SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarter ended June 30, 1998
Commission File Number:
II-A: 0-16388 II-D: 0-16980 II-G: 0-17802
II-B: 0-16405 II-E: 0-17320 II-H: 0-18305
II-C: 0-16981 II-F: 0-17799
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP II-A
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP II-B
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP II-C
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP II-D
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP II-E
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP II-F
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP II-G
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP II-H
---------------------------------------------------------
(Exact name of Registrant as specified in its Articles)
II-A 73-1295505
II-B 73-1303341
II-C 73-1308986
II-D 73-1329761
II-E 73-1324751
II-F 73-1330632
II-G 73-1336572
Oklahoma II-H 73-1342476
- ---------------------------- -------------------------------
(State or other jurisdiction (I.R.S. Employer Identification
of incorporation or Number)
organization)
Two West Second Street, Tulsa, Oklahoma 74103
------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code:(918) 583-1791
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 such filing
requirements for the past 90 days.
Yes X No
------ ------
1
<PAGE>
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP II-A
GEODYNE PRODUCTION PARTNERSHIP II-A
COMBINED BALANCE SHEETS
(Unaudited)
ASSETS
June 30, December 31,
1998 1997
----------- ------------
CURRENT ASSETS:
Cash and cash equivalents $ 816,601 $ 830,584
Accounts receivable:
Oil and gas sales 576,132 837,560
Other (Note 3) 1,710,190 20,975
---------- ----------
Total current assets $3,102,923 $1,689,119
NET OIL AND GAS PROPERTIES, utilizing
the successful efforts method 4,504,319 4,894,853
DEFERRED CHARGE 911,041 911,041
---------- ----------
$8,518,283 $7,495,013
========== ==========
LIABILITIES AND PARTNERS' CAPITAL (DEFICIT)
CURRENT LIABILITIES:
Accounts payable $ 107,828 $ 233,246
Gas imbalance payable 142,043 142,043
---------- ----------
Total current liabilities $ 249,871 $ 375,289
ACCRUED LIABILITY $ 157,050 $ 157,050
PARTNERS' CAPITAL (DEFICIT):
General Partner ($ 317,783) ($ 387,587)
Limited Partners, issued and
outstanding, 484,283 units 8,429,145 7,350,261
---------- ----------
Total Partners' capital $8,111,362 $6,962,674
---------- ----------
$8,518,283 $7,495,013
========== ==========
The accompanying condensed notes are an integral part of these
combined financial statements.
2
<PAGE>
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP II-A
GEODYNE PRODUCTION PARTNERSHIP II-A
COMBINED STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED JUNE 30, 1998 AND 1997
(Unaudited)
1998 1997
---------- ----------
REVENUES:
Oil and gas sales $ 896,499 $1,508,683
Interest income 10,141 10,074
Gain on sale of oil and
gas properties 205,857 57,024
Contract settlement income 1,710,190 -
---------- ----------
$2,822,687 $1,575,781
COSTS AND EXPENSES:
Lease operating $ 284,930 $ 431,151
Production tax 56,315 83,728
Depreciation, depletion, and
amortization of oil and gas
properties 162,901 192,985
General and administrative
(Note 2) 136,112 163,724
---------- ----------
$ 640,258 $ 871,588
---------- ----------
NET INCOME $2,182,429 $ 704,193
========== ==========
GENERAL PARTNER - NET INCOME $ 115,130 $ 42,425
========== ==========
LIMITED PARTNERS - NET INCOME $2,067,299 $ 661,768
========== ==========
NET INCOME per unit $ 4.27 $ 1.37
========== ==========
UNITS OUTSTANDING 484,283 484,283
========== ==========
The accompanying condensed notes are an integral part of these
combined financial statements.
3
<PAGE>
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP II-A
GEODYNE PRODUCTION PARTNERSHIP II-A
COMBINED STATEMENTS OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 1998 AND 1997
(Unaudited)
1998 1997
---------- ----------
REVENUES:
Oil and gas sales $1,932,820 $3,023,880
Interest income 18,604 17,027
Gain on sale of oil and
gas properties 652,721 57,024
Contract settlement income 1,710,190 -
---------- ----------
$4,314,335 $3,097,931
COSTS AND EXPENSES:
Lease operating $ 596,845 $ 726,363
Production tax 115,073 180,088
Depreciation, depletion, and
amortization of oil and gas
properties 323,497 389,667
Impairment provision - 684,276
General and administrative
(Note 2) 305,348 327,310
---------- ----------
$1,340,763 $2,307,704
---------- ----------
NET INCOME $2,973,572 $ 790,227
========== ==========
GENERAL PARTNER - NET INCOME $ 160,688 $ 81,618
========== ==========
LIMITED PARTNERS - NET INCOME $2,812,884 $ 708,609
========== ==========
NET INCOME per unit $ 5.81 $ 1.46
========== ==========
UNITS OUTSTANDING 484,283 484,283
========== ==========
The accompanying condensed notes are an integral part of these
combined financial statements.
4
<PAGE>
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP II-A
GEODYNE PRODUCTION PARTNERSHIP II-A
COMBINED STATEMENTS OF CASH FLOWS
FOR THE SIX MONTHS ENDED JUNE 30, 1998 AND 1997
(Unaudited)
1998 1997
---------- ----------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $2,973,572 $ 790,227
Adjustments to reconcile net
income to net cash provided
by operating activities:
Depreciation, depletion, and
amortization of oil and gas
properties 323,497 389,667
Impairment provision - 684,276
Gain on sale of oil and gas
properties ( 652,721) ( 57,024)
Decrease in accounts receivable -
oil and gas sales 261,428 230,648
Increase in accounts receivable -
General Partner - ( 45,411)
Increase in accounts receivable -
other ( 1,689,215) -
Decrease in accounts payable ( 125,418) ( 82,810)
---------- ----------
Net cash provided by operating
activities $1,091,143 $1,909,573
---------- ----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures ($ 17,847) ($ 75,753)
Proceeds from sale of oil and
gas properties 737,605 64,558
---------- ----------
Net cash provided (used) by
investing activities $ 719,758 ($ 11,195)
---------- ----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Cash distributions ($1,824,884) ($1,943,195)
---------- ----------
Net cash used by financing activities ($1,824,884) ($1,943,195)
---------- ----------
NET DECREASE IN CASH AND CASH
EQUIVALENTS ($ 13,983) ($ 44,817)
CASH AND CASH EQUIVALENTS AT
BEGINNING OF PERIOD 830,584 875,918
---------- ----------
CASH AND CASH EQUIVALENTS AT
END OF PERIOD $ 816,601 $ 831,101
========== ==========
The accompanying condensed notes are an integral part of these
combined financial statements.
5
<PAGE>
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP II-B
GEODYNE PRODUCTION PARTNERSHIP II-B
COMBINED BALANCE SHEETS
(Unaudited)
ASSETS
June 30, December 31,
1998 1997
----------- ------------
CURRENT ASSETS:
Cash and cash equivalents $ 343,723 $ 644,574
Accounts receivable:
Oil and gas sales 421,863 565,152
Other (Note 3) 2,793,295 -
---------- ----------
Total current assets $3,558,881 $1,209,726
NET OIL AND GAS PROPERTIES, utilizing
the successful efforts method 2,862,850 3,035,158
DEFERRED CHARGE 169,811 169,811
---------- ----------
$6,591,542 $4,414,695
========== ==========
LIABILITIES AND PARTNERS' CAPITAL (DEFICIT)
CURRENT LIABILITIES:
Accounts payable $ 77,180 $ 141,754
Gas imbalance payable 24,671 24,671
---------- ----------
Total current liabilities $ 101,851 $ 166,425
ACCRUED LIABILITY $ 88,519 $ 88,519
PARTNERS' CAPITAL (DEFICIT):
General Partner ($ 171,679) ($ 305,223)
Limited Partners, issued and
outstanding, 361,719 units 6,572,851 4,464,974
---------- ----------
Total Partners' capital $6,401,172 $4,159,751
---------- ----------
$6,591,542 $4,414,695
========== ==========
The accompanying condensed notes are an integral part of these
combined financial statements.
6
<PAGE>
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP II-B
GEODYNE PRODUCTION PARTNERSHIP II-B
COMBINED STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED JUNE 30, 1998 AND 1997
(Unaudited)
1998 1997
---------- ----------
REVENUES:
Oil and gas sales $ 634,517 $ 980,036
Interest income 4,099 5,927
Gain on sale of oil and
gas properties 5,491 50,476
Contract settlement income 2,793,295 -
---------- ----------
$3,437,402 $1,036,439
COSTS AND EXPENSES:
Lease operating $ 168,679 $ 271,921
Production tax 42,520 57,004
Depreciation, depletion, and
amortization of oil and gas
properties 97,349 122,525
General and administrative
(Note 2) 103,080 130,090
---------- ----------
$ 411,628 $ 581,540
---------- ----------
NET INCOME $3,025,774 $ 454,899
========== ==========
GENERAL PARTNER - NET INCOME $ 154,978 $ 27,350
========== ==========
LIMITED PARTNERS - NET INCOME $2,870,796 $ 427,549
========== ==========
NET INCOME per unit $ 7.93 $ 1.18
========== ==========
UNITS OUTSTANDING 361,719 361,719
========== ==========
The accompanying condensed notes are an integral part of these
combined financial statements.
7
<PAGE>
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP II-B
GEODYNE PRODUCTION PARTNERSHIP II-B
COMBINED STATEMENTS OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 1998 AND 1997
(Unaudited)
1998 1997
---------- ----------
REVENUES:
Oil and gas sales $1,429,973 $2,059,385
Interest income 9,685 9,991
Gain on sale of oil and
gas properties 63,175 50,476
Contract settlement income 2,793,295 -
---------- ----------
$4,296,128 $2,119,852
COSTS AND EXPENSES:
Lease operating $ 420,017 $ 479,879
Production tax 85,832 129,692
Depreciation, depletion, and
amortization of oil and gas
properties 200,971 261,856
Impairment provision - 530,988
General and administrative
(Note 2) 229,906 257,538
---------- ----------
$ 936,726 $1,659,953
---------- ----------
NET INCOME $3,359,402 $ 459,899
========== ==========
GENERAL PARTNER - NET INCOME $ 175,525 $ 54,209
========== ==========
LIMITED PARTNERS - NET INCOME $3,183,877 $ 405,690
========== ==========
NET INCOME per unit $ 8.80 $ 1.12
========== ==========
UNITS OUTSTANDING 361,719 361,719
========== ==========
The accompanying condensed notes are an integral part of these
combined financial statements.
8
<PAGE>
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP II-B
GEODYNE PRODUCTION PARTNERSHIP II-B
COMBINED STATEMENTS OF CASH FLOWS
FOR THE SIX MONTHS ENDED JUNE 30, 1998 AND 1997
(Unaudited)
1998 1997
---------- ----------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $3,359,402 $ 459,899
Adjustments to reconcile net
income to net cash provided
by operating activities:
Depreciation, depletion, and
amortization of oil and gas
properties 200,971 261,856
Impairment provision - 530,988
Gain on sale of oil and gas
properties ( 63,175) ( 50,476)
Decrease in accounts receivable -
oil and gas sales 143,289 148,704
Increase in accounts receivable -
General Partner - ( 50,278)
Increase in accounts receivable -
other ( 2,793,295) -
Decrease in accounts payable ( 64,574) ( 102,287)
---------- ----------
Net cash provided by operating
activities $ 782,618 $1,198,406
---------- ----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures ($ 40,233) ($ 1,043)
Proceeds from sale of oil and
gas properties 74,745 51,441
---------- ----------
Net cash provided by investing
activities $ 34,512 $ 50,398
---------- ----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Cash distributions ($1,117,981) ($1,336,177)
---------- ----------
Net cash used by financing activities ($1,117,981) ($1,336,177)
---------- ----------
NET DECREASE IN CASH AND CASH
EQUIVALENTS ($ 300,851) ($ 87,373)
CASH AND CASH EQUIVALENTS AT
BEGINNING OF PERIOD 644,574 569,257
---------- ----------
CASH AND CASH EQUIVALENTS AT
END OF PERIOD $ 343,723 $ 481,884
========== ==========
The accompanying condensed notes are an integral part of these
combined financial statements.
9
<PAGE>
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP II-C
GEODYNE PRODUCTION PARTNERSHIP II-C
COMBINED BALANCE SHEETS
(Unaudited)
ASSETS
June 30, December 31,
1998 1997
----------- ------------
CURRENT ASSETS:
Cash and cash equivalents $ 178,199 $ 358,095
Accounts receivable:
Oil and gas sales 189,917 273,399
Other (Note 3) 1,197,148 1,931
---------- ----------
Total current assets $1,565,264 $ 633,425
NET OIL AND GAS PROPERTIES, utilizing
the successful efforts method 1,489,044 1,667,269
DEFERRED CHARGE 139,621 139,621
---------- ----------
$3,193,929 $2,440,315
========== ==========
LIABILITIES AND PARTNERS' CAPITAL (DEFICIT)
CURRENT LIABILITIES:
Accounts payable $ 27,307 $ 33,293
Gas imbalance payable 22,563 22,563
---------- ----------
Total current liabilities $ 49,870 $ 55,856
ACCRUED LIABILITY $ 49,647 $ 49,647
PARTNERS' CAPITAL (DEFICIT):
General Partner ($ 72,510) ($ 123,277)
Limited Partners, issued and
outstanding, 154,621 units 3,166,922 2,458,089
---------- ----------
Total Partners' capital $3,094,412 $2,334,812
---------- ----------
$3,193,929 $2,440,315
========== ==========
The accompanying condensed notes are an integral part of these
combined financial statements.
10
<PAGE>
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP II-C
GEODYNE PRODUCTION PARTNERSHIP II-C
COMBINED STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED JUNE 30, 1998 AND 1997
(Unaudited)
1998 1997
---------- ---------
REVENUES:
Oil and gas sales $ 274,090 $427,984
Interest income 3,773 3,155
Gain on sale of oil and
gas properties 5,331 90,348
Contract settlement income 1,197,148 -
---------- --------
$1,480,342 $521,487
COSTS AND EXPENSES:
Lease operating $ 71,017 $106,476
Production tax 19,503 28,957
Depreciation, depletion, and
amortization of oil and gas
properties 50,005 50,034
General and administrative
(Note 2) 44,521 56,221
---------- --------
$ 185,046 $241,688
---------- --------
NET INCOME $1,295,296 $279,799
========== ========
GENERAL PARTNER - NET INCOME $ 66,576 $ 15,834
========== ========
LIMITED PARTNERS - NET INCOME $1,228,720 $263,965
========== ========
NET INCOME per unit $ 7.95 $ 1.71
========== ========
UNITS OUTSTANDING 154,621 154,621
========== ========
The accompanying condensed notes are an integral part of these
combined financial statements.
11
<PAGE>
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP II-C
GEODYNE PRODUCTION PARTNERSHIP II-C
COMBINED STATEMENTS OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 1998 AND 1997
(Unaudited)
1998 1997
---------- ----------
REVENUES:
Oil and gas sales $ 642,625 $ 942,166
Interest income 7,110 5,771
Gain on sale of oil and
gas properties 198,858 90,348
Contract settlement income 1,197,148 -
---------- ----------
$2,045,741 $1,038,285
COSTS AND EXPENSES:
Lease operating $ 160,081 $ 198,414
Production tax 42,741 64,823
Depreciation, depletion, and
amortization of oil and gas
properties 109,598 106,929
Impairment provision - 66,617
General and administrative
(Note 2) 98,730 110,732
---------- ----------
$ 411,150 $ 547,515
---------- ----------
NET INCOME $1,634,591 $ 490,770
========== ==========
GENERAL PARTNER - NET INCOME $ 85,758 $ 31,192
========== ==========
LIMITED PARTNERS - NET INCOME $1,548,833 $ 459,578
========== ==========
NET INCOME per unit $ 10.02 $ 2.97
========== ==========
UNITS OUTSTANDING 154,621 154,621
========== ==========
The accompanying condensed notes are an integral part of these
combined financial statements.
