
years each. As of the date of these financial statements, the General Partner
has not determined whether to extend the term of any Partnership.
For purposes of these financial statements, the Partnerships and
Production Partnerships are collectively referred to as the "Partnerships" and
the general partner and managing partner are collectively referred to as the
"General Partner." An affiliate of the General Partner owned the following Units
at December 31, 1997:
F-30
<PAGE>
Number of Percent of
Partnership Units Owned Outstanding Units
----------- ----------- -----------------
I-B 2,727 22.8%
I-C 959 10.8%
I-D 745 10.4%
I-E 6,073 14.5%
I-F 2,352 16.4%
The Partnerships' sole business is the development and production of oil
and gas.
Allocation of Costs and Revenues
The combination of the allocation provisions in each Partnership's limited
partnership agreement and each Production Partnership's partnership agreement
(collectively, the "Partnership Agreement") results in allocations of costs and
income between the Limited Partners and General Partner as follows:
Before Payout(1) After Payout(1)
-------------------- --------------------
General Limited General Limited
Partner Partners Partner Partners
-------- -------- -------- --------
Costs(2)
- ------------------------
Sales commissions, pay-
ment for organization
and offering costs
and management fee 1% 99% - -
Property acquisition
costs 1% 99% 1% 99%
Identified development
drilling 1% 99% 1% 99%
Development drilling 10% 90% 15% 85%
General and administra-
tive costs, direct
administrative costs
and operating costs(3) 10% 90% 15% 85%
Income(2)
- ------------------------
Temporary investments of
Limited Partners'
capital contributions 1% 99% 1% 99%
Income from oil and gas
production(3) 10% 90% 15% 85%
Sale of producing pro-
perties (3) 10% 90% 15% 85%
All other income 10% 90% 15% 85%
- ----------
F-31
<PAGE>
(1) Payout occurs when total distributions to Limited Partners equal total
original Limited Partner subscriptions.
(2) The allocations in the table result generally from the combined effect of
the allocation provisions in the Partnership Agreements. For example, the
costs incurred in development drilling are allocated 90.9091% to the
limited partnership and 9.0909% to the managing partner. The 90.9091%
portion of these costs allocated to the limited partnership, when passed
through the limited partnership, is further allocated 99% to the limited
partners and 1% to the general partner. In this manner the Limited
Partners are allocated 90% of such costs and the General Partner is
allocated 10% of such costs.
(3) Distributions of cash and the above allocation of income and costs of the
General Partner are subject to subordination during the first two
twelve-month "allocation periods". The first twelve-month "allocation
period" commenced on the last day of the first full fiscal quarter after
the earlier of (i) the date on which 90% of a limited partnership's
capital contribution to a Production Partnership has been expended or (ii)
two years after activation of a Production Partnership. The second
twelve-month "allocation period" commenced at the end of the first
allocation period. To the extent that the amount of cash distributed in
the allocation periods is insufficient to permit the Limited Partners to
receive a 15% cumulative (but not compounded) twelve-month return on their
capital contributions, up to one-half of the managing partners' share of
distributable cash after each such allocation period, and a corresponding
amount of their allocable share of income and costs, shall thereafter be
allocated to permit the Limited Partners to receive, to the extent
available, the aggregate amount of such deficiency. After the allocation
periods, the managing partner may recoup amounts previously allocated to
the Limited Partners pursuant to this subordination provision to the
extent income is otherwise sufficient to permit Limited Partners to
receive at least a 15% cumulative (but not compounded) twelve-month return
since the commencement of the allocation periods.
Currently, the I-B and I-C Partnerships are subject to subordination as
discussed above, as the Limited Partners did not receive a 15% cumulative cash
distribution; therefore, one-half of the General Partner's income and costs for
those Partnerships are being allocated to the Limited Partners.
The I-D Partnership achieved payout late in 1991. Beginning with 1992,
operations for the I-D Partnership were allocated using the after payout
percentages set forth in the table. The I-E and I-F Partnerships achieved payout
during the second quarter of 1995. Beginning with the second quarter of 1995,
operations for the I-E and I-F Partnerships were allocated using the after
payout percentages.
F-32
<PAGE>
Basis of Presentation
These financial statements reflect the combined accounts of each
Partnership after the elimination of all inter-partnership transactions and
balances.
Cash and Cash Equivalents
The Partnerships consider all highly liquid investments with a maturity of
three months or less when purchased to be cash equivalents. Cash equivalents are
not insured, which cause the Partnerships to be subject to risk.
Credit Risk
Accrued oil and gas sales which are due from a variety of oil and gas
purchasers subject the Partnerships to a concentration of credit risk. Some of
these purchasers are discussed in Note 3 - Major Customers.
