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:
III-A: 0-18302 III-B: 0-18636 III-C: 0-18634
III-D: 0-18936 III-E: 0-19010 III-F: 0-19102
III-G: 0-19563
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-A
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-B
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-C
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-D
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-E
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-F
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-G
---------------------------------------------------------
(Exact name of Registrant as specified in its Articles)
III-A 73-1352993
III-B 73-1358666
III-C 73-1356542
III-D 73-1357374
III-E 73-1367188
III-F 73-1377737
Oklahoma III-G 73-1377828
- ---------------------------- -------------------------------
(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 III-A
BALANCE SHEETS
(Unaudited)
ASSETS
September 30, December 31,
1998 1997
------------- ------------
CURRENT ASSETS:
Cash and cash equivalents $ 324,860 $ 522,371
Accounts receivable:
Oil and gas sales 265,218 524,541
Other - 308
---------- ----------
Total current assets $ 590,078 $1,047,220
NET OIL AND GAS PROPERTIES, utilizing
the successful efforts method 2,293,475 2,669,949
DEFERRED CHARGE 199,722 199,722
---------- ----------
$3,083,275 $3,916,891
========== ==========
LIABILITIES AND PARTNERS' CAPITAL (DEFICIT)
CURRENT LIABILITIES:
Accounts payable $ 30,865 $ 39,622
Gas imbalance payable 38,418 38,418
---------- ----------
Total current liabilities $ 69,283 $ 78,040
ACCRUED LIABILITY $ 51,905 $ 51,905
PARTNERS' CAPITAL (DEFICIT):
General Partner ($ 209,906) ($ 198,271)
Limited Partners, issued and
outstanding, 263,976 units 3,171,993 3,985,217
---------- ----------
Total Partners' capital $2,962,087 $3,786,946
---------- ----------
$3,083,275 $3,916,891
========== ==========
The accompanying condensed notes are an integral part of
these financial statements.
2
<PAGE>
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-A
STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 1998 AND 1997
(Unaudited)
1998 1997
--------- ---------
REVENUES:
Oil and gas sales $428,407 $712,026
Interest income 3,436 9,002
Loss on sale of oil and gas
properties ( 81) ( 387)
-------- --------
$431,762 $720,641
COSTS AND EXPENSES:
Lease operating $103,106 $ 76,887
Production tax 37,047 54,458
Depreciation, depletion, and
amortization of oil and gas
properties 113,924 205,936
General and administrative
(Note 2) 75,481 74,192
-------- --------
$329,558 $411,473
-------- --------
NET INCOME $102,204 $309,168
======== ========
GENERAL PARTNER - NET INCOME $ 9,495 $ 23,246
======== ========
LIMITED PARTNERS - NET INCOME $ 92,709 $285,922
======== ========
NET INCOME per unit $ .35 $ 1.08
======== ========
UNITS OUTSTANDING 263,976 263,976
======== ========
The accompanying condensed notes are an integral part of
these financial statements.
3
<PAGE>
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-A
STATEMENTS OF OPERATIONS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1998 AND 1997
(Unaudited)
1998 1997
---------- ----------
REVENUES:
Oil and gas sales $1,573,580 $2,578,627
Interest income 14,033 22,480
Gain (loss) on sale of oil and
gas properties 19,960 ( 10,842)
---------- ----------
$1,607,573 $2,590,265
COSTS AND EXPENSES:
Lease operating $ 313,761 $ 338,876
Production tax 125,983 202,696
Depreciation, depletion, and
amortization of oil and gas
properties 385,298 691,287
Impairment provision - 1,617,006
General and administrative
(Note 2) 239,914 238,929
---------- ----------
$1,064,956 $3,088,794
---------- ----------
NET INCOME (LOSS) $ 542,617 ($ 498,529)
========== ==========
GENERAL PARTNER - NET INCOME $ 41,841 $ 66,281
========== ==========
LIMITED PARTNERS - NET INCOME (LOSS) $ 500,776 ($ 564,810)
========== ==========
NET INCOME (LOSS) per unit $ 1.90 ($ 2.14)
========== ==========
UNITS OUTSTANDING 263,976 263,976
========== ==========
The accompanying condensed notes are an integral part of
these financial statements.
4
<PAGE>
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-A
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) $ 542,617 ($ 498,529)
Adjustments to reconcile net income
(loss) to net cash provided by
operating activities:
Depreciation, depletion, and
amortization of oil and gas
properties 385,298 691,287
Impairment provision - 1,617,006
(Gain) loss on sale of oil and
gas properties ( 19,960) 10,842
Decrease in accounts receivable -
oil and gas sales 259,323 183,710
Decrease in accounts receivable -
other 308 -
Decrease in accounts payable ( 8,757) ( 16,170)
---------- ----------
Net cash provided by operating
activities $1,158,829 $1,988,146
---------- ----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures ($ 12,261) ($ 36,054)
Proceeds from sale of oil and
gas properties 23,397 519,917
---------- ----------
Net cash provided by investing
activities $ 11,136 $ 483,863
---------- ----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Cash distributions ($1,367,476) ($2,545,334)
---------- ----------
Net cash used by financing activities ($1,367,476) ($2,545,334)
---------- ----------
NET DECREASE IN CASH AND CASH
EQUIVALENTS ($ 197,511) ($ 73,325)
CASH AND CASH EQUIVALENTS AT
BEGINNING OF PERIOD 522,371 610,116
---------- ----------
CASH AND CASH EQUIVALENTS AT
END OF PERIOD $ 324,860 $ 536,791
========== ==========
The accompanying condensed notes are an integral part of
these financial statements.
5
<PAGE>
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-B
BALANCE SHEETS
(Unaudited)
ASSETS
September 30, December 31,
1998 1997
------------- ------------
CURRENT ASSETS:
Cash and cash equivalents $ 189,312 $ 305,288
Accounts receivable:
Oil and gas sales 163,539 307,724
Other - 130
---------- ----------
Total current assets $ 352,851 $ 613,142
NET OIL AND GAS PROPERTIES, utilizing
the successful efforts method 1,279,680 1,499,148
DEFERRED CHARGE 136,296 136,296
---------- ----------
$1,768,827 $2,248,586
========== ==========
LIABILITIES AND PARTNERS' CAPITAL (DEFICIT)
CURRENT LIABILITIES:
Accounts payable $ 22,908 $ 19,432
Gas imbalance payable 6,676 6,676
---------- ----------
Total current liabilities $ 29,584 $ 26,108
ACCRUED LIABILITY $ 28,494 $ 28,494
PARTNERS' CAPITAL (DEFICIT):
General Partner ($ 89,808) ($ 97,840)
Limited Partners, issued and
outstanding, 138,336 units 1,800,557 2,291,824
---------- ----------
Total Partners' capital $1,710,749 $2,193,984
---------- ----------
$1,768,827 $2,248,586
========== ==========
The accompanying condensed notes are an integral part of
these financial statements.