12
<PAGE>
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP II-C
GEODYNE PRODUCTION PARTNERSHIP II-C
COMBINED STATEMENTS OF CASH FLOWS
FOR THE SIX MONTHS ENDED JUNE 30, 1998 AND 1997
(Unaudited)
1998 1997
---------- ----------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $1,634,591 $490,770
Adjustments to reconcile net
income to net cash provided
by operating activities:
Depreciation, depletion, and
amortization of oil and gas
properties 109,598 106,929
Impairment provision - 66,617
Gain on sale of oil and gas
properties ( 198,858) ( 90,348)
Decrease in accounts receivable -
oil and gas sales 83,482 90,554
Increase in accounts receivable -
General Partner - ( 32,946)
Increase in accounts receivable -
other ( 1,195,217) -
Decrease in accounts payable ( 5,986) ( 35,689)
---------- --------
Net cash provided by operating
activities $ 427,610 $595,887
---------- --------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures ($ 14,789) ($ 2,567)
Proceeds from sale of oil and
gas properties 282,274 130,310
---------- --------
Net cash provided by investing
activities $ 267,485 $127,743
---------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Cash distributions ($ 874,991) ($762,923)
---------- --------
Net cash used by financing activities ($ 874,991) ($762,923)
---------- --------
NET DECREASE IN CASH AND CASH
EQUIVALENTS ($ 179,896) ($ 39,293)
CASH AND CASH EQUIVALENTS AT
BEGINNING OF PERIOD 358,095 387,334
---------- --------
CASH AND CASH EQUIVALENTS AT
END OF PERIOD $ 178,199 $348,041
========== ========
The accompanying condensed notes are an integral part of these
combined financial statements.
13
<PAGE>
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP II-D
GEODYNE PRODUCTION PARTNERSHIP II-D
COMBINED BALANCE SHEETS
(Unaudited)
ASSETS
June 30, December 31,
1998 1997
----------- ------------
CURRENT ASSETS:
Cash and cash equivalents $ 467,207 $1,151,142
Accounts receivable:
Oil and gas sales 409,057 646,750
Other (Note 3) 3,033,283 20,267
---------- ----------
Total current assets $3,909,547 $1,818,159
NET OIL AND GAS PROPERTIES, utilizing
the successful efforts method 3,016,528 3,417,760
DEFERRED CHARGE 544,345 544,345
---------- ----------
$7,470,420 $5,780,264
========== ==========
LIABILITIES AND PARTNERS' CAPITAL (DEFICIT)
CURRENT LIABILITIES:
Accounts payable $ 80,842 $ 86,058
Gas imbalance payable 107,004 107,004
---------- ----------
Total current liabilities $ 187,846 $ 193,062
ACCRUED LIABILITY $ 239,083 $ 239,083
PARTNERS' CAPITAL (DEFICIT):
General Partner ($ 96,040) ($ 224,003)
Limited Partners, issued and
outstanding, 314,878 units 7,139,531 5,572,122
---------- ----------
Total Partners' capital $7,043,491 $5,348,119
---------- ----------
$7,470,420 $5,780,264
========== ==========
The accompanying condensed notes are an integral part of these
combined financial statements.
14
<PAGE>
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP II-D
GEODYNE PRODUCTION PARTNERSHIP II-D
COMBINED STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED JUNE 30, 1998 AND 1997
(Unaudited)
1998 1997
---------- ----------
REVENUES:
Oil and gas sales $ 633,539 $1,069,055
Interest income 8,801 8,552
Gain on sale of oil and
gas properties 69,790 75,486
Contract settlement income 3,033,283 -
---------- ----------
$3,745,413 $1,153,093
COSTS AND EXPENSES:
Lease operating $ 228,329 $ 292,478
Production tax 38,318 82,708
Depreciation, depletion, and
amortization of oil and gas
properties 114,382 144,252
General and administrative
(Note 2) 90,214 116,802
---------- ----------
$ 471,243 $ 636,240
---------- ----------
NET INCOME $3,274,170 $ 516,853
========== ==========
GENERAL PARTNER - NET INCOME $ 167,843 $ 31,185
========== ==========
LIMITED PARTNERS - NET INCOME $3,106,327 $ 485,668
========== ==========
NET INCOME per unit $ 9.86 $ 1.54
========== ==========
UNITS OUTSTANDING 314,878 314,878
========== ==========
The accompanying condensed notes are an integral part of these
combined financial statements.
15
<PAGE>
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP II-D
GEODYNE PRODUCTION PARTNERSHIP II-D
COMBINED STATEMENTS OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 1998 AND 1997
(Unaudited)
1998 1997
---------- ----------
REVENUES:
Oil and gas sales $1,345,511 $2,279,952
Interest income 19,370 15,122
Gain on sale of oil and
gas properties 508,895 85,390
Contract settlement income 3,033,283 -
---------- ----------
$4,907,059 $2,380,464
COSTS AND EXPENSES:
Lease operating $ 485,866 $ 529,080
Production tax 102,417 166,451
Depreciation, depletion, and
amortization of oil and gas
properties 227,383 308,735
Impairment provision - 143,957
General and administrative
(Note 2) 200,303 230,038
---------- ----------
$1,015,969 $1,378,261
---------- ----------
NET INCOME $3,891,090 $1,002,203
========== ==========
GENERAL PARTNER - NET INCOME $ 202,681 $ 67,462
========== ==========
LIMITED PARTNERS - NET INCOME $3,688,409 $ 934,741
========== ==========
NET INCOME per unit $ 11.71 $ 2.97
========== ==========
UNITS OUTSTANDING 314,878 314,878
========== ==========
The accompanying condensed notes are an integral part of these
combined financial statements.
16
<PAGE>
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP II-D
GEODYNE PRODUCTION PARTNERSHIP II-D
COMBINED STATEMENTS OF CASH FLOWS
FOR THE SIX MONTHS ENDED JUNE 30, 1998 AND 1997
(Unaudited)
1998 1997
----------- ----------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $3,891,090 $1,002,203
Adjustments to reconcile net
income to net cash provided
by operating activities:
Depreciation, depletion, and
amortization of oil and gas
properties 227,383 308,735
Impairment provision - 143,957
Gain on sale of oil and gas
properties ( 508,895) ( 85,390)
Decrease in accounts receivable -
oil and gas sales 237,693 182,954
Increase in accounts receivable -
General Partner - ( 71,625)
Increase in accounts receivable -
other ( 3,013,016) -
Decrease in accounts payable ( 5,216) ( 66,151)
---------- ----------
Net cash provided by operating
activities $ 829,039 $1,414,683
---------- ----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures ($ 2,441) ($ 4,402)
Proceeds from sale of oil and
gas properties 685,185 190,877
---------- ----------
Net cash provided by investing
activities $ 682,744 $ 186,475
---------- ----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Cash distributions ($2,195,718) ($1,689,096)
---------- ----------
Net cash used by financing activities ($2,195,718) ($1,689,096)
---------- ----------
NET DECREASE IN CASH AND CASH
EQUIVALENTS ($ 683,935) ($ 87,938)
CASH AND CASH EQUIVALENTS AT
BEGINNING OF PERIOD 1,151,142 906,737
---------- ----------
CASH AND CASH EQUIVALENTS AT
END OF PERIOD $ 467,207 $ 818,799
========== ==========
The accompanying condensed notes are an integral part of these
combined financial statements.
17
<PAGE>
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP II-E
GEODYNE PRODUCTION PARTNERSHIP II-E
COMBINED BALANCE SHEETS
(Unaudited)
ASSETS
June 30, December 31,
1998 1997
------------ ------------
CURRENT ASSETS:
Cash and cash equivalents $ 622,367 $ 670,777
Accounts receivable:
Oil and gas sales 275,854 415,377
Other (Note 3) 6,158,619 110
----------- ----------
Total current assets $ 7,056,840 $1,086,264
NET OIL AND GAS PROPERTIES, utilizing
the successful efforts method 2,670,174 2,841,080
DEFERRED CHARGE 330,531 330,531
----------- ----------
$10,057,545 $4,257,875
=========== ==========
LIABILITIES AND PARTNERS' CAPITAL (DEFICIT)
CURRENT LIABILITIES:
Accounts payable $ 43,590 $ 100,603
Gas imbalance payable 171,089 171,089
----------- ----------
Total current liabilities $ 214,679 $ 271,692
ACCRUED LIABILITY $ 63,625 $ 63,625
PARTNERS' CAPITAL (DEFICIT):
General Partner $ 127,547 ($ 172,017)
Limited Partners, issued and
outstanding, 228,821 units 9,651,695 4,094,575
----------- ----------
Total Partners' capital $ 9,779,241 $3,922,558
----------- ----------
$10,057,545 $4,257,875
=========== ==========
The accompanying condensed notes are an integral part of these
combined financial statements.
18
<PAGE>
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP II-E
GEODYNE PRODUCTION PARTNERSHIP II-E
COMBINED STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED JUNE 30, 1998 AND 1997
(Unaudited)
1998 1997
---------- ----------
REVENUES:
Oil and gas sales $ 412,505 $599,676
Interest income 4,235 5,426
Gain on sale of oil and
gas properties 257,260 51,772
Contract settlement income 6,158,619 -
---------- --------
$6,832,619 $656,874
COSTS AND EXPENSES:
Lease operating $ 111,277 $222,653
Production tax 30,246 49,992
Depreciation, depletion, and
amortization of oil and gas
properties 122,132 152,599
General and administrative
(Note 2) 68,824 105,103
---------- --------
$ 332,479 $530,347
---------- --------
NET INCOME $6,500,140 $126,527
========== ========
GENERAL PARTNER - NET INCOME $ 329,680 $ 12,159
========== ========
LIMITED PARTNERS - NET INCOME $6,170,460 $114,368
========== ========
NET INCOME per unit $ 26.97 $ .50
========== ========
UNITS OUTSTANDING 228,821 228,821
========== ========
The accompanying condensed notes are an integral part of these
combined financial statements.
19
<PAGE>
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP II-E
GEODYNE PRODUCTION PARTNERSHIP II-E
COMBINED STATEMENTS OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 1998 AND 1997
(Unaudited)
1998 1997
---------- ----------
REVENUES:
Oil and gas sales $ 890,830 $1,379,969
Interest income 10,693 9,637
Gain on sale of oil and
gas properties 320,475 51,772
Contract settlement income 6,158,619 -
---------- ----------
$7,380,617 $1,441,378
COSTS AND EXPENSES:
Lease operating $ 243,303 $ 394,560
Production tax 63,944 114,409
Depreciation, depletion, and
amortization of oil and gas
properties 258,703 316,037
Impairment provision - 992,851
General and administrative
(Note 2) 149,475 201,281
---------- ----------
$ 715,425 $2,019,138
---------- ----------
NET INCOME (LOSS) $6,665,192 ($ 577,760)
========== ==========
GENERAL PARTNER - NET INCOME $ 343,073 $ 22,986
========== ==========
LIMITED PARTNERS - NET INCOME (LOSS) $6,322,119 ($ 600,746)
========== ==========
NET INCOME (LOSS) per unit $ 27.63 ($ 2.63)
========== ==========
UNITS OUTSTANDING 228,821 228,821
========== ==========
The accompanying condensed notes are an integral part of these
combined financial statements.
20
<PAGE>
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP II-E
GEODYNE PRODUCTION PARTNERSHIP II-E
COMBINED STATEMENTS OF CASH FLOWS
FOR THE SIX MONTHS ENDED JUNE 30, 1998 AND 1997
(Unaudited)
1998 1997
---------- ----------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) $6,665,192 ($577,760)
Adjustments to reconcile net income
(loss) to net cash provided by
operating activities:
Depreciation, depletion, and
amortization of oil and gas
properties 258,703 316,037
Impairment provision - 992,851
Gain on sale of oil and gas
properties ( 320,475) ( 51,772)
Decrease in accounts receivable -
oil and gas sales 139,523 141,632
Increase in accounts receivable -
General Partner - ( 1,275)
Increase in accounts receivable -
other ( 6,158,509) -
Decrease in accounts payable ( 57,013) ( 70,747)
---------- --------
Net cash provided by operating
activities $ 527,421 $748,966
---------- --------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures ($ 116,267) ($ 5,629)
Proceeds from sale of oil and
gas properties 348,945 245,478
---------- --------
Net cash provided by investing
activities $ 232,678 $239,849
---------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Cash distributions ($ 808,509) ($830,473)
---------- --------
Net cash used by financing activities ($ 808,509) ($830,473)
---------- --------
NET INCREASE (DECREASE) IN CASH AND
CASH EQUIVALENTS ($ 48,410) $158,342
CASH AND CASH EQUIVALENTS AT
BEGINNING OF PERIOD 670,777 528,765
---------- --------
CASH AND CASH EQUIVALENTS AT
END OF PERIOD $ 622,367 $687,107
========== ========
The accompanying condensed notes are an integral part of these
combined financial statements.
21
<PAGE>
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP II-F
GEODYNE PRODUCTION PARTNERSHIP II-F
COMBINED BALANCE SHEETS
(Unaudited)
ASSETS
June 30, December 31,
1998 1997
----------- ------------
CURRENT ASSETS:
Cash and cash equivalents $ 832,039 $ 741,852
Accounts receivable:
Oil and gas sales 223,840 334,094
Other - 43
---------- ----------
Total current assets $1,055,879 $1,075,989
NET OIL AND GAS PROPERTIES, utilizing
the successful efforts method 2,222,818 2,432,033
DEFERRED CHARGE 56,867 56,867
---------- ----------
$3,335,564 $3,564,889
========== ==========
LIABILITIES AND PARTNERS' CAPITAL (DEFICIT)
CURRENT LIABILITIES:
Accounts payable $ 24,623 $ 64,348
Gas imbalance payable 25,184 25,184
---------- ----------
Total current liabilities $ 49,807 $ 89,532
ACCRUED LIABILITY $ 27,907 $ 27,907
PARTNERS' CAPITAL (DEFICIT):
General Partner ($ 151,418) ($ 143,355)
Limited Partners, issued and
outstanding, 171,400 units 3,409,268 3,590,805
---------- ----------
Total Partners' capital $3,257,850 $3,447,450
---------- ----------
$3,335,564 $3,564,889
========== ==========
The accompanying condensed notes are an integral part of these
combined financial statements.
22
<PAGE>
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP II-F
GEODYNE PRODUCTION PARTNERSHIP II-F
COMBINED STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED JUNE 30, 1998 AND 1997
(Unaudited)
1998 1997
---------- ---------
REVENUES:
Oil and gas sales $388,884 $447,250
Interest income 3,948 4,571
Gain on sale of oil and
gas properties 538,754 166,768
-------- --------
$931,586 $618,589
COSTS AND EXPENSES:
Lease operating $ 62,517 $ 72,158
Production tax 25,515 30,708
Depreciation, depletion, and
amortization of oil and gas
properties 83,517 103,640
General and administrative
(Note 2) 47,610 54,812
-------- --------
$219,159 $261,318
-------- --------
NET INCOME $712,427 $357,271
======== ========
GENERAL PARTNER - NET INCOME $ 38,765 $ 21,781
======== ========
LIMITED PARTNERS - NET INCOME $673,662 $335,490
======== ========
NET INCOME per unit $ 3.93 $ 1.96
======== ========
UNITS OUTSTANDING 171,400 171,400
======== ========
The accompanying condensed notes are an integral part of these
combined financial statements.