Receivable from General Partner
The I-C Partnership recorded a receivable from the General Partner at
December 31, 1996 in the amount of $14,452 for proceeds due to the I-C
Partnership from the sale of oil and gas properties. Such receivable was
collected by the I-C Partnership in the first quarter of 1997. The I-C
Partnership also recorded a receivable from the General Partner at December 31,
1996 in the amount of $470 due to indirect general and administrative expenses
exceeding the reimbursable indirect limit imposed by the Advisory Agreement.
Such receivable was collected by the I-C Partnership during the first quarter of
1997.
Oil and Gas Properties
The Partnerships follow the successful efforts method of accounting for
their oil and gas properties. Under the successful efforts method, the
Partnerships capitalize all property acquisition costs and development costs
incurred in connection with the further development of oil and gas reserves.
Property acquisition costs include costs incurred by the Partnerships or the
General Partner to acquire producing properties, including related title
insurance or examination costs, commissions, engineering, legal and accounting
fees, and similar costs directly related to the acquisitions, plus an allocated
portion of the General Partner's property screening costs. The acquisition cost
to the Partnerships of properties acquired by the General Partner is adjusted to
reflect the net cash results of operations, including interest incurred to
F-33
<PAGE>
finance the acquisition, for the period of time the properties are held by the
General Partner. Leasehold impairment of unproved properties is recognized based
upon an individual property assessment and exploratory experience. Upon
discovery of commercial reserves, leasehold costs are transferred to producing
properties.
Depletion of the cost of producing oil and gas properties, amortization of
related intangible drilling and development costs, and depreciation of tangible
lease and well equipment are computed on the units-of-production method. The
Partnerships' depletion, depreciation, and amortization includes dismantlement
and abandonment costs, net of estimated salvage value. The depreciation,
depletion, and amortization rates per equivalent barrel of oil produced during
the years ended December 31, 1997, 1996, and 1995 were as follows:
Partnership 1997 1996 1995
----------- ------ ------ ------
I-B $2.92 $2.31 $10.23
I-C 1.06 .89 2.92
I-D 1.09 1.26 2.10
I-E 1.68 1.92 2.82
I-F 1.93 1.88 3.01
When complete units of depreciable property are retired or sold, the asset
cost and related accumulated depreciation are eliminated with any gain or loss
reflected in income. When less than complete units of depreciable property are
retired or sold, the difference between asset cost and salvage value is charged
or credited to accumulated depreciation.
The Partnerships follow the provisions of Statement of Financial
Accounting Standards ("SFAS") No. 121, "Accounting for the Impairment of Long
Lived Assets and Assets Held for Disposal," which is intended to establish more
consistent accounting standards for measuring the recoverability of long-lived
assets. SFAS No. 121 requires successful efforts companies, like the
Partnerships, to evaluate the recoverability of the carrying costs of their
proved oil and gas properties at the lowest level for which there are
identifiable cash flows that are largely independent of the cash flows of other
groups of oil and gas properties. With respect to the Partnerships' oil and gas
properties, this evaluation was performed for each field. SFAS No. 121 provides
that if the unamortized costs of oil and gas properties exceed the expected
undiscounted future cash flows from such properties, the cost of the properties
is written down to fair value, which is determined by using the discounted
future cash flows from the properties. During 1997, 1996, and 1995, the
Partnerships recorded the following non-cash charges against earnings
(impairment provisions):
F-34
<PAGE>
Partnership 1997 1996 1995
----------- --------- ------- ---------
I-B $17,233 $ - $125,159
I-C 4,679 - 155,698
I-D 12,290 - 19,510
I-E 59,728 - 748,728
I-F 20,908 - 258,913
In addition, during 1997 the General Partner determined that the
Partnerships' unproved properties would be uneconomic to develop and, therefore,
of little or no value. This determination was based on an evaluation by the
General Partner that it is unlikely that these unproved properties would be
developed due to the low oil and gas prices received over the last several years
and provisions in the Partnership Agreements which limit the level of
permissible drilling activity. As a result of this determination, the
Partnerships recorded the following non-cash charges against earnings at March
31, 1997 in order to reflect the writing-off of the Partnerships' unproved
properties:
Partnership Amount
----------- --------
I-B $ 2,493
I-C -
I-D 49,500
I-E 231,962
I-F 93,723
Deferred Charge
The Deferred Charge represents costs deferred for lease operating expenses
incurred in connection with the Partnerships' underproduced gas imbalance
positions. The rate used in calculating the deferred charge is the average of
the annual production costs per Mcf. At December 31, 1997 and 1996, cumulative
total gas sales volumes for underproduced wells were less than the Partnerships'
pro-rata share of total gas production from these wells by the following
amounts:
