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 September 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
September 30, December 31,
1998 1997
------------- ------------
CURRENT ASSETS:
Cash and cash equivalents $2,469,615 $ 830,584
Accounts receivable:
Oil and gas sales 457,471 837,560
Other - 20,975
---------- ----------
Total current assets $2,927,086 $1,689,119
NET OIL AND GAS PROPERTIES, utilizing
the successful efforts method 4,283,131 4,894,853
DEFERRED CHARGE 911,041 911,041
---------- ----------
$8,121,258 $7,495,013
========== ==========
LIABILITIES AND PARTNERS' CAPITAL (DEFICIT)
CURRENT LIABILITIES:
Accounts payable $ 94,369 $ 233,246
Gas imbalance payable 142,043 142,043
---------- ----------
Total current liabilities $ 236,412 $ 375,289
ACCRUED LIABILITY $ 157,050 $ 157,050
PARTNERS' CAPITAL (DEFICIT):
General Partner ($ 407,608) ($ 387,587)
Limited Partners, issued and
outstanding, 484,283 units 8,135,404 7,350,261
---------- ----------
Total Partners' capital $7,727,796 $6,962,674
---------- ----------
$8,121,258 $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 SEPTEMBER 30, 1998 AND 1997
(Unaudited)
1998 1997
---------- ----------
REVENUES:
Oil and gas sales $1,092,544 $1,161,480
Interest income 22,091 8,488
Gain on sale of oil and
gas properties 35,623 2,974
---------- ----------
$1,150,258 $1,172,942
COSTS AND EXPENSES:
Lease operating $ 311,930 $ 355,007
Production tax 69,778 73,185
Depreciation, depletion, and
amortization of oil and gas
properties 214,594 189,743
General and administrative
(Note 2) 138,442 132,162
---------- ----------
$ 734,744 $ 750,097
---------- ----------
NET INCOME $ 415,514 $ 422,845
========== ==========
GENERAL PARTNER - NET INCOME $ 28,255 $ 28,308
========== ==========
LIMITED PARTNERS - NET INCOME $ 387,259 $ 394,537
========== ==========
NET INCOME per unit $ .80 $ .81
========== ==========
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 NINE MONTHS ENDED SEPTEMBER 30, 1998 AND 1997
(Unaudited)
1998 1997
---------- ----------
REVENUES:
Oil and gas sales $3,025,364 $4,185,360
Interest income 40,695 25,515
Gain on sale of oil and
gas properties 688,344 59,998
Contract settlement income
(Note 1) 1,710,190 -
---------- ----------
$5,464,593 $4,270,873
COSTS AND EXPENSES:
Lease operating $ 908,775 $1,081,370
Production tax 184,851 253,273
Depreciation, depletion, and
amortization of oil and gas
properties 538,091 579,410
Impairment provision - 684,276
General and administrative
(Note 2) 443,790 459,472
---------- ----------
$2,075,507 $3,057,801
---------- ----------
NET INCOME $3,389,086 $1,213,072
========== ==========
GENERAL PARTNER - NET INCOME $ 188,943 $ 109,925
========== ==========
LIMITED PARTNERS - NET INCOME $3,200,143 $1,103,147
========== ==========
NET INCOME per unit $ 6.61 $ 2.28
========== ==========
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 NINE MONTHS ENDED SEPTEMBER 30, 1998 AND 1997
(Unaudited)
1998 1997
---------- ----------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $3,389,086 $1,213,072
Adjustments to reconcile net
income to net cash provided
by operating activities:
Depreciation, depletion, and
amortization of oil and gas
properties 538,091 579,410
Impairment provision - 684,276
Gain on sale of oil and gas
properties ( 688,344) ( 59,998)
Decrease in accounts receivable -
oil and gas sales 380,089 269,172
Decrease in accounts receivable -
other 20,975 -
Decrease in accounts payable ( 138,877) ( 89,346)
---------- ----------
Net cash provided by operating
activities $3,501,020 $2,596,586
---------- ----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures ($ 22,565) ($ 132,062)
Proceeds from sale of oil and
gas properties 784,540 67,978
---------- ----------
Net cash provided (used) by
investing activities $ 761,975 ($ 64,084)
---------- ----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Cash distributions ($2,623,964) ($2,704,202)
---------- ----------
Net cash used by financing activities ($2,623,964) ($2,702,202)
---------- ----------
NET INCREASE (DECREASE) IN CASH
AND CASH EQUIVALENTS $1,639,031 ($ 171,700)
CASH AND CASH EQUIVALENTS AT
BEGINNING OF PERIOD 830,584 875,918
---------- ----------
CASH AND CASH EQUIVALENTS AT
END OF PERIOD $2,469,615 $ 704,218
========== ==========
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
September 30, December 31,
1998 1997
------------ ------------
CURRENT ASSETS:
Cash and cash equivalents $2,944,027 $ 644,574
Accounts receivable:
Oil and gas sales 349,712 565,152
---------- ----------
Total current assets $3,293,739 $1,209,726
NET OIL AND GAS PROPERTIES, utilizing
the successful efforts method 2,770,394 3,035,158
DEFERRED CHARGE 169,811 169,811
---------- ----------
$6,233,944 $4,414,695
========== ==========
LIABILITIES AND PARTNERS' CAPITAL (DEFICIT)
CURRENT LIABILITIES:
Accounts payable $ 65,046 $ 141,754
Gas imbalance payable 24,671 24,671
---------- ----------
Total current liabilities $ 89,717 $ 166,425
ACCRUED LIABILITY $ 88,519 $ 88,519
PARTNERS' CAPITAL (DEFICIT):
General Partner ($ 316,565) ($ 305,223)
Limited Partners, issued and
outstanding, 361,719 units 6,372,273 4,464,974
---------- ----------
Total Partners' capital $6,055,708 $4,159,751
---------- ----------
$6,233,944 $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 SEPTEMBER 30, 1998 AND 1997
(Unaudited)
1998 1997
-------- ---------
REVENUES:
Oil and gas sales $543,938 $785,354
Interest income 24,180 4,899
Gain on sale of oil and
gas properties 3,649 5,301
-------- --------
$571,767 $795,554
COSTS AND EXPENSES:
Lease operating $210,925 $231,394
Production tax 33,204 56,100
Depreciation, depletion, and
amortization of oil and gas
properties 95,742 129,584
General and administrative
(Note 2) 103,430 95,212
-------- --------
$443,301 $512,290
-------- --------
NET INCOME $128,466 $283,264
======== ========
GENERAL PARTNER - NET INCOME $ 9,044 $ 19,102
======== ========
LIMITED PARTNERS - NET INCOME $119,422 $264,162
======== ========
NET INCOME per unit $ .33 $ .73
======== ========
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 NINE MONTHS ENDED SEPTEMBER 30, 1998 AND 1997
(Unaudited)
1998 1997
---------- ----------
REVENUES:
Oil and gas sales $1,973,911 $2,844,739
Interest income 33,865 14,890
Gain on sale of oil and
gas properties 66,824 55,777
Contract settlement income
(Note 1) 2,793,295 -
---------- ----------
$4,867,895 $2,915,406
COSTS AND EXPENSES:
Lease operating $ 630,942 $ 711,273
Production tax 119,036 185,792
Depreciation, depletion, and
amortization of oil and gas
properties 296,713 391,440
Impairment provision - 530,988
General and administrative
(Note 2) 333,336 352,750
---------- ----------
$1,380,027 $2,172,243
---------- ----------
NET INCOME $3,487,868 $ 743,163
========== ==========
GENERAL PARTNER - NET INCOME $ 184,569 $ 73,311
========== ==========
LIMITED PARTNERS - NET INCOME $3,303,299 $ 669,852
========== ==========
NET INCOME per unit $ 9.13 $ 1.85
========== ==========
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 NINE MONTHS ENDED SEPTEMBER 30, 1998 AND 1997
(Unaudited)
1998 1997
---------- ----------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $3,487,868 $ 743,163
Adjustments to reconcile net
income to net cash provided
by operating activities:
Depreciation, depletion, and
amortization of oil and gas
properties 296,713 391,440
Impairment provision - 530,988
Gain on sale of oil and gas
properties ( 66,824) ( 55,777)
Decrease in accounts receivable -
oil and gas sales 215,440 179,777
Decrease in accounts payable ( 76,708) ( 108,250)
---------- ----------
Net cash provided by operating
activities $3,856,489 $1,681,341
---------- ----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures ($ 43,519) $ -
Proceeds from sale of oil and
gas properties 78,394 57,264
---------- ----------
Net cash provided by investing
activities $ 34,875 $ 57,264
---------- ----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Cash distributions ($1,591,911) ($1,815,198)
---------- ----------
Net cash used by financing activities ($1,591,911) ($1,815,198)
---------- ----------
NET INCREASE (DECREASE) IN CASH AND
CASH EQUIVALENTS $2,299,453 ($ 76,593)
CASH AND CASH EQUIVALENTS AT
BEGINNING OF PERIOD 644,574 569,257
---------- ----------
CASH AND CASH EQUIVALENTS AT
END OF PERIOD $2,944,027 $ 492,664
========== ==========
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
September 30, December 31,
1998 1997
------------- ------------
CURRENT ASSETS:
Cash and cash equivalents $1,302,424 $ 358,095
Accounts receivable:
Oil and gas sales 158,011 273,399
Other - 1,931
---------- ----------
Total current assets $1,460,435 $ 633,425
NET OIL AND GAS PROPERTIES, utilizing
the successful efforts method 1,440,402 1,667,269
DEFERRED CHARGE 139,621 139,621
---------- ----------
$3,040,458 $2,440,315
========== ==========
LIABILITIES AND PARTNERS' CAPITAL (DEFICIT)
CURRENT LIABILITIES:
Accounts payable $ 25,743 $ 33,293
Gas imbalance payable 22,563 22,563
---------- ----------
Total current liabilities $ 48,306 $ 55,856
ACCRUED LIABILITY $ 49,647 $ 49,647
PARTNERS' CAPITAL (DEFICIT):
General Partner ($ 133,357) ($ 123,277)
Limited Partners, issued and
outstanding, 154,621 units 3,075,862 2,458,089
---------- ----------
Total Partners' capital $2,942,505 $2,334,812
---------- ----------
$3,040,458 $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 SEPTEMBER 30, 1998 AND 1997
(Unaudited)
1998 1997
--------- ---------
REVENUES:
Oil and gas sales $253,933 $374,214
Interest income 10,759 3,029
Gain (loss) on sale of oil
and gas properties ( 7,362) 9,147
-------- --------
$257,330 $386,390
COSTS AND EXPENSES:
Lease operating $ 75,529 $ 93,561
Production tax 15,445 30,342
Depreciation, depletion, and
amortization of oil and gas
properties 52,158 50,655
General and administrative
(Note 2) 44,210 40,690
-------- --------
$187,342 $215,248
-------- --------
NET INCOME $ 69,988 $171,142
======== ========
GENERAL PARTNER - NET INCOME $ 5,048 $ 10,432
======== ========
LIMITED PARTNERS - NET INCOME $ 64,940 $160,710
======== ========
NET INCOME per unit $ .42 $ 1.04
======== ========
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 NINE MONTHS ENDED SEPTEMBER 30, 1998 AND 1997
(Unaudited)
1998 1997
---------- ----------
REVENUES:
Oil and gas sales $ 896,558 $1,316,380
Interest income 17,869 8,800
Gain on sale of oil and
gas properties 191,496 99,495
Contract settlement income
(Note 1) 1,197,148 -
---------- ----------
$2,303,071 $1,424,675
COSTS AND EXPENSES:
Lease operating $ 235,610 $ 291,975
Production tax 58,186 95,165
Depreciation, depletion, and
amortization of oil and gas
properties 161,756 157,584
Impairment provision - 66,617
General and administrative
(Note 2) 142,940 151,422
---------- ----------
$ 598,492 $ 762,763
---------- ----------
NET INCOME $1,704,579 $ 661,912
========== ==========
GENERAL PARTNER - NET INCOME $ 90,806 $ 41,624
========== ==========
LIMITED PARTNERS - NET INCOME $1,613,773 $ 620,288
========== ==========
NET INCOME per unit $ 10.44 $ 4.01
========== ==========
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 NINE MONTHS ENDED SEPTEMBER 30, 1998 AND 1997
(Unaudited)
1998 1997
---------- ----------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $1,704,579 $ 661,912
Adjustments to reconcile net
income to net cash provided
by operating activities:
Depreciation, depletion, and
amortization of oil and gas
properties 161,756 157,584
Impairment provision - 66,617
Gain on sale of oil and gas
properties ( 191,496) ( 99,495)
Decrease in accounts receivable -
oil and gas sales 115,388 89,995
Decrease in accounts receivable -
other 1,931 -
Decrease in accounts payable ( 7,550) ( 36,386)
---------- ----------
Net cash provided by operating
activities $1,784,608 $ 840,227
---------- ----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures ($ 18,306) ($ 6,070)
Proceeds from sale of oil and
gas properties 274,913 139,470
---------- ----------
Net cash provided by investing
activities $ 256,607 $ 133,400
---------- ----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Cash distributions ($1,096,886) ($1,107,612)
---------- ----------
Net cash used by financing activities ($1,096,886) ($1,107,612)
---------- ----------
NET INCREASE (DECREASE) IN CASH AND
CASH EQUIVALENTS $ 944,329 ($ 133,985)
CASH AND CASH EQUIVALENTS AT
BEGINNING OF PERIOD 358,095 387,334
---------- ----------