23
<PAGE>
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP II-F
GEODYNE PRODUCTION PARTNERSHIP II-F
COMBINED STATEMENTS OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 1998 AND 1997
(Unaudited)
1998 1997
---------- ----------
REVENUES:
Oil and gas sales $ 820,953 $1,176,415
Interest income 10,043 8,090
Gain on sale of oil and
gas properties 655,945 166,768
---------- ----------
$1,486,941 $1,351,273
COSTS AND EXPENSES:
Lease operating $ 148,402 $ 177,618
Production tax 54,461 84,878
Depreciation, depletion, and
amortization of oil and gas
properties 177,239 205,539
Impairment provision - 1,377,160
General and administrative
(Note 2) 106,786 109,756
---------- ----------
$ 486,888 $1,954,951
---------- ----------
NET INCOME (LOSS) $1,000,052 ($ 603,678)
========== ==========
GENERAL PARTNER - NET INCOME $ 56,690 $ 32,720
========== ==========
LIMITED PARTNERS - NET INCOME (LOSS) $ 943,463 ($ 636,398)
========== ==========
NET INCOME (LOSS) per unit $ 5.50 ($ 3.71)
========== ==========
UNITS OUTSTANDING 171,400 171,400
========== ==========
The accompanying condensed notes are an integral part of these
combined financial statements.
24
<PAGE>
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP II-F
GEODYNE PRODUCTION PARTNERSHIP II-F
COMBINED STATEMENTS OF CASH FLOWS
FOR THE SIX MONTHS ENDED JUNE 30, 1998 AND 1997
(Unaudited)
1998 1997
---------- ----------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) $1,000,053 ($ 603,678)
Adjustments to reconcile net income
(loss) to net cash provided by
operating activities:
Depreciation, depletion, and
amortization of oil and gas
properties 177,239 205,539
Impairment provision - 1,377,160
Gain on sale of oil and gas
properties ( 655,945) ( 166,768)
Decrease in accounts receivable -
oil and gas sales 110,254 104,366
Decrease in accounts receivable -
General Partner - 12,169
Decrease in accounts receivable -
other 43 -
Decrease in accounts payable ( 39,725) ( 11,541)
---------- ----------
Net cash provided by operating-
activities $ 591,919 $ 917,247
---------- ----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures ($ 32,829) ($ 17,239)
Proceeds from sale of oil and
gas properties 720,750 298,834
---------- ----------
Net cash provided by investing
activities $ 687,921 $ 281,595
---------- ----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Cash distributions ($1,189,653) ($ 930,455)
---------- ----------
Net cash used by financing activities ($1,189,653) ($ 930,455)
---------- ----------
NET INCREASE IN CASH AND CASH
EQUIVALENTS $ 90,187 $ 268,387
CASH AND CASH EQUIVALENTS AT
BEGINNING OF PERIOD 741,852 441,903
---------- ----------
CASH AND CASH EQUIVALENTS AT
END OF PERIOD $ 832,039 $ 710,290
========== ==========
The accompanying condensed notes are an integral part of these
combined financial statements.
25
<PAGE>
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP II-G
GEODYNE PRODUCTION PARTNERSHIP II-G
COMBINED BALANCE SHEETS
(Unaudited)
ASSETS
June 30, December 31,
1998 1997
----------- ------------
CURRENT ASSETS:
Cash and cash equivalents $1,745,845 $1,564,325
Accounts receivable:
Oil and gas sales 482,613 710,336
---------- ----------
Total current assets $2,228,458 $2,274,661
NET OIL AND GAS PROPERTIES, utilizing
the successful efforts method 4,790,240 5,237,082
DEFERRED CHARGE 123,977 123,977
---------- ----------
$7,142,675 $7,635,720
========== ==========
LIABILITIES AND PARTNERS' CAPITAL (DEFICIT)
CURRENT LIABILITIES:
Accounts payable $ 52,747 $ 135,761
Gas imbalance payable 57,250 57,250
---------- ----------
Total current liabilities $ 109,997 $ 193,011
ACCRUED LIABILITY $ 64,109 $ 64,109
PARTNERS' CAPITAL (DEFICIT):
General Partner ($ 329,275) ($ 312,392)
Limited Partners, issued and
outstanding, 372,189 units 7,297,844 7,690,992
---------- ----------
Total Partners' capital $6,968,569 $7,378,600
---------- ----------
$7,142,675 $7,635,720
========== ==========
The accompanying condensed notes are an integral part of these
combined financial statements.
26
<PAGE>
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP II-G
GEODYNE PRODUCTION PARTNERSHIP II-G
COMBINED STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED JUNE 30, 1998 AND 1997
(Unaudited)
1998 1997
---------- ----------
REVENUES:
Oil and gas sales $ 834,167 $ 981,156
Interest income 8,518 9,799
Gain on sale of oil and
gas properties 1,126,657 329,485
---------- ----------
$1,969,342 $1,320,440
COSTS AND EXPENSES:
Lease operating $ 134,397 $ 159,418
Production tax 55,722 69,927
Depreciation, depletion, and
amortization of oil and gas
properties 180,454 227,148
General and administrative
(Note 2) 103,383 118,908
---------- ----------
$ 473,956 $ 575,401
---------- ----------
NET INCOME $1,495,386 $ 745,039
========== ==========
GENERAL PARTNER - NET INCOME $ 81,562 $ 45,848
========== ==========
LIMITED PARTNERS - NET INCOME $1,413,824 $ 699,191
========== ==========
NET INCOME per unit $ 3.80 $ 1.88
========== ==========
UNITS OUTSTANDING 372,189 372,189
========== ==========
The accompanying condensed notes are an integral part of these
combined financial statements.
27
<PAGE>
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP II-G
GEODYNE PRODUCTION PARTNERSHIP II-G
COMBINED STATEMENTS OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 1998 AND 1997
(Unaudited)
1998 1997
---------- ----------
REVENUES:
Oil and gas sales $1,748,556 $2,517,489
Interest income 21,487 17,231
Gain on sale of oil and
gas properties 1,372,284 329,485
---------- ----------
$3,142,327 $2,864,205
COSTS AND EXPENSES:
Lease operating $ 316,829 $ 387,582
Production tax 117,399 186,021
Depreciation, depletion, and
amortization of oil and gas
properties 380,514 449,874
Impairment provision - 3,101,656
General and administrative
(Note 2) 231,797 238,159
---------- ----------
$1,046,539 $4,363,292
---------- ----------
NET INCOME (LOSS) $2,095,788 ($1,499,087)
========== ==========
GENERAL PARTNER - NET INCOME $ 118,936 $ 66,245
========== ==========
LIMITED PARTNERS - NET INCOME (LOSS) $1,976,852 ($1,565,332)
========== ==========
NET INCOME (LOSS) per unit $ 5.31 ($ 4.21)
========== ==========
UNITS OUTSTANDING 372,189 372,189
========== ==========
The accompanying condensed notes are an integral part of these
combined financial statements.
28
<PAGE>
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP II-G
GEODYNE PRODUCTION PARTNERSHIP II-G
COMBINED STATEMENTS OF CASH FLOWS
FOR THE SIX MONTHS ENDED JUNE 30, 1998 AND 1997
(Unaudited)
1998 1997
----------- ----------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) $2,095,788 ($1,499,087)
Adjustments to reconcile net income
(loss) to net cash provided by
operating activities:
Depreciation, depletion, and
amortization of oil and gas
properties 380,514 449,874
Impairment provision - 3,101,656
Gain on sale of oil and gas
properties ( 1,372,284) ( 329,485)
Decrease in accounts receivable -
oil and gas sales 227,723 215,583
Decrease in accounts receivable -
General Partner - 28,104
Decrease in accounts payable ( 83,014) ( 25,030)
---------- ----------
Net cash provided by operating
activities $1,248,727 $1,941,615
---------- ----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures ($ 63,181) ($ 35,916)
Proceeds from sale of oil and
gas properties 1,501,793 692,687
---------- ----------
Net cash provided by investing
activities $1,438,612 $ 656,771
---------- ----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Cash distributions ($2,505,819) ($1,959,203)
---------- ----------
Net cash used by financing activities ($2,505,819) ($1,959,203)
---------- ----------
NET INCREASE IN CASH AND CASH
EQUIVALENTS $ 181,520 $ 639,183
CASH AND CASH EQUIVALENTS AT
BEGINNING OF PERIOD 1,564,325 932,165
---------- ----------
CASH AND CASH EQUIVALENTS AT
END OF PERIOD $1,745,845 $1,571,348
========== ==========
The accompanying condensed notes are an integral part of these
combined financial statements.
29
<PAGE>
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP II-H
GEODYNE PRODUCTION PARTNERSHIP II-H
COMBINED BALANCE SHEETS
(Unaudited)
ASSETS
June 30, December 31,
1998 1997
----------- ------------
CURRENT ASSETS:
Cash and cash equivalents $ 401,636 $ 364,502
Accounts receivable:
Oil and gas sales 112,645 168,833
---------- ----------
Total current assets $ 514,281 $ 533,335
NET OIL AND GAS PROPERTIES, utilizing
the successful efforts method 1,122,777 1,225,295
DEFERRED CHARGE 29,519 29,519
---------- ----------
$1,666,577 $1,788,149
========== ==========
LIABILITIES AND PARTNERS' CAPITAL (DEFICIT)
CURRENT LIABILITIES:
Accounts payable $ 12,763 $ 31,925
Gas imbalance payable 13,149 13,149
---------- ----------
Total current liabilities $ 25,912 $ 45,074
ACCRUED LIABILITY $ 14,648 $ 14,648
PARTNERS' CAPITAL (DEFICIT):
General Partner ($ 82,874) ($ 78,796)
Limited Partners, issued and
outstanding, 91,711 units 1,708,891 1,807,223
---------- ----------
Total Partners' capital $1,626,017 $1,728,427
---------- ----------
$1,666,577 $1,788,149
========== ==========
The accompanying condensed notes are an integral part of these
combined financial statements.
30
<PAGE>
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP II-H
GEODYNE PRODUCTION PARTNERSHIP II-H
COMBINED STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED JUNE 30, 1998 AND 1997
(Unaudited)
1998 1997
-------- ----------
REVENUES:
Oil and gas sales $195,270 $249,219
Interest income 1,887 2,247
Gain on sale of oil and
gas properties 257,705 75,503
-------- --------
$454,862 $326,969
COSTS AND EXPENSES:
Lease operating $ 32,716 $ 40,901
Production tax 13,457 18,796
Depreciation, depletion, and
amortization of oil and gas
properties 41,604 54,935
General and administrative
(Note 2) 25,478 29,264
-------- --------
$113,255 $143,896
-------- --------
NET INCOME $341,607 $183,073
======== ========
GENERAL PARTNER - NET INCOME $ 18,651 $ 11,239
======== ========
LIMITED PARTNERS - NET INCOME $322,956 $171,834
======== ========
NET INCOME per unit $ 3.52 $ 1.87
======== ========
UNITS OUTSTANDING 91,711 91,711
======== ========
The accompanying condensed notes are an integral part of these
combined financial statements.
31
<PAGE>
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP II-H
GEODYNE PRODUCTION PARTNERSHIP II-H
COMBINED STATEMENTS OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 1998 AND 1997
(Unaudited)
1998 1997
-------- ----------
REVENUES:
Oil and gas sales $412,973 $ 610,033
Interest income 4,822 3,956
Gain on sale of oil and
gas properties 315,023 75,503
-------- ----------
$732,818 $ 689,492
COSTS AND EXPENSES:
Lease operating $ 76,189 $ 97,304
Production tax 28,324 46,827
Depreciation, depletion, and
amortization of oil and gas
properties 88,085 108,330
Impairment provision - 785,220
General and administrative
(Note 2) 57,114 58,645
-------- ----------
$249,712 $1,096,326
-------- ----------
NET INCOME (LOSS) $483,106 ($ 406,834)
======== ==========
GENERAL PARTNER - NET INCOME $ 27,438 $ 15,203
======== ==========
LIMITED PARTNERS - NET INCOME (LOSS) $455,668 ($ 422,037)
======== ==========
NET INCOME (LOSS) per unit $ 4.97 ($ 4.60)
======== ==========
UNITS OUTSTANDING 91,711 91,711
======== ==========
The accompanying condensed notes are an integral part of these
combined financial statements.
32
<PAGE>
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP II-H
GEODYNE PRODUCTION PARTNERSHIP II-H
COMBINED STATEMENTS OF CASH FLOWS
FOR THE SIX MONTHS ENDED JUNE 30, 1998 AND 1997
(Unaudited)
1998 1997
--------- ----------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) $483,106 ($406,834)
Adjustments to reconcile net income
(loss) to net cash provided by
operating activities:
Depreciation, depletion, and
amortization of oil and gas
properties 88,085 108,330
Impairment provision - 785,220
Gain on sale of oil and gas
properties ( 315,023) ( 75,503)
Decrease in accounts receivable -
oil and gas sales 56,188 48,588
(Increase) decrease in accounts
receivable - General Partner - 7,644
Decrease in accounts payable ( 19,162) ( 6,056)
-------- --------
Net cash provided by operating
activities $293,194 $461,389
-------- --------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures ($ 15,635) ($ 8,251)
Proceeds from sale of oil and
gas properties 345,091 189,986
-------- --------
Net cash provided by investing
activities $329,456 $181,735
-------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Cash distributions ($585,516) ($464,868)
-------- --------
Net cash used by financing activities ($585,516) ($464,868)
-------- --------
NET INCREASE IN CASH AND CASH
EQUIVALENTS $ 37,134 $178,256
CASH AND CASH EQUIVALENTS AT
BEGINNING OF PERIOD 364,502 221,484
-------- --------
CASH AND CASH EQUIVALENTS AT
END OF PERIOD $401,636 $399,740
======== ========
The accompanying condensed notes are an integral part of these
combined financial statements.
33
<PAGE>
GEODYNE ENERGY INCOME PROGRAM II LIMITED PARTNERSHIPS
CONDENSED NOTES TO THE COMBINED FINANCIAL STATEMENTS
JUNE 30, 1998
(Unaudited)
1. ACCOUNTING POLICIES
-------------------
The combined balance sheets as of June 30, 1998, combined statements of
operations for the three and six months ended June 30, 1998 and 1997, and
combined statements of cash flows for the six months ended June 30, 1998
and 1997 have been prepared by Geodyne Resources, Inc., the General
Partner of the limited partnerships, without audit. Each limited
partnership is a general partner in the related Geodyne Production
Partnership in which Geodyne Resources, Inc. serves as the managing
partner. Unless the context indicates otherwise, all references to a
"Partnership" or the "Partnerships" are references to the limited
partnership and its related production partnership, collectively, and all
references to the "General Partner" are references to the general partner
of the limited partnerships and the managing partner of the production
partnerships, collectively. In the opinion of management the financial
statements referred to above include all necessary adjustments, consisting
of normal recurring adjustments, to present fairly the combined financial
position at June 30, 1998, the combined results of operations for the
three and six months ended June 30, 1998 and 1997, and the combined cash
flows for the six months ended June 30, 1998 and 1997.
Information and footnote disclosures normally included in financial
statements prepared in accordance with generally accepted accounting
principles have been condensed or omitted. The accompanying interim
financial statements should be read in conjunction with the Partnerships'
Annual Report on Form 10-K filed for the year ended December 31, 1997. The
results of operations for the period ended June 30, 1998 are not
necessarily indicative of the results to be expected for the full year.
The Limited Partners' net income or loss per unit is based upon each $100
initial capital contribution.
34
<PAGE>
OIL AND GAS PROPERTIES
----------------------
The Partnerships follow the successful efforts method of accounting for
their oil and gas properties. Under the successful efforts method, the
Partnerships capitalize all property acquisition costs and development
costs incurred in connection with the further development of oil and gas
reserves. Property acquisition costs include costs incurred by the
Partnerships or the General Partner to acquire producing properties,
including related title insurance or examination costs, commissions,
engineering, legal and accounting fees, and similar costs directly related
to the acquisitions, plus an allocated portion, of the General Partner's
property screening costs. The acquisition cost to the Partnerships of
properties acquired by the General Partner is adjusted to reflect the net
cash results of operations, including interest incurred to finance the
acquisition, for the period of time the properties are held by the General
Partner prior to their transfer to the Partnerships. Leasehold impairment
is recognized based upon an individual property assessment and exploratory
experience. Upon discovery of commercial reserves, leasehold costs are
transferred to producing properties.