F-35
<PAGE>
1997 1996
---------------------- ----------------------
Partnership Mcf Amount Mcf Amount
----------- --------- -------- --------- --------
I-B 132,544 $ 99,262 131,516 $121,350
I-C 68,009 110,943 74,846 66,882
I-D 308,124 104,793 351,688 98,015
I-E 1,430,637 750,369 1,543,471 822,824
I-F 519,564 501,016 578,968 465,201
Accrued Liability
The Accrued Liability represents charges accrued for lease operating
expenses incurred in connection with the Partnerships' overproduced gas
imbalance positions. The rate used in calculating the accrued liability is the
average of the annual production costs per Mcf. At December 31, 1997 and 1996,
cumulative total gas sales volumes for overproduced wells exceeded the
Partnerships' pro-rata share of total gas production from these wells by the
following amounts:
1997 1996
---------------------- --------------------
Partnership Mcf Amount Mcf Amount
----------- ------- -------- ------- --------
I-B 30,071 $ 22,520 33,716 $ 31,110
I-C 11,097 18,103 13,861 12,386
I-D 42,180 14,345 60,338 16,816
I-E 263,786 138,356 267,610 142,663
I-F 120,710 116,401 129,172 103,790
Oil and Gas Sales and Gas Imbalance Payable
The Partnerships' oil and condensate production is sold, title passed, and
revenue recognized at or near the Partnerships' wells under short-term purchase
contracts at prevailing prices in accordance with arrangements which are
customary in the oil industry. Sales of gas applicable to the Partnerships'
interest in producing oil and gas leases are recorded as revenue when the gas is
metered and title transferred pursuant to the gas sales contracts covering the
Partnerships' interest in gas reserves. During such times as a Partnership's
sales of gas exceed its pro rata ownership in a well, such sales are recorded as
revenue unless total sales from the well have exceeded the Partnership's share
of estimated total gas reserves underlying the property, at which time such
excess is recorded as a liability. The rates per Mcf used to calculate this
liability are based on the average gas prices received for the volumes at the
time the overproduction occurred. This also reflects the price for which the
F-36
<PAGE>
Partnerships are currently settling this liability. At December 31, 1997 and
1996 total sales exceeded the Partnerships' share of estimated total gas
reserves as follows:
1997 1996
------------------- -------------------
Partnership Mcf Amount Mcf Amount
----------- ------- ------- ------- --------
I-B 2,077 $ 3,116 3,321 $ 4,982
I-C - - - -
I-D 26,647 39,971 24,458 36,687
I-E 90,589 135,884 82,800 124,200
I-F 31,364 47,046 30,186 45,279
These amounts were recorded as gas imbalance payables in accordance with the
sales method. These gas imbalance payables will be settled by either gas
production by the underproduced party in excess of current estimates of total
gas reserves for the well or by a negotiated or contractual payment to the
underproduced party.
General and Administrative Overhead
The General Partner and its affiliates are reimbursed for actual general
and administrative costs incurred and attributable to the conduct of the
business affairs and operations of the Partnerships.
Use of Estimates in Financial Statements
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates. Further, the
deferred charge, the gas imbalance payable, and the accrued liability all
involve estimates which could materially differ from the actual amounts
ultimately realized or incurred in the near term. Oil and gas reserves (see Note
4) also involve significant estimates which could materially differ from the
actual amounts ultimately realized.
Income Taxes
Income or loss for income tax purposes is includable in the income tax
returns of the partners. Accordingly, no recognition has been given to income
taxes in these financial statements.
F-37
<PAGE>
2. TRANSACTIONS WITH RELATED PARTIES
The Partnerships reimburse the General Partner for the general and
administrative overhead applicable to the Partnerships, based on an allocation
of actual costs incurred by the General Partner. When actual costs incurred
benefit other Partnerships and affiliates, the allocation of costs is based on
the relationship of the Partnerships' reserves to the total reserves owned by
all Partnerships and affiliates. The General Partner believes this allocation
method is reasonable. Although the actual costs incurred by the General Partner
and its affiliates have fluctuated during the three years presented, the amounts
charged to the Partnerships have not fluctuated due to expense limitations
imposed by the Partnership Agreements. The following is a summary of payments
made to the General Partner or its affiliates by the Partnerships for general
and administrative overhead costs for the years ended December 31, 1997, 1996,
and 1995:
Partnership 1997 1996 1995
----------- -------- -------- --------
I-B $ 45,252 $ 45,252 $ 41,178
I-C 93,058 93,550 93,550
I-D 79,944 79,944 79,944
I-E 464,880 464,880 464,880
I-F 159,120 159,120 159,120
Affiliates of the Partnerships operate certain of the Partnerships'
properties and their policy is to bill the Partnerships for all customary
charges and cost reimbursements associated with these activities, together with
any compressor rentals, consulting, or other services provided. Such charges are
comparable to third party charges in the area where the wells are located and
are the same as charged to other working interest owners in the wells.