6
<PAGE>
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-B
STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 1998 AND 1997
(Unaudited)
1998 1997
--------- ---------
REVENUES:
Oil and gas sales $267,275 $428,266
Interest income 1,496 4,890
Gain (loss) on sale of oil
and gas properties 32,404 ( 159)
-------- --------
$301,175 $432,997
COSTS AND EXPENSES:
Lease operating $ 75,619 $ 52,059
Production tax 22,144 32,868
Depreciation, depletion, and
amortization of oil and gas
properties 71,199 118,845
General and administrative
(Note 2) 39,561 38,884
-------- --------
$208,523 $242,656
-------- --------
NET INCOME $ 92,652 $190,341
======== ========
GENERAL PARTNER - NET INCOME $ 23,641 $ 14,026
======== ========
LIMITED PARTNERS - NET INCOME $ 69,011 $176,315
======== ========
NET INCOME per unit $ .50 $ 1.27
======== ========
UNITS OUTSTANDING 138,336 138,336
======== ========
The accompanying condensed notes are an integral part of
these financial statements.
7
<PAGE>
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-B
STATEMENTS OF OPERATIONS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1998 AND 1997
(Unaudited)
1998 1997
---------- ----------
REVENUES:
Oil and gas sales $957,758 $1,522,622
Interest income 7,386 12,551
Gain (loss) on sale of oil
and gas properties 33,219 ( 7,832)
-------- ----------
$998,363 $1,527,341
COSTS AND EXPENSES:
Lease operating $206,566 $ 210,321
Production tax 75,882 118,418
Depreciation, depletion, and
amortization of oil and gas
properties 234,406 394,554
Impairment provision - 738,122
General and administrative
(Note 2) 125,695 125,331
-------- ----------
$642,549 $1,586,746
-------- ----------
NET INCOME (LOSS) $355,814 ($ 59,405)
======== ==========
GENERAL PARTNER - NET INCOME $ 85,081 $ 41,709
======== ==========
LIMITED PARTNERS - NET INCOME (LOSS) $270,733 ($ 101,114)
======== ==========
NET INCOME (LOSS) per unit $ 1.96 ($ .73)
======== ==========
UNITS OUTSTANDING 138,336 138,336
======== ==========
The accompanying condensed notes are an integral part of
these financial statements.
8
<PAGE>
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-B
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) $355,814 ($ 59,405)
Adjustments to reconcile net income
(loss) to net cash provided by
operating activities:
Depreciation, depletion, and
amortization of oil and gas
properties 234,406 394,554
Impairment provision - 738,122
(Gain) loss on sale of oil and
gas properties ( 33,219) 7,832
Decrease in accounts receivable -
oil and gas sales 144,185 102,791
Decrease in accounts receivable -
other 130 -
Increase in accounts payable 3,476 9,737
-------- ----------
Net cash provided by operating
activities $704,792 $1,193,631
-------- ----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures ($ 15,746) ($ 41,925)
Proceeds from sale of oil and
gas properties 34,027 252,459
-------- ----------
Net cash provided by investing
activities $ 18,281 $ 210,534
-------- ----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Cash distributions ($839,049) ($1,482,217)
-------- ----------
Net cash used by financing activities ($839,049) ($1,482,217)
-------- ----------
NET DECREASE IN CASH AND CASH
EQUIVALENTS ($115,976) ($ 78,052)
CASH AND CASH EQUIVALENTS AT
BEGINNING OF PERIOD 305,288 376,603
-------- ----------
CASH AND CASH EQUIVALENTS AT
END OF PERIOD $189,312 $ 298,551
======== ==========
The accompanying condensed notes are an integral part of
these financial statements.
9
<PAGE>
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-C
BALANCE SHEETS
(Unaudited)
ASSETS
September 30, December 31,
1998 1997
------------- ------------
CURRENT ASSETS:
Cash and cash equivalents $ 450,530 $ 540,911
Accounts receivable:
Oil and gas sales 317,631 497,683
Other - 54
---------- ----------
Total current assets $ 768,161 $1,038,648
NET OIL AND GAS PROPERTIES, utilizing
the successful efforts method 3,077,954 3,442,631
DEFERRED CHARGE 86,649 86,649
---------- ----------
$3,932,764 $4,567,928
========== ==========
LIABILITIES AND PARTNERS' CAPITAL (DEFICIT)
CURRENT LIABILITIES:
Accounts payable $ 43,029 $ 53,049
Gas imbalance payable 30,493 30,493
---------- ----------
Total current liabilities $ 73,522 $ 83,542
ACCRUED LIABILITY $ 142,828 $ 142,828
PARTNERS' CAPITAL (DEFICIT):
General Partner ($ 178,511) ($ 171,438)
Limited Partners, issued and
outstanding, 244,536 units 3,894,925 4,512,996
---------- ----------
Total Partners' capital $3,716,414 $4,341,558
---------- ----------
$3,932,764 $4,567,928
========== ==========
The accompanying condensed notes are an integral part of
these financial statements.
10
<PAGE>
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-C
STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 1998 AND 1997
(Unaudited)
1998 1997
-------- ----------
REVENUES:
Oil and gas sales $580,014 $633,934
Interest income 5,122 5,071
Gain on sale of oil and gas
properties 34,561 17,697
-------- --------
$619,697 $656,702
COSTS AND EXPENSES:
Lease operating $125,358 $102,256
Production tax 44,123 46,589
Depreciation, depletion, and
amortization of oil and gas
properties 156,876 176,829
General and administrative
(Note 2) 69,936 68,732
-------- --------
$396,293 $394,406
-------- --------
NET INCOME $223,404 $262,296
======== ========
GENERAL PARTNER - NET INCOME $ 17,189 $ 19,934
======== ========
LIMITED PARTNERS - NET INCOME $206,215 $242,362
======== ========
NET INCOME per unit $ .84 $ .99
======== ========
UNITS OUTSTANDING 244,536 244,536
======== ========
The accompanying condensed notes are an integral part of
these financial statements.