Depletion of the costs of producing oil and gas properties, amortization
of related intangible drilling and development costs, and depreciation of
tangible lease and well equipment are computed on the unit-of-production
method. The Partnerships' depletion, depreciation, and amortization
includes estimated dismantlement and abandonment costs, net of estimated
salvage value.
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 to accumulated depreciation.
Statement of Financial Accounting Standards ("SFAS") No. 121, "Accounting
for the Impairment of Long Lived Assets and Assets Held for Disposal",
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 for each field exceed
the expected undiscounted future cash flows from such properties, the cost
of the properties is written down to fair value, which is
35
<PAGE>
determined by using the discounted future cash flows from the properties.
The Partnerships recorded a non-cash charge against earnings (impairment
provision) during the six months ended June 30, 1997 pursuant to SFAS No.
121 as follows:
Partnership Amount
----------- -----------
II-A $ 684,276
II-B 530,988
II-C 66,617
II-D 143,957
II-E 992,851
II-F 1,377,160
II-G 3,101,656
II-H 785,220
No such charge was recorded during the six months ended June 30, 1998. The
risk that the Partnerships will be required to record such impairment
provisions in the future increases when oil and gas prices are depressed.
2. TRANSACTIONS WITH RELATED PARTIES
---------------------------------
The Partnerships' Partnership Agreements provide for reimbursement
to the General Partner for all direct general and administrative expenses
and for the general and administrative overhead applicable to the
Partnerships based on an allocation of actual costs incurred. During the
three months ended June 30, 1998 the following payments were made to the
General Partner or its affiliates by the Partnerships:
Direct General Administrative
Partnership and Administrative Overhead
----------- ------------------- ---------------
II-A $8,669 $127,443
II-B 7,890 95,190
II-C 3,832 40,689
II-D 7,351 82,863
II-E 8,608 60,216
II-F 2,505 45,105
II-G 5,439 97,944
II-H 1,343 24,135
36
<PAGE>
During the six months ended June 30, 1998 the following payments were made
to the General Partner or its affiliates by the Partnerships:
Direct General Administrative
Partnership and Administrative Overhead
----------- ------------------- ---------------
II-A $ 50,462 $254,886
II-B 39,526 190,380
II-C 17,352 81,378
II-D 34,577 165,726
II-E 29,043 120,432
II-F 16,576 90,210
II-G 35,909 195,888
II-H 8,844 48,270
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 their activities.
3. SUBSEQUENT EVENT
----------------
On July 30, an arbitration and lawsuit involving Geodyne Resources, Inc.
as General Partner of the Geodyne II-A, II-B, II-C, II-D and II-E
Partnerships and other plaintiffs against a gas purchaser was settled.
This matter involved claims for take or pay deficiencies and gas pricing
issues arising out of a gas purchase contract pursuant to which the gas
purchaser purchased gas from the Geodyne II-A, II-B, II-C, II-D and II-E
Partnerships and other owners. The settlement resolves all issues between
the parties concerning this contract.
As a result of this settlement, the II-A, II-B, II-C, II-D and II-E
Partnerships received in August 1998 the following amounts:
PARTNERSHIP TOTAL
----------- ----------
II-A $1,710,190
II-B 2,793,295
II-C 1,197,148
II-D 3,033,283
II-E 6,158,619
These amounts are included in "Accounts Receivable - Other" on the
accompanying balance sheets at June 30, 1998. In addition, these amounts
will be included in the II-A, II-B, II-C, II-D and II-E Partnerships'
November 1998 cash distributions.
37
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
USE OF FORWARD-LOOKING STATEMENTS AND ESTIMATES
- -----------------------------------------------
This Quarterly 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
Quarterly 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, and otherwise indicated.
GENERAL
- -------
The Partnerships are engaged in the business of acquiring and operating
producing oil and gas properties located in the continental United States.
In general, a Partnership acquired producing properties and did not engage
in development drilling or enhanced recovery projects, except as an
incidental part of the management of the producing properties acquired.
Therefore, the economic life of each Partnership, and its related
Production Partnership, is limited to the period of time required to fully
produce its acquired oil and gas reserves. The net proceeds from the oil
and gas operations are distributed to the Limited Partners and the General
Partner in accordance with the terms of the Partnerships' partnership
agreements.
38
<PAGE>
LIQUIDITY AND CAPITAL RESOURCES
- -------------------------------
The Partnerships began operations and investors were assigned their rights
as Limited Partners, having made capital contributions in the amounts and
on the dates set forth below:
Limited
Date of Partner Capital
Partnership Activation Contributions
----------- ------------------ ---------------
II-A July 22, 1987 $48,428,300
II-B October 14, 1987 36,171,900
II-C January 14, 1988 15,462,100
II-D May 10, 1988 31,487,800
II-E September 27, 1988 22,882,100
II-F January 5, 1989 17,140,000
II-G April 10, 1989 37,218,900
II-H May 17, 1989 9,171,100
In general, the amount of funds available for acquisition of producing
properties was equal to the capital contributions of the Limited Partners,
less 15% for sales commissions and organization and management fees. All
of the Partnerships have fully invested their capital contributions.
Net proceeds from the operations less necessary operating capital are
distributed to the Limited Partners on a quarterly basis. Revenues and net
proceeds of a Partnership are largely dependent upon the volumes of oil
and gas sold and the prices received for such oil and gas. While the
General Partner cannot predict future pricing trends, it believes the
working capital available as of June 30, 1998 and the net revenue
generated from future operations will provide sufficient working capital
to meet current and future obligations.
On July 30, 1998 the General Partner reached a settlement with a gas
purchaser involving claims for take or pay deficiencies and gas pricing
issues arising out of a gas purchase contract. As a result of this
settlement, the II-A, II-B, II-C, II-D and II-E Partnerships received the
following amounts in August 1998:
PARTNERSHIP TOTAL
----------- ----------
II-A $1,710,190
II-B 2,793,295
II-C 1,197,148
II-D 3,033,283
II-E 6,158,619
39
<PAGE>
These amounts will be included in the II-A, II-B, II-C, II-D and II-E
Partnerships' third quarter cash distributions to be paid in November
1998.
The Partnerships' Statements of Cash Flows for the six months ended June
30, 1998 include proceeds from the sale of oil and gas properties during
the six months ended June 30, 1998. These proceeds received during the
first quarter were included in the Partnerships' cash distributions paid
during May 1998, and the proceeds received during the second quarter will
be included in the Partnerships' cash distributions to be paid in August
1998. It is possible that the Partnerships' repurchase values and future
cash distributions could decline as a result of the disposition of these
properties. On the other hand, the General Partner believes there will be
beneficial operating efficiencies related to the Partnerships' remaining
properties. This is primarily due to the fact that the properties sold
generally bore a higher ratio of operating expenses as compared to
reserves than the Partnerships' remaining properties.
During the six months ended June 30, 1998 capital expenditures incurred by
the II-E Partnership totaled $116,267. These expenditures resulted
primarily from the recompletion of four wells within the Richie unit
located in Acadia Parish, Louisiana of which three were successful. The
II-E Partnership has a 5.8% working interest in the Richie unit. These
recompletions were attempted in order to improve the recovery of reserves.
RESULTS OF OPERATIONS
- ---------------------
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.
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. Such spot market sales are generally short-term in nature and
are dependent upon the obtaining of transportation services provided by
pipelines. In addition, crude oil prices are at or near their lowest level
in the past decade due primarily to the global surplus of crude oil.
Management is unable to predict whether future oil and gas prices will (i)
stabilize, (ii) increase, or (iii) decrease.
40
<PAGE>
II-A PARTNERSHIP
THREE MONTHS ENDED JUNE 30, 1998 AS COMPARED TO THE THREE MONTHS ENDED
JUNE 30, 1997.
Three Months Ended June 30,
---------------------------
1998 1997
-------- ----------
Oil and gas sales $896,499 $1,508,683
Oil and gas production expenses $341,245 $ 514,879
Barrels produced 24,402 26,766
Mcf produced 306,092 373,003
Average price/Bbl $ 11.73 $ 19.74
Average price/Mcf $ 1.99 $ 2.63
As shown in the table above, total oil and gas sales decreased $612,184
(40.6%) for the three months ended June 30, 1998 as compared to the three
months ended June 30, 1997. Of this decrease, approximately $176,000 was
related to a decrease in volumes of gas sold and approximately $195,000
and $196,000, respectively, were related to decreases in the average
prices of oil and gas sold. Volumes of oil and gas sold decreased 2,364
barrels and 66,911 Mcf, respectively, for the three months ended June 30,
1998 as compared to the three months ended June 30, 1997. The decrease in
volumes of gas sold resulted primarily from (i) positive prior period
volume adjustments made by the purchaser on one significant well during
the three months ended June 30, 1997, (ii) normal declines in production
due to diminished reserves on several wells during the three months ended
June 30, 1998, and (iii) the shutting-in of one significant well during
the three months ended June 31, 1998 in order to perform a workover.
Average oil and gas prices decreased to $11.73 per barrel and $1.99 per
Mcf, respectively, for the three months ended June 30, 1998 from $19.74
per barrel and $2.63 per Mcf, respectively, for the three months ended
June 30, 1997.
The II-A Partnership recognized a gas contract settlement in the amount of
$1,710,190 during the three months ended June 30, 1998. This settlement
involved claims made for take or pay deficiencies and gas pricing issues
arising out of a gas purchase contract. No similar settlements occurred
during the three months ended June 30, 1997.
41
<PAGE>
Oil and gas production expenses (including lease operating expenses and
production taxes) decreased $173,634 (33.7%) for the three months ended
June 30, 1998 as compared to the three months ended June 30, 1997. This
decrease resulted primarily from (i) decreased production taxes associated
with the decrease in oil and gas sales, (ii) decreased lease operating
expenses primarily due to the decreases in volumes of oil and gas sold,
and (iii) workover expenses incurred on two significant wells during the
three months ended June 30, 1997 in order to improve the recovery of
reserves. As a percentage of oil and gas sales, these expenses increased
to 38.1% for the three months ended June 30, 1998 from 34.1% for the three
months ended June 31, 1997. This percentage increase was primarily due to
the decreases in the average prices of oil and gas sold during the three
months ended June 30, 1998 as compared to the three months ended June 30,
1997.
Depreciation, depletion, and amortization of oil and gas properties
decreased $30,084 (15.6%) for the three months ended June 30, 1998 as
compared to the three months ended June 30, 1997. This decrease resulted
primarily from the decreases in volumes of oil and gas sold during the
three months ended June 30, 1998 as compared to the three months ended
June 30, 1997. As a percentage of oil and gas sales, this expense
increased to 18.2% for the three months ended June 30, 1998 from 12.8% for
the three months ended June 30, 1997. This percentage increase was
primarily due to the decreases in the average prices of oil and gas sold
during the three months ended June 30, 1998 as compared to the three
months ended June 30, 1997.
General and administrative expenses decreased $27,612 (16.9%) for the
three months ended June 30, 1998 as compared to the three months ended
June 30, 1997. This decrease was primarily due to a decrease in
professional fees for the three months ended June 30, 1998 as compared to
the three months ended June 30, 1997. As a percentage of oil and gas
sales, these expenses increased to 15.2% for the three months ended June
30, 1998 from 10.9% for the three months ended June 30, 1997. This
percentage increase was primarily due to the decrease in oil and gas sales
discussed above.
42
<PAGE>
SIX MONTHS ENDED JUNE 30, 1998 AS COMPARED TO THE SIX MONTHS ENDED JUNE
30, 1997.
Six Months Ended June 30,
---------------------------
1998 1997
---------- ----------
Oil and gas sales $1,932,820 $3,023,880
Oil and gas production expenses $ 711,918 $ 906,451
Barrels produced 46,448 51,281
Mcf produced 619,915 769,733
Average price/Bbl $ 13.69 $ 20.70
Average price/Mcf $ 2.09 $ 2.55
As shown in the table above, total oil and gas sales decreased $1,091,060
(36.1%) for the six months ended June 30, 1998 as compared to the six
months ended June 30, 1997. Of this decrease, approximately $382,000 was
related to a decrease in volumes of gas sold and approximately $326,000
and $285,000, respectively, were related to decreases in the average
prices of oil and gas sold. Volumes of oil and gas sold decreased 4,833
barrels and 149,818 Mcf, respectively, for the six months ended June 30,
1998 as compared to the six months ended June 30, 1997. The decrease in
volumes of gas sold resulted primarily from (i) positive prior period
volume adjustments made by purchasers on two significant wells during the
six months ended June 30, 1997, (ii) normal declines in production due to
diminished reserves on several wells during the six months ended June 30,
1998, and (iii) the shutting-in of one significant well during the six
months ended June 30, 1998 in order to perform a workover. Average oil and
gas prices decreased to $13.69 per barrel and $2.09 per Mcf, respectively,
for the six months ended June 30, 1998 from $20.70 per barrel and $2.55
per Mcf, respectively, for the six months ended June 30, 1997.
As discussed in Liquidity and Capital Resources above, the II-A
Partnership sold certain oil and gas properties during the six months
ended June 30, 1998 and recognized a $652,721 gain on such sales. Similar
sales during the six months ended June 30, 1997 resulted in the II-A
Partnership recognizing similar gains totaling $57,024.
The II-A Partnership recognized a gas contract settlement in the amount of
$1,710,190 during the six months ended June 30, 1998. This settlement
involved claims made for take or pay deficiencies and gas pricing issues
arising out of a gas purchase contract. No similar settlements occurred
during the three months ended June 30, 1997.
43
<PAGE>
Oil and gas production expenses (including lease operating expenses and
production taxes) decreased $194,533 (21.5%) for the six months ended June
30, 1998 as compared to the six months ended June 30, 1997. This decrease
resulted primarily from (i) decreased production taxes associated with the
decrease in oil and gas sales, (ii) decreased lease operating expenses
primarily due to the decreases in volumes of oil and gas sold, and (iii)
workover expenses incurred on two significant wells during the six months
ended June 30, 1997. As a percentage of oil and gas sales, these expenses
increased to 36.8% for the six months ended June 30, 1998 from 30.0% for
the six months ended June 31, 1997. This percentage increase was primarily
due to the decreases in the average prices of oil and gas sold during the
six months ended June 30, 1998 as compared to the six months ended June
30, 1997.
Depreciation, depletion, and amortization of oil and gas properties
decreased $66,170 (17.0%) for the six months ended June 30, 1998 as
compared to the six months ended June 30, 1997. This decrease resulted
primarily from the decreases in volumes of oil and gas sold during the six
months ended June 30, 1998 as compared to the six months ended June 30,
1997. As a percentage of oil and gas sales, this expense increased to
16.7% for the six months ended June 30, 1998 from 12.9% for the six months
ended June 30, 1997. This percentage increase was primarily due to the
decreases in the average prices of oil and gas sold during the six months
ended June 30, 1998 as compared to the six months ended June 30, 1997.
The II-A Partnership recognized a non-cash charge against earnings of
$684,276 during the six months ended June 30, 1997. Of this amount,
$223,943 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 $460,333 was related to the writing-off of unproved properties.
These unproved properties were written off based on the General Partner's
determination that it was unlikely that such properties would be developed
due to the low oil and gas prices received over the prior several years
and provisions in the II-A Partnership's partnership agreement which limit
the level of permissible drilling activity. No similar charges were
necessary during the six months ended June 30, 1998.
General and administrative expenses decreased $21,962 (6.7%) for the six
months ended June 30, 1998 as compared to the six months ended June 30,
1997. As a percentage of oil and gas sales, these expenses increased to
15.8% for the six months ended June 30, 1998 from 10.8% for the six months
ended June 30, 1997. This percentage increase was primarily due to the
decrease in oil and gas sales discussed above.
44
<PAGE>
The Limited Partners have received cash distributions through June 30,
1998 totaling $43,725,357 or 90.29% of the Limited Partners' capital
contributions.
II-B PARTNERSHIP
THREE MONTHS ENDED JUNE 30, 1998 AS COMPARED TO THE THREE MONTHS ENDED
JUNE 30, 1997.