CASH AND CASH EQUIVALENTS AT
END OF PERIOD $1,302,424 $ 253,349
========== ==========
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
September 30, December 31,
1998 1997
------------ ------------
CURRENT ASSETS:
Cash and cash equivalents $3,311,975 $1,151,142
Accounts receivable:
Oil and gas sales 300,304 646,750
General Partner (Note 2) 363 -
Other - 20,267
---------- ----------
Total current assets $3,612,642 $1,818,159
NET OIL AND GAS PROPERTIES, utilizing
the successful efforts method 2,901,295 3,417,760
DEFERRED CHARGE 544,345 544,345
---------- ----------
$7,058,282 $5,780,264
========== ==========
LIABILITIES AND PARTNERS' CAPITAL (DEFICIT)
CURRENT LIABILITIES:
Accounts payable $ 77,417 $ 86,058
Gas imbalance payable 107,004 107,004
---------- ----------
Total current liabilities $ 184,421 $ 193,062
ACCRUED LIABILITY $ 239,083 $ 239,083
PARTNERS' CAPITAL (DEFICIT):
General Partner ($ 251,127) ($ 224,003)
Limited Partners, issued and
outstanding, 314,878 units 6,885,905 5,572,122
---------- ----------
Total Partners' capital $6,634,778 $5,348,119
---------- ----------
$7,058,282 $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 SEPTEMBER 30, 1998 AND 1997
(Unaudited)
1998 1997
--------- ----------
REVENUES:
Oil and gas sales $540,255 $865,030
Interest income 27,851 7,774
Gain on sale of oil and
gas properties 9,650 11,706
Contract settlement income
(Note 1) 363 -
-------- --------
$578,119 $884,510
COSTS AND EXPENSES:
Lease operating $222,073 $237,324
Production tax 34,797 71,475
Depreciation, depletion, and
amortization of oil and gas
properties 110,762 134,830
General and administrative
(Note 2) 90,053 81,438
-------- --------
$457,685 $525,067
-------- --------
NET INCOME $120,434 $359,443
======== ========
GENERAL PARTNER - NET INCOME $ 9,060 $ 22,976
======== ========
LIMITED PARTNERS - NET INCOME $111,374 $336,467
======== ========
NET INCOME per unit $ .36 $ 1.07
======== ========
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 NINE MONTHS ENDED SEPTEMBER 30, 1998 AND 1997
(Unaudited)
1998 1997
---------- ----------
REVENUES:
Oil and gas sales $1,885,766 $3,144,982
Interest income 47,221 22,896
Gain on sale of oil and
gas properties 518,545 97,096
Contract settlement income
(Note 1) 3,033,646 -
---------- ----------
$5,485,178 $3,264,974
COSTS AND EXPENSES:
Lease operating $ 707,939 $ 766,404
Production tax 137,214 237,926
Depreciation, depletion, and
amortization of oil and gas
properties 338,145 443,565
Impairment provision - 143,957
General and administrative
(Note 2) 290,356 311,476
---------- ----------
$1,473,654 $1,903,328
---------- ----------
NET INCOME $4,011,524 $1,361,646
========== ==========
GENERAL PARTNER - NET INCOME $ 211,741 $ 90,438
========== ==========
LIMITED PARTNERS - NET INCOME $3,799,783 $1,271,208
========== ==========
NET INCOME per unit $ 12.07 $ 4.04
========== ==========
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 NINE MONTHS ENDED SEPTEMBER 30, 1998 AND 1997
(Unaudited)
1998 1997
----------- ----------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $4,011,524 $1,361,646
Adjustments to reconcile net
income to net cash provided
by operating activities:
Depreciation, depletion, and
amortization of oil and gas
properties 338,145 443,565
Impairment provision - 143,957
Gain on sale of oil and gas
properties ( 518,545) ( 97,096)
Decrease in accounts receivable -
oil and gas sales 346,446 180,649
Increase in accounts receivable -
General Partner ( 363) -
Decrease in accounts receivable -
other 20,267 -
Decrease in accounts payable ( 8,641) ( 71,308)
---------- ----------
Net cash provided by operating
activities $4,188,833 $1,961,413
---------- ----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures ($ 1,639) ($ 45,321)
Proceeds from sale of oil and
gas properties 698,504 202,663
---------- ----------
Net cash provided by investing
activities $ 696,865 $ 157,342
---------- ----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Cash distributions ($2,724,865) ($2,430,195)
---------- ----------
Net cash used by financing activities ($2,724,865) ($2,430,195)
---------- ----------
NET INCREASE (DECREASE) IN CASH AND
CASH EQUIVALENTS $2,160,833 ($ 311,440)
CASH AND CASH EQUIVALENTS AT
BEGINNING OF PERIOD 1,151,142 906,737
---------- ----------
CASH AND CASH EQUIVALENTS AT
END OF PERIOD $3,311,975 $ 595,297
========== ==========
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
September 30, December 31,
1998 1997
------------ ------------
CURRENT ASSETS:
Cash and cash equivalents $6,309,572 $ 670,777
Accounts receivable:
Oil and gas sales 185,330 415,377
General Partner (Note 2) 736 -
Other - 110
---------- ----------
Total current assets $6,495,638 $1,086,264
NET OIL AND GAS PROPERTIES, utilizing
the successful efforts method 2,540,301 2,841,080
DEFERRED CHARGE 330,531 330,531
---------- ----------
$9,366,470 $4,257,875
========== ==========
LIABILITIES AND PARTNERS' CAPITAL (DEFICIT)
CURRENT LIABILITIES:
Accounts payable $ 38,850 $ 100,603
Gas imbalance payable 171,089 171,089
---------- ----------
Total current liabilities $ 209,939 $ 271,692
ACCRUED LIABILITY $ 63,625 $ 63,625
PARTNERS' CAPITAL (DEFICIT):
General Partner ($ 182,720) ($ 172,017)
Limited Partners, issued and
outstanding, 228,821 units 9,275,626 4,094,575
---------- ----------
Total Partners' capital $9,092,906 $3,922,558
---------- ----------
$9,366,470 $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 SEPTEMBER 30, 1998 AND 1997
(Unaudited)
1998 1997
--------- ---------
REVENUES:
Oil and gas sales $366,664 $591,192
Interest income 52,456 6,347
Gain on sale of oil and
gas properties 6,200 963
Contract settlement income
(Note 1) 736 -
-------- --------
$426,056 $598,502
COSTS AND EXPENSES:
Lease operating $120,322 $115,568
Production tax 26,860 45,879
Depreciation, depletion, and
amortization of oil and gas
properties 123,671 154,394
General and administrative
(Note 2) 65,460 49,977
-------- --------
$336,313 $365,818
-------- --------
NET INCOME $ 89,743 $232,684
======== ========
GENERAL PARTNER - NET INCOME $ 6,811 $ 17,492
======== ========
LIMITED PARTNERS - NET INCOME $ 82,932 $215,192
======== ========
NET INCOME per unit $ .36 $ .94
======== ========
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 NINE MONTHS ENDED SEPTEMBER 30, 1998 AND 1997
(Unaudited)
1998 1997
---------- ----------
REVENUES:
Oil and gas sales $1,257,494 $1,971,161
Interest income 63,149 15,984
Gain on sale of oil and
gas properties 326,675 52,735
Contract settlement income
(Note 1) 6,159,355 -
---------- ----------
$7,806,673 $2,039,880
COSTS AND EXPENSES:
Lease operating $ 363,625 $ 510,128
Production tax 90,804 160,288
Depreciation, depletion, and
amortization of oil and gas
properties 382,374 470,431
Impairment provision - 992,851
General and administrative
(Note 2) 214,935 251,258
---------- ----------
$1,051,738 $2,384,956
---------- ----------
NET INCOME (LOSS) $6,754,935 ($ 345,076)
========== ==========
GENERAL PARTNER - NET INCOME $ 349,884 $ 40,478
========== ==========
LIMITED PARTNERS - NET INCOME (LOSS) $6,405,051 ($ 385,554)
========== ==========
NET INCOME (LOSS) per unit $ 27.99 ($ 1.68)
========== ==========
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 NINE MONTHS ENDED SEPTEMBER 30, 1998 AND 1997
(Unaudited)
1998 1997
---------- ----------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) $6,754,935 ($ 345,076)
Adjustments to reconcile net income
(loss) to net cash provided by
operating activities:
Depreciation, depletion, and
amortization of oil and gas
properties 382,374 470,431
Impairment provision - 992,851
Gain on sale of oil and gas
properties ( 326,675) ( 52,735)
Decrease in accounts receivable -
oil and gas sales 230,047 125,464
Increase in accounts receivable -
General Partner ( 736) ( 12,023)
Decrease in accounts receivable -
other 110 -
Decrease in accounts payable ( 61,753) ( 82,021)
---------- ----------
Net cash provided by operating
activities $6,978,302 $1,096,891
---------- ----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures ($ 110,926) ($ 5,314)
Proceeds from sale of oil and
gas properties 356,006 273,731
---------- ----------
Net cash provided by investing
activities $ 245,080 $ 268,417
---------- ----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Cash distributions ($1,584,587) ($1,364,505)
---------- ----------
Net cash used by financing activities ($1,584,587) ($1,364,505)
---------- ----------
NET INCREASE IN CASH AND CASH
EQUIVALENTS $5,638,795 $ 803
CASH AND CASH EQUIVALENTS AT
BEGINNING OF PERIOD 670,777 528,765
---------- ----------
CASH AND CASH EQUIVALENTS AT
END OF PERIOD $6,309,572 $ 529,568
========== ==========
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
September 30, December 31,
1998 1997
------------- ------------
CURRENT ASSETS:
Cash and cash equivalents $ 205,738 $ 741,852
Accounts receivable:
Oil and gas sales 163,849 334,094
Other - 43
---------- ----------
Total current assets $ 369,587 $1,075,989
NET OIL AND GAS PROPERTIES, utilizing
the successful efforts method 2,148,750 2,432,033
DEFERRED CHARGE 56,867 56,867
---------- ----------
$2,575,204 $3,564,889
========== ==========
LIABILITIES AND PARTNERS' CAPITAL (DEFICIT)
CURRENT LIABILITIES:
Accounts payable $ 23,932 $ 64,348
Gas imbalance payable 25,184 25,184
---------- ----------
Total current liabilities $ 49,116 $ 89,532
ACCRUED LIABILITY $ 27,907 $ 27,907
PARTNERS' CAPITAL (DEFICIT):
General Partner ($ 153,067) ($ 143,355)
Limited Partners, issued and
outstanding, 171,400 units 2,651,248 3,590,805
---------- ----------
Total Partners' capital $2,498,181 $3,447,450
---------- ----------
$2,575,204 $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 SEPTEMBER 30, 1998 AND 1997
(Unaudited)
1998 1997
---------- ---------
REVENUES:
Oil and gas sales $266,881 $498,151
Interest income 6,023 5,395
Gain (loss) on sale of oil
and gas properties ( 1,643) 4,202
-------- --------
$271,261 $507,748
COSTS AND EXPENSES:
Lease operating $ 69,935 $ 62,365
Production tax 19,525 31,954
Depreciation, depletion, and
amortization of oil and gas
properties 77,170 102,584
General and administrative
(Note 2) 49,088 48,174
-------- --------
$215,718 $245,077
-------- --------
NET INCOME $ 55,543 $262,671
======== ========
GENERAL PARTNER - NET INCOME $ 5,563 $ 16,967
======== ========
LIMITED PARTNERS - NET INCOME $ 49,980 $245,704
======== ========
NET INCOME per unit $ .30 $ 1.43
======== ========
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 NINE MONTHS ENDED SEPTEMBER 30, 1998 AND 1997
(Unaudited)
1998 1997
---------- ----------
REVENUES:
Oil and gas sales $1,087,834 $1,674,566
Interest income 16,066 13,485
Gain on sale of oil and
gas properties 654,302 170,970
---------- ----------
$1,758,202 $1,859,021
COSTS AND EXPENSES:
Lease operating $ 218,337 $ 239,983
Production tax 73,986 116,832
Depreciation, depletion, and
amortization of oil and gas
properties 254,409 308,123
Impairment provision - 1,377,160
General and administrative
(Note 2) 155,874 157,930
---------- ----------
$ 702,606 $2,200,028
---------- ----------
NET INCOME (LOSS) $1,055,596 ($ 341,007)
========== ==========
GENERAL PARTNER - NET INCOME $ 62,153 $ 49,687
========== ==========
LIMITED PARTNERS - NET INCOME (LOSS) $ 993,443 ($ 390,694)
========== ==========
NET INCOME (LOSS) per unit $ 5.80 ($ 2.28)
========== ==========
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 NINE MONTHS ENDED SEPTEMBER 30, 1998 AND 1997
(Unaudited)
1998 1997
---------- ----------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) $1,055,596 ($ 341,007)
Adjustments to reconcile net income
(loss) to net cash provided by
operating activities:
Depreciation, depletion, and
amortization of oil and gas
properties 254,409 308,123
Impairment provision - 1,377,160
Gain on sale of oil and gas
properties ( 654,302) ( 170,970)
Decrease in accounts receivable -
oil and gas sales 170,245 90,641
Increase in accounts receivable -
General Partner - ( 14,104)
Decrease in accounts receivable -
other 43 -
Decrease in accounts payable ( 40,416) ( 18,443)
---------- ----------
Net cash provided by operating-
activities $ 785,575 $1,231,400
---------- ----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures ($ 34,281) ($ 51,001)
Proceeds from sale of oil and
gas properties 717,457 362,751
---------- ----------
Net cash provided by investing
activities $ 683,176 $ 311,750