During 1995 the Partnerships sold gas at market prices to El Paso Energy
Marketing Company, formerly known as Premier Gas Company ("El Paso"). El Paso,
like other similar gas marketing firms, then resold such gas to third parties at
market prices. El Paso was an affiliate of the Partnerships until December 6,
1995. The following table summarizes the total amount of the Partnerships' sales
to El Paso during 1995:
Partnership 1995
----------- ----------
I-B $ 43,625
I-C 2,521
I-D 362,560
I-E 2,099,338
I-F 481,355
F-38
<PAGE>
3. MAJOR CUSTOMERS
The following table sets forth purchasers who individually accounted for
ten percent or more of the Partnerships' combined oil and gas sales for the
years ended December 31, 1997, 1996, and 1995:
Partnership Purchaser Percentage
- ----------- --------------------- -----------------------
1997 1996 1995
----- ----- -----
I-B Williams Energy
Services Co. 24.4% - % - %
Byrd Operating Company 18.7% 11.6% - %
El Paso 12.6% 10.0% 17.2%
Parker & Parsley
Development Company - 22.7% - %
Apache Corporation - - % 22.5%
Staley Operating Co. - - % 16.0%
I-C Hallwood Petroleum
("Hallwood") 36.2% 42.8% 31.0%
Conoco, Inc. ("Conoco") 30.3% 25.2% 26.4%
Koch Oil Company 12.8% 18.3% - %
National Cooperative
Refinery Association - % - % 10.9%
I-D El Paso 35.5% 27.9% 29.3%
Hallwood 24.9% 31.8% 22.5%
Conoco 19.6% 23.1% 23.0%
I-E El Paso 51.3% 49.4% 43.9%
I-F El Paso 33.9% 31.9% 27.3%
In the event of interruption of purchases by one or more of these
significant customers or the cessation or material change in availability of
open-access transportation by the Partnerships' pipeline transporters, the
Partnerships may encounter difficulty in marketing their gas and in maintaining
historic sales levels. Alternative purchasers or transporters may not be readily
available.
4. SUPPLEMENTAL OIL AND GAS INFORMATION
The following supplemental information regarding the oil and gas activities
of the Partnerships is presented pursuant to the disclosure requirements
promulgated by the SEC.
F-39
<PAGE>
Capitalized Costs
Capitalized costs and accumulated depreciation, depletion, amortization,
and valuation allowance at December 31, 1997 and 1996 were as follows:
I-B Partnership
---------------
1997 1996
------------ -----------
Proved properties $6,509,872 $7,009,360
Unproved properties,
not subject to
depreciation,
depletion, and
amortization - 2,493
--------- ---------
$6,509,872 $7,011,853
Less accumulated
depreciation,
depletion, amorti-
zation, and valua-
tion allowance ( 6,182,735) ( 6,592,507)
--------- ---------
Net oil and gas
properties $ 327,137 $ 419,346
========= =========
F-40
<PAGE>
I-C Partnership
---------------
1997 1996
------------ -----------
Proved properties $3,641,486 $3,904,778
Unproved properties,
not subject to
depreciation,
depletion, and
amortization - 455
--------- ---------
$3,641,486 $3,905,233
Less accumulated
depreciation,
depletion, amorti-
zation, and valua-
tion allowance ( 3,306,752) ( 3,587,310)
--------- ---------
Net oil and gas
properties $ 334,734 $ 317,923
========= =========
I-D Partnership
---------------
1997 1996
------------ ------------
Proved properties $4,869,810 $4,892,664
Unproved properties,
not subject to
depreciation,
depletion, and
amortization - 49,914
--------- ---------
$4,869,810 $4,942,578
Less accumulated
depreciation,
depletion, amorti-
zation, and valua-
tion allowance ( 4,155,654) ( 4,087,338)
--------- ---------
Net oil and gas
properties $ 714,156 $ 855,240
========= =========
F-41
<PAGE>
I-E Partnership
---------------
1997 1996
------------ ------------
Proved properties $27,408,834 $27,671,041
Unproved properties,
not subject to
depreciation,
depletion, and
amortization - 233,294
---------- ----------
$27,408,834 $27,904,335
Less accumulated
depreciation,
depletion, amorti-
zation, and valua-
tion allowance ( 22,564,456) ( 22,282,606)
---------- ----------
Net oil and gas
properties $ 4,844,378 $ 5,621,729
========== ==========
I-F Partnership
---------------
1997 1996
------------ -----------
Proved properties $ 8,021,051 $8,205,960
Unproved properties,
not subject to
depreciation,
depletion, and
amortization - 88,701
---------- ---------
$ 8,021,051 $8,294,661
Less accumulated