Three Months Ended June 30,
---------------------------
1998 1997
-------- --------
Oil and gas sales $634,517 $980,036
Oil and gas production expenses $211,199 $328,925
Barrels produced 12,845 19,038
Mcf produced 235,275 224,547
Average price/Bbl $ 13.75 $ 20.07
Average price/Mcf $ 1.95 $ 2.66
As shown in the table above, total oil and gas sales decreased $345,519
(35.3%) for the three months ended June 30, 1998 as compared to the three
months ended June 30, 1997. Of this decrease, approximately $124,000 was
related to a decrease in volumes of oil sold and approximately $81,000 and
$167,000, respectively, were related to decreases in the average prices of
oil and gas sold. Volumes of oil sold decreased 6,193 barrels while
volumes of gas sold increased 10,728 Mcf for the three months ended June
30, 1998 as compared to the three months ended June 30, 1997. The decrease
in volumes of oil sold resulted primarily from (i) normal declines in
production due to diminished reserves on several wells during the three
months ended June 30, 1998 and (ii) prior period volume adjustments made
by purchasers on several wells during the three months ended June 30, 1997
Average oil and gas prices decreased to $13.75 per barrel and $1.95 per
Mcf, respectively, for the three months ended June 30, 1998 from $20.07
per barrel and $2.66 per Mcf, respectively, for the three months ended
June 30, 1997.
As discussed in Liquidity and Capital Resources above, the II-B
Partnership sold certain oil and gas properties during the three months
ended June 30, 1998 and recognized a $5,491 gain on such sales. Similar
sales during the three months ended June 30, 1997 resulted in the II-B
Partnership recognizing similar gains totaling $50,476.
45
<PAGE>
The II-B Partnership recognized a gas contract settlement in the amount of
$2,793,295 during the three months ended June 30, 1998. This settlement
involved claims for take or pay deficiencies and gas pricing issues
arising out of a gas purchase contract. No similar settlements occurred
during the three months ended June 30, 1997.
Oil and gas production expenses (including lease operating expenses and
production taxes) decreased $117,726 (35.8%) for the three months ended
June 30, 1998 as compared to the three months ended June 30, 1997. This
decrease resulted primarily from (i) workover expenses incurred on three
significant wells during the three months ended June 30, 1997 in order to
improve the recovery of reserves, (ii) a decrease in lease operating
expenses associated with the decrease in volumes of oil sold during the
three months ended June 30, 1998 as compared to the three months ended
June 30, 1997, and (iii) a decrease in production taxes associated with
the decrease in oil and gas sales. As a percentage of oil and gas sales,
these expenses remained relatively constant at 33.3 % for the three months
ended June 30, 1998 and 33.6% for the three months ended June 30, 1997.
Depreciation, depletion, and amortization of oil and gas properties
decreased $25,176 (20.5%) for the three months ended June 30, 1998 as
compared to the three months ended June 30, 1997. This decrease resulted
primarily from (i) the decrease in volumes of oil sold during the three
significant months ended June 30, 1998 as compared to the three months
ended June 30, 1997 and (ii) an upward revision in the estimate of
remaining gas reserves at December 31, 1997. As a percentage of oil and
gas sales, this expense increased to 15.3% for the three months ended June
30, 1998 from 12.5% for the three months ended June 30, 1997. This
percentage increase was primarily due to the decreases in the average
prices of oil and gas sold during the three months ended June 30, 1998 as
compared to the three months ended June 30, 1997.
General and administrative expenses decreased $27,010 (20.8%) for the
three months ended June 30, 1998 as compared to the three months ended
June 30, 1997. This decrease resulted primarily from a decrease in
professional fees during the three months ended June 30, 1998 as compared
to the three months ended June 30, 1997. As a percentage of oil and gas
sales, these expenses increased to 16.2% for the three months ended June
30, 1998 from 13.3% for the three months ended June 30, 1997. This
percentage increase was primarily due to the decrease in oil and gas sales
discussed above.
46
<PAGE>
SIX MONTHS ENDED JUNE 30, 1998 AS COMPARED TO THE SIX MONTHS ENDED JUNE
30, 1997.
Six Months Ended June 30,
---------------------------
1998 1997
---------- ----------
Oil and gas sales $1,429,973 $2,059,385
Oil and gas production expenses $ 505,849 $ 609,571
Barrels produced 28,756 34,469
Mcf produced 472,287 517,211
Average price/Bbl $ 15.06 $ 20.88
Average price/Mcf $ 2.11 $ 2.59
As shown in the table above, total oil and gas sales decreased $629,412
(30.5%) for the six months ended June 30, 1998 as compared to the six
months ended June 30, 1997. Of this decrease, approximately $119,000 and
$116,000, respectively, were related to decreases in volumes of oil and
gas sold and approximately $167,000 and $227,000, respectively, were
related to decreases in the average prices of oil and gas sold. Volumes of
oil and gas sold decreased 5,713 barrels and 44,924 Mcf, respectively, for
the six months ended June 30, 1998 as compared to the six months ended
June 30, 1997. The decrease in volumes of oil sold resulted primarily from
normal declines in production due to diminished reserves on several wells
during the six months ended June 30, 1998. Average oil and gas prices
decreased to $15.06 per barrel and $2.11 per Mcf, respectively, for the
six months ended June 30, 1998 from $20.88 per barrel and $2.59 per Mcf,
respectively, for the six months ended June 30, 1997.
As discussed in Liquidity and Capital Resources above, the II-B
Partnership sold certain oil and gas properties during the six months
ended June 30, 1998 and recognized a $63,175 gain on such sales. Similar
sales during the six months ended June 30, 1997 resulted in the II-B
Partnership recognizing similar gains totaling $50,476.
The II-B Partnership recognized a gas contract settlement in the amount of
$2,793,295 during the six months ended June 30, 1998. This settlement
involved claims made for take or pay deficiencies and gas pricing issues
arising out of a gas purchase contract. No similar settlements occurred
during the six months ended June 30, 1997.
47
<PAGE>
Oil and gas production expenses (including lease operating expenses and
production taxes) decreased $103,722 (17.0%) for the six months ended June
30, 1998 as compared to the six months ended June 30, 1997. This decrease
resulted primarily from a decrease in both lease operating expenses
associated with the decrease in volumes of oil and gas sold during the six
months ended June 30, 1998 as compared to the six months ended June 30,
1997 and production taxes associated with the decrease in oil and gas
sales. As a percentage of oil and gas sales, these expenses increased to
35.4% for the six months ended June 30, 1998 from 29.6% for the six months
ended June 30, 1997. This percentage increase was primarily due to the
decreases in the average prices of oil and gas sold during the six months
ended June 30, 1998 as compared to the six months ended June 30, 1997.
Depreciation, depletion, and amortization of oil and gas properties
decreased $60,885 (23.3%) for the six months ended June 30, 1998 as
compared to the six months ended June 30, 1997. This decrease resulted
primarily from (i) the decreases in volumes of oil and gas sold during the
six months ended June 30, 1998 as compared to the six months ended June
30, 1997 and (ii) an upward revision in the estimate of remaining gas
reserves at December 31, 1997. As a percentage of oil and gas sales, this
expense increased to 14.1% for the six months ended June 30, 1998 from
12.7% for the six months ended June 30, 1997.
The II-B Partnership recognized a non-cash charge against earnings of
$530,988 during the six months ended June 30, 1997. Of this amount
$134,003 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 $396,985 was related to the writing-off of unproved properties.
These unproved properties were written off based on the General Partner's
determination that it was unlikely that such properties would be developed
due to the low oil and gas prices received over the prior several years
and provisions in the II-B Partnership's partnership agreement which limit
the level of permissible drilling activity. No similar charges were
necessary during the six months ended June 30, 1998.
General and administrative expenses decreased $27,632 (10.7%) for the six
months ended June 30, 1998 as compared to the six months ended June 30,
1997. This decrease resulted primarily from a decrease in professional
fees during the six months ended June 30, 1998 as compared to the six
months ended June 30, 1997. As a percentage of oil and gas sales, these
expenses increased to 16.1% for the six months ended June 30, 1998 from
12.5% for the six months ended June 30, 1997. This percentage increase was
primarily due to the decrease in oil and gas sales discussed above.
48
<PAGE>
The Limited Partners have received cash distributions through June 30,
1998 totaling $30,892,916 or 85.41% of the Limited Partners' capital
contributions.
II-C PARTNERSHIP
THREE MONTHS ENDED JUNE 30, 1998 AS COMPARED TO THE THREE MONTHS ENDED
JUNE 30, 1997.
Three Months Ended June 30,
---------------------------
1998 1997
-------- --------
Oil and gas sales $274,090 $427,984
Oil and gas production expenses $ 90,520 $135,433
Barrels produced 3,845 6,259
Mcf produced 117,133 130,154
Average price/Bbl $ 14.59 $ 19.36
Average price/Mcf $ 1.86 $ 2.36
As shown in the table above, total oil and gas sales decreased $153,894
(36.0%) for the three months ended June 30, 1998 as compared to the three
months ended June 30, 1997. Of this decrease, approximately $47,000 and
$31,000, respectively, were related to decreases in volumes of oil and gas
sold and approximately $18,000 and $58,000, respectively, were related to
decreases in the average prices of oil and gas sold. Volumes of oil and
gas sold decreased 2,414 barrels and 13,021 Mcf, respectively, for the
three months ended June 30, 1998 as compared to the three months ended
June 30, 1997. The decrease in volumes of oil sold resulted primarily from
(i) normal declines in production due to diminished reserves on several
wells during the three months ended June 30, 1998, (ii) positive prior
period volume adjustments made by purchasers on several wells during the
three months ended June 30, 1997, and (ii) the sale of two significant
wells during 1997. The decrease in volumes of gas sold resulted primarily
from normal declines in production due to diminished reserves on several
wells during the three months ended June 30, 1998. Average oil and gas
prices decreased to $14.59 per barrel and $1.86 per Mcf, respectively, for
the three months ended June 30, 1998 from $19.36 per barrel and $2.36 per
Mcf, respectively, for the three months ended June 30, 1997.
As discussed in Liquidity and Capital resources above, the II-C
Partnership sold certain oil and gas properties during the three months
ended June 30, 1998 and recognized a $5,331 gain on such sales. Similar
sales during the three months ended June 30, 1997 resulted in the II-C
Partnership recognizing similar gains totaling $90,348.
49
<PAGE>
The II-C Partnership recognized a gas contract settlement in the amount of
$1,197,148 during the three months ended June 30, 1998. This settlement
involved claims made for take or pay deficiencies and gas pricing issues
arising out of a gas purchase contract. No similar settlements occurred
during the three months ended June 30, 1997.
Oil and gas production expenses (including lease operating expenses and
production taxes) decreased $44,913 (33.2%) for the three months ended
June 30, 1998 as compared to the three months ended June 30, 1997. This
decrease resulted primarily from (i) a decrease in production taxes
associated with the decrease in oil and gas sales discussed above, (ii) a
decrease in lease operating expenses associated with the decreases in
volumes of oil and gas sold during the three months ended June 30, 1998 as
compared to the three months ended June 30, 1997, and (iii) workover
expenses incurred on one significant unit during the three months ended
June 30, 1997 in order to improve the recovery of reserves. As a
percentage of oil and gas sales, these expenses increased to 33.0% for the
three months ended June 30, 1998 from 31.6% for the three months ended
June 30, 1997.
Depreciation, depletion, and amortization of oil and gas properties
remained relatively constant for the three months ended June 30, 1998 as
compared to the three months ended June 30, 1997. As a percentage of oil
and gas sales, this expense increased to 18.2% for the three months ended
June 30, 1998 from 11.7% for the three months ended June 30, 1997. This
percentage increase was primarily due to the decreases in the average
prices of oil and gas sold during the three months ended June 30, 1998 as
compared to the three months ended June 30, 1997.
General and administrative expenses decreased $11,700 (20.8%) for the
three months ended June 30, 1998 as compared to the three months ended
June 30, 1997. This decrease resulted primarily from a decrease in
professional fees during the three months ended June 30, 1998 as compared
to the three months ended June 30,1997. As a percentage of oil and gas
sales, these expenses increased to 16.2% for the three months ended June
30, 1998 from 13.1% for the three months ended June 30, 1997. This
percentage increase was primarily due to the decrease in oil and gas sales
discussed above.
50
<PAGE>
SIX MONTHS ENDED JUNE 30, 1998 AS COMPARED TO THE SIX MONTHS ENDED JUNE
30, 1997.
Six Months Ended June 30,
-------------------------
1998 1997
-------- ----------
Oil and gas sales $642,625 $942,166
Oil and gas production expenses $202,822 $263,237
Barrels produced 8,849 11,332
Mcf produced 254,188 290,427
Average price/Bbl $ 14.87 $ 20.74
Average price/Mcf $ 2.01 $ 2.43
As shown in the table above, total oil and gas sales decreased $299,541
(31.8%) for the six months ended June 30, 1998 as compared to the six
months ended June 30, 1997. Of this decrease, approximately $51,000 and
$88,000, respectively, were related to decreases in volumes of oil and gas
sold and approximately $52,000 and $108,000, respectively, were related to
decreases in the average prices of oil and gas sold. Volumes of oil and
gas sold decreased 2,483 barrels and 36,239 Mcf, respectively, for the six
months ended June 30, 1998 as compared to the six months ended June 30,
1997. The decreases in volumes of oil and gas sold resulted primarily from
normal declines in production due to diminished reserves on several wells
during the six months ended June 30, 1998. Average oil and gas prices
decreased to $14.87 per barrel and $2.01 per Mcf, respectively, for the
six months ended June 30, 1998 from $20.74 per barrel and $2.43 per Mcf,
respectively, for the six months ended June 30, 1997.
As discussed in Liquidity and Capital Resources above, the II-C
Partnership sold certain oil and gas properties during the six months
ended June 30, 1998 and recognized a $198,858 gain on such sales. Similar
sales during the six months ended June 30, 1997 resulted in the II-C
Partnership recognizing similar gains totaling $90,348.
The II-C Partnership recognized a gas contract settlement in the amount of
$1,197,148 during the six months ended June 30, 1998. This settlement
involved claims made for take or pay deficiencies and gas pricing issues
arising out of a gas purchase contract. No similar settlements occurred
during the six months ended June 30, 1997.
51
<PAGE>
Oil and gas production expenses (including lease operating expenses and
production taxes) decreased $60,415 (23.0%) for the six months ended June
30, 1998 as compared to the six months ended June 30, 1997. This decrease
resulted primarily from (i) a decrease in production taxes associated with
the decrease in oil and gas sales, (ii) a decrease in lease operating
expenses associated with the decreases in volumes of oil and gas sold
during the six months ended June 30, 1998 as compared to the six months
ended June 30, 1997, and (iii) workover expenses incurred on one
significant unit during the six months ended June 30, 1997 in order to
improve the recovery of reserves. As a percentage of oil and gas sales,
these expenses increased to 31.6% for the six months ended June 30, 1998
from 27.9% for the six months ended June 30, 1997. This percentage
increase was primarily due to the decreases in the average prices of oil
and gas sold for the six months ended June 30, 1998 as compared to the six
months ended June 30, 1997.
Depreciation, depletion, and amortization of oil and gas properties
increased $2,669 (2.5%) for the six months ended June 30, 1998 as compared
to the six months ended June 30, 1997. As a percentage of oil and gas
sales, this expense increased to 17.1% for the six months ended June 30,
1998 from 11.3% for the six months ended June 30, 1997. This percentage
increase was primarily due to the decreases in the average prices of oil
and gas sold during the six months ended June 30, 1998 as compared to the
six months ended June 30, 1997.
The II-C Partnership recognized a non-cash charge against earnings of
$66,617 during the six months ended June 30, 1997. Of this amount, $36,163
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
$30,454 was related to the writing-off of unproved properties. These
unproved properties were written off based on the General Partner's
determination that it was unlikely that such properties would be developed
due to the low oil and gas prices received over the prior several years
and provisions in the II-C Partnership's partnership agreement which limit
the level of permissible drilling activity. No similar charges were
necessary during the six months ended June 30, 1998.