---------- ----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Cash distributions ($2,004,865) ($1,627,572)
---------- ----------
Net cash used by financing activities ($2,004,865) ($1,627,572)
---------- ----------
NET DECREASE IN CASH AND CASH
EQUIVALENTS ($ 536,114) ($ 84,422)
CASH AND CASH EQUIVALENTS AT
BEGINNING OF PERIOD 741,852 441,903
---------- ----------
CASH AND CASH EQUIVALENTS AT
END OF PERIOD $ 205,738 $ 357,481
========== ==========
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
September 30, December 31,
1998 1997
------------- ------------
CURRENT ASSETS:
Cash and cash equivalents $ 438,860 $1,564,325
Accounts receivable:
Oil and gas sales 348,460 710,336
---------- ----------
Total current assets $ 787,320 $2,274,661
NET OIL AND GAS PROPERTIES, utilizing
the successful efforts method 4,633,558 5,237,082
DEFERRED CHARGE 123,977 123,977
---------- ----------
$5,544,855 $7,635,720
========== ==========
LIABILITIES AND PARTNERS' CAPITAL (DEFICIT)
CURRENT LIABILITIES:
Accounts payable $ 51,252 $ 135,761
Gas imbalance payable 57,250 57,250
---------- ----------
Total current liabilities $ 108,502 $ 193,011
ACCRUED LIABILITY $ 64,109 $ 64,109
PARTNERS' CAPITAL (DEFICIT):
General Partner ($ 333,155) ($ 312,392)
Limited Partners, issued and
outstanding, 372,189 units 5,705,399 7,690,992
---------- ----------
Total Partners' capital $5,372,244 $7,378,600
---------- ----------
$5,544,855 $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 SEPTEMBER 30, 1998 AND 1997
(Unaudited)
1998 1997
-------- ----------
REVENUES:
Oil and gas sales $561,811 $1,057,832
Interest income 12,836 11,851
Gain (loss) on sale of oil
and gas properties ( 3,499) 8,936
-------- ----------
$571,148 $1,078,619
COSTS AND EXPENSES:
Lease operating $149,170 $ 132,956
Production tax 42,199 68,972
Depreciation, depletion, and
amortization of oil and gas
properties 163,274 223,052
General and administrative
(Note 2) 106,564 104,590
-------- ----------
$461,207 $ 529,570
-------- ----------
NET INCOME $109,941 $ 549,049
======== ==========
GENERAL PARTNER - NET INCOME $ 11,386 $ 35,782
======== ==========
LIMITED PARTNERS - NET INCOME $ 98,555 $ 513,267
======== ==========
NET INCOME per unit $ .27 $ 1.38
======== ==========
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 NINE MONTHS ENDED SEPTEMBER 30, 1998 AND 1997
(Unaudited)
1998 1997
---------- ----------
REVENUES:
Oil and gas sales $2,310,367 $3,575,321
Interest income 34,323 29,082
Gain on sale of oil and
gas properties 1,368,785 338,421
---------- ----------
$3,713,475 $3,942,824
COSTS AND EXPENSES:
Lease operating $ 465,999 $ 520,538
Production tax 159,598 254,993
Depreciation, depletion, and
amortization of oil and gas
properties 543,788 672,926
Impairment provision - 3,101,656
General and administrative
(Note 2) 338,361 342,749
---------- ----------
$1,507,746 $4,892,862
---------- ----------
NET INCOME (LOSS) $2,205,729 ($ 950,038)
========== ==========
GENERAL PARTNER - NET INCOME $ 130,322 $ 102,027
========== ==========
LIMITED PARTNERS - NET INCOME (LOSS) $2,075,407 ($1,052,065)
========== ==========
NET INCOME (LOSS) per unit $ 5.58 ($ 2.83)
========== ==========
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 NINE MONTHS ENDED SEPTEMBER 30, 1998 AND 1997
(Unaudited)
1998 1997
----------- ----------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) $2,205,729 ($ 950,038)
Adjustments to reconcile net income
(loss) to net cash provided by
operating activities:
Depreciation, depletion, and
amortization of oil and gas
properties 543,788 672,926
Impairment provision - 3,101,656
Gain on sale of oil and gas
properties ( 1,368,785) ( 338,421)
Decrease in accounts receivable -
oil and gas sales 361,876 187,687
Increase in accounts receivable -
General Partner - ( 26,836)
Decrease in accounts payable ( 84,509) ( 40,554)
---------- ----------
Net cash provided by operating
activities $1,658,099 $2,606,420
---------- ----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures ($ 74,175) ($ 111,222)
Proceeds from sale of oil and
gas properties 1,502,696 827,570
---------- ----------
Net cash provided by investing
activities $1,428,521 $ 716,348
---------- ----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Cash distributions ($4,212,085) ($3,497,542)
---------- ----------
Net cash used by financing activities ($4,212,085) ($3,497,542)
---------- ----------
NET DECREASE IN CASH AND CASH
EQUIVALENTS ($1,125,465) ($ 174,774)
CASH AND CASH EQUIVALENTS AT
BEGINNING OF PERIOD 1,564,325 932,165
---------- ----------
CASH AND CASH EQUIVALENTS AT
END OF PERIOD $ 438,860 $ 757,391
========== ==========
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
September 30, December 31,
1998 1997
------------- ------------
CURRENT ASSETS:
Cash and cash equivalents $ 103,052 $ 364,502
Accounts receivable:
Oil and gas sales 82,736 168,833
---------- ----------
Total current assets $ 185,788 $ 533,335
NET OIL AND GAS PROPERTIES, utilizing
the successful efforts method 1,085,656 1,225,295
DEFERRED CHARGE 29,519 29,519
---------- ----------
$1,300,963 $1,788,149
========== ==========
LIABILITIES AND PARTNERS' CAPITAL (DEFICIT)
CURRENT LIABILITIES:
Accounts payable $ 12,393 $ 31,925
Gas imbalance payable 13,149 13,149
---------- ----------
Total current liabilities $ 25,542 $ 45,074
ACCRUED LIABILITY $ 14,648 $ 14,648
PARTNERS' CAPITAL (DEFICIT):
General Partner ($ 83,715) ($ 78,796)
Limited Partners, issued and
outstanding, 91,711 units 1,344,488 1,807,223
---------- ----------
Total Partners' capital $1,260,773 $1,728,427
---------- ----------
$1,300,963 $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 SEPTEMBER 30, 1998 AND 1997
(Unaudited)
1998 1997
-------- ----------
REVENUES:
Oil and gas sales $136,780 $251,228
Interest income 2,866 2,856
Gain (loss) on sale of oil
and gas properties ( 836) 1,884
-------- --------
$138,810 $255,968
COSTS AND EXPENSES:
Lease operating $ 35,793 $ 31,913
Production tax 10,703 16,847
Depreciation, depletion, and
amortization of oil and gas
properties 38,690 52,896
General and administrative
(Note 2) 26,255 25,770
-------- --------
$111,441 $127,426
-------- --------
NET INCOME $ 27,369 $128,542
======== ========
GENERAL PARTNER - NET INCOME $ 2,772 $ 8,400
======== ========
LIMITED PARTNERS - NET INCOME $ 24,597 $120,142
======== ========
NET INCOME per unit $ .27 $ 1.31
======== ========
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 NINE MONTHS ENDED SEPTEMBER 30, 1998 AND 1997
(Unaudited)
1998 1997
-------- ----------
REVENUES:
Oil and gas sales $549,753 $ 861,261
Interest income 7,688 6,812
Gain on sale of oil and
gas properties 314,187 77,387
-------- ----------
$871,628 $ 945,460
COSTS AND EXPENSES:
Lease operating $111,982 $ 129,217
Production tax 39,027 63,674
Depreciation, depletion, and
amortization of oil and gas
properties 126,775 161,226
Impairment provision - 785,220
General and administrative
(Note 2) 83,369 84,415
-------- ----------
$361,153 $1,223,752
-------- ----------
NET INCOME (LOSS) $510,475 ($ 278,292)
======== ==========
GENERAL PARTNER - NET INCOME $ 30,210 $ 23,603
======== ==========
LIMITED PARTNERS - NET INCOME (LOSS) $480,265 ($ 301,895)
======== ==========
NET INCOME (LOSS) per unit $ 5.24 ($ 3.29)
======== ==========
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 NINE MONTHS ENDED SEPTEMBER 30, 1998 AND 1997
(Unaudited)
1998 1997
--------- ----------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) $510,475 ($278,292)
Adjustments to reconcile net income
(loss) to net cash provided by
operating activities:
Depreciation, depletion, and
amortization of oil and gas
properties 126,775 161,226
Impairment provision - 785,220
Gain on sale of oil and gas
properties ( 314,187) ( 77,387)
Decrease in accounts receivable -
oil and gas sales 86,097 43,323
Increase in accounts receivable -
General Partner - ( 5,060)
Decrease in accounts payable ( 19,532) ( 10,183)
-------- --------
Net cash provided by operating
activities $389,628 $618,847
-------- --------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures ($ 18,222) ($ 27,686)
Proceeds from sale of oil and
gas properties 345,273 221,575
-------- --------
Net cash provided by investing
activities $327,051 $193,889
-------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Cash distributions ($978,129) ($856,819)
-------- --------
Net cash used by financing activities ($978,129) ($856,819)
-------- --------
NET DECREASE IN CASH AND CASH
EQUIVALENTS ($261,450) ($ 44,083)
CASH AND CASH EQUIVALENTS AT
BEGINNING OF PERIOD 364,502 221,484
-------- --------
CASH AND CASH EQUIVALENTS AT
END OF PERIOD $103,052 $177,401
======== ========
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
SEPTEMBER 30, 1998
(Unaudited)
1. ACCOUNTING POLICIES
-------------------
The combined balance sheets as of September 30, 1998, combined statements
of operations for the three and nine months ended September 30, 1998 and
1997, and combined statements of cash flows for the nine months ended
September 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 September 30, 1998, the combined results of operations for the
three and nine months ended September 30, 1998 and 1997, and the combined
cash flows for the nine months ended September 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 September 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 nine months ended September 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 nine months ended September 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.
CONTRACT SETTLEMENT INCOME
--------------------------
On July 30, 1998 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 and October 1998 the following
amounts:
AUGUST OCTOBER
PARTNERSHIP 1998 1998 TOTAL
----------- ---------- -------- ----------
II-A $1,710,190 $ - $1,710,190
II-B 2,793,295 - 2,793,295
II-C 1,197,148 - 1,197,148
II-D 3,033,283 363 3,033,646
II-E 6,158,619 736 6,159,355
36
<PAGE>
The amounts received in August 1998 were accrued at June 30, 1998 and will
be included in the II-A, II-B, II-C, II-D and II-E Partnerships' November
1998 cash distributions. The amounts received in October 1998 will be
included in the II-D and II-E Partnership's February 1999 cash
distributions. The amounts received in October 1998 are included in the
"Accounts Receivable - General Partner" on the accompanying balance sheets
at September 30, 1998. These amounts were related to an overriding royalty
interest owned by the II-D and II-E Partnerships in one well involved in
the settlement.
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 September 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 $10,999 $127,443
II-B 8,240 95,190
II-C 3,521 40,689
II-D 7,190 82,863
II-E 5,244 60,216
II-F 3,983 45,105
II-G 8,620 97,944
II-H 2,120 24,135
During the nine months ended September 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 $ 61,461 $382,329
II-B 47,766 285,570
II-C 20,873 122,067
II-D 41,767 248,589
II-E 34,287 180,648
II-F 20,559 135,315
II-G 44,529 293,832
II-H 10,964 72,405
37
<PAGE>
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.
The receivable from the General Partner at September 30, 1998 for the II-D
and II-E Partnerships represents contract settlement income associated
with an overriding royalty interest owned in one well involved in the
arbitration and lawsuit discussed in Note 1. Subsequent to September 30,
1998 such receivable was collected by the II-D and II-E Partnerships.
38
<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.
39
<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 September 30, 1998 and the net revenue
generated from future operations will provide sufficient working capital
to meet current and future obligations.
The Partnerships' Statements of Cash Flows for the nine months ended
September 30, 1998 include proceeds from the sale of oil and gas
properties. The proceeds received during the first quarter of 1998 were
included in the Partnerships' cash distributions paid during May 1998, the
proceeds received during the second quarter of 1998 were included in the
Partnerships' cash distributions paid during August 1998, and the proceeds
received during the third quarter of 1998 will be included in the
Partnerships' cash distributions to be paid in November 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
40
<PAGE>
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.