11
<PAGE>
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-C
STATEMENTS OF OPERATIONS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1998 AND 1997
(Unaudited)
1998 1997
---------- ----------
REVENUES:
Oil and gas sales $1,814,170 $2,234,020
Interest income 16,071 15,763
Gain on sale of oil and gas
properties 439,894 73,369
---------- ----------
$2,270,135 $2,323,152
COSTS AND EXPENSES:
Lease operating $ 366,067 $ 354,901
Production tax 132,826 166,831
Depreciation, depletion, and
amortization of oil and gas
properties 439,682 564,045
Impairment provision - 1,696,417
General and administrative
(Note 2) 222,389 226,703
---------- ----------
$1,160,964 $3,008,897
---------- ----------
NET INCOME (LOSS) $1,109,171 ($ 685,745)
========== ==========
GENERAL PARTNER - NET INCOME $ 72,242 $ 55,343
========== ==========
LIMITED PARTNERS - NET INCOME (LOSS) $1,036,929 ($ 741,088)
========== ==========
NET INCOME (LOSS) per unit $ 4.24 ($ 3.03)
========== ==========
UNITS OUTSTANDING 244,536 244,536
========== ==========
The accompanying condensed notes are an integral part of
these financial statements.
12
<PAGE>
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-C
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) $1,109,171 ($ 685,745)
Adjustments to reconcile net income
(loss) to net cash provided by
operating activities:
Depreciation, depletion, and
amortization of oil and gas
properties 439,682 564,045
Impairment provision - 1,696,417
Gain on sale of oil and gas
properties ( 439,894) ( 73,369)
Decrease in accounts receivable -
oil and gas sales 180,052 182,407
Decrease in accounts receivable -
General Partner - 31,764
Decrease in accounts receivable -
other 54 -
Decrease in accounts payable ( 10,020) ( 21,392)
---------- ----------
Net cash provided by operating
activities $1,279,045 $1,694,127
---------- ----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures ($ 118,032) ($ 69,357)
Proceeds from sale of oil and
gas properties 482,921 166,430
---------- ----------
Net cash provided by investing
activities $ 364,889 $ 97,073
---------- ----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Cash distributions ($1,734,315) ($1,968,847)
---------- ----------
Net cash used by financing activities ($1,734,315) ($1,968,847)
---------- ----------
NET DECREASE IN CASH AND CASH
EQUIVALENTS ($ 90,381) ($ 177,647)
CASH AND CASH EQUIVALENTS AT
BEGINNING OF PERIOD 540,911 537,233
---------- ----------
CASH AND CASH EQUIVALENTS AT
END OF PERIOD $ 450,530 $ 359,586
========== ==========
The accompanying condensed notes are an integral part of
these financial statements.
13
<PAGE>
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-D
BALANCE SHEETS
(Unaudited)
ASSETS
September 30, December 31,
1998 1997
------------- ------------
CURRENT ASSETS:
Cash and cash equivalents $ 257,201 $ 298,964
Accounts receivable:
Oil and gas sales 244,782 361,775
---------- ----------
Total current assets $ 501,983 $ 660,739
NET OIL AND GAS PROPERTIES, utilizing
the successful efforts method 2,017,210 2,211,248
DEFERRED CHARGE 18,875 18,875
---------- ----------
$2,538,068 $2,890,862
========== ==========
LIABILITIES AND PARTNERS' CAPITAL (DEFICIT)
CURRENT LIABILITIES:
Accounts payable $ 45,846 $ 114,286
---------- ----------
Total current liabilities $ 45,846 $ 114,286
ACCRUED LIABILITY $ 201,934 $ 201,934
PARTNERS' CAPITAL (DEFICIT):
General Partner ($ 66,664) ($ 62,091)
Limited Partners, issued and
outstanding, 131,008 units 2,356,952 2,636,733
---------- ----------
Total Partners' capital $2,290,288 $2,574,642
---------- ----------
$2,538,068 $2,890,862
========== ==========
The accompanying condensed notes are an integral part of
these financial statements.
14
<PAGE>
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-D
STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 1998 AND 1997
(Unaudited)
1998 1997
-------- ---------
REVENUES:
Oil and gas sales $436,235 $472,603
Interest income 2,462 3,042
Gain (loss) on sale of oil
and gas properties ( 2,126) 3,234
-------- --------
$436,571 $478,879
COSTS AND EXPENSES:
Lease operating $146,240 $149,391
Production tax 29,981 35,345
Depreciation, depletion, and
amortization of oil and gas
properties 87,437 99,845
General and administrative
(Note 2) 37,465 36,823
-------- --------
$301,123 $321,404
-------- --------
NET INCOME $135,448 $157,475
======== ========
GENERAL PARTNER - NET INCOME $ 10,147 $ 11,715
======== ========
LIMITED PARTNERS - NET INCOME $125,301 $145,760
======== ========
NET INCOME per unit $ .96 $ 1.11
======== ========
UNITS OUTSTANDING 131,008 131,008
======== ========
The accompanying condensed notes are an integral part of
these financial statements.
15
<PAGE>
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-D
STATEMENTS OF OPERATIONS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1998 AND 1997
(Unaudited)
1998 1997
---------- ----------
REVENUES:
Oil and gas sales $1,348,399 $1,734,127
Interest income 7,232 9,459
Gain on sale of oil and
gas properties 56,646 23,702
---------- ----------
$1,412,277 $1,767,288
COSTS AND EXPENSES:
Lease operating $ 424,713 $ 474,265
Production tax 89,677 124,947
Depreciation, depletion, and
amortization of oil and gas
properties 245,005 317,302
Impairment provision - 932,243
General and administrative
(Note 2) 119,558 122,100
---------- ----------
$ 878,953 $1,970,857
---------- ----------
NET INCOME (LOSS) $ 533,324 ($ 203,569)
========== ==========
GENERAL PARTNER - NET INCOME $ 36,105 $ 39,330
========== ==========
LIMITED PARTNERS - NET INCOME (LOSS) $ 497,219 ($ 242,899)
========== ==========
NET INCOME (LOSS) per unit $ 3.80 ($ 1.85)
========== ==========
UNITS OUTSTANDING 131,008 131,008
========== ==========
The accompanying condensed notes are an integral part of
these financial statements.
16
<PAGE>
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-D
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) $533,324 ($ 203,569)
Adjustments to reconcile net income
(loss) to net cash provided by
operating activities:
Depreciation, depletion, and
amortization of oil and gas
properties 245,005 317,302
Impairment provision - 932,243
Gain on sale of oil and gas
properties ( 56,646) ( 23,702)
Decrease in accounts receivable -
oil and gas sales 116,993 106,588
Increase in accounts receivable -
General Partner - ( 1,314)
Decrease in accounts payable ( 68,440) ( 62,159)
-------- ----------
Net cash provided by operating
activities $770,236 $1,065,389
-------- ----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures ($ 58,841) ($ 670)
Proceeds from sale of oil and
gas properties 64,520 25,103
-------- ----------
Net cash provided by investing
activities $ 5,679 $ 24,433
-------- ----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Cash distributions ($817,678) ($1,151,841)
-------- ----------
Net cash used by financing activities ($817,678) ($1,151,841)
-------- ----------
NET DECREASE IN CASH AND CASH
EQUIVALENTS ($ 41,763) ($ 62,019)
CASH AND CASH EQUIVALENTS AT
BEGINNING OF PERIOD 298,964 319,245
-------- ----------
CASH AND CASH EQUIVALENTS AT
END OF PERIOD $257,201 $ 257,226
======== ==========
The accompanying condensed notes are an integral part of
these financial statements.