52
<PAGE>
General and administrative expenses decreased $12,002 (10.8%) for the six
months ended June 30, 1998 as compared to the six months ended June 30,
1997. This decrease resulted primarily from a decrease in professional
fees during the six months ended June 30, 1998 as compared to the six
months ended June 30, 1997. As a percentage of oil and gas sales, these
expenses increased to 15.4% for the six months ended June 30, 1998 from
11.8% for the six months ended June 30, 1997. This percentage increase was
primarily due to the decrease in oil and gas sales discussed above.
The Limited Partners have received cash distributions through June 30,
1998 totaling $14,065,686 or 90.97% of the Limited Partners' capital
contributions.
II-D PARTNERSHIP
THREE MONTHS ENDED JUNE 30, 1998 AS COMPARED TO THE THREE MONTHS ENDED
JUNE 30, 1997.
Three Months Ended June 30,
---------------------------
1998 1997
-------- ----------
Oil and gas sales $633,539 $1,069,055
Oil and gas production expenses $266,647 $ 375,186
Barrels produced 8,665 12,836
Mcf produced 281,157 349,345
Average price/Bbl $ 11.49 $ 16.86
Average price/Mcf $ 1.90 $ 2.44
As shown in the table above, total oil and gas sales decreased $435,516
(40.7%) for the three months ended June 30, 1998 as compared to the three
months ended June 30, 1997. Of this decrease, approximately $70,000 and
$166,000, respectively, were related to decreases in volumes of oil and
gas sold and approximately $47,000 and $152,000, respectively, were
related to decreases in the average prices of oil and gas sold. Volumes of
oil and gas sold decreased 4,171 barrels and 68,188 Mcf, respectively, for
the three months ended June 30, 1998 as compared to the three months ended
June 30, 1997. The decrease in volumes of oil sold resulted primarily from
(i) the sale of a significant number of wells in 1997 and 1998, (ii)
positive prior period volume adjustments by a purchaser on one significant
well during the six months ended June 30, 1997, and (iii) normal declines
in production due to diminishing reserves on two significant wells during
the three months ended June 30, 1998. The decrease in volumes of gas sold
resulted primarily from the sale of a significant number of wells in 1997
and 1998. Average oil and gas prices decreased to $11.49 per barrel and
$1.90 per Mcf, respectively, for the three months ended June 30, 1998 from
$16.86 per barrel and $2.44 per Mcf, respectively, for the three months
ended June 30, 1997.
53
<PAGE>
As discussed in Liquidity and Capital Resources above, the II-D
Partnership sold certain oil and gas properties during the three months
ended June 30, 1998 and recognized a $69,790 gain on such sales. Similar
sales during the three months ended June 30, 1997 resulted in the II-D
Partnership recognizing similar gains totaling $75,486.
The II-D Partnership recognized a gas contract settlement in the amount of
$3,033,283 during the three months ended June 30, 1998. This settlement
involved claims made for take or pay deficiencies and gas pricing issues
arising out of a gas purchase contract. No similar settlements occurred
during the three months ended June 30, 1997.
Oil and gas production expenses (including lease operating expenses and
production taxes) decreased $108,539 (28.9%) for the three months ended
June 30, 1998 as compared to the three months ended June 30, 1997. This
decrease resulted primarily from (i) a decrease in production taxes
associated with the decrease in oil and gas sales and (ii) a decrease in
lease operating expenses associated with the decreases in volumes of oil
and gas sold during the six months ended June 30, 1998 as compared to the
six months ended June 30, 1997. As a percentage of oil and gas sales,
these expenses increased to 42.1% for the three months ended June 30, 1998
from 35.1% for the three months ended June 30, 1997. This percentage
increase was primarily due to the decreases in the average prices of oil
and gas sold during the three months ended June 30, 1998 as compared to
the three months ended June 30, 1997.
Depreciation, depletion, and amortization of oil and gas properties
decreased $29,870 (20.7%) for the three months ended June 30, 1998 as
compared to the three months ended June 30, 1997. This decrease resulted
primarily from the decrease in volumes of oil and gas sold during the
three months ended June 30, 1998 as compared to the three months ended
June 30 1997. As a percentage of oil and gas sales, this expense increased
to 18.1% for the three months ended June 30, 1998 from 13.5% for the three
months ended June 30, 1997. This percentage increase was primarily due to
the decreases in the average price of oil and gas sold during the three
months ended June 30, 1998 as compared to the three months ended June 30
1997.
54
<PAGE>
General and administrative expenses decreased $26,588 (22.8%) for the
three months ended June 30, 1998 as compared to the three months ended
June 30, 1997. This decrease resulted primarily from a decrease in legal
and other professional fees for the three months ended June 30, 1998 as
compared to the three months ended June 30, 1997. As a percentage of oil
and gas sales, these expenses increased to 14.2% for the three months
ended June 30, 1998 from 10.9% for the three months ended June 30, 1997.
This percentage increase was primarily due to the decrease in oil and gas
sales discussed above.
SIX MONTHS ENDED JUNE 30, 1998 AS COMPARED TO THE SIX MONTHS ENDED JUNE
30, 1997.
Six Months Ended June 30,
---------------------------
1998 1997
---------- ----------
Oil and gas sales $1,345,511 $2,279,952
Oil and gas production expenses $ 588,283 $ 695,531
Barrels produced 20,494 25,538
Mcf produced 539,314 759,290
Average price/Bbl $ 13.57 $ 20.24
Average price/Mcf $ 1.98 $ 2.32
As shown in the table above, total oil and gas sales decreased $934,441
(41%) for the six months ended June 30, 1998 as compared to the six months
ended June 30, 1997. Of this decrease, approximately $102,000 and
$511,000, respectively, were related to decreases in volumes of oil and
gas sold and approximately $137,000 and $185,000, respectively, were
related to decreases in the average prices of oil and gas sold. Volumes of
oil and gas sold decreased 5,044 barrels and 219,976 Mcf, respectively,
for the six months ended June 30, 1998 as compared to the six months ended
June 30, 1997. The decrease in volumes of oil sold resulted primarily from
(i) the sale of a significant number of wells in 1997 and 1998, (ii)
positive prior period volume adjustments by purchasers on two significant
wells during the six months ended June 30, 1997, and (iii) normal declines
in production due to diminishing reserves on two significant wells during
the six months ended June 30, 1998. The decrease in volumes of gas sold
resulted primarily from (i) the sale of a significant number of wells in
1997 and 1998, (ii) the shutting-in of one significant well during the six
months ended June 30, 1998 to perform a workover in order to improve the
recovery of reserves, (iii) the temporary abandonment of another
significant well during the six months ended June 30, 1998, and (iv) a
positive prior period volume adjustment by a purchaser on another
significant well during the six months ended June 30, 1998. Average oil
and gas prices decreased to $13.57 per barrel and $1.98 per Mcf,
respectively, for the six months ended June 30, 1998 from
55
<PAGE>
$20.24 per barrel and $2.32 per Mcf, respectively, for the six months
ended June 30, 1997.
As discussed in Liquidity and Capital Resources above, the II-D
Partnership sold certain oil and gas properties during the six months
ended June 30, 1998 and recognized a $508,895 gain on such sales. Similar
sales during the six months ended June 30, 1997 resulted in the II-D
Partnership recognizing similar gains totaling $85,390.
The II-D Partnership recognized a gas contract settlement in the amount of
$3,033,283 during the six months ended June 30, 1998. This settlement
involved claims made for take or pay deficiencies and gas pricing issues
arising out of a gas purchase contract. No similar settlements occurred
during the six months ended June 30, 1997.
Oil and gas production expenses (including lease operating expenses and
production taxes) decreased $107,248 (15.4%) for the six months ended June
30, 1998 as compared to the six months ended June 30, 1997. This decrease
resulted primarily from (i) a decrease in production taxes associated with
the decrease in oil and gas sales discussed above and (ii) a decrease in
lease operating expenses associated with the decreases in volumes of oil
and gas sold during the six months ended June 30, 1998 as compared to the
six months ended June 30, 1997. These decreases were partially offset by
(i) workover expenses incurred on three significant wells during the six
months ended June 30, 1998 in order to improve the recovery of reserves
and (ii) a positive prior period lease operating expenses adjustment by
the operator of one significant well during the six months ended June 30,
1998. As a percentage of oil and gas sales, these expenses increased to
43.7% for the six months ended June 30, 1998 from 30.5% for the six months
ended June 30, 1997. This percentage increase was primarily due to the
decreases in the average prices of oil and gas sold during the six months
ended June 30, 1998 as compared to the six months ended June 30, 1997.
Depreciation, depletion, and amortization of oil and gas properties
decreased $81,352 (26.4%) for the six months ended June 30, 1998 as
compared to the six months ended June 30, 1997. This decrease resulted
primarily from the decrease in volumes of oil and gas sold during the six
months ended June 30, 1998 as compared to the six months ended June 30,
1997. As a percentage of oil and gas sales, this expense increased to
16.9% for the six months ended June 30, 1998 from 13.5% for the six months
ended June 30, 1997. This percentage increase was primarily due to the
decreases in the average prices of oil and gas sold during the six months
ended June 30, 1998 as compared to the six months ended June 30, 1997.
56
<PAGE>
The II-D Partnership recognized a non-cash charge against earnings of
$143,957 during the six months ended June 30, 1997. This impairment
provision was necessary due 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 during the six months ended June 30,
1998.
General and administrative expenses decreased $29,735 (12.9%) for the six
months ended June 30, 1998 as compared to the six months ended June 30,
1997. This decrease resulted primarily from a decrease in legal fees
during the six months ended June 30, 1998 as compared to the six months
ended June 30, 1997. As a percentage of oil and gas sales, these expenses
increased to 14.9% for the six months ended June 30, 1998 from 10.1% for
the six months ended June 30, 1997. This percentage increase was primarily
due to the decrease in oil and gas sales discussed above.
The Limited Partners have received cash distributions through June 30,
1998 totaling $27,710,903 or 88.01% of Limited Partners' capital
contributions.
II-E PARTNERSHIP
THREE MONTHS ENDED JUNE 30, 1998 AS COMPARED TO THE THREE MONTHS ENDED
JUNE 30, 1997.
Three Months Ended June 30,
---------------------------
1998 1997
-------- --------
Oil and gas sales $412,505 $599,676
Oil and gas production expenses $141,523 $272,645
Barrels produced 10,322 11,099
Mcf produced 142,193 192,047
Average price/Bbl $ 14.02 $ 18.84
Average price/Mcf $ 1.88 $ 2.03
As shown in the table above, total oil and gas sales decreased $187,171
(31.2%) for the three months ended June 30, 1998 as compared to the three
months ended June 30, 1997. Of this decrease, approximately $15,000 and
$101,000, respectively, were related to decreases in volumes of oil and
gas sold and approximately $50,000 and $21,000, respectively, were related
to decreases in the average prices of oil and gas sold. Volumes of oil and
gas sold decreased 777 barrels and 49,854 Mcf, respectively, for the three
months ended June 30, 1998 as compared to the three months ended June 30,
1997. The decrease in volumes of gas sold resulted primarily from (i)
normal declines in production due to diminished reserves during the three
months ended June 30, 1998 and (ii) the sale of several
57
<PAGE>
wells during 1997 and 1998. The average oil price decreased to $14.02 per
barrel for the three months ended June 30, 1998 from $18.84 per barrel for
the three months ended June 30, 1997. The average gas price decreased to
$1.88 per Mcf for the three months ended June 30, 1998 from $2.03 per Mcf
for the three months ended June 30, 1997.
As discussed in Liquidity and Capital Resources above, the II-E
Partnership sold certain oil and gas properties during the three months
ended June 30, 1998 and recognized a $257,260 gain on such sales. Similar
sales during the three months ended June 30, 1997 resulted in the II-E
Partnership recognizing similar gains totaling $51,772.
The II-E Partnership recognized a gas contract settlement in the amount of
$6,158,619 during the three months ended June 30, 1998. This settlement
involved claims made for take or pay deficiencies and gas pricing issues
arising out of a gas purchase contract. No similar settlements occurred
during the three months ended June 30, 1997.
Oil and gas production expenses (including lease operating expenses and
production taxes) decreased $131,122 (48.1%) for the three months ended
June 30, 1998 as compared to the three months ended June 30, 1997. This
decrease resulted primarily from (i) a decrease in production taxes
associated with the decrease in oil and gas sales, (ii) a decrease in
lease operating expenses associated with the decreases in volumes of oil
and gas sold during the three months ended June 30, 1998 as compared to
the three months ended June 30, 1997, (iii) workover expenses incurred on
one significant well during the three months ended June 30, 1997 in order
to improve the recovery of reserves, (iv) the sale of several wells during
1997 and 1998, and (v) a negative prior period lease operating expense
adjustment made by the operator of one significant well during the three
months ended June 30, 1998. As a percentage of oil and gas sales, these
expenses decreased to 34.3% for the three months ended June 30, 1998 from
45.5% for the three months ended June 30, 1997. This percentage decrease
was primarily due to the dollar decrease in oil and gas production
expenses discussed above.
Depreciation, depletion, and amortization of oil and gas properties
decreased $30,467 (20.0%) for the three months ended June 30, 1998 as
compared to the three months ended June 30, 1997. This decrease resulted
primarily from (i) the decreases in volumes of oil and gas sold during the
three months ended June 30, 1998 as compared to the three months ended
June 30, 1997 and (ii) upward revisions in the estimates of remaining oil
and gas reserves at December 31, 1997. As a percentage of oil and gas
sales, this expense increased to 29.6% for the three months ended June 30,
1998 from 25.4% for the three months ended June 30, 1997. This percentage
increase was primarily due to decreases in the
58
<PAGE>
average prices of oil and gas sold during the six months ended June 30,
1998 as compared to the six months ended June 30, 1997.
General and administrative expenses decreased $36,279 (34.5%) for the
three months ended June 30, 1998 as compared to the three months ended
June 30, 1997. This decrease resulted primarily from a decrease in legal
expenses during the three months ended June 30, 1998 as compared to the
three months ended June 30, 1997. As a percentage of oil and gas sales,
these expenses decreased to 16.7% for the three months ended June 30, 1998
from 17.5% for the three months ended June 30, 1997.
SIX MONTHS ENDED JUNE 30, 1998 AS COMPARED TO THE SIX MONTHS ENDED JUNE
30, 1997.
Six Months Ended June 30,
-------------------------
1998 1997
-------- ----------
Oil and gas sales $890,830 $1,379,969
Oil and gas production expenses $307,247 $ 508,969
Barrels produced 18,722 23,160
Mcf produced 320,042 396,698
Average price/Bbl $ 14.21 $ 20.08
Average price/Mcf $ 1.95 $ 2.31
As shown in the table above, total oil and gas sales decreased $489,138
(35.4%) for the six months ended June 30, 1998 as compared to the six
months ended June 30, 1997. Of this decrease, approximately $89,000 and
$177,000, respectively, were related to a decrease in volumes of oil and
gas sold and approximately $110,000 and $113,000, respectively, were
related to decreases in the average prices of oil and gas sold. Volumes of
oil and gas sold decreased 4,438 barrels and 76,656 Mcf, respectively, for
the six months ended June 30, 1998 as compared to the six months ended
June 30, 1997. The decrease in volumes of oil sold resulted primarily from
normal declines in production due to diminishing reserves on several wells
during the six months ended June 30, 1998. The decrease in the volumes of
gas sold resulted primarily from (i) normal declines in production due to
diminishing reserves on several wells during the six months ended June 30,
1998, (ii) the sale of several wells during 1997 and 1998, and (iii)
positive prior period volume adjustments made by the purchaser on one
significant well during the six months ended June 30, 1997. Average oil
and gas prices decreased to $14.21 per barrel and $1.95 per Mcf,
respectively, for the six months ended June 30, 1998 from $20.08 per
barrel and $2.31 per Mcf, respectively, for the six months ended June 30,
1997.