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 and October 1998:
AUGUST OCTOBER PER
PARTNERSHIP 1998 1998 TOTAL UNIT
----------- ---------- -------- ---------- -------
II-A $1,710,190 $ - $1,710,190 $3.53
II-B 2,793,295 - 2,793,295 7.72
II-C 1,197,148 - 1,197,148 7.74
II-D 3,033,283 363 3,033,646 9.63
II-E 6,158,619 736 6,159,355 26.92
The amounts received in August 1998 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 amounts received in October 1998 will be
included in the II-D and II-E Partnerships fourth quarter cash
distribution to be paid in February 1999.
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.
41
<PAGE>
II-A PARTNERSHIP
THREE MONTHS ENDED SEPTEMBER 30, 1998 AS COMPARED TO THE THREE MONTHS
ENDED SEPTEMBER 30, 1997.
Three Months Ended September 30,
--------------------------------
1998 1997
---------- ----------
Oil and gas sales $1,092,544 $1,161,480
Oil and gas production expenses $ 381,708 $ 428,192
Barrels produced 19,085 28,089
Mcf produced 481,584 356,101
Average price/Bbl $ 10.66 $ 16.45
Average price/Mcf $ 1.85 $ 1.96
As shown in the table above, total oil and gas sales decreased $68,936
(5.9%) for the three months ended September 30, 1998 as compared to the
three months ended September 30, 1997. Of this decrease, approximately
$148,000 was related to a decrease in volumes of oil sold and
approximately $110,000 and $57,000, respectively, were related to
decreases in the average prices of oil and gas sold. These decreases were
partially offset by an increase of approximately $246,000 related to an
increase in volumes of gas sold. Volumes of oil sold decreased 9,004
barrels, while volumes of gas sold increased 125,483 Mcf for the three
months ended September 30, 1998 as compared to the three months ended
September 30, 1997. The decrease in volumes of oil sold resulted primarily
from (i) a positive prior period volume adjustment made by the purchaser
on one significant well during the three months ended September 30, 1997,
(ii) a negative prior period volume adjustment made by the purchaser on
another significant well during the three months ended September 30, 1998,
and (iii) the sale of several wells during 1997 and early 1998. The
increase in volumes of gas sold resulted primarily from positive prior
period volume adjustments made by the purchaser on two significant wells
during the three months ended September 30, 1998. Average oil and gas
prices decreased to $10.66 per barrel and $1.85 per Mcf, respectively, for
the three months ended September 30, 1998 from $16.45 per barrel and $1.96
per Mcf, respectively, for the three months ended September 30, 1997.
Oil and gas production expenses (including lease operating expenses and
production taxes) decreased $46,484 (10.9%) for the three months ended
September 30, 1998 as compared to the three months ended September 30,
1997. This decrease resulted primarily from workover expenses incurred on
three significant wells during the three months ended September 30, 1997
in order to improve the recovery of reserves. As a percentage of oil and
gas sales, these expenses decreased to 34.9% for the three months ended
September 30, 1998 from
42
<PAGE>
36.9% for the three months ended September 30, 1997. This percentage
decrease was primarily due to the dollar decrease in oil and gas
production expenses.
Depreciation, depletion, and amortization of oil and gas properties
increased $24,851 (13.1%) for the three months ended September 30, 1998 as
compared to the three months ended September 30, 1997. This increase
resulted primarily from the increase in volumes of gas sold during the
three months ended September 30, 1998 as compared to the three months
ended September 30, 1997. As a percentage of oil and gas sales, this
expense increased to 19.6% for the three months ended September 30, 1998
from 16.3% for the three months ended September 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 September 30, 1998 as compared
to the three months ended September 30, 1997.
General and administrative expenses increased $6,280 (4.8%) for the three
months ended September, 30, 1998 as compared to the three months ended
September 30, 1997. As a percentage of oil and gas sales, these expenses
increased to 12.7% for the three months ended September 30, 1998 from
11.4% for the three months ended September 30, 1997.
NINE MONTHS ENDED SEPTEMBER 30, 1998 AS COMPARED TO THE NINE MONTHS ENDED
SEPTEMBER 30, 1997.
Nine Months Ended September 30,
-------------------------------
1998 1997
---------- ----------
Oil and gas sales $3,025,364 $4,185,360
Oil and gas production expenses $1,093,626 $1,334,643
Barrels produced 65,533 79,370
Mcf produced 1,101,499 1,125,834
Average price/Bbl $ 12.81 $ 19.20
Average price/Mcf $ 1.98 $ 2.36
As shown in the table above, total oil and gas sales decreased $1,159,996
(27.7%) for the nine months ended September 30, 1998 as compared to the
nine months ended September 30, 1997. Of this decrease, approximately
$266,000 was related to a decrease in volumes of oil sold and
approximately $419,000 and $418,000, respectively, were related to
decreases in the average prices of oil and gas sold. Volumes of oil and
gas sold decreased 13,837 barrels and 24,335 Mcf, respectively, for the
nine months ended September 30, 1998 as compared to the nine months ended
September 30, 1997. The decrease in volumes of oil sold resulted primarily
from (i) a positive prior period volume adjustment made by the purchaser
on one significant well during the nine months ended September 30, 1997,
(ii) a
43
<PAGE>
negative prior period volume adjustment made by the purchaser on another
well during the nine months ended September 30, 1998, and (iii) normal
declines in production due to diminishing reserves on several wells.
Average oil and gas prices decreased to $12.81 per barrel and $1.98 per
Mcf, respectively, for the nine months ended September 30, 1998 from
$19.20 per barrel and $2.36 per Mcf, respectively, for the nine months
ended September 30, 1997.
As discussed in Liquidity and Capital Resources above, the II-A
Partnership sold certain oil and gas properties during the nine months
ended September 30, 1998 and recognized a $688,344 gain on such sales.
Similar sales during the nine months ended September 30, 1997 resulted in
the II-A Partnership recognizing similar gains totaling $59,998.
The II-A Partnership recognized a gas contract settlement in the amount of
$1,710,190 during the nine months ended September 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 nine months ended September 30, 1997.
Oil and gas production expenses (including lease operating expenses and
production taxes) decreased $241,017 (18.1%) for the nine months ended
September 30, 1998 as compared to the nine months ended September 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, and (iii) workover expenses incurred on two significant
wells during the nine months ended September 30, 1997 in order to improve
the recovery of reserves. As a percentage of oil and gas sales, these
expenses increased to 36.1% for the nine months ended September 30, 1998
from 31.9% for the nine months ended September 30, 1997. This percentage
increase was primarily due to the decreases in the average prices of oil
and gas sold during the nine months ended September 30, 1998 as compared
to the nine months ended September 30, 1997.
Depreciation, depletion, and amortization of oil and gas properties
decreased $41,319 (7.1%) for the nine months ended September 30, 1998 as
compared to the nine months ended September 30, 1997. As a percentage of
oil and gas sales, this expense increased to 17.8% for the nine months
ended September 30, 1998 from 13.8% for the nine months ended September
30, 1997. This percentage increase was primarily due to the decreases in
the average prices of oil and gas sold during the nine months ended
September 30, 1998 as compared to the nine months ended September 30,
1997.
44
<PAGE>
The II-A Partnership recognized a non-cash charge against earnings of
$684,276 during the nine months ended September 30, 1997. Of this amount,
$223,943 was related to a 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 impairment 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 Partnerships' partnership agreement which limit the
level of permissible drilling activity. No similar charges were necessary
during the nine months ended September 30, 1998.
General and administrative expenses decreased $15,682 (3.4%) for the nine
months ended September 30, 1998 as compared to the nine months ended
September 30, 1997. As a percentage of oil and gas sales, these expenses
increased to 14.7% for the nine months ended September 30, 1998 from 11.0%
for the nine months ended September 30, 1997. This percentage increase was
primarily due to the decrease in oil and gas sales.
The Limited Partners have received cash distributions through September
30, 1998 totaling $44,406,357 or 91.70% of the Limited Partners' capital
contributions.
II-B PARTNERSHIP
THREE MONTHS ENDED SEPTEMBER 30, 1998 AS COMPARED TO THE THREE MONTHS
ENDED SEPTEMBER 30, 1997.
Three Months Ended September 30,
--------------------------------
1998 1997
-------- --------
Oil and gas sales $543,938 $785,354
Oil and gas production expenses $244,129 $287,494
Barrels produced 12,625 16,796
Mcf produced 231,444 257,519
Average price/Bbl $ 11.88 $ 16.08
Average price/Mcf $ 1.70 $ 2.00
As shown in the table above, total oil and gas sales decreased $241,416
(30.7%) for the three months ended September 30, 1998 as compared to the
three months ended September 30, 1997. Of this decrease, approximately
$67,000 and $52,000, respectively, were related to decreases in volumes of
oil and gas sold and approximately $53,000 and $69,000, 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 26,075 Mcf, respectively, for
the three months ended September 30, 1998 as compared to the three months
ended September 30, 1997.
45
<PAGE>
The decrease in volumes of oil sold resulted primarily from (i) the sale
of several wells during 1997 and early 1998, (ii) normal declines in
production due to diminishing reserves on several wells, and (iii) a
negative prior period volume adjustment made by the purchaser on one
significant well during the three months ended September 30, 1998. The
decrease in volumes of gas sold resulted primarily from positive prior
period volume adjustments made by purchasers on several wells during the
three months ended September 30, 1997 and one significant well being
shut-in during the three months ended September 30, 1998 in order to
conduct a workover in an effort to improve the recovery of reserves.
Average oil and gas prices decreased to $11.88 per barrel and $1.70 per
Mcf, respectively, for the three months ended September 30, 1998 from
$16.08 per barrel and $2.00 per Mcf, respectively, for the three months
ended September 30, 1997.
Oil and gas production expenses (including lease operating expenses and
production taxes) decreased $43,365 (15.1%) for the three months ended
September 30, 1998 as compared to the three months ended September 30,
1997. This decrease resulted primarily from (i) workover expenses incurred
on two significant wells during the three months ended September 30, 1997
in order to improve the recovery of reserves and (ii) a decrease in
production taxes associated with the decrease in oil and gas sales. As a
percentage of oil and gas sales, these expenses increased to 44.9% for the
three months ended September 30, 1998 from 36.6% for the three months
ended September 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 September 30, 1998 as compared to the three months ended
September 30, 1997.
Depreciation, depletion, and amortization of oil and gas properties
decreased $33,842 (26.1%) for the three months ended September 30, 1998 as
compared to the three months ended September 30, 1997. This decrease
resulted primarily from (i) the decreases in volumes of oil and gas sold
during the three months ended September 30, 1998 as compared to the three
months ended September 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 17.6% for the three months
ended September 30, 1998 from 16.5% for the three months ended September
30, 1997.
46
<PAGE>
General and administrative expenses increased $8,218 (8.6%) for the three
months ended September 30, 1998 as compared to the three months ended
September 30, 1997. As a percentage of oil and gas sales, these expenses
increased to 19.0% for the three months ended September 30, 1998 from
12.1% for the three months ended September 30, 1997. This percentage
increase was primarily due to the decrease in oil and gas sales.
NINE MONTHS ENDED SEPTEMBER 30, 1998 AS COMPARED TO THE NINE MONTHS ENDED
SEPTEMBER 30, 1997.
Nine Months Ended September 30,
-------------------------------
1998 1997
---------- ----------
Oil and gas sales $1,973,911 $2,844,739
Oil and gas production expenses $ 749,978 $ 897,065
Barrels produced 41,381 51,265
Mcf produced 703,731 774,730
Average price/Bbl $ 14.09 $ 19.31
Average price/Mcf $ 1.98 $ 2.39
As shown in the table above, total oil and gas sales decreased $870,828
(30.6%) for the nine months ended September 30, 1998 as compared to the
nine months ended September 30, 1997. Of this decrease, approximately
$191,000 and $170,000, respectively, were related to decreases in volumes
of oil and gas sold and approximately $216,000 and $294,000, respectively,
were related to decreases in the average prices of oil and gas sold.
Volumes of oil and gas sold decreased 9,884 barrels and 70,999 Mcf,
respectively, for the nine months ended September 30, 1998 as compared to
the nine months ended September 30, 1997. The decrease in volumes of oil
sold resulted primarily from (i) normal declines in production due to
diminishing reserves on several wells, (ii) the sale of several wells in
1997 and early 1998, and (iii) negative prior period volume adjustments
made by the purchasers on two significant wells during the nine months
ended September 30, 1998. Average oil and gas prices decreased to $14.09
per barrel and $1.98 per Mcf, respectively, for the nine months ended
September 30, 1998 from $19.31 per barrel and $2.39 per Mcf, respectively,
for the nine months ended September 30, 1997.
The II-B Partnership recognized a gas contract settlement in the amount of
$2,793,295 during the nine months ended September 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 nine months ended September 30, 1997.