17
<PAGE>
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-E
BALANCE SHEETS
(Unaudited)
ASSETS
September 30, December 31,
1998 1997
------------- ------------
CURRENT ASSETS:
Cash and cash equivalents $ 844,238 $ 1,114,574
Accounts receivable:
Oil and gas sales 752,448 1,361,797
---------- -----------
Total current assets $1,596,686 $ 2,476,371
NET OIL AND GAS PROPERTIES,
utilizing the successful
efforts method 7,824,708 8,716,929
DEFERRED CHARGE 204,087 204,087
---------- -----------
$9,625,481 $11,397,387
========== ===========
LIABILITIES AND PARTNERS' CAPITAL (DEFICIT)
CURRENT LIABILITIES:
Accounts payable $ 290,493 $ 693,518
Gas imbalance payable 142,749 142,749
---------- -----------
Total current liabilities $ 433,242 $ 836,267
ACCRUED LIABILITY $ 320,943 $ 320,943
PARTNERS' CAPITAL (DEFICIT):
General Partner ($ 227,720) ($ 209,050)
Limited Partners, issued and
outstanding, 418,266 units 9,099,016 10,449,227
---------- -----------
Total Partners' capital $8,871,296 $10,240,177
---------- -----------
$9,625,481 $11,397,387
========== ===========
The accompanying condensed notes are an integral part of
these financial statements.
18
<PAGE>
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-E
STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 1998 AND 1997
(Unaudited)
1998 1997
---------- ----------
REVENUES:
Oil and gas sales $1,373,883 $1,878,608
Interest income 10,200 11,414
Gain (loss) on sale of oil
and gas properties ( 1,063) 136
---------- ----------
$1,383,020 $1,890,158
COSTS AND EXPENSES:
Lease operating $ 815,923 $ 901,133
Production tax 88,476 137,778
Depreciation, depletion, and
amortization of oil and gas
properties 252,032 426,859
General and administrative
(Note 2) 119,580 117,537
---------- ----------
$1,276,011 $1,583,307
---------- ----------
NET INCOME $ 107,009 $ 306,851
========== ==========
GENERAL PARTNER - NET INCOME $ 14,922 $ 31,846
========== ==========
LIMITED PARTNERS - NET INCOME $ 92,087 $ 275,005
========== ==========
NET INCOME per unit $ .22 $ .66
========== ==========
UNITS OUTSTANDING 418,266 418,266
========== ==========
The accompanying condensed notes are an integral part of
these financial statements.
19
<PAGE>
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-E
STATEMENTS OF OPERATIONS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1998 AND 1997
(Unaudited)
1998 1997
---------- ----------
REVENUES:
Oil and gas sales $4,995,623 $6,914,717
Interest income 34,228 34,775
Gain (loss) on sale of oil
and gas properties 36,098 ( 174)
---------- ----------
$5,065,949 $6,949,318
COSTS AND EXPENSES:
Lease operating $2,336,628 $2,703,699
Production tax 339,339 493,049
Depreciation, depletion, and
amortization of oil and gas
properties 856,678 1,356,502
Impairment provision - 2,893,438
General and administrative
(Note 2) 386,625 388,691
---------- ----------
$3,919,270 $7,835,379
---------- ----------
NET INCOME (LOSS) $1,146,679 ($ 886,061)
========== ==========
GENERAL PARTNER - NET INCOME $ 89,890 $ 123,956
========== ==========
LIMITED PARTNERS - NET INCOME (LOSS) $1,056,789 ($1,010,017)
========== ==========
NET INCOME (LOSS) per unit $ 2.53 ($ 2.41)
========== ==========
UNITS OUTSTANDING 418,266 418,266
========== ==========
The accompanying condensed notes are an integral part of
these financial statements.
20
<PAGE>
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-E
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) $1,146,679 ($ 886,061)
Adjustments to reconcile net income
(loss) to net cash provided by
operating activities:
Depreciation, depletion, and
amortization of oil and gas
properties 856,678 1,356,502
Impairment provision - 2,893,438
(Gain) loss on sale of oil and
gas properties ( 36,098) 174
Decrease in accounts receivable -
oil and gas sales 609,349 337,771
Decrease in accounts payable ( 403,025) ( 274,960)
---------- ----------
Net cash provided by operating
activities $2,173,583 $3,426,864
---------- ----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures ($ 2,013) ($ 70,042)
Proceeds from sale of oil and
gas properties 73,654 6,186
---------- ----------
Net cash provided (used) by
investing activities $ 71,641 ($ 63,856)
---------- ----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Cash distributions ($2,515,560) ($3,675,634)
---------- ----------
Net cash used by financing activities ($2,515,560) ($3,675,634)
---------- ----------
NET DECREASE IN CASH AND CASH
EQUIVALENTS ($ 270,336) ($ 312,626)
CASH AND CASH EQUIVALENTS AT
BEGINNING OF PERIOD 1,114,574 1,243,143
---------- ----------
CASH AND CASH EQUIVALENTS AT
END OF PERIOD $ 844,238 $ 930,517
========== ==========
The accompanying condensed notes are an integral part of
these financial statements.
21
<PAGE>
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-F
BALANCE SHEETS
(Unaudited)
ASSETS
September 30, December 31,
1998 1997
------------- ------------
CURRENT ASSETS:
Cash and cash equivalents $ 360,339 $ 541,382
Accounts receivable:
Oil and gas sales 232,583 472,746
Other 9,631 9,631
---------- ----------
Total current assets $ 602,553 $1,023,759
NET OIL AND GAS PROPERTIES, utilizing
the successful efforts method 3,148,912 3,604,665
DEFERRED CHARGE 124,393 124,393
---------- ----------
$3,875,858 $4,752,817
========== ==========
LIABILITIES AND PARTNERS' CAPITAL (DEFICIT)
CURRENT LIABILITIES:
Accounts payable $ 137,564 $ 165,963
Gas imbalance payable 119,864 119,864
---------- ----------
Total current liabilities $ 257,428 $ 285,827
ACCRUED LIABILITY $ 159,275 $ 159,275
PARTNERS' CAPITAL (DEFICIT):
General Partner ($ 161,590) ($ 146,427)
Limited Partners, issued and
outstanding, 221,484 units 3,620,745 4,454,142
---------- ----------
Total Partners' capital $3,459,155 $4,307,715
---------- ----------
$3,875,858 $4,752,817
========== ==========
The accompanying condensed notes are an integral part of
these financial statements.