59
<PAGE>
The II-E Partnership recognized a gas contract settlement in the amount of
$6,158,619 during the six months ended June 30, 1998. This settlement
involved claims made for take or pay deficiencies and gas pricing issues
arising out of a gas purchase contract. No similar settlements occurred
during the six months ended June 30, 1997.
Oil and gas production expenses (including lease operating expenses and
production taxes) decreased $201,722 (39.6%) for the six months ended June
30, 1998 as compared to the six months ended June 30, 1997. This decrease
resulted primarily from (i) a decrease in production taxes associated with
the decrease in oil and gas sales discussed above, (ii) a decrease in
lease operating expenses associated with the decreases in volumes of oil
and gas sold during the six months ended June 30, 1998 as compared to the
six months ended June 30, 1997, (iii) the sale of several wells during
1997 and 1998, (iv) workover expenses incurred on one significant well
during the six months ended June 30, 1997 in order to improve the recovery
of reserves, and (v) a negative prior period lease operating expense
adjustment made by the operator of one significant well during the six
months ended June 30, 1998. As a percentage of oil and gas sales, these
expenses decreased to 34.5% for the six months ended June 30, 1998 from
36.9% for the six months ended June 30, 1997.
Depreciation, depletion, and amortization of oil and gas properties
decreased $57,334 (18.1%) for the six months ended June 30, 1998 as
compared to the six months ended June 30, 1997. This decrease resulted
primarily from (i) the decreases in volumes of oil and gas sold during the
six months ended June 30, 1998 as compared to the six months ended June
30, 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 increased to 29.0% for the six months ended June 30, 1998 from
22.9% for the six months ended June 30, 1997. This percentage increase was
primarily due to the decreases in the average prices of oil and gas sold
during the six months ended June 30, 1998 as compared to the six months
ended June 30, 1997.
60
<PAGE>
The II-E Partnership recognized a non-cash charge against earnings of
$992,851 during the six months ended June 30, 1997. Of this amount,
$317,979 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 $674,872 was related to the writing-off of unproved properties.
These unproved properties were written off based on the General Partner's
determination that it was unlikely that such properties would be developed
due to the low oil and gas prices received over the prior several years
and provisions in the II-E Partnership's partnership agreement which limit
the level of permissible drilling activity. No similar charges were
necessary during the six months ended June 30, 1998.
General and administrative expenses decreased $51,806 (25.7%) for the six
months ended June 30, 1998 as compared to the six months ended June 30,
1997. This decrease resulted primarily from a decrease in legal expenses
during the six months ended June 30, 1998 as compared to the six months
ended June 30, 1997. As a percentage of oil and gas sales, these expenses
increased to 16.8% for the six months ended June 30, 1998 from 14.6% for
the six months ended June 30, 1997. This percentage increase was primarily
due to the decrease in oil and gas sales discussed above.
The Limited Partners have received cash distributions through June 30,
1998 totaling $15,865,574 or 69.34% of Limited Partners' capital
contributions.
II-F PARTNERSHIP
THREE MONTHS ENDED JUNE 30, 1998 AS COMPARED TO THE THREE MONTHS ENDED
JUNE 30, 1997.
Three Months Ended June 30,
---------------------------
1998 1997
-------- --------
Oil and gas sales $388,882 $447,250
Oil and gas production expenses $ 88,032 $102,866
Barrels produced 10,980 11,858
Mcf produced 114,372 147,808
Average price/Bbl $ 15.81 $ 18.11
Average price/Mcf $ 1.88 $ 1.57
As shown in the table above, total oil and gas sales decreased $58,366
(13.1%) for the three months ended June 30, 1998 as compared to the three
months ended June 30, 1997. Of this decrease, approximately $16,000 and
$53,000, respectively, were related to decreases in volumes of oil and gas
sold and approximately $25,000 was related to a
61
<PAGE>
decrease in the average price of oil sold, which amounts were partially
offset by an increase of approximately $35,000 related to an increase in
the average price of gas sold. Volumes of oil sold decreased 878 barrels,
while volumes of gas sold decreased 33,436 Mcf for the three months ended
June 30, 1998 as compared to the three months ended June 30, 1997. The
decrease in volumes of gas sold resulted primarily from the sale of
several wells during 1997 and the first two quarters of 1998. Average oil
prices decreased to $15.81 per barrel for the three months ended June 30,
1998 from $18.11 per barrel for the three months ended June 30, 1997.
Average gas prices increased to $1.88 per Mcf for the three months ended
June 30, 1998 from $1.57 per Mcf for the three months ended June 30, 1997.
As discussed in Liquidity and Capital Resources above, the II-F
Partnership sold certain oil and gas properties during the three months
ended June 30, 1998 and recognized a $538,754 gain on such sales. Similar
sales during the three months ended June 30, 1997 resulted in the II-F
Partnership recognizing similar gains totaling $166,768.
Oil and gas production expenses (including lease operating expenses and
production taxes) decreased $14,834 (14.4%) for the three months ended
June 30, 1998 as compared to the three months ended June 30, 1997. This
decrease resulted primarily from (i) a decrease in production taxes
associated with the decrease in oil and gas sales and (ii) a decrease in
lease operating expenses associated with the decreases in volumes of oil
and gas sold during the three months ended June 30, 1998 as compared to
the three months ended June 30, 1997. As a percentage of oil and gas
sales, these expenses remained relatively constant at 22.6% for the three
months ended June 30, 1998 and 23.0% for the three months ended June 30,
1997.
Depreciation, depletion, and amortization of oil and gas properties
decreased $20,123 (19.4%) for the three months ended June 30, 1998 as
compared to the three months ended June 30, 1997. This decrease resulted
primarily from (i) the decreases in volumes of oil and gas sold during the
three months ended June 30, 1998 as compared to the three months ended
June 30, 1997 and (ii) upward revisions in the estimates of remaining oil
and gas reserves at December 31, 1997. As a percentage of oil and gas
sales, this expense remained relatively constant at 21.5% for the three
months ended June 30, 1998 and 23.2% for the three months ended June 30,
1997.
62
<PAGE>
General and administrative expenses decreased $7,202 (13.1%) for the three
months ended June 30, 1998 as compared to the three months ended June 30,
1997. This decrease resulted primarily from a decrease in professional
fees during the three months ended June 30, 1998 as compared to the three
months ended June 30, 1997. As a percentage of oil and gas sales, these
expenses remained relatively constant at 12.2% for the three months ended
June 30, 1998 and 12.3% for the three months ended June 30, 1997.
SIX MONTHS ENDED JUNE 30, 1998 AS COMPARED TO THE SIX MONTHS ENDED JUNE
30, 1997.
Six Months Ended June 30,
-------------------------
1998 1997
-------- ----------
Oil and gas sales $820,953 $1,176,415
Oil and gas production expenses $202,863 $ 262,496
Barrels produced 20,785 23,870
Mcf produced 257,819 291,017
Average price/Bbl $ 14.99 $ 19.51
Average price/Mcf $ 1.98 $ 2.44
As shown in the table above, total oil and gas sales decreased $355,462
(30.2%) for the six months ended June 30, 1998 as compared to the six
months ended June 30, 1997. Of this decrease, approximately $60,000 and
$81,000, respectively, were related to decreases in volumes oil and gas
sold and approximately $94,000 and $120,000, respectively, were related to
decreases in the average prices of oil and gas sold. Volumes of oil and
gas sold decreased 3,085 barrels and 33,198 Mcf, respectively, for the six
months ended June 30, 1998 as compared to the six months ended June 30,
1997. The decreases in volumes of oil and gas sold resulted primarily from
the sale of several wells during 1997 and the first two quarters of 1998.
Average oil and gas prices decreased to $14.99 per barrel and $1.98 per
Mcf, respectively, for the six months ended June 30, 1998 from $19.51 per
barrel and $2.44 per Mcf, respectively, for the six months ended June 30,
1997.
As discussed in Liquidity and Capital Resources above, the II-F
Partnership sold certain oil and gas properties during the six months
ended June 30, 1998 and recognized a $655,945 gain on such sales. Similar
sales during the six months ended June 30, 1997 resulted in the II-F
Partnership recognizing similar gains totaling $166,768.
63
<PAGE>
Oil and gas production expenses (including lease operating expenses and
production taxes) decreased $59,633 (22.7%) for the six months ended June
30, 1998 as compared to the six months ended June 30, 1997. This decrease
resulted primarily from (i) a decrease in production taxes associated with
the decrease in oil and gas sales, (ii) a decrease in lease operating
expenses associated with the decreases in volumes of oil and gas sold
during the six months ended June 30, 1998 as compared to the six months
ended June 30, 1997, (iii) workover expenses incurred on two significant
wells during the six months ended June 30, 1997 in order to improve the
recovery of reserves, and (iv) a positive prior period lease operating
expense adjustment incurred on one significant well during the six months
ended June 30, 1997. As a percentage of oil and gas sales, these expenses
increased to 24.7% for the six months ended June 30, 1998 from 22.3% for
the six months ended June 30, 1997. This percentage increase was primarily
due to the decreases in the average prices of oil and gas sold during the
six months ended June 30, 1998 as compared to the six months ended June
30, 1997.
Depreciation, depletion, and amortization of oil and gas properties
decreased $28,300 (13.8%) for the six months ended June 30, 1998 as
compared to the six months ended June 30, 1997. This decrease resulted
primarily from (i) the decreases in volumes of oil and gas sold during the
six months ended June 30, 1998 as compared to the six months ended June
30, 1997 and (ii) upward revisions in the estimates of remaining oil and
gas reserves at December 31, 1997. As a percentage of oil and gas sales,
this expense increased to 21.6% for the six months ended June 30, 1998
from 17.5% for the six months ended June 30, 1997. This percentage
increase was primarily due to the decreases in the average prices of oil
and gas sold during the six months ended June 30, 1998 as compared to the
six months ended June 30, 1997.
The II-F Partnership recognized a non-cash charge against earnings of
$1,377,160 during the six months ended June 30, 1997. Of this amount,
$208,255 was related to the decline in oil and gas prices used to
determine the recoverability of proved oil and gas reserves at March 31,
1997 and $1,168,905 was related to the writing-off of unproved properties.
These unproved properties were written off based on the General Partner's
determination that it was unlikely that such properties would be developed
due to the low oil and gas prices received over the prior several years
and provisions in the II-E Partnership's partnership agreement which limit
the level of permissible drilling activity. No similar charges were
necessary during the six months ended June 30, 1998.
64
<PAGE>
General and administrative expenses decreased $2,970 (2.7%) for the six
months ended June 30, 1998 as compared to the six months ended June 30,
1997. As a percentage of oil and gas sales, these expenses increased to
13.0% for the six months ended June 30, 1998 from 9.3% for the six months
ended June 30, 1997. This percentage increase was primarily due to the
decrease in oil and gas sales discussed above.
The Limited Partners have received cash distributions through June 30,
1998 totaling $16,039,051 or 93.58% of Limited Partners' capital
contributions.
II-G PARTNERSHIP
THREE MONTHS ENDED JUNE 30, 1998 AS COMPARED TO THE THREE MONTHS ENDED
JUNE 30, 1997.
Three Months Ended June 30,
---------------------------
1998 1997
-------- --------
Oil and gas sales $834,166 $981,156
Oil and gas production expenses $190,119 $229,345
Barrels produced 23,057 24,902
Mcf produced 248,346 318,934
Average price/Bbl $ 15.80 $ 18.11
Average price/Mcf $ 1.89 $ 1.66
As shown in the table above, total oil and gas sales decreased $146,989
(15.0%) for the three months ended June 30, 1998 as compared to the three
months ended June 30, 1997. Of this decrease, approximately $34,000 and
$117,000, respectively, were related to decreases in volumes of oil and
gas sold and approximately $53,000 was related to a decrease in the
average price of oil sold, which decreases were partially offset by an
increase of approximately $57,000 related to an increase in the average
price of gas sold. Volumes of oil and gas sold decreased 1,845 barrels and
70,588 Mcf, respectively, for the three months ended June 30, 1998 as
compared to the three months ended June 30, 1997. The decrease in volumes
of gas sold resulted primarily from the sale of several wells during 1997
and the first two quarters of 1998. Average oil prices decreased to $15.80
per barrel for the three months ended June 30, 1998 from $18.11 per barrel
for the three months ended June 30, 1997. Average gas prices increased to
$1.89 per Mcf for the three months ended June 30, 1998 from $1.66 per Mcf
for the three months ended June 30, 1997.
65
<PAGE>
As discussed in Liquidity and Capital Resources above, the II-G
Partnership sold certain oil and gas properties during the three months
ended June 30, 1998 and recognized a $1,126,657 gain on such sales.
Similar sales during the three months ended June 30, 1997 resulted in the
II-G Partnership recognizing similar gains totaling $329,485.
Oil and gas production expenses (including lease operating expenses and
production taxes) decreased $39,226 (17.1%) for the three months ended
June 30, 1998 as compared to the three months ended June 30, 1997. This
decrease resulted primarily from (i) a decrease in production taxes
associated with the decrease in oil and gas sales and (ii) a decrease in
lease operating expenses associated with the decrease in volumes of oil
and gas sold during the three months ended June 30, 1998 as compared to
the three months ended June 30, 1997. As a percentage of oil and gas
sales, these expenses remained relatively constant at 22.8% for the three
months ended June 30, 1998 and 23.4% for the three months ended June 30,
1997.
Depreciation, depletion, and amortization of oil and gas properties
decreased $46,694 (20.6%) for the three months ended June 30, 1998 as
compared to the three months ended June 30, 1997. This decrease resulted
primarily from (i) the decreases in volumes of oil and gas sold during the
three months ended June 30, 1998 as compared to the three months ended
June 30, 1997 and (ii) upward revisions in the estimates of remaining oil
and gas reserves at December 31, 1997. As a percentage of oil and gas
sales, this expense decreased to 20.6% for the three months ended June 30,
1998 from 23.2% for the three months ended June 30, 1997. This percentage
decrease was primarily due to the upward revisions discussed above.
General and administrative expenses decreased $15,525 (13.1%) for the
three months ended June 30, 1998 as compared to the three months ended
June 30, 1997. This decrease was primarily due to a decrease in
professional fees during the three months ended June 30, 1998 as compared
to the three months ended June 30, 1997. As a percentage of oil and gas
sales, these expenses remained relatively constant at 12.4% for the three
months ended June 30, 1998 and 12.1% for the three months ended June 30,
1997.
66
<PAGE>
SIX MONTHS ENDED JUNE 30, 1998 AS COMPARED TO THE SIX MONTHS ENDED JUNE
30, 1997.
Six Months Ended June 30,
-------------------------
1998 1997
---------- ----------
Oil and gas sales $1,748,556 $2,517,489
Oil and gas production expenses $ 434,228 $ 573,603
Barrels produced 43,650 50,149
Mcf produced 553,490 626,682
Average price/Bbl $ 14.98 $ 19.51
Average price/Mcf $ 1.98 $ 2.46
As shown in the table above, total oil and gas sales decreased $768,933
(30.5%) for the six months ended June 30, 1998 as compared to the six
months ended June 30, 1997. Of this decrease, approximately $127,000 and
$180,000, respectively, were related to decreases in volumes of oil and
gas sold and approximately $197,000 and $265,000, respectively, were
related to decreases in the average prices of oil and gas sold. Volumes of
oil and gas sold decreased 6,499 barrels and 73,192 Mcf, respectively, for
the six months ended June 30, 1998 as compared to the six months ended
June 30, 1997. The decrease in volumes of oil and gas sold resulted
primarily from the sale of several wells during 1997 and the first two
quarters of 1998. Average oil and gas prices decreased to $14.98 per
barrel and $1.98 per Mcf, respectively, for the six months ended June 30,
1998 from $19.51 per barrel and $2.46 per Mcf, respectively, for the six
months ended June 30, 1997.
As discussed in Liquidity and Capital Resources above, the II-G
Partnership sold certain oil and gas properties during the six months
ended June 30, 1998 and recognized a $1,372,284 gain on such sales.
Similar sales during the six months ended June 30, 1997 resulted in the
II-G Partnership recognizing similar gains totaling $329,485.