47
<PAGE>
Oil and gas production expenses (including lease operating expenses and
production taxes) decreased $147,087 (16.4%) for the nine months ended
September 30, 1998 as compared to the nine months ended September 30,
1997. This decrease resulted primarily from a decrease in lease operating
expenses associated with the decreases in volumes of oil and gas sold
during the nine months ended September 30, 1998 as compared to the nine
months ended September 30, 1997 and the decrease in production taxes
associated with the decrease in oil and gas sales. As a percentage of oil
and gas sales, these expenses increased to 38.0% for the nine months ended
September 30, 1998 from 31.5% for the nine months ended September 30,
1997. This percentage increase was primarily due to the decreases in the
average prices of oil and gas sold during the nine months ended September
30, 1998 as compared to the nine months ended September 30, 1997.
Depreciation, depletion, and amortization of oil and gas properties
decreased $94,727 (24.2%) for the nine months ended September 30, 1998 as
compared to the nine months ended September 30, 1997. This decrease
resulted primarily from (i) the decreases in volumes of oil and gas sold
during the nine months ended September 30, 1998 as compared to the nine
months ended September 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 15.0% for the nine months
ended September 30, 1998 from 13.8% for the nine months ended September
30, 1997.
The II-B Partnership recognized a non-cash charge against earnings of
$530,988 during the nine months ended September 30, 1997. Of this amount
$134,003 was related to a 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 nine months ended September 30, 1998.
48
<PAGE>
General and administrative expenses decreased $19,414 (5.5%) for the nine
months ended September 30, 1998 as compared to the nine months ended
September 30, 1997. As a percentage of oil and gas sales, these expenses
increased to 16.9% for the nine months ended September 30, 1998 from 12.4%
for the nine months ended September 30, 1997. This percentage increase was
primarily due to the decrease in oil and gas sales.
The Limited Partners have received cash distributions through September
30, 1998 totaling $31,212,916 or 86.29% of the Limited Partners' capital
contributions.
II-C PARTNERSHIP
THREE MONTHS ENDED SEPTEMBER 30, 1998 AS COMPARED TO THE THREE MONTHS
ENDED SEPTEMBER 30, 1997.
Three Months Ended September 30,
--------------------------------
1998 1997
-------- --------
Oil and gas sales $253,933 $374,214
Oil and gas production expenses $ 90,974 $123,903
Barrels produced 4,119 5,915
Mcf produced 121,527 134,306
Average price/Bbl $ 12.28 $ 16.77
Average price/Mcf $ 1.67 $ 2.05
As shown in the table above, total oil and gas sales decreased $120,281
(32.1%) for the three months ended September 30, 1998 as compared to the
three months ended September 30, 1997. Of this decrease, approximately
$30,000 and $26,000, respectively, were related to decreases in volumes of
oil and gas sold and approximately $18,000 and $46,000, respectively, were
related to decreases in the average prices of oil and gas sold. Volumes of
oil and gas sold decreased 1,796 barrels and 12,779 Mcf, respectively, for
the three months ended September 30, 1998 as compared to the three months
ended September 30, 1997. The decrease in volumes of oil sold resulted
primarily from (i) the sale of several wells in 1997 and early 1998 and
(ii) normal declines in production due to the diminishing reserves on
several wells. The decrease in volumes of gas sold resulted primarily from
the sale of several wells in 1997 and early 1998. Average oil and gas
prices decreased to $12.28 per barrel and $1.67 per Mcf, respectively, for
the three months ended September 30, 1998 from $16.77 per barrel and $2.05
per Mcf, respectively, for the three months ended September 30, 1997.
49
<PAGE>
As discussed in Liquidity and Capital Resources above, the II-C
Partnership sold certain oil and gas properties during the three months
ended September 30, 1998 and recognized a $7,362 loss on such sales.
Similar sales during the three months ended September 30, 1997 resulted in
the II-C Partnership recognizing gains totaling $9,147.
Oil and gas production expenses (including lease operating expenses and
production taxes) decreased $32,929 (26.6%) for the three months ended 30,
1998 as compared to the three months ended September 30, 1997. This
decrease resulted primarily from (i) a decrease in lease operating
expenses associated with the decreases in volumes of oil and gas sold
during the three months ended September 30, 1998 as compared to the three
months ended September 30, 1997, (ii) a decrease in production taxes
associated with the decrease in oil and gas sales, and (iii) workover
expenses incurred on three significant wells during the three months ended
September 30, 1997 in order to improve the recovery of reserves. As a
percentage of oil and gas sales, these expenses increased to 35.8% for the
three months ended September 30, 1998 from 33.1% for the three months
ended September 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 September 30, 1998 as compared to September 30, 1997.
Depreciation, depletion, and amortization of oil and gas properties
increased $1,503 (3.0%) the three months ended September 30, 1998 as
compared to the three months ended September 30, 1997. As a percentage of
oil and gas sales, this expense increased to 20.5% for the three months
ended September 30, 1998 from 13.5% for the three months ended September
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
September 30, 1998 as compared to the three months ended September 30,
1997.
General and administrative expenses increased $3,520 (8.7%) for the three
months ended September 30, 1998 as compared to the three months ended
September 30, 1997. As a percentage of oil and gas sales, these expenses
increased to 17.4% for the three months ended September 30, 1998 from
10.9% for the three months ended September 30, 1997. This percentage
increase was primarily due to the decrease in oil and gas sales.
50
<PAGE>
NINE MONTHS ENDED SEPTEMBER 30, 1998 AS COMPARED TO THE NINE MONTHS ENDED
SEPTEMBER 30, 1997.
Nine Months Ended September 30,
-------------------------------
1998 1997
-------- ----------
Oil and gas sales $896,558 $1,316,380
Oil and gas production expenses $293,796 $ 387,140
Barrels produced 12,968 17,247
Mcf produced 375,715 424,733
Average price/Bbl $ 14.05 $ 19.38
Average price/Mcf $ 1.90 $ 2.31
As shown in the table above, total oil and gas sales decreased $419,822
(31.9%) for the nine months ended September 30, 1998 as compared to the
nine months ended September 30, 1997. Of this decrease, approximately
$83,000 and $113,000, respectively, were related to decreases in volumes
of oil and gas sold and approximately $69,000 and $154,000, respectively,
were related to decreases in the average prices of oil and gas sold.
Volumes of oil and gas sold decreased 4,279 barrels and 49,018 Mcf,
respectively, for the nine months ended September 30, 1998 as compared to
the nine months ended September 30, 1997. The decrease in volumes of oil
sold resulted primarily from (i) the sale of several wells in 1997 and
early 1998 and (ii) normal declines in production due to diminishing
reserves on several wells. The decrease in volumes of gas sold resulted
primarily from (i) the sale of several wells in 1997 and early 1998 and
(ii) a negative prior period volume adjustment made by the purchaser on
one significant well during the nine months ended September 30, 1998.
Average oil and gas prices decreased to $14.05 per barrel and $1.90 per
Mcf, respectively, for the nine months ended September 30, 1998 from
$19.38 per barrel and $2.31 per Mcf, respectively, for the nine months
ended September 30, 1997.
As discussed in Liquidity and Capital Resources above, the II-C
Partnership sold certain oil and gas properties during the nine months
ended September 30, 1998 and recognized a $191,496 gain on such sales.
Sales during the nine months ended September 30, 1997 resulted in the II-C
Partnership recognizing similar gains totaling $99,495.
The II-C Partnership recognized a gas contract settlement in the amount of
$1,197,148 during the nine months ended September 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 nine months ended September 30, 1997.
51
<PAGE>
Oil and gas production expenses (including lease operating expenses and
production taxes) decreased $93,344 (24.1%) for the nine months ended
September 30, 1998 as compared to the nine months ended September 30,
1997. This decrease resulted primarily from (i) a decrease in lease
operating expenses associated with the decreases in volumes of oil and gas
sold during the nine months ended September 30, 1998 as compared to the
nine months ended September 30, 1997, (ii) a decrease in production taxes
associated with the decrease in oil and gas sales, and (iii) workover
expenses incurred on one well during the nine months ended September 30,
1997 in order to improve the recovery of reserves. As a percentage of oil
and gas sales, these expenses increased to 32.8% for the nine months ended
September 30, 1998 from 29.4% for the nine months ended September 30,
1997. This percentage increase was primarily due to the decreases in the
average prices of oil and gas sold for the nine months ended September 30,
1998 as compared to the nine months ended September 30, 1997.
Depreciation, depletion, and amortization of oil and gas properties
increased $4,172 (2.6%) for the nine months ended September 30, 1998 as
compared to the nine months ended September 30, 1997. As a percentage of
oil and gas sales, this expense increased to 18.0% for the nine months
ended September 30, 1998 from 12.0% for the nine months ended September
30, 1997. This percentage increase was primarily due to the decreases in
the average prices of oil and gas sold during the nine months ended
September 30, 1998 as compared to the nine months ended June 30, 1997.
The II-C Partnership recognized a non-cash charge against earnings of
$66,617 during the nine months ended September 30, 1997. Of this amount,
$36,163 was related to a 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 nine months ended September 30, 1998.
52
<PAGE>
General and administrative expenses decreased $8,482 (5.6%) for the nine
months ended September 30, 1998 as compared to the nine months ended
September 30, 1997. As a percentage of oil and gas sales, these expenses
increased to 15.9% for the nine months ended September 30, 1998 from 11.5%
for the nine months ended September 30, 1997. This percentage increase was
primarily due to the decrease in oil and gas sales.
The Limited Partners have received cash distributions through September
30, 1998 totaling $14,221,686 or 91.98% of the Limited Partners' capital
contributions.
II-D PARTNERSHIP
THREE MONTHS ENDED SEPTEMBER 30, 1998 AS COMPARED TO THE THREE MONTHS
ENDED SEPTEMBER 30, 1997.
Three Months Ended September 30,
--------------------------------
1998 1997
-------- --------
Oil and gas sales $540,255 $865,030
Oil and gas production expenses $256,870 $308,799
Barrels produced 9,708 13,570
Mcf produced 264,360 317,094
Average price/Bbl $ 12.71 $ 17.24
Average price/Mcf $ 1.58 $ 1.99
As shown in the table above, total oil and gas sales decreased $324,775
(37.5%) for the three months ended September 30, 1998 as compared to the
three months ended September 30, 1997. Of this decrease, approximately
$67,000 and $105,000, respectively, were related to decreases in volumes
of oil and gas sold and approximately $44,000 and $109,000, respectively,
were related to decreases in the average prices of oil and gas sold.
Volumes of oil and gas sold decreased 3,862 barrels and 52,734 Mcf,
respectively, for the three months ended September 30, 1998 as compared to
the three months ended September 30, 1997. The decrease in volumes of oil
sold resulted primarily from (i) the sale of several wells in 1997 and
early 1998 and (ii) a positive prior period volume adjustment made by the
purchaser on one significant well during the three months ended September
30, 1997. The decrease in volumes of gas sold resulted primarily from (i)
the sale of several wells in 1997 and early 1998 and (ii) receipt of a
reduced percentage of sales on one significant well during the three
months ended September 30, 1998 due to the II-D Partnership's overproduced
position in that well. Average oil and gas prices decreased to $12.71 per
barrel and $1.58 per Mcf, respectively, for the three months ended
September 30, 1998 from $17.24 per barrel and $1.99 per Mcf, respectively,
for the three months ended September 30, 1997.
53
<PAGE>
Oil and gas production expenses (including lease operating expenses and
production taxes) decreased $51,929 (16.8%) for the three months ended
September 30, 1998 as compared to the three months ended September 30,
1997. This decrease resulted primarily from a decrease in production taxes
associated with the decrease in oil and gas sales and a decrease in lease
operating expenses associated with the decreases in volumes of oil and gas
sold, which decreases were partially offset by workover expenses incurred
on one significant well during the three months ended September 30, 1998.
As a percentage of oil and gas sales, these expenses increased to 47.5%
for the three months ended September 30, 1998 from 35.7% for the three
months ended September 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 September 30, 1998 as compared to the three months
ended September 30, 1997.
Depreciation, depletion, and amortization of oil and gas properties
decreased $24,068 (17.9%) for the three months ended September 30, 1998 as
compared to the three months ended September 30, 1997. This decrease
resulted primarily from the decreases in volumes of oil and gas sold
during the three months ended September 30, 1998 as compared to the three
months ended September 30 1997. As a percentage of oil and gas sales, this
expense increased to 20.5% for the three months ended September 30, 1998
from 15.6% for the three months ended September 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 September 30, 1998 as compared
to the three months ended September 30 1997.
General and administrative expenses increased $8,615 (10.6%) for the three
months ended September 30, 1998 as compared to the three months ended
September 30, 1997. This increase resulted primarily from an increase in
legal expenses associated with the gas contract settlement discussed above
for the three months ended September 30, 1998. As a percentage of oil and
gas sales, these expenses increased to 16.7% for the three months ended
September 30, 1998 from 9.4% for the three months ended September 30,
1997. This percentage increase was primarily due to the decrease in oil
and gas sales.
54
<PAGE>
NINE MONTHS ENDED SEPTEMBER 30, 1998 AS COMPARED TO THE NINE MONTHS ENDED
SEPTEMBER 30, 1997.