22
<PAGE>
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-F
STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 1998 AND 1997
(Unaudited)
1998 1997
-------- ---------
REVENUES:
Oil and gas sales $425,564 $656,490
Interest income 4,484 5,029
Gain (loss) on sale of oil
and gas properties ( 893) 113
-------- --------
$429,155 $661,632
COSTS AND EXPENSES:
Lease operating $212,573 $295,930
Production tax 27,874 37,135
Depreciation, depletion, and
amortization of oil and gas
properties 119,141 268,417
General and administrative
(Note 2) 63,330 62,247
-------- --------
$422,918 $663,729
-------- --------
NET INCOME (LOSS) $ 6,237 ($ 2,097)
======== ========
GENERAL PARTNER - NET INCOME $ 4,853 $ 10,380
======== ========
LIMITED PARTNERS - NET INCOME (LOSS) $ 1,384 ($ 12,477)
======== ========
NET INCOME (LOSS) per unit $ .01 ($ .06)
======== ========
UNITS OUTSTANDING 221,484 221,484
======== ========
The accompanying condensed notes are an integral part of
these financial statements.
23
<PAGE>
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-F
STATEMENTS OF OPERATIONS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1998 AND 1997
(Unaudited)
1998 1997
---------- ----------
REVENUES:
Oil and gas sales $1,660,573 $2,281,635
Interest income 16,294 16,453
Gain (loss) on sale of oil and
gas properties 27,168 ( 120)
---------- ----------
$1,704,035 $2,297,968
COSTS AND EXPENSES:
Lease operating $ 780,879 $ 826,588
Production tax 119,269 123,883
Depreciation, depletion, and
amortization of oil and gas
properties 423,084 803,335
Impairment provision - 2,884,405
General and administrative
(Note 2) 201,107 205,410
---------- ----------
$1,524,339 $4,843,621
---------- ----------
NET INCOME (LOSS) $ 179,696 ($2,545,653)
========== ==========
GENERAL PARTNER - NET INCOME $ 25,093 $ 19,404
========== ==========
LIMITED PARTNERS - NET INCOME (LOSS) $ 154,603 ($2,565,057)
========== ==========
NET INCOME (LOSS) per unit $ .70 ($ 11.58)
========== ==========
UNITS OUTSTANDING 221,484 221,484
========== ==========
The accompanying condensed notes are an integral part of
these financial statements.
24
<PAGE>
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-F
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) $ 179,696 ($2,545,653)
Adjustments to reconcile net income
(loss) to net cash provided by
operating activities:
Depreciation, depletion, and
amortization of oil and gas
properties 423,084 803,335
Impairment provision - 2,884,405
(Gain) loss on sale of oil and
gas properties ( 27,168) 120
Decrease in accounts receivable -
oil and gas sales 240,163 204,866
Decrease in accounts payable ( 28,399) ( 22,514)
---------- ----------
Net cash provided by operating
activities $ 787,376 $1,324,559
---------- ----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures $ - ($ 31,343)
Proceeds from sale of oil and
gas properties 59,837 5,680
---------- ----------
Net cash provided (used) by
investing activities $ 59,837 ($ 25,663)
---------- ----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Cash distributions ($1,028,256) ($1,397,658)
---------- ----------
Net cash used by financing activities ($1,028,256) ($1,397,658)
---------- ----------
NET DECREASE IN CASH AND CASH
EQUIVALENTS ($ 181,043) ($ 98,762)
CASH AND CASH EQUIVALENTS AT
BEGINNING OF PERIOD 541,382 504,658
---------- ----------
CASH AND CASH EQUIVALENTS AT
END OF PERIOD $ 360,339 $ 405,896
========== ==========
The accompanying condensed notes are an integral part of
these financial statements.
25
<PAGE>
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-G
BALANCE SHEETS
(Unaudited)
ASSETS
September 30, December 31,
1998 1997
------------- ------------
CURRENT ASSETS:
Cash and cash equivalents $ 187,952 $ 351,163
Accounts receivable:
Oil and gas sales 149,957 285,689
General Partner - 13,140
Other 6,369 6,369
---------- ----------
Total current assets $ 344,278 $ 656,361
NET OIL AND GAS PROPERTIES, utilizing
the successful efforts method 1,879,582 2,141,289
DEFERRED CHARGE 75,406 75,406
---------- ----------
$2,299,266 $2,873,056
========== ==========
LIABILITIES AND PARTNERS' CAPITAL (DEFICIT)
CURRENT LIABILITIES:
Accounts payable $ 80,202 $ 101,925
Gas imbalance payable 59,607 59,607
---------- ----------
Total current liabilities $ 139,809 $ 161,532
ACCRUED LIABILITY $ 89,310 $ 89,310
PARTNERS' CAPITAL (DEFICIT):
General Partner ($ 94,404) ($ 85,608)
Limited Partners, issued and
outstanding, 121,925 units 2,164,551 2,707,822
---------- ----------
Total Partners' capital $2,070,147 $2,622,214
---------- ----------
$2,299,266 $2,873,056
========== ==========
The accompanying condensed notes are an integral part of
these financial statements.
26
<PAGE>
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-G
STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 1998 AND 1997
(Unaudited)
1998 1997
-------- ---------
REVENUES:
Oil and gas sales $246,676 $398,505
Interest income 2,339 3,501
Gain (loss) on sale of oil
and gas properties ( 95) 31
-------- --------
$248,920 $402,037
COSTS AND EXPENSES:
Lease operating $131,326 $186,212
Production tax 15,587 21,738
Depreciation, depletion, and
amortization of oil and gas
properties 71,620 147,446
General and administrative
(Note 2) 34,867 34,269
-------- --------
$253,400 $389,665
-------- --------
NET INCOME (LOSS) ($ 4,480) $ 12,372
======== ========
GENERAL PARTNER - NET INCOME $ 2,524 $ 6,341
======== ========
LIMITED PARTNERS - NET INCOME (LOSS) ($ 7,004) $ 6,031
======== ========
NET INCOME (LOSS) per unit ($ .06) $ .05
======== ========
UNITS OUTSTANDING 121,925 121,925
======== ========
The accompanying condensed notes are an integral part of
these financial statements.