depreciation,
depletion, amorti-
zation, and valua-
tion allowance ( 6,563,143) ( 6,547,831)
---------- ---------
Net oil and gas
properties $ 1,457,908 $1,746,830
========== =========
F-42
<PAGE>
Costs Incurred
The Partnerships incurred no costs in connection with oil and gas
acquisition or exploration activities during 1997, 1996, and 1995. Costs
incurred by the Partnerships in connection with oil and gas property development
activities during 1997, 1996, and 1995 were as follows:
Partnership 1997 1996 1995
----------- -------- ------- --------
I-B $ 1,149 $ 445 $ 8,037
I-C 100,573 1,039 -
I-D 34,805 10,930 7,434
I-E 279,631 55,490 105,852
I-F 104,709 27,863 54,383
Quantities of Proved Oil and Gas Reserves - Unaudited
The following tables summarize changes in net quantities of the
Partnerships' proved reserves, all of which are located in the United States,
for the periods indicated. The proved reserves at December 31, 1997, 1996, and
1995 were estimated by petroleum engineers employed by affiliates of the
Partnerships. Certain reserve information was reviewed by Ryder Scott Company
Petroleum Engineers, an independent petroleum engineering firm. The following
information includes certain gas balancing adjustments which cause the gas
volume to differ from the reserve reports prepared by the General Partner and
reviewed by Ryder Scott.
F-43
<PAGE>
I-B Partnership
---------------
Crude Natural
Oil Gas
(Barrels) (Mcf)
--------- -----------
Proved reserves, Dec. 31, 1994 25,265 1,061,804
Production ( 4,628) ( 150,238)
Sales of minerals in
place ( 33) ( 8,103)
Extensions and discoveries 156 23,443
Revisions of previous
estimates ( 797) ( 24,686)
------ ---------
Proved reserves, Dec. 31, 1995 19,963 902,220
Production ( 2,297) ( 150,543)
Revisions of previous
estimates ( 4,763) 158,168
------ ---------
Proved reserves, Dec. 31, 1996 12,903 909,845
Production ( 2,277) ( 129,776)
Sales of minerals in
place ( 765) ( 21,278)
Revisions of previous
estimates 785 ( 46,749)
------ ---------
Proved reserves, Dec. 31, 1997 10,646 712,042
====== =========
PROVED DEVELOPED RESERVES:
December 31, 1995 19,963 902,220
====== =========
December 31, 1996 12,903 909,845
====== =========
December 31, 1997 10,646 712,042
====== =========
F-44
<PAGE>
I-C Partnership
---------------
Crude Natural
Oil Gas
(Barrels) (Mcf)
--------- ---------
Proved reserves, Dec. 31, 1994 95,437 967,562
Production ( 27,843) (207,207)
Sales of minerals in
place ( 363) ( 14,708)
Extensions and discoveries 29 4,374
Revisions of previous
estimates 41,535 ( 9,961)
------- -------
Proved reserves, Dec. 31, 1995 108,795 740,060
Production ( 27,537) (226,820)
Sales of minerals in
place ( 4,934) ( 51,035)
Revisions of previous
estimates 44,909 340,705
------- -------
Proved reserves, Dec. 31, 1996 121,233 802,910
Production ( 25,122) (178,180)
Sales of minerals in
place ( 23,710) ( 4,023)
Extensions and discoveries 9,718 138,053
Revisions of previous
estimates ( 21,212) 35,059
------- -------
Proved reserves, Dec. 31, 1997 60,907 793,819
======= =======
PROVED DEVELOPED RESERVES:
December 31, 1995 108,795 740,060
======= =======
December 31, 1996 121,233 802,910
======= =======
December 31, 1997 60,907 793,819
======= =======
F-45
<PAGE>
I-D Partnership
---------------
Crude Natural
Oil Gas
(Barrels) (Mcf)
--------- -----------
Proved reserves, Dec. 31, 1994 71,457 2,582,099
Production (22,427) ( 577,969)
Sales of minerals in
place ( 6) ( 2,087)
Extensions and discoveries 140 9,656
Revisions of previous
estimates 3,810 388,141
------ ---------
Proved reserves, Dec. 31, 1995 52,974 2,399,840
Production (21,291) ( 577,657)
Sales of minerals in
place ( 4,935) ( 29,621)
Extensions and discoveries 123 5,646
Revisions of previous
estimates 28,706 499,715
------ ---------
Proved reserves, Dec. 31, 1996 55,577 2,297,923
Production (18,760) ( 510,113)
Sales of minerals in
place ( 168) ( 5,510)
Revisions of previous
estimates 4,349 156,947
------ ---------
Proved reserves, Dec. 31, 1997 40,998 1,939,247
====== =========
PROVED DEVELOPED RESERVES:
December 31, 1995 52,974 2,399,840
====== =========
December 31, 1996 55,219 2,276,438
====== =========
December 31, 1997 40,875 1,925,548
====== =========