Nine Months Ended September 30,
-------------------------------
1998 1997
---------- ----------
Oil and gas sales $1,885,766 $3,144,982
Oil and gas production expenses $ 845,153 $1,004,330
Barrels produced 30,202 39,108
Mcf produced 803,674 1,076,384
Average price/Bbl $ 13.30 $ 19.20
Average price/Mcf $ 1.85 $ 2.22
As shown in the table above, total oil and gas sales decreased $1,259,216
(40.0%) for the nine months ended September 30, 1998 as compared to the
nine months ended September 30, 1997. Of this decrease, approximately
$171,000 and $607,000, respectively, were related to decreases in volumes
of oil and gas sold and approximately $178,000 and $303,000, respectively,
were related to decreases in the average prices of oil and gas sold.
Volumes of oil and gas sold decreased 8,906 barrels and 272,710 Mcf,
respectively, for the nine months ended September 30, 1998 as compared to
the nine months ended September 30, 1997. The decrease in volumes of oil
sold resulted primarily from (i) the sale of several wells in 1997 and
early 1998 and (ii) normal declines in production due to diminishing
reserves on several wells. The decrease in volumes of gas sold resulted
primarily from (i) the sale of a several wells in 1997 and early 1998,
(ii) positive prior period volume adjustments made by the purchasers on
two significant wells during the nine months ended September 30, 1997, and
(iii) normal declines in production due to diminishing reserves on several
wells. Average oil and gas prices decreased to $13.30 per barrel and $1.85
per Mcf, respectively, for the nine months ended September 30, 1998 from
$19.20 per barrel and $2.22 per Mcf, respectively, for the nine months
ended September 30, 1997.
As discussed in Liquidity and Capital Resources above, the II-D
Partnership sold certain oil and gas properties during the nine months
ended September 30, 1998 and recognized a $518,545 gain on such sales.
Sales during the nine months ended September 30, 1997 resulted in the II-D
Partnership recognizing similar gains totaling $97,096.
The II-D Partnership recognized a gas contact settlement in the amount of
$3,033,646 during the nine months ended September 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 nine months ended September 30, 1997.
55
<PAGE>
Oil and gas production expenses (including lease operating expenses and
production taxes) decreased $159,177 (15.8%) for the nine months ended
September 30, 1998 as compared to the nine months ended September 30,
1997. This decrease resulted primarily from a decrease in production taxes
associated with the decrease in oil and gas sales and a decrease in lease
operating expenses associated with the decreases in volumes of oil and gas
sold, which decreases were partially offset by workover expenses incurred
on several wells during the nine months ended September 30, 1998 in order
to improve the recovery of reserves. As a percentage of oil and gas sales,
these expenses increased to 44.8% for the nine months ended September 30,
1998 from 31.9% for the nine months ended September 30, 1997. This
percentage increase was primarily due to the decreases in the average
prices of oil and gas sold during the nine months ended September 30, 1998
as compared to the nine months ended September 30, 1997.
Depreciation, depletion, and amortization of oil and gas properties
decreased $105,420 (23.8%) for the nine months ended September 30, 1998 as
compared to the nine months ended September 30, 1997. This decrease
resulted primarily from the decreases in volumes of oil and gas sold
during the nine months ended September 30, 1998 as compared to the nine
months ended September 30 1997. As a percentage of oil and gas sales, this
expense increased to 17.9% for the nine months ended September 30, 1998
from 14.1% for the nine months ended September 30, 1997. This percentage
increase was primarily due to the decreases in the average prices of oil
and gas sold during the nine months ended September 30, 1998 as compared
to the nine months ended September 30, 1997.
The II-D Partnership recognized a non-cash charge against earnings of
$143,957 during the nine months ended September 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 nine months ended
September 30, 1998.
General and administrative expenses decreased $21,120 (6.8%) for the nine
months ended September 30, 1998 as compared to the nine months ended
September 30, 1997. As a percentage of oil and gas sales, these expenses
increased to 15.4% for the nine months ended September 30, 1998 from 9.9%
for the nine months ended September 30, 1997. This percentage increase was
primarily due to the decrease in oil and gas sales.
The Limited Partners have received cash distributions through September
30, 1998 totaling $28,075,903 or 89.16% of Limited Partners' capital
contributions.
56
<PAGE>
II-E PARTNERSHIP
THREE MONTHS ENDED SEPTEMBER 30, 1998 AS COMPARED TO THE THREE MONTHS
ENDED SEPTEMBER 30, 1997.
Three Months Ended September 30,
--------------------------------
1998 1997
-------- --------
Oil and gas sales $366,664 $591,192
Oil and gas production expenses $147,182 $161,447
Barrels produced 10,767 10,638
Mcf produced 142,090 197,851
Average price/Bbl $ 13.05 $ 17.96
Average price/Mcf $ 1.59 $ 2.02
As shown in the table above, total oil and gas sales decreased $224,528
(38.0%) for the three months ended September 30, 1998 as compared to the
three months ended September 30, 1997. Of this decrease, approximately
$53,000 and $61,000, respectively, were related to decreases in the
average prices of oil and gas sold and approximately $113,000 was related
to a decrease in the volumes of gas sold. Volumes of oil sold increased
129 barrels, while volumes of gas sold decreased 55,761 Mcf for the three
months ended September 30, 1998 as compared to the three months ended
September 30, 1997. The decrease in volumes of gas sold resulted primarily
from (i) the receipt of a reduced percentage of sales on one significant
well during the three months ended September 30, 1998 due to the II-E
Partnership's overproduced position in that well, (ii) normal declines in
production on several wells due to diminishing reserves, and (iii) the
sale of several wells during 1997 and early 1998. Average oil and gas
prices decreased to $13.05 per barrel and $1.59 per Mcf, respectively, for
the three months ended September 30, 1998 from $17.96 per barrel and $2.02
per Mcf, respectively, for the three months ended September 30, 1997.
Oil and gas production expenses (including lease operating expenses and
production taxes) decreased $14,265 (8.8%) for the three months ended
September 30, 1998 as compared to the three months ended September 30,
1997. This decrease resulted primarily from a decrease in production taxes
associated with the decrease in oil and gas sales and a decrease in lease
operating expenses related to the decrease in volumes of gas sold, which
decrease was partially offset by workover expenses incurred on one
significant well during the three months ended September 30, 1998 in order
to improve the recovery of reserves. As a percentage of oil and gas sales,
these expenses increased to 40.1% for the three months ended September 30,
1998 from 27.3% for the three months ended September 30, 1997. This
percentage increase was primarily due to the decreases in the average
57
<PAGE>
prices of oil and gas sold during the three months ended September 30,
1998 as compared to the three months ended September 30, 1997 and the
workover expenses incurred during the three months ended September 30,
1998.
Depreciation, depletion, and amortization of oil and gas properties
decreased $30,723 (19.9%) for the three months ended September 30, 1998 as
compared to the three months ended September 30, 1997. This decrease
resulted primarily from the decrease in volumes of gas sold during the
three months ended September 30, 1998 as compared to the three months
ended September 30, 1997. As a percentage of oil and gas sales, this
expense increased to 33.7% for the three months ended September 30, 1998
from 26.1% for the three months ended September 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 September 30, 1998 as compared
to the three months ended September 30, 1997.
General and administrative expenses increased $15,483 (31.0%) for the
three months ended September 30, 1998 as compared to the three months
ended September 30, 1997. This increase resulted primarily from an
increase in legal expenses associated with the gas contract settlement
discussed above during the three months ended September 30, 1998. As a
percentage of oil and gas sales, these expenses increased to 17.9% for the
three months ended September 30, 1998 from 8.5% for the three months ended
September 30, 1997. This percentage increase was primarily due to the
dollar increase in general and administrative expenses and decreases in
the average prices of oil and gas sold during the three months ended
September 30, 1998 as compared to the three months ended September 30,
1997.
NINE MONTHS ENDED SEPTEMBER 30, 1998 AS COMPARED TO THE NINE MONTHS ENDED
SEPTEMBER 30, 1997.
Nine Months Ended September 30,
-------------------------------
1998 1997
---------- ----------
Oil and gas sales $1,257,494 $1,971,161
Oil and gas production expenses $ 454,429 $ 670,416
Barrels produced 29,489 33,798
Mcf produced 462,132 594,549
Average price/Bbl $ 13.79 $ 19.41
Average price/Mcf $ 1.84 $ 2.21
As shown in the table above, total oil and gas sales decreased $713,667
(36.2%) for the nine months ended September 30, 1998 as compared to the
nine months ended September 30, 1997. Of this decrease, approximately
$84,000 and $293,000, respectively, were related to decreases in
58
<PAGE>
volumes of oil and gas sold and approximately $166,000 and $171,000,
respectively, were related to decreases in the average prices of oil and
gas sold. Volumes of oil and gas sold decreased 4,309 barrels and 132,417
Mcf, respectively, for the nine months ended September 30, 1998 as
compared to the nine months ended September 30, 1997. The decreases in
volumes of oil and gas sold resulted primarily from normal declines in
production due to diminishing reserves on several wells and the sale of
several wells during 1997 and early 1998. Average oil and gas prices
decreased to $13.79 per barrel and $1.84 per Mcf, respectively, for the
nine months ended September 30, 1998 from $19.41 per barrel and $2.21 per
Mcf, respectively, for the nine months ended September 30, 1997.
As discussed in Liquidity and Capital Resources above, the II-E
Partnership sold certain oil and gas properties during the nine months
ended September 30, 1998 and recognized a $326,675 gain on such sales.
Sales during the nine months ended September 30, 1997 resulted in the II-E
Partnership recognizing similar gains totaling $52,735.
The II-E Partnership recognized a gas contract settlement in the amount of
$6,159,355 during the nine months ended September 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 nine months ended September 30, 1997.
Oil and gas production expenses (including lease operating expenses and
production taxes) decreased $215,987 (32.2%) for the nine months ended
September 30, 1998 as compared to the nine months ended September 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, and (iii) workover expenses incurred on one significant
well during the nine months ended September 30, 1997. As a percentage of
oil and gas sales, these expenses increased to 36.1% for the nine months
ended September 30, 1998 from 34.0% for the nine months ended September
30, 1997. This percentage increase was primarily due to the decreases in
the average prices of oil and gas sold during the nine months ended
September 30, 1998 as compared to the nine months ended September 30,
1997.
59
<PAGE>
Depreciation, depletion, and amortization of oil and gas properties
decreased $88,057 (18.7%) for the nine months ended September 30, 1998 as
compared to the nine months ended September 30, 1997. This decrease
resulted primarily from the decreases in volumes of oil and gas sold
during the nine months ended September 30, 1998 as compared to the nine
months ended September 30, 1997. As a percentage of oil and gas sales,
this expense increased to 30.4% for the nine months ended September 30,
1998 from 23.9% for the nine months ended September 30, 1997. This
percentage increase was primarily due to the decreases in the average
prices of oil and gas sold during the nine months ended September 30, 1998
as compared to the nine months ended September 30, 1997.
The II-E Partnership recognized a non-cash charge against earnings of
$992,851 during the nine months ended September 30, 1997. Of this amount,
$317,979 was related to a 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 nine months ended September 30, 1998.
General and administrative expenses decreased $36,323 (14.5%) for the nine
months ended September 30, 1998 as compared to the nine months ended
September 30, 1997. This decrease resulted primarily from a decrease in
legal expenses associated with the gas contract settlement discussed above
during the nine months ended September 30, 1998 as compared to the nine
months ended September 30, 1997. As a percentage of oil and gas sales,
these expenses increased to 17.1% for the nine months ended September 30,
1998 from 12.7% for the nine months ended September 30, 1997. This
percentage increase was primarily due to the decrease in oil and gas
sales.
The Limited Partners have received cash distributions through September
30, 1998 totaling $16,324,574 or 71.34% of Limited Partners' capital
contributions.
60
<PAGE>
II-F PARTNERSHIP
THREE MONTHS ENDED SEPTEMBER 30, 1998 AS COMPARED TO THE THREE MONTHS
ENDED SEPTEMBER 30, 1997.
Three Months Ended September 30,
--------------------------------
1998 1997
-------- --------
Oil and gas sales $266,881 $498,151
Oil and gas production expenses $ 89,460 $ 94,319
Barrels produced 7,692 11,202
Mcf produced 120,405 149,512
Average price/Bbl $ 11.07 $ 17.66
Average price/Mcf $ 1.51 $ 2.01
As shown in the table above, total oil and gas sales decreased $231,270
(46.4%) for the three months ended September 30, 1998 as compared to the
three months ended September 30, 1997. Of this decrease, approximately
$62,000 and $58,000, respectively, were related to decreases in volumes of
oil and gas sold and approximately $51,000 and $60,000, respectively, were
related to decreases in the average prices of oil and gas sold. Volumes of
oil and gas sold decreased 3,510 barrels and 29,107 Mcf, respectively, for
the three months ended September 30, 1998 as compared to the three months
ended September 30, 1997. The decreases in volumes of oil and gas sold
resulted primarily from the sale of several wells during 1997 and early
1998. Average oil and gas prices decreased to $11.07 per barrel and $1.51
per Mcf, respectively, for the three months ended September 30, 1998 from
$17.66 per barrel and $2.01 per Mcf, respectively, for the three months
ended September 30, 1997.