27
<PAGE>
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-G
STATEMENTS OF OPERATIONS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1998 AND 1997
(Unaudited)
1998 1997
---------- ----------
REVENUES:
Oil and gas sales $ 992,166 $1,405,635
Interest income 9,097 10,893
Gain on sale of oil and
gas properties 23,094 4,974
---------- ----------
$1,024,357 $1,421,502
COSTS AND EXPENSES:
Lease operating $ 492,410 $ 531,400
Production tax 67,892 74,160
Depreciation, depletion, and
amortization of oil and gas
properties 258,962 447,642
Impairment provision - 1,449,404
General and administrative
(Note 2) 110,743 113,160
---------- ----------
$ 930,007 $2,615,766
---------- ----------
NET INCOME (LOSS) $ 94,350 ($1,194,264)
========== ==========
GENERAL PARTNER - NET INCOME $ 14,621 $ 15,624
========== ==========
LIMITED PARTNERS - NET INCOME (LOSS) $ 79,729 ($1,209,888)
========== ==========
NET INCOME (LOSS) per unit $ .65 ($ 9.92)
========== ==========
UNITS OUTSTANDING 121,925 121,925
========== ==========
The accompanying condensed notes are an integral part of
these financial statements.
28
<PAGE>
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-G
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) $ 94,350 ($1,194,264)
Adjustments to reconcile net income
(loss) to net cash provided by
operating activities:
Depreciation, depletion, and
amortization of oil and gas
properties 258,962 447,642
Impairment provision - 1,449,404
Gain on sale of oil and gas
properties ( 23,094) ( 4,974)
Decrease in accounts receivable -
oil and gas sales 135,732 129,603
Decrease in accounts receivable -
General Partner 13,140 -
Decrease in accounts payable ( 21,723) ( 14,422)
-------- ----------
Net cash provided by operating
activities $457,367 $ 812,989
-------- ----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures ($ 7,883) ($ 26,510)
Proceeds from sale of oil and
gas properties 33,722 12,848
-------- ----------
Net cash provided (used) by
investing activities $ 25,839 ($ 13,662)
-------- ----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Cash distributions ($646,417) ($ 838,879)
-------- ----------
Net cash used by financing activities ($646,417) ($ 838,879)
-------- ----------
NET DECREASE IN CASH AND CASH
EQUIVALENTS ($163,211) ($ 39,552)
CASH AND CASH EQUIVALENTS AT
BEGINNING OF PERIOD 351,163 315,955
-------- ----------
CASH AND CASH EQUIVALENTS AT
END OF PERIOD $187,952 $ 276,403
======== ==========
The accompanying condensed notes are an integral part of
these financial statements.
29
<PAGE>
GEODYNE ENERGY INCOME III LIMITED PARTNERSHIPS
CONDENSED NOTES TO THE FINANCIAL STATEMENTS
SEPTEMBER 30, 1998
(Unaudited)
1. ACCOUNTING POLICIES
-------------------
The balance sheets as of September 30, 1998, statements of operations for
the three and nine months ended September 30, 1998 and 1997, and
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 Partnerships (the "General Partner"), without audit. In the opinion of
management the financial statements referred to above include all
necessary adjustments, consisting of normal recurring adjustments, to
present fairly the financial position at September 30, 1998, the results
of operations for the three and nine months ended September 30, 1998 and
1997, and the 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.
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
30
<PAGE>
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 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
----------- -----------
III-A $1,617,006
III-B 738,122
III-C 1,696,417
III-D 932,243
III-E 2,893,438
III-F 2,884,405
III-G 1,449,404
No such charge was necessary for the nine months ended September 30, 1998.
31
<PAGE>
The risk that the Partnerships will be required to record such impairment
provisions in the future increases when oil and gas prices are depressed.
2. TRANSACTIONS WITH RELATED PARTIES
---------------------------------
The Partnerships' partnership agreements provide for reimbursement to the
General Partner for all direct general and administrative expenses and for
the general and administrative overhead applicable to the Partnerships
based on an allocation of actual costs incurred. During the three months
ended 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
----------- ------------------- ---------------
III-A $6,013 $ 69,468
III-B 3,156 36,405
III-C 5,583 64,353
III-D 2,989 34,476
III-E 9,510 110,070
III-F 5,046 58,284
III-G 2,782 32,085
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
----------- ------------------- ---------------
III-A $31,510 $208,404
III-B 16,480 109,215
III-C 29,330 193,059
III-D 16,130 103,428
III-E 56,415 330,210
III-F 26,255 174,852
III-G 14,488 96,255
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.
32
<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 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.
33
<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
----------- ------------------ ---------------
III-A November 21, 1989 $26,397,600
III-B January 24, 1990 13,833,600
III-C February 27, 1990 24,453,600
III-D September 5, 1990 13,100,800
III-E December 26, 1990 41,826,600
III-F March 7, 1991 22,148,400
III-G September 20, 1991 12,192,500
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. Proceeds received during the first quarter of 1998 were
included in the Partnerships' cash distributions paid in May 1998,
proceeds received during the second quarter of 1998 were included in the
Partnerships' cash distributions paid in August 1998, and 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 primarily due to the fact that the properties sold
generally bore a higher
34
<PAGE>
ratio of operating expenses as compared to reserves than the
Partnerships' remaining properties.
The Partnerships will terminate on the following dates in accordance with
their partnership agreements.
Partnership Termination Date
----------- ----------------
III-A November 28, 1999
III-B January 24, 2000
III-C February 28, 2000
III-D September 5, 2000
III-E December 26, 2000
III-F March 7, 2001
III-G September 20, 2001
However, the partnership agreements provide that the General Partner may
extend the term of each Partnership for up to five periods of two years
each. As of the date of this Quarterly Report, the General Partner has not
determined whether to extend the term of any Partnership.
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 in the
"spot market". Prices on the spot market are subject to wide seasonal and
regional pricing fluctuations due to the highly competitive nature of the
spot market. 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.
35
<PAGE>
III-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 $428,407 $712,026
Oil and gas production expenses $140,153 $131,345
Barrels produced 7,908 9,074
Mcf produced 168,184 238,355
Average price/Bbl $ 11.93 $ 19.21
Average price/Mcf $ 1.99 $ 2.26
As shown in the above table, total oil and gas sales decreased $283,619
(39.8%) for the three months ended September 30, 1998 as compared to the
three months ended September 30, 1997. Of this decrease, approximately
$158,000 was related to a decrease in volumes of gas sold and
approximately $58,000 and $45,000, respectively, were related to decreases
in the average prices of oil and gas sold. Volumes of oil and gas sold
decreased 1,166 barrels and 70,171 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
positive prior period volume adjustments made by the purchaser on two
significant wells during the three months ended September 30, 1997. The
decrease in volumes of gas sold resulted primarily from normal declines in
production due to diminishing reserves on several wells and the sale of
several wells in 1997 and 1998. Average oil and gas prices decreased to
$11.93 per barrel and $1.99 per Mcf, respectively, for the three months
ended September 30, 1998 from $19.21 per barrel and $2.26 per Mcf,
respectively, for the three months ended September 30, 1997.