F-46
<PAGE>
I-E Partnership
---------------
Crude Natural
Oil Gas
(Barrels) (Mcf)
--------- ------------
Proved reserves, Dec. 31, 1994 485,418 12,717,229
Production ( 89,117) ( 2,412,342)
Sales of minerals in
place ( 65) ( 12,013)
Extensions and discoveries 10,358 66,844
Revisions of previous
estimates 86,214 2,321,612
------- ----------
Proved reserves, Dec. 31, 1995 492,808 12,681,330
Production ( 70,998) ( 2,206,082)
Sales of minerals in
place ( 24,754) ( 278,884)
Extensions and discoveries 778 73,593
Revisions of previous
estimates 123,001 1,483,030
------- ----------
Proved reserves, Dec. 31, 1996 520,835 11,752,987
Production ( 77,648) ( 2,139,704)
Sales of minerals in
place ( 14,619) ( 66,444)
Extensions and discoveries 29,604 18,612
Revisions of previous
estimates ( 58,499) 985,558
------- ----------
Proved reserves, Dec. 31, 1997 399,673 10,551,009
======= ==========
PROVED DEVELOPED RESERVES:
December 31, 1995 492,808 12,681,330
======= ==========
December 31, 1996 519,687 11,683,935
======= ==========
December 31, 1997 399,277 10,506,977
======= ==========
F-47
<PAGE>
I-F Partnership
---------------
Crude Natural
Oil Gas
(Barrels) (Mcf)
--------- -----------
Proved reserves, Dec. 31, 1994 235,262 3,935,837
Production ( 45,101) ( 711,486)
Sales of minerals in
place ( 33) ( 5,373)
Extensions and discoveries 7,063 36,456
Revisions of previous
estimates 49,360 578,157
------- ---------
Proved reserves, Dec. 31, 1995 246,551 3,833,591
Production ( 35,577) ( 652,692)
Sales of minerals in
place ( 12,337) ( 132,134)
Extensions and discoveries 399 26,335
Revisions of previous
estimates 70,126 481,185
------- ---------
Proved reserves, Dec. 31, 1996 269,162 3,556,285
Production ( 38,725) ( 571,101)
Sales of minerals in
place ( 8,673) ( 38,629)
Extensions and discoveries 10,361 6,514
Revisions of previous
estimates ( 34,694) 377,552
------- ---------
Proved reserves, Dec. 31, 1997 197,431 3,330,621
======= =========
PROVED DEVELOPED RESERVES:
December 31, 1995 246,551 3,833,591
======= =========
December 31, 1996 268,768 3,532,534
======= =========
December 31, 1997 197,297 3,315,478
======= =========
Standardized Measure of Discounted Future Net Cash Flows of Proved Oil and
Gas Reserves - Unaudited
F-48
<PAGE>
The following tables set forth each of the Partnerships' estimated future
net cash flows as of December 31, 1997 relating to proved oil and gas reserves
based on the standardized measure as prescribed in SFAS No. 69:
Partnership
------------------------------
I-B I-C
------------ -------------
Future cash inflows $1,941,526 $ 2,947,424
Future production and
development costs ( 552,823) ( 1,186,744)
--------- ----------
Future net cash
flows $1,388,703 $ 1,760,680
10% discount to
reflect timing of
cash flows ( 439,036) ( 585,010)
--------- ----------
Standardized measure
of discounted
future net cash
flows $ 949,667 $ 1,175,670
========= ==========
Partnership
------------------------------
I-D I-E
------------ -------------
Future cash inflows $5,183,042 $30,577,321
Future production and
development costs ( 1,335,553) ( 9,611,493)
--------- ----------
Future net cash
flows $3,847,489 $20,965,828
10% discount to
reflect timing of
cash flows ( 1,071,700) ( 6,394,370)
--------- ----------
Standardized measure
of discounted
future net cash
flows $2,775,789 $14,571,458
========= ==========
F-49
<PAGE>
I-F Partnership
---------------
Future cash inflows $11,093,413
Future production and
development costs ( 4,114,244)
----------
Future net cash
flows $ 6,979,169
10% discount to
reflect timing of
cash flows ( 2,281,427)
----------
Standardized measure
of discounted
future net cash
flows $ 4,697,742
==========
The process of estimating oil and gas reserves is complex, requiring significant
subjective decisions in the evaluation of available geological, engineering, and
economic data for each reservoir. The data for a given reservoir may change
substantially over time as a result of, among other things, additional
development activity, production history, and viability of production under
varying economic conditions; consequently, it is reasonably possible that
material revisions to existing reserve estimates may occur in the near future.