Oil and gas production expenses (including lease operating expenses and
production taxes) decreased $4,859 (5.2%) for the three months ended
September 30, 1998 as compared to the three months ended September 30,
1997. As a percentage of oil and gas sales, these expenses increased to
33.5% for the three months ended September 30, 1998 from 18.9% for the
three months ended September 30, 1997. This percentage increase was
primarily due to the decreases in the average prices of oil and gas sold
for the three months ended September 30, 1998 as compared to the three
months ended September 30, 1997.
Depreciation, depletion, and amortization of oil and gas properties
decreased $25,414 (24.8%) for the three months ended September 30, 1998 as
compared to the three months ended September 30, 1997. This decrease
resulted primarily from the decreases in volumes of oil and gas sold
during the three months ended September 30, 1998 as compared to the three
months ended September 30, 1997. As a percentage of oil and gas sales,
this expense increased to 28.9% for the
61
<PAGE>
three months ended September 30, 1998 from 20.6% for the three months
ended September 30, 1997. This percentage increase was primarily due to
the decreases in the average prices of oil and gas sold for the three
months ended September 30, 1998 as compared to the three months ended
September 30, 1997.
General and administrative expenses increased $914 (1.9%) for the three
months ended September 30, 1998 as compared to the three months ended
September 30, 1997. As a percentage of oil and gas sales, these expenses
increased to 18.4% for the three months ended September 30, 1998 from 9.7%
for the three months ended September 30, 1997. This percentage increase
was primarily due to the decrease in oil and gas sales.
NINE MONTHS ENDED SEPTEMBER 30, 1998 AS COMPARED TO THE NINE MONTHS ENDED
SEPTEMBER 30, 1997.
Nine Months Ended September 30,
-------------------------------
1998 1997
---------- ----------
Oil and gas sales $1,087,834 $1,674,566
Oil and gas production expenses $ 292,323 $ 356,815
Barrels produced 28,477 35,072
Mcf produced 378,224 440,529
Average price/Bbl $ 13.93 $ 18.92
Average price/Mcf $ 1.83 $ 2.30
As shown in the table above, total oil and gas sales decreased $586,732
(35.0%) for the nine months ended September 30, 1998 as compared to the
nine months ended September 30, 1997. Of this decrease, approximately
$125,000 and $143,000 respectively, were related to decreases in volumes
of oil and gas sold and approximately $142,000 and $177,000, respectively,
were related to decreases in the average prices of oil and gas sold.
Volumes of oil and gas sold decreased 6,595 barrels and 62,305 Mcf,
respectively, for the nine months ended September 30, 1998 as compared to
the nine months ended September 30, 1997. The decrease in volumes of oil
and gas sold resulted primarily from the sale of several wells during 1997
and early 1998. Average oil and gas prices decreased to $13.93 per barrel
and $1.83 per Mcf, respectively, for the nine months ended September 30,
1998 from $18.92 per barrel and $2.30 per Mcf, respectively, for the nine
months ended September 30, 1997.
62
<PAGE>
As discussed in Liquidity and Capital Resources above, the II-F
Partnership sold certain oil and gas properties during the nine months
ended September 30, 1998 and recognized a $654,302 gain on such sales.
Sales during the nine months ended September 30, 1997 resulted in the II-F
Partnership recognizing similar gains totaling $170,970.
Oil and gas production expenses (including lease operating expenses and
production taxes) decreased $64,492 (18.1%) for the nine months ended
September 30, 1998 as compared to the nine months ended September 30,
1997. This decrease resulted primarily from a decrease in production taxes
associated with the decrease in oil and gas sales and a decrease in lease
operating expenses associated with the decreases in volumes of oil and gas
sold during the nine months ended September 30, 1998 as compared to the
nine months ended September 30, 1997. As a percentage of oil and gas
sales, these expenses increased to 26.9% for the nine months ended
September 30, 1998 from 21.3% for the nine months ended September 30,
1997. This percentage increase was primarily due to the decreases in the
average prices of oil and gas sold during the nine months ended September
30, 1998 as compared to the nine months ended September 30, 1997.
Depreciation, depletion, and amortization of oil and gas properties
decreased $53,714 (17.4%) for the nine months ended September 30, 1998 as
compared to the nine months ended September 30, 1997. This decrease
resulted primarily from the decreases in volumes of oil and gas sold
during the nine months ended September 30, 1998 as compared to the nine
months ended September 30, 1997. As a percentage of oil and gas sales,
this expense increased to 23.4% for the nine months ended September 30,
1998 from 18.4% for the nine months ended September 30, 1997. This
percentage increase was primarily due to the decreases in the average
prices of oil and gas sold during the nine months ended September 30, 1998
as compared to the nine months ended September 30, 1997.
The II-F Partnership recognized a non-cash charge against earnings of
$1,377,160 during the nine months ended September 30, 1997. Of this
amount, $208,255 was related to a 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 nine months ended September 30, 1998.
63
<PAGE>
General and administrative expenses decreased $2,056 (1.3%) for the nine
months ended September 30, 1998 as compared to the nine months ended
September 30, 1997. As a percentage of oil and gas sales, these expenses
increased to 14.3% for the nine months ended September 30, 1998 from 9.4%
for the nine months ended September 30, 1997. This percentage increase was
primarily due to the decrease in oil and gas sales.
The Limited Partners have received cash distributions through September
30, 1998 totaling $16,847,051 or 98.29% of Limited Partners' capital
contributions.
II-G PARTNERSHIP
THREE MONTHS ENDED SEPTEMBER 30, 1998 AS COMPARED TO THE THREE MONTHS
ENDED SEPTEMBER 30, 1997.
Three Months Ended September 30,
--------------------------------
1998 1997
-------- ----------
Oil and gas sales $561,811 $1,057,832
Oil and gas production expenses $191,369 $ 201,928
Barrels produced 16,107 23,506
Mcf produced 253,227 318,866
Average price/Bbl $ 11.03 $ 17.66
Average price/Mcf $ 1.52 $ 2.02
As shown in the table above, total oil and gas sales decreased $496,021
(46.9%) for the three months ended September 30, 1998 as compared to the
three months ended September 30, 1997. Of this decrease, approximately
$131,000 and $132,000, respectively, were related to decreases in volumes
oil and gas sold and approximately $107,000 and $126,000, respectively,
were related to decreases in the average prices of oil and gas sold.
Volumes of oil and gas sold decreased 7,399 barrels and 65,639 Mcf,
respectively, for the three months ended September 30, 1998 as compared to
the three months ended September 30, 1997. The decrease in volumes of oil
sold resulted primarily from the sale of several wells during 1997 and
early 1998. The decrease in volumes of gas sold resulted primarily from
(i) the sale of several wells in 1997 and early 1998 and (ii) negative
prior period volume adjustments made by the purchaser on two significant
wells during the three months ended September 30, 1998. Average oil and
gas prices decreased to $11.03 per barrel and $1.52 per Mcf, respectively,
for the three months ended September 30, 1998 from $17.66 per barrel and
$2.02 per Mcf, respectively, for the three months ended September 30,
1997.
64
<PAGE>
Oil and gas production expenses (including lease operating expenses and
production taxes) decreased $10,559 (5.2%) for the three months ended
September 30, 1998 as compared to the three months ended September 30,
1997. This decrease resulted primarily from a decrease in production taxes
associated with the decrease in oil and gas sales, which decrease was
partially offset by workover expenses incurred on two significant wells
during the three months ended September 30, 1998 in order to improve the
recovery of reserves. As a percentage of oil and gas sales, these expenses
increased to 34.1% for the three months ended September 30, 1998 from
19.1% for the three months ended September 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 September 30, 1998 as compared
to the three months ended September 30, 1997.
Depreciation, depletion, and amortization of oil and gas properties
decreased $59,778 (26.8%) for the three months ended September 30, 1998 as
compared to the three months ended September 30, 1997. This decrease
resulted primarily from the decreases in volumes of oil and gas sold
during the three months ended September 30, 1998 as compared to the three
months ended September 30, 1997. As a percentage of oil and gas sales,
these expenses increased to 29.1% for the three months ended September 30,
1998 from 21.1% for the three months ended September 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 September 30,
1998 as compared to the three months ended September 30, 1997.
General and administrative expenses increased $1,974 (1.9%) for the three
months ended September 30, 1998 as compared to the three months ended
September 30, 1997. As a percentage of oil and gas sales, these expenses
increased to 19.0% for the three months ended September 30, 1998 from 9.9%
for the three months ended September 30, 1997. This percentage increase
was primarily due to the decrease in oil and gas sales.
65
<PAGE>
NINE MONTHS ENDED SEPTEMBER 30, 1998 AS COMPARED TO THE NINE MONTHS ENDED
SEPTEMBER 30, 1997.
Nine Months Ended September 30,
-------------------------------
1998 1997
---------- ----------
Oil and gas sales $2,310,367 $3,575,321
Oil and gas production expenses $ 625,597 $ 775,531
Barrels produced 59,757 73,655
Mcf produced 806,717 945,548
Average price/Bbl $ 13.92 $ 18.92
Average price/Mcf $ 1.83 $ 2.31
As shown in the table above, total oil and gas sales decreased $1,264,954
(35.4%) for the nine months ended September 30, 1998 as compared to the
nine months ended September 30, 1997. Of this decrease, approximately
$263,000 and $320,000, respectively, were related to decreases in volumes
of oil and gas sold and approximately $299,000 and $383,000, respectively,
were related to decreases in the average prices of oil and gas sold.
Volumes of oil and gas sold decreased 13,898 barrels and 138,831 Mcf,
respectively, for the nine months ended September 30, 1998 as compared to
the nine months ended September 30, 1997. The decreases in volumes of oil
and gas sold resulted primarily from the sale of several wells during 1997
and early 1998. Average oil and gas prices decreased to $13.92 per barrel
and $1.83 per Mcf, respectively, for the nine months ended September 30,
1998 from $18.92 per barrel and $2.31 per Mcf, respectively, for the nine
months ended September 30, 1997.
As discussed in Liquidity and Capital Resources above, the II-G
Partnership sold certain oil and gas properties during the nine months
ended September 30, 1998 and recognized a $1,368,785 gain on such sales.
Sales during the nine months ended September 30, 1997 resulted in the II-G
Partnership recognizing similar gains totaling $338,421.
Oil and gas production expenses (including lease operating expenses and
production taxes) decreased $149,934 (19.3%) for the nine months ended
September 30, 1998 as compared to the nine months ended September 30,
1997. This decrease resulted primarily from a decrease in production taxes
associated with the decrease in oil and gas sales and a decrease in lease
operating expenses associated with the decreases in volumes of oil and gas
sold during the nine months ended September 30, 1998 as compared to the
nine months ended September 30, 1997. As a percentage of oil and gas
sales, these expenses increased to 27.1% for the nine months ended
September 30, 1998 from 21.7% for the nine months ended September 30,
1997. This percentage increase was primarily due to the decreases in the
average prices of
66
<PAGE>
oil and gas sold during the nine months ended September 30, 1998 as
compared to the nine months ended September 30, 1997.
Depreciation, depletion, and amortization of oil and gas properties
decreased $129,138 (19.2%) for the nine months ended September 30, 1998 as
compared to the nine months ended September 30, 1997. This decrease
resulted primarily from the decreases in volumes of oil and gas sold
during the nine months ended September 30, 1998 as compared to the nine
months ended September 30, 1997. As a percentage of oil and gas sales,
this expense increased to 23.5% for the nine months ended September 30,
1998 from 18.8% for the nine months ended September 30, 1997. This
percentage increase was primarily due to the decreases in the average
prices of oil and gas sold during the nine months ended September 30, 1998
as compared to the nine months ended September 30, 1997.
The II-G Partnership recognized a non-cash charge against earnings of
$3,101,656 during the nine months ended September 30, 1997. Of this
amount, $489,672 was related to a 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 nine months ended September 30, 1998.
General and administrative expenses decreased $4,388 (1.3%) for the nine
months ended September 30, 1998 as compared to the nine months ended
September 30, 1997. As a percentage of oil and gas sales, these expenses
increased to 14.6% for the nine months ended September 30, 1998 from 9.6%
for the nine months ended September 30, 1997. This percentage increase was
primarily due to the decrease in oil and gas sales.
The Limited Partners have received cash distributions through September
30, 1998 totaling $34,721,371 or 93.29% of Limited Partners' capital
contributions.
67
<PAGE>
II-H PARTNERSHIP
THREE MONTHS ENDED SEPTEMBER 30, 1998 AS COMPARED TO THE THREE MONTHS
ENDED SEPTEMBER 30, 1997.