Oil and gas production expenses (including lease operating expenses and
production taxes) increased $8,808 (6.7%) for the three months ended
September 30, 1998 as compared to the three months ended September 30,
1997. This increase resulted primarily from workover expenses incurred on
one well during the three months ended September 30, 1998 in order to
improve the recovery of reserves and positive ad valorem tax adjustments
on four wells during the three months ended September 30, 1998. This
increase was partially offset by 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 32.7% for the three months ended
September 30, 1998 from 18.4% for the three months ended September 30,
1997. This percentage increase was primarily due to the dollar increase
36
<PAGE>
in production expenses and 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 $92,012 (44.7%) for the three months ended September 30, 1998 as
compared to the three months ended September 30, 1997. This decrease
resulted primarily from (i) 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) upward revisions in the estimates
of remaining oil and gas reserves at December 31, 1997. As a percentage of
oil and gas sales, this expense decreased to 26.6% for the three months
ended September 30, 1998 from 28.9% for the three months ended September
30, 1997. This percentage decrease was primarily due to the dollar
decrease in depreciation, depletion, and amortization.
General and administrative expenses increased $1,289 (1.7%) 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 17.6% for the three months ended September 30, 1998 from
10.4% for the three months ended September 30, 1997. This percentage
increase was primarily due to the decreases 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 $1,573,580 $2,578,627
Oil and gas production expenses $ 439,744 $ 541,572
Barrels produced 27,025 30,701
Mcf produced 567,122 798,664
Average price/Bbl $ 13.01 $ 20.01
Average price/Mcf $ 2.15 $ 2.46
As shown in the above table, total oil and gas sales decreased $1,005,047
(39.0%) for the nine months ended September 30, 1998 as compared to the
nine months ended September 30, 1997. Of this decrease, approximately
$569,000 was related to a decrease in the volumes of gas sold and
approximately $189,000 and $173,000, respectively, were related to
decreases in the average prices of oil and gas sold. Volumes of oil and
gas sold decreased 3,676 barrels and 231,542 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
37
<PAGE>
sold resulted primarily from normal declines in production due to
diminishing reserves on several significant wells. The decrease in the
volumes of 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 1998. Average oil and gas prices decreased to $13.01 per
barrel and $2.15 per Mcf, respectively, for the nine months ended
September 30, 1998 from $20.01 per barrel and $2.46 per Mcf, respectively,
for the nine months ended September 30, 1997.
Oil and gas production expenses (including lease operating expenses and
production taxes) decreased $101,828 (18.8%) 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 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 27.9% for the nine months ended
September 30, 1998 from 21.0% 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.
Depreciation, depletion, and amortization of oil and gas properties
decreased $305,989 (44.3%) 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) upward revisions in the estimates
of remaining oil and gas reserves at December 31, 1997. As a percentage of
oil and gas sales, this expense decreased to 24.5% for the nine months
ended September 30, 1998 from 26.8% for the nine months ended September
30, 1997. This percentage decrease was primarily due to the upward
revisions in the estimates of remaining oil and gas reserves.
The III-A Partnership recognized a non-cash charge against earnings of
$1,617,006 during the nine months ended September 30, 1997. Of this
amount, $184,644 was related to the decline in oil and gas prices used to
determine the recoverability of proved oil and gas reserves at March 31,
1997 and $1,432,362 was related to 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
38
<PAGE>
and provisions in the III-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 remained relatively constant 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 9.3%
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 $24,878,701 or 94.25% of Limited Partners' capital
contributions.
III-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 $267,275 $428,266
Oil and gas production expenses $ 97,763 $ 84,927
Barrels produced 7,848 8,405
Mcf produced 87,673 120,161
Average price/Bbl $ 12.54 $ 19.16
Average price/Mcf $ 1.93 $ 2.22
As shown in the table above, total oil and gas sales decreased $160,991
(37.6%) for the three months ended September 30, 1998 as compared to the
three months ended September 30, 1997. Of this decrease, approximately
$11,000 and $72,000, respectively, were related to decreases in volumes of
oil and gas sold and approximately $52,000 and $26,000, respectively, were
related to decreases in the average prices of oil and gas sold. Volumes of
oil and gas sold decreased 557 barrels and 32,488 Mcf, respectively, for
the three months ended September 30, 1998 as compared to the three months
ended September 30, 1997. The decrease in the volumes of gas 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
1998, and (iii) the receipt of an increased percentage of sales during the
three months ended September 30, 1997 on one well due to an underproduced
gas balancing position in that well. Average oil and gas prices decreased
to $12.54 per barrel and $1.93 per Mcf, respectively, for the three months
ended September 30, 1998 from $19.16 per barrel and
39
<PAGE>
$2.22 per Mcf, respectively, for the three months ended September 30,
1997.
As discussed in Liquidity and Capital Resources above, the III-B
Partnership sold certain oil and gas properties during the three months
ended September 30, 1998 and recognized a $32,404 gain on such sales.
Similar sales during the three months ended September 30, 1997 resulted in
the III-B Partnership recognizing a loss totaling $159.
Oil and gas production expenses (including lease operating expenses and
production taxes) increased $12,836 (15.1%) for the three months ended
September 30, 1998 as compared to the three months ended September 30,
1997. This increase resulted primarily from workover expenses incurred on
two wells during the three months ended September 30, 1998. This increase
was partially offset by 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 36.6% for the three months ended September 30, 1998
from 19.8% 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 and the dollar increase in
production expenses.
Depreciation, depletion, and amortization of oil and gas properties
decreased $47,646 (40.1%) 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) upward revisions in the estimates
of remaining oil and gas reserves at December 31, 1997. As a percentage of
oil and gas sales, this expense decreased to 26.6% for the three months
ended September 30, 1998 from 27.8% for the three months ended September
30, 1997.
General and administrative expenses increased $677 (1.7%) 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 14.8% for the three months ended September 30, 1998 from 9.1%
for the three months ended September 30, 1997. This percentage increase
was primarily due to the decrease in oil and gas sales.
40
<PAGE>
The III-B Partnership achieved payout during the first quarter of 1998.