Oil and gas production expenses (including lease operating expenses and
production taxes) decreased $139,375 (24.3%) for the six months ended June
30, 1998 as compared to the six months ended June 30, 1997. This decrease
resulted primarily from (i) a decrease in production taxes associated with
the decrease in oil and gas sales discussed above, (ii) a decrease in
lease operating expenses associated with the decreases in volumes of oil
and gas sold during the six months ended June 30, 1998 as compared to the
six months ended June 30, 1997, (iii) workover expenses incurred on two
significant wells during the six months ended June 30, 1997 in order to
improve the recovery of reserves, (iv) the sale of several wells during
1997 and the first two quarters of 1998, and (v) a positive prior period
lease operating
67
<PAGE>
expense adjustment on one significant well during the six months ended
June 30, 1997. As a percentage of oil and gas sales, these expenses
increased to 24.8% for the six months ended June 30, 1998 from 22.8% for
the six months ended June 30, 1997.
Depreciation, depletion, and amortization of oil and gas properties
decreased $69,360 (15.4%) for the six months ended June 30, 1998 as
compared to the six months ended June 30, 1997. This decrease resulted
primarily from (i) the decreases in volumes of oil and gas sold during the
six months ended June 30, 1998 as compared to the six months ended June
30, 1997 and (ii) upward revisions in the estimates of remaining oil and
gas reserves at December 31, 1997. As a percentage of oil and gas sales,
this expense increased to 21.8% for the six months ended June 30, 1998
from 17.9% for the six months ended June 30, 1997. This percentage
increase was primarily due to the decreases in the average prices of oil
and gas sold during the six months ended June 30, 1998 as compared to the
six months ended June 30, 1997.
The II-G Partnership recognized a non-cash charge against earnings of
$3,101,656 during the six months ended June 30, 1997. Of this amount,
$489,672 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 $2,611,984 was related to the writing-off of unproved properties.
These unproved properties were written off based on the General Partner's
determination that it was unlikely that such properties would be developed
due to the low oil and gas prices received over the prior several years
and provisions in the II-G Partnership's partnership agreement which limit
the level of permissible drilling activity. No similar charges were
necessary during the six months ended June 30, 1998.
General and administrative expenses decreased $6,362 (2.7%) for the six
months ended June 30, 1998 as compared to the six months ended June 30,
1997. As a percentage of oil and gas sales, these expenses increased to
13.3% for the six months ended June 30, 1998 from 9.5% for the six months
ended June 30, 1997. This percentage increase was primarily due to the
decrease in oil and gas sales discussed above.
The Limited Partners have received cash distributions through June 30,
1998 totaling $33,030,371 or 88.75% of Limited Partners' capital
contributions.
68
<PAGE>
II-H PARTNERSHIP
THREE MONTHS ENDED JUNE 30, 1998 AS COMPARED TO THE THREE MONTHS ENDED
JUNE 30, 1997.
Three Months Ended June 30,
---------------------------
1998 1997
-------- --------
Oil and gas sales $195,270 $249,219
Oil and gas production expenses $ 46,173 $ 59,697
Barrels produced 5,362 5,785
Mcf produced 58,604 78,951
Average price/Bbl $ 15.82 $ 18.10
Average price/Mcf $ 1.88 $ 1.83
As shown in the table above, total oil and gas sales decreased $53,949
(21.6%) for the three months ended June 30, 1998 as compared to the three
months ended June 30, 1997. Of this decrease, approximately $8,000 and
$37,000, respectively, were related to decreases in volumes of oil and gas
sold and approximately $12,000 was related to a decrease in the average
price of oil sold. Volumes of oil and gas sold decreased 423 barrels and
20,347 Mcf, respectively, for the three months ended June 30, 1998 as
compared to the three months ended June 30, 1997. The decrease in volumes
of gas sold resulted primarily from the sale of several wells during 1997
and the first two quarters of 1998. Average oil prices decreased to $15.82
per barrel for the three months ended June 30, 1998 from $18.10 per barrel
for the three months ended June 30, 1997. Average gas prices increases to
$1.88 per Mcf for the three months ended June 30, 1998 from $1.83 per Mcf
for the three months ended June 30, 1997.
As discussed in Liquidity and Capital Resources above, the II-H
Partnership sold certain oil and gas properties during the three months
ended June 30, 1998 and recognized a $257,705 gain on such sales. Similar
sales during the three months ended June 30, 1997 resulted in the II-H
Partnership recognizing similar gains totaling $75,503.
Oil and gas production expenses (including lease operating expenses and
production taxes) decreased $13,524 (22.7%) for the three months ended
June 30, 1998 as compared to the three months ended June 30, 1997. This
decrease resulted primarily from (i) a decrease in production taxes
associated with the decrease in oil and gas sales and (ii) a decrease in
lease operating expenses associated with the decreases in volumes of oil
and gas sold during the three months ended June 30, 1998 as compared to
the three months ended June 30, 1997. As a percentage of oil and gas
sales, these expenses remained relatively constant at 23.6% for the three
months
69
<PAGE>
ended June 30, 1998 and 24.0% for the three months ended June 30, 1997.
Depreciation, depletion, and amortization of oil and gas properties
decreased $13,331 (24.3%) for the three months ended June 30, 1998 as
compared to the three months ended June 30, 1997. This decrease resulted
primarily from (i) the decreases in volumes of oil and gas sold during the
three months ended June 30, 1998 as compared to the three months ended
June 30, 1997 and (ii) upward revisions in the estimates of remaining oil
and gas reserves at December 31, 1997. As a percentage of oil and gas
sales, this expense remained relatively constant at 21.3% for the three
months ended June 30, 1998 and 22.0% for the three months ended June 30,
1997.
General and administrative expenses decreased $3,786 (12.9%) for the three
months ended June 30, 1998 as compared to the three months ended June 30,
1997. This decrease was primarily due to a decrease in professional fees
during the three months ended June 30, 1998 as compared to the three
months ended June 30, 1997. As a percentage of oil and gas sales, these
expenses remained relatively constant at 13.0% for the three months ended
June 30, 1998 and 11.7% for the three months ended June 30, 1997.
SIX MONTHS ENDED JUNE 30, 1998 AS COMPARED TO THE SIX MONTHS ENDED JUNE
30, 1997.
Six Months Ended June 30,
-------------------------
1998 1997
-------- --------
Oil and gas sales $412,973 $610,033
Oil and gas production expenses $104,513 $144,131
Barrels produced 10,151 11,666
Mcf produced 131,279 154,134
Average price/Bbl $ 14.99 $ 19.51
Average price/Mcf $ 1.99 $ 2.48
As shown in the table above, total oil and gas sales decreased $197,060
(32.3%) for the six months ended June 30, 1998 as compared to the six
months ended June 30, 1997. Of this decrease, approximately $29,000 and
$57,000, respectively, were related to decreases in volumes oil and gas
sold and approximately $46,000 and $65,000, respectively, were related to
decreases in the average prices of oil and gas sold. Volumes of oil and
gas sold decreased 1,515 barrels and 22,855 Mcf, respectively, for the six
months ended June 30, 1998 as compared to the six months ended June 30,
1997. The decreases in volumes of oil and gas sold resulted primarily from
the sale of several wells during 1997 and the first two quarters of 1998.
Average oil and gas prices decreased to $14.99 per barrel
70
<PAGE>
and $1.99 per Mcf, respectively, for the six months ended June 30, 1998
from $19.51 per barrel and $2.48 per Mcf, respectively, for the six months
ended June 30, 1997.
As discussed in Liquidity and Capital Resources above, the II-H
Partnership sold certain oil and gas properties during the six months
ended June 30, 1998 and recognized a $315,023 gain on such sales. Similar
sales during the six months ended June 30, 1997 resulted in the II-H
Partnership recognizing a similar gain totaling $75,503.
Oil and gas production expenses (including lease operating expenses and
production taxes) decreased $39,618 (27.5%) for the six months ended June
30, 1998 as compared to the six months ended June 30, 1997. This decrease
resulted primarily from (i) a decrease in production taxes associated with
the decrease in oil and gas sales discussed above, (ii) a decrease in
lease operating expenses associated with the decreases in volumes of oil
and gas sold during the six months ended June 30, 1998 as compared to the
six months ended June 30, 1997, (iii) workover expenses incurred on two
significant wells during the six months ended June 30, 1997 in order to
improve the recovery of reserves, and (iv) a positive prior period lease
operating expense adjustment incurred on one significant well during the
six months ended June 30, 1997. As a percentage of oil and gas sales,
these expenses remained relatively constant at 25.3% for the six months
ended June 30, 1998 and 23.6% for the six months ended June 30, 1997.
Depreciation, depletion, and amortization of oil and gas properties
decreased $20,245 (18.7%) for the six months ended June 30, 1998 as
compared to the six months ended June 30, 1997. This decrease resulted
primarily from (i) the decreases in volumes of oil and gas sold during the
six months ended June 30, 1998 as compared to the six months ended June
30, 1997 and (ii) upward revisions in the estimates of remaining oil and
gas reserves at December 31, 1997. As a percentage of oil and gas sales,
this expense increased to 21.3% for the six months ended June 30, 1998
from 17.8% for the six months ended June 30, 1997. This percentage
increase was primarily due to the decreases in the average prices of oil
and gas sold during the six months ended June 30, 1998 as compared to the
six months ended June 30, 1997.
The II-H Partnership recognized a non-cash charge against earnings of
$785,220 during the six months ended June 30, 1997. Of this amount,
$125,223 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 $659,997 was related to the writing-off of unproved properties.
These unproved properties were written off based on the General Partner's
determination that it was
71
<PAGE>
unlikely that such properties would be developed due to the low oil and
gas prices received over the prior several years and provisions in the
II-H Partnership's partnership agreement which limit the level of
permissible drilling activity. No similar charges were necessary during
the six months ended June 30, 1998.
General and administrative expenses decreased $1,531 (2.6%) for the six
months ended June 30, 1998 as compared to the six months ended June 30,
1997. As a percentage of oil and gas sales, these expenses increased to
13.8% for the six months ended June 30, 1998 from 9.6% for the six months
ended June 30, 1997. This percentage increase was primarily due to the
decrease in oil and gas sales discussed above.
The Limited Partners have received cash distributions through June 30,
1998 totaling $7,693,364 or 83.89% of Limited Partners' capital
contributions.
72
<PAGE>
PART II. OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
27.1 Financial Data Schedule containing summary financial
information extracted from the II-A Partnership's
financial statements as of June 30, 1998 and for the six
months ended June 30, 1998, filed herewith.
27.2 Financial Data Schedule containing summary financial
information extracted from the II-B Partnership's
financial statements as of June 30, 1998 and for the six
months ended June 30, 1998, filed herewith.
27.3 Financial Data Schedule containing summary financial
information extracted from the II-C Partnership's
financial statements as of June 30, 1998 and for the six
months ended June 30, 1998, filed herewith.
27.4 Financial Data Schedule containing summary financial
information extracted from the II-D Partnership's
financial statements as of June 30, 1998 and for the six
months ended June 30, 1998, filed herewith.
27.5 Financial Data Schedule containing summary financial
information extracted from the II-E Partnership's
financial statements as of June 30, 1998 and for the six
months ended June 30, 1998, filed herewith.
27.6 Financial Data Schedule containing summary financial
information extracted from the II-F Partnership's
financial statements as of June 30, 1998 and for the six
months ended June 30, 1998, filed herewith.
27.7 Financial Data Schedule containing summary financial
information extracted from the II-G Partnership's
financial statements as of June 30, 1998 and for the six
months ended June 30, 1998, filed herewith.
27.8 Financial Data Schedule containing summary financial
information extracted from the II-H Partnership's
financial statements as of June 30, 1998 and for the six
months ended June 30, 1998, filed herewith.
73
<PAGE>
All other exhibits are omitted as inapplicable.
(b) Reports on Form 8-K.
None.
74
<PAGE>
SIGNATURES
Pursuant to the requirements 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 authorized.
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP II-A
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP II-B
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP II-C
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP II-D
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP II-E
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP II-F
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP II-G
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP II-H
(Registrant)
BY: GEODYNE RESOURCES, INC.
General Partner
Date: August 13, 1998 By: /s/Dennis R. Neill
--------------------------------
(Signature)
Dennis R. Neill
President
Date: August 13, 1998 By: /s/Patrick M. Hall
--------------------------------
(Signature)
Patrick M. Hall
Principal Accounting Officer
75
<PAGE>
INDEX TO EXHIBITS
NUMBER DESCRIPTION
- ------ -----------
27.1 Financial Data Schedule containing summary financial information
extracted from the Geodyne Energy Income Limited Partnership II-A's
financial statements as of June 30, 1998 and for the six months
ended June 30, 1998, filed herewith.
27.2 Financial Data Schedule containing summary financial information
extracted from the Geodyne Energy Income Limited Partnership II-B's
financial statements as of June 30, 1998 and for the six months
ended June 30, 1998, filed herewith.
27.3 Financial Data Schedule containing summary financial information
extracted from the Geodyne Energy Income Limited Partnership II-C's
financial statements as of June 30, 1998 and for the six months
ended June 30, 1998, filed herewith.
27.4 Financial Data Schedule containing summary financial information
extracted from the Geodyne Energy Income Limited Partnership II-D's
financial statements as of June 30, 1998 and for the six months
ended June 30, 1998, filed herewith.
27.5 Financial Data Schedule containing summary financial information
extracted from the Geodyne Energy Income Limited Partnership II-E's
financial statements as of June 30, 1998 and for the six months
ended June 30, 1998, filed herewith.
27.6 Financial Data Schedule containing summary financial information
extracted from the Geodyne Energy Income Limited Partnership II-F's
financial statements as of June 30, 1998 and for the six months
ended June 30, 1998, filed herewith.
27.7 Financial Data Schedule containing summary financial information
extracted from the Geodyne Energy Income Limited Partnership II-G's
financial statements as of June 30, 1998 and for the six months
ended June 30, 1998, filed herewith.
27.8 Financial Data Schedule containing summary financial information
extracted from the Geodyne Energy Income Limited Partnership II-H's
financial statements as of June 30, 1998 and for the six months
ended June 30, 1998, filed herewith.
All other exhibits are omitted as inapplicable.
76
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0000824894
<NAME> GEODYNE ENERGY INCOME LIMITED PARTNERSHIP II-A
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> JUN-30-1998
<CASH> 816,601
<SECURITIES> 0
<RECEIVABLES> 2,286,322
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 3,102,923
<PP&E> 30,922,933
<DEPRECIATION> 26,418,614
<TOTAL-ASSETS> 8,518,283
<CURRENT-LIABILITIES> 249,871
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 8,111,362
<TOTAL-LIABILITY-AND-EQUITY> 8,518,283
<SALES> 1,932,820
<TOTAL-REVENUES> 4,314,335
<CGS> 0
<TOTAL-COSTS> 1,340,763
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 2,973,572
<INCOME-TAX> 0
<INCOME-CONTINUING> 2,973,572
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 2,973,572
<EPS-PRIMARY> 5.81
<EPS-DILUTED> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0000826345
<NAME> GEODYNE ENERGY INCOME LIMITED PARTNERSHIP II-B
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> JUN-30-1998
<CASH> 343,723
<SECURITIES> 0
<RECEIVABLES> 3,215,158
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 3,558,881
<PP&E> 21,677,760
<DEPRECIATION> 18,814,910
<TOTAL-ASSETS> 6,591,542
<CURRENT-LIABILITIES> 101,851
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 6,401,172
<TOTAL-LIABILITY-AND-EQUITY> 6,591,542
<SALES> 1,429,973
<TOTAL-REVENUES> 4,296,128
<CGS> 0
<TOTAL-COSTS> 936,726
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 3,359,402
<INCOME-TAX> 0
<INCOME-CONTINUING> 3,359,402
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 3,359,402
<EPS-PRIMARY> 8.80
<EPS-DILUTED> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0000833054
<NAME> GEODYNE ENERGY INCOME LIMITED PARTNERSHIP II-C
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
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