Although every reasonable effort has been made to ensure that the reserve
estimates reported herein represent the most accurate assessment possible, the
significance of the subjective decisions required and variances in available
data for various reservoirs make these estimates generally less precise than
other estimates presented in connection with financial statement disclosures.
The Partnerships' reserves were determined at December 31, 1997 using oil and
gas prices of approximately $16.25 per barrel and $2.32 per Mcf, respectively.
F-50
<PAGE>
INDEX TO EXHIBITS
-----------------
Number Description
- ------ -----------
4.1 The Certificate and Agreements of Limited Partnership for the
following Geodyne Energy Income Limited Partnerships have been
previously filed with the SEC as Exhibit 2.1 to Form 8-A filed by
each Limited Partnership on the dates shown below and are hereby
incorporated by reference.
Partnership Filing Date File No.
----------- ------------ --------
I-B May 23, 1986 0-14657
I-C May 23, 1986 0-14658
I-D May 5, 1987 0-15831
I-E May 5, 1987 0-15832
I-F May 5, 1987 0-15833
4.2 Advisory Agreement dated as of November 24, 1992 between Samson,
PaineWebber, Geodyne Resources, Geodyne Properties, Inc., Geodyne
Production Company, and Geodyne Energy Company filed as Exhibit 28.3
to Registrant's Current Report on Form 8-K on December 24, 1992 and
is hereby incorporated by reference.
4.3 Second Amendment to Amended and Restated Agreement and Certificate
of Limited Partnership of Geodyne Energy Income Limited Partnership
I-B, filed as Exhibit 4.1 to Registrant's Current Report on Form 8-K
dated August 2, 1993 filed with the SEC on August 10, 1993 and is
hereby incorporated by reference.
4.4 Second Amendment to Amended and Restated Agreement and Certificate
of Limited Partnership of Geodyne Energy Income Limited Partnership
I-C, filed as Exhibit 4.2 to Registrant's Current Report on Form 8-K
dated August 2, 1993 filed with the SEC on August 10, 1993 and is
hereby incorporated by reference.
4.5 Second Amendment to Amended and Restated Agreement and Certificate
of Limited Partnership of Geodyne Energy Income Limited Partnership
I-D, filed as Exhibit 4.3 to Registrant's Current Report on Form 8-K
dated August 2, 1993 filed with the SEC on August 10, 1993 and is
hereby incorporated by reference.
F-51
<PAGE>
4.6 Second Amendment to Amended and Restated Agreement and Certificate
of Limited Partnership of Geodyne Energy Income Limited Partnership
I-E, filed as Exhibit 4.4 to Registrant's Current Report on Form 8-K
dated August 2, 1993 filed with the SEC on August 10, 1993 and is
hereby incorporated by reference.
4.7 Second Amendment to Amended and Restated Agreement and Certificate
of Limited Partnership of Geodyne Energy Income Limited Partnership
I-F, filed as Exhibit 4.5 to Registrant's Current Report on Form 8-K
dated August 2, 1993 filed with the SEC on August 10, 1993 and is
hereby incorporated by reference.
*23.1 Consent of Ryder Scott Company Petroleum Engineers for Geodyne
Energy Income Limited Partnership I-B.
*23.2 Consent of Ryder Scott Company Petroleum Engineers for Geodyne
Energy Income Limited Partnership I-C.
*23.3 Consent of Ryder Scott Company Petroleum Engineers for Geodyne
Energy Income Limited Partnership I-D.
*23.4 Consent of Ryder Scott Company Petroleum Engineers for Geodyne
Energy Income Limited Partnership I-E.
*23.5 Consent of Ryder Scott Company Petroleum Engineers for Geodyne
Energy Income Limited Partnership I-F.
*27.1 Financial Data Schedule containing summary financial information
extracted from the Geodyne Energy Income Limited Partnership I-B's
financial statements as of December 31, 1997 and for the year ended
December 31, 1997.