Three Months Ended September 30,
--------------------------------
1998 1997
-------- --------
Oil and gas sales $136,780 $251,228
Oil and gas production expenses $ 46,496 $ 48,760
Barrels produced 3,736 5,463
Mcf produced 61,996 76,662
Average price/Bbl $ 10.95 $ 17.66
Average price/Mcf $ 1.55 $ 2.02
As shown in the table above, total oil and gas sales decreased $114,448
(45.6%) for the three months ended September 30, 1998 as compared to the
three months ended September 30, 1997. Of this decrease, approximately
$30,000 and $30,000, respectively, were related to decreases in the
volumes of oil and gas sold and approximately $25,000 and $29,000,
respectively, were related to decreases in the average prices of oil and
gas sold. Volumes of oil and gas sold decreased 1,727 barrels and 14,666
Mcf, respectively, for the three months ended September 30, 1998 as
compared to the three months ended September 30, 1997. The decrease in
volumes of oil sold resulted primarily from the sale of several wells
during 1997 and early 1998. The decrease in volumes of gas sold resulted
primarily from (i) the sale of several wells during 1997 and early 1998
and (ii) negative prior period volume adjustments made by purchasers on
two significant wells during the three months ended September 30, 1998.
Average oil and gas prices decreased to $10.95 per barrel and $1.55 per
Mcf, respectively, for the three months ended September 30, 1998 from
$17.66 per barrel and $2.02 per Mcf, respectively, for the three months
ended September 30, 1997.
Oil and gas production expenses (including lease operating expenses and
production taxes) decreased $2,264 (4.6%) for the three months ended
September 30, 1998 as compared to the three months ended September 30,
1997. This decrease resulted primarily from a decrease in production taxes
associated with the decrease in oil and gas sales, which decrease was
partially offset by workover expenses on two significant wells during the
three months ended September 30, 1998 in order to improve the recovery of
reserves. As a percentage of oil and gas sales, these expenses increased
to 34.0% for the three months ended September 30, 1998 from 19.4% for the
three months ended September 30, 1997. This percentage increase was
primarily due to the decreases in the average prices of oil and gas sold
during the three
68
<PAGE>
months ended September 30, 1998 as compared to the three months ended
September 30, 1997.
Depreciation, depletion, and amortization of oil and gas properties
decreased $14,206 (26.9%) for the three months ended September 30, 1998 as
compared to the three months ended September 30, 1997. This decrease
resulted primarily from the decreases in volumes of oil and gas sold
during the three months ended September 30, 1998 as compared to the three
months ended September 30, 1997. As a percentage of oil and gas sales,
these expenses increased to 28.3% for the three months ended September 30,
1998 from 21.1% for the three months ended September 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 September 30,
1998 as compared to the three months ended September 30, 1997.
General and administrative expenses increased $485 (1.9%) for the three
months ended September 30, 1998 as compared to the three months ended
September 30, 1997. As a percentage of oil and gas sales, these expenses
increased to 19.2% for the three months ended September 30, 1998 from
10.3% for the three months ended September 30, 1997. This percentage
increase was primarily due to the decrease in oil and gas sales.
NINE MONTHS ENDED SEPTEMBER 30, 1998 AS COMPARED TO THE NINE MONTHS ENDED
SEPTEMBER 30, 1997.
Nine Months Ended September 30,
-------------------------------
1998 1997
-------- --------
Oil and gas sales $549,753 $861,261
Oil and gas production expenses $151,009 $192,891
Barrels produced 13,887 17,129
Mcf produced 193,275 230,796
Average price/Bbl $ 13.90 $ 18.92
Average price/Mcf $ 1.85 $ 2.33
As shown in the table above, total oil and gas sales decreased $311,508
(36.2%) for the nine months ended September 30, 1998 as compared to the
nine months ended September 30, 1997. Of this decrease, approximately
$61,000 and $87,000, respectively, were related to decreases in the
volumes of oil and gas sold and approximately $70,000 and $93,000,
respectively, were related to decreases in the average prices of oil and
gas sold. Volumes of oil and gas sold decreased 3,242 barrels and 37,521
Mcf, respectively, for the nine months ended September 30, 1998 as
compared to the nine months ended September 30, 1997. The decreases in
volumes of oil and gas sold resulted primarily from the sale of several
wells during 1997 and early 1998. Average oil
69
<PAGE>
and gas prices decreased to $13.90 per barrel and $1.85 per Mcf,
respectively, for the nine months ended September 30, 1998 from $18.92 per
barrel and $2.33 per Mcf, respectively, for the nine months ended
September 30, 1997.
As discussed in Liquidity and Capital Resources above, the II-H
Partnership sold certain oil and gas properties during the nine months
ended September 30, 1998 and recognized a $314,187 gain on such sales.
Sales during the nine months ended September 30, 1997 resulted in the II-H
Partnership recognizing similar gains totaling $77,387.
Oil and gas production expenses (including lease operating expenses and
production taxes) decreased $41,882 (21.7%) for the nine months ended
September 30, 1998 as compared to the nine months ended September 30,
1997. This decrease resulted primarily from a decrease in production taxes
associated with the decrease in oil and gas sales and a decrease in lease
operating expenses associated with the decreases in volumes of oil and gas
sold during the nine months ended September 30, 1998 as compared to the
nine months ended September 30, 1997. As a percentage of oil and gas
sales, these expenses increased to 27.5% for the nine months ended
September 30, 1998 from 22.4% for the nine months ended September 30,
1997. This percentage increase was primarily due to the decreases in the
average prices of oil and gas sold during the nine months ended September
30, 1998 as compared to the nine months ended September 30, 1997.
Depreciation, depletion, and amortization of oil and gas properties
decreased $34,451 (21.4%) for the nine months ended September 30, 1998 as
compared to the nine months ended September 30, 1997. This decrease
resulted primarily from the decreases in volumes of oil and gas sold
during the nine months ended September 30, 1998 as compared to the nine
months ended September 30, 1997. As a percentage of oil and gas sales,
this expense increased to 23.1% for the nine months ended September 30,
1998 from 18.7% for the nine months ended September 30, 1997. This
percentage increase was primarily due to the decreases in the average
prices of oil and gas sold during the nine months ended September 30, 1998
as compared to the nine months ended September 30, 1997.
The II-H Partnership recognized a non-cash charge against earnings of
$785,220 during the nine months ended September 30, 1997. Of this amount,
$125,223 was related to a 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 unlikely that such properties would be developed
due to the
70
<PAGE>
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 nine months ended September 30, 1998.
General and administrative expenses decreased $1,046 (1.2%) for the nine
months ended September 30, 1998 as compared to the nine months ended
September 30, 1997. As a percentage of oil and gas sales, these expenses
increased to 15.2% for the nine months ended September 30, 1998 from 9.8%
for the nine months ended September 30, 1997. This percentage increase was
primarily due to the decrease in oil and gas sales.
The Limited Partners have received cash distributions through September
30, 1998 totaling $8,082,364 or 88.13% of Limited Partners' capital
contributions.
71
<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 September 30, 1998 and for
the nine months ended September 30, 1998, filed
herewith.
27.2 Financial Data Schedule containing summary financial
information extracted from the II-B Partnership's
financial statements as of September 30, 1998 and for
the nine months ended September 30, 1998, filed
herewith.
27.3 Financial Data Schedule containing summary financial
information extracted from the II-C Partnership's
financial statements as of September 30, 1998 and for
the nine months ended September 30, 1998, filed
herewith.
27.4 Financial Data Schedule containing summary financial
information extracted from the II-D Partnership's
financial statements as of September 30, 1998 and for
the nine months ended September 30, 1998, filed
herewith.
27.5 Financial Data Schedule containing summary financial
information extracted from the II-E Partnership's
financial statements as of September 30, 1998 and for
the nine months ended September 30, 1998, filed
herewith.
27.6 Financial Data Schedule containing summary financial
information extracted from the II-F Partnership's
financial statements as of September 30, 1998 and for
the nine months ended September 30, 1998, filed
herewith.
27.7 Financial Data Schedule containing summary financial
information extracted from the II-G Partnership's
financial statements as of September 30, 1998 and for
the nine months ended September 30, 1998, filed
herewith.
72
<PAGE>
27.8 Financial Data Schedule containing summary financial
information extracted from the II-H Partnership's
financial statements as of September 30, 1998 and for
the nine months ended September 30, 1998, filed
herewith.
All other exhibits are omitted as inapplicable.
(b) Reports on Form 8-K.
1. Current Report on Form 8-K filed during the third quarter of
1998:
Date of Event: June 24, 1998
Date filed with SEC: July 1, 1998
Items Included: Item 5 - Other Events
2. Current Report on Form 8-K filed during the third quarter of
1998:
Date of Event: July 30, 1998
Date filed with SEC: August 5, 1998
Items Included: Item 5 - Other Events
73
<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: November 13, 1998 By: /s/Dennis R. Neill
--------------------------------
(Signature)
Dennis R. Neill
President
Date: November 13, 1998 By: /s/Patrick M. Hall
--------------------------------
(Signature)
Patrick M. Hall
Principal Accounting Officer
74
<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 September 30, 1998 and for the nine
months ended September 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 September 30, 1998 and for the nine
months ended September 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 September 30, 1998 and for the nine
months ended September 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 September 30, 1998 and for the nine
months ended September 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 September 30, 1998 and for the nine
months ended September 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 September 30, 1998 and for the nine
months ended September 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 September 30, 1998 and for the nine
months ended September 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 September 30, 1998 and for the nine
months ended September 30, 1998, filed herewith.
All other exhibits are omitted as inapplicable.
75
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<NAME> GEODYNE ENERGY INCOME LTD PARTNERSHIP II-A
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<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> SEP-30-1998
<CASH> 2,469,615
<SECURITIES> 0
<RECEIVABLES> 457,471
<ALLOWANCES> 0
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<CURRENT-ASSETS> 2,927,086
<PP&E> 30,901,780
<DEPRECIATION> 26,618,649
<TOTAL-ASSETS> 8,121,258
<CURRENT-LIABILITIES> 236,412
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 7,727,796
<TOTAL-LIABILITY-AND-EQUITY> 8,121,258
<SALES> 3,025,364
<TOTAL-REVENUES> 5,464,593
<CGS> 0
<TOTAL-COSTS> 2,075,507
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 3,389,086
<INCOME-TAX> 0
<INCOME-CONTINUING> 3,389,086
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 3,389,086
<EPS-PRIMARY> 6.61
<EPS-DILUTED> 0
</TABLE>
<TABLE> <S> <C>
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<NAME> GEODYNE ENERGY INCOME LTD PARTNERSHIP II-B
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> SEP-30-1998
<CASH> 2,944,027
<SECURITIES> 0
<RECEIVABLES> 349,712
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 3,293,739
<PP&E> 21,573,596
<DEPRECIATION> 18,803,202
<TOTAL-ASSETS> 6,233,944
<CURRENT-LIABILITIES> 89,717
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 6,055,708
<TOTAL-LIABILITY-AND-EQUITY> 6,233,944
<SALES> 1,973,911
<TOTAL-REVENUES> 4,867,895
<CGS> 0
<TOTAL-COSTS> 1,380,027
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
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<INCOME-PRETAX> 3,487,868
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<INCOME-CONTINUING> 3,487,868
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<NET-INCOME> 3,487,868
<EPS-PRIMARY> 9.13
<EPS-DILUTED> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
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<NAME> GEODYNE ENERGY INCOME LTD PARTNERSHIP II-C
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> SEP-30-1998
<CASH> 1,302,424
<SECURITIES> 0
<RECEIVABLES> 158,011
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 1,460,435
<PP&E> 9,269,178
<DEPRECIATION> 7,828,776
<TOTAL-ASSETS> 3,040,458
<CURRENT-LIABILITIES> 48,306
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 2,942,505
<TOTAL-LIABILITY-AND-EQUITY> 3,040,458
<SALES> 896,558
<TOTAL-REVENUES> 2,303,071
<CGS> 0
<TOTAL-COSTS> 598,492
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 1,704,579
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<INCOME-CONTINUING> 1,704,579
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<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,704,579
<EPS-PRIMARY> 10.44
<EPS-DILUTED> 0
</TABLE>
<TABLE> <S> <C>
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<NAME> GEODYNE ENERGY INCOME LTD PARTNERSHIP II-D
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<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> SEP-30-1998
<CASH> 3,311,975
<SECURITIES> 0
<RECEIVABLES> 300,667
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 3,612,642
<PP&E> 16,931,785
<DEPRECIATION> 14,030,490
<TOTAL-ASSETS> 7,058,282
<CURRENT-LIABILITIES> 184,421
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 6,634,778
<TOTAL-LIABILITY-AND-EQUITY> 7,058,282
<SALES> 1,885,766
<TOTAL-REVENUES> 5,485,178
<CGS> 0
<TOTAL-COSTS> 1,473,654
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
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<INCOME-PRETAX> 4,011,524
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<INCOME-CONTINUING> 4,011,524
<DISCONTINUED> 0
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<CHANGES> 0
<NET-INCOME> 4,011,524
<EPS-PRIMARY> 12.07
<EPS-DILUTED> 0
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<TABLE> <S> <C>
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<NAME> GEODYNE ENERGY INCOME LTD PARTNERSHIP II-E
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> SEP-30-1998
<CASH> 6,309,572
<SECURITIES> 0
<RECEIVABLES> 186,066
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 6,495,638
<PP&E> 15,296,112
<DEPRECIATION> 12,755,811
<TOTAL-ASSETS> 9,366,470
<CURRENT-LIABILITIES> 209,939
<BONDS> 0
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