*27.2 Financial Data Schedule containing summary financial information
extracted from the Geodyne Energy Income Limited Partnership I-C's
financial statements as of December 31, 1997 and for the year ended
December 31, 1997.
*27.3 Financial Data Schedule containing summary financial information
extracted from the Geodyne Energy Income Limited Partnership I-D's
financial statements as of December 31, 1997 and for the year ended
December 31, 1997.
*27.4 Financial Data Schedule containing summary financial information
extracted from the Geodyne Energy Income Limited Partnership I-E's
financial statements as of December 31, 1997 and for the year ended
December 31, 1997.
F-52
<PAGE>
*27.5 Financial Data Schedule containing summary financial information
extracted from the Geodyne Energy Income Limited Partnership I-F's
financial statements as of December 31, 1997 and for the year ended
December 31, 1997.
All other Exhibits are omitted as inapplicable.
----------
* Filed herewith.
F-53
RYDER SCOTT COMPANY Fax (713) 651-0849
PETROLEUM ENGINEERS
1100 Louisiana Suite 3800 Houston, Texas 77002-5218 Telephone (713) 651-9191
CONSENT OF PETROLEUM ENGINEERING FIRM
We consent to the reference to our name included in this Annual Report on
Form 10-K for the year ended December 31, 1997 for Geodyne Energy Income Limited
Partnership I-B.
//s// Ryder Scott Company
Petroleum Engineers
RYDER SCOTT COMPANY
PETROLEUM ENGINEERS
Houston, Texas
January 13, 1998
RYDER SCOTT COMPANY Fax (713) 651-0849
PETROLEUM ENGINEERS
1100 Louisiana Suite 3800 Houston, Texas 77002-5218 Telephone (713) 651-9191
CONSENT OF PETROLEUM ENGINEERING FIRM
We consent to the reference to our name included in this Annual Report on
Form 10-K for the year ended December 31, 1997 for Geodyne Energy Income Limited
Partnership I-C.
//s// Ryder Scott Company
Petroleum Engineers
RYDER SCOTT COMPANY
PETROLEUM ENGINEERS
Houston, Texas
January 13, 1998
RYDER SCOTT COMPANY Fax (713) 651-0849
PETROLEUM ENGINEERS
1100 Louisiana Suite 3800 Houston, Texas 77002-5218 Telephone (713) 651-9191
CONSENT OF PETROLEUM ENGINEERING FIRM
We consent to the reference to our name included in this Annual Report on
Form 10-K for the year ended December 31, 1997 for Geodyne Energy Income Limited
Partnership I-D.
//s// Ryder Scott Company
Petroleum Engineers
RYDER SCOTT COMPANY
PETROLEUM ENGINEERS
Houston, Texas
January 13, 1998
RYDER SCOTT COMPANY Fax (713) 651-0849
PETROLEUM ENGINEERS
1100 Louisiana Suite 3800 Houston, Texas 77002-5218 Telephone (713) 651-9191
CONSENT OF PETROLEUM ENGINEERING FIRM
We consent to the reference to our name included in this Annual Report on
Form 10-K for the year ended December 31, 1997 for Geodyne Energy Income Limited
Partnership I-E.
//s// Ryder Scott Company
Petroleum Engineers
RYDER SCOTT COMPANY
PETROLEUM ENGINEERS
Houston, Texas
January 13, 1998
RYDER SCOTT COMPANY Fax (713) 651-0849
PETROLEUM ENGINEERS
1100 Louisiana Suite 3800 Houston, Texas 77002-5218 Telephone (713) 651-9191
CONSENT OF PETROLEUM ENGINEERING FIRM
We consent to the reference to our name included in this Annual Report on
Form 10-K for the year ended December 31, 1997 for Geodyne Energy Income Limited
Partnership I-F.
//s// Ryder Scott Company
Petroleum Engineers
RYDER SCOTT COMPANY
PETROLEUM ENGINEERS
Houston, Texas
January 13, 1998
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0000780200
<NAME> GEODYNE ENERGY INCOME LIMITED PARTNERSHIP I-B
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> DEC-31-1997
<CASH> 77,028
<SECURITIES> 0
<RECEIVABLES> 53,389
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 130,417
<PP&E> 6,509,872
<DEPRECIATION> 6,182,735
<TOTAL-ASSETS> 556,816
<CURRENT-LIABILITIES> 12,482
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 521,814
<TOTAL-LIABILITY-AND-EQUITY> 556,816
<SALES> 358,282
<TOTAL-REVENUES> 377,018
<CGS> 0
<TOTAL-COSTS> 287,946
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 89,072
<INCOME-TAX> 0
<INCOME-CONTINUING> 89,072
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 89,072
<EPS-PRIMARY> 6.78
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