After payout, operations and revenues for the III-B Partnership have been
and will be allocated using after payout percentages. After payout
percentages allocate operating income and expenses 15% to the General
Partner and 85% to the Limited Partners. (Before payout, operating income
and expenses were allocated 5% to the General Partner and 95% to the
Limited Partners). See the Partnerships' Annual Report on Form 10-K for
the year ended December 31, 1997 for further discussion of pre and post
payout allocations of income and expense.
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 $957,758 $1,522,622
Oil and gas production expenses $282,448 $ 328,739
Barrels produced 26,493 27,663
Mcf produced 284,710 400,369
Average price/Bbl $ 13.48 $ 20.06
Average price/Mcf $ 2.11 $ 2.42
As shown in the table above, total oil and gas sales decreased $564,864
(37.1%) for the nine months ended September 30, 1998 as compared to the
nine months ended September 30, 1997. Of this decrease, approximately
$280,000 was related to a decrease in the volumes of gas sold and
approximately $174,000 and $88,000, respectively, were related to
decreases in the average prices of oil and gas sold. Volumes of oil and
gas sold decreased 1,170 barrels and 115,659 Mcf, respectively, for the
nine months ended September 30, 1998 as compared to the nine months ended
September 30, 1997. The decrease in the volumes of gas sold resulted
primarily from the sale of several wells in 1997 and normal declines in
production due to diminishing reserves on several wells. Average oil and
gas prices decreased to $13.48 per barrel and $2.11 per Mcf, respectively,
for the nine months ended September 30, 1998 from $20.06 per barrel and
$2.42 per Mcf, respectively, for the nine months ended September 30, 1997.
As discussed in Liquidity and Capital Resources above, the III-B
Partnership sold certain oil and gas properties during the nine months
ended September 30, 1998 and recognized a $33,219 gain on such sales.
Similar sales during the nine months ended September 30, 1997 resulted in
the III-B Partnership recognizing a loss totaling $7,832.
41
<PAGE>
Oil and gas production expenses (including lease operating expenses and
production taxes) decreased $46,291 (14.1%) 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) the sale of
several wells in 1997 and 1998, and (iii) the refund of prior period lease
operating expenses during the nine months ended September 30, 1998 by the
operator of one well. These decreases were partially offset by workover
expenses incurred on one significant well during the nine months ended
September 30, 1998. As a percentage of oil and gas sales, these expenses
increased to 29.5% for the nine months ended September 30, 1998 from 21.6%
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
decreased $160,148 (40.6%) 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 decrease 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) upward revisions in the estimates
of remaining oil and gas reserves at December 31, 1997. As a percentage of
oil and gas sales, this expense decreased to 24.5% for the nine months
ended September 30, 1998 from 25.9% for the nine months ended September
30, 1997.
The III-B Partnership recognized a non-cash charge against earnings of
$738,122 during the nine months ended September 30, 1997. Of this amount,
$77,653 was related to the decline in oil and gas prices used to determine
the recoverability of proved oil and gas reserves at March 31, 1997 and
$660,469 was related to the 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 III-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.
42
<PAGE>
General and administrative expenses remained relatively constant 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 13.1% for the nine months ended September 30, 1998 from 8.2%
for the nine months ended September 30, 1997. This percentage increase was
primarily due to the decrease in oil and gas sales discussed above.
The III-B Partnership achieved payout during the nine months ended
September 30, 1998. After payout, operations and revenues for the III-B
Partnership have been and will be allocated using after payout
percentages. After payout percentages allocate operating income and
expenses 15% to the General Partner and 85% to the Limited Partners.
(Before payout, operating income and expenses were allocated 5% to the
General Partner and 95% to the Limited Partners). See the Partnerships'
Annual Report on Form 10-K for the year ended December 31, 1997 for
further discussion of pre and post payout allocations of income and
expense.
The Limited Partners have received cash distributions through September
30, 1998 totaling $14,479,353 or 104.67% of Limited Partners' capital
contributions.
III-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 $580,014 $633,934
Oil and gas production expenses $169,481 $148,845
Barrels produced 5,424 6,175
Mcf produced 307,257 263,504
Average price/Bbl $ 14.00 $ 19.01
Average price/Mcf $ 1.64 $ 1.96
As shown in the table above, oil and gas sales decreased $53,920 (8.5%)
for the three months ended September 30, 1998 as compared to the three
months ended September 30, 1997. Of this decrease, approximately $14,000
was related to a decrease in the volumes of oil sold and approximately
$27,000 and $98,000, respectively, were related to decreases in the
average prices of oil and gas sold. These decreases were partially offset
by an increase of approximately $86,000 related to an increase in the
volumes of gas sold. Volumes of oil sold decreased 751 barrels, while
volumes of gas sold increased 43,753 Mcf for the three months ended
September 30, 1998 as compared to the three months ended
43
<PAGE>
September 30, 1997. The decrease in volumes of oil sold resulted primarily
from normal declines in production due to diminishing reserves on several
wells. The increase in the volumes of gas sold resulted primarily from the
successful recompletion of one significant well during early 1998. Average
oil and gas prices decreased to $14.00 per barrel and $1.64 per Mcf,
respectively, for the three months ended September 30, 1998 from $19.01
per barrel and $1.96 per Mcf, respectively, for the three months ended
September 30, 1997.
As discussed in Liquidity and Capital Resources above, the III-C
Partnership sold certain oil and gas properties during the three months
ended September 30, 1998 and recognized a $34,561 gain on such sales.
Similar sales during the three months ended September 30, 1997 resulted in
the III-C Partnership recognizing gains totaling $17,697.
Oil and gas production expenses (including lease operating expenses and
production taxes) increased $20,636 (13.9%) for the three months ended
September 30, 1998 as compared to the three months ended September 30,
1997. This increase resulted primarily from (i) an increase in general
repair and maintenance expenses on several wells during the three months
ended September 30, 1998 and (ii) a non-recurring increase in compression
expenses on one significant well during the three months ended September
30, 1998. As a percentage of oil and gas sales, these expenses increased
to 29.2% for the three months ended September 30, 1998 from 23.5% for the
three months ended September 30, 1997. This percentage increase was
primarily due to the dollar increase in production expenses and 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 $19,953 (11.3%) for the three months ended September 30, 1998 as
compared to the three months ended September 30, 1997. This decrease
resulted primarily from upward revisions in the estimates of remaining oil
and gas reserves at December 31, 1997. As a percentage of oil and gas
sales, this expense remained relatively constant at 27.0% for the three
months ended September 30, 1998 and 27.9% for three months ended September
30, 1997.
General and administrative expenses increased $1,204 (1.8%) 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 12.1% for the three months ended September 30, 1998 from
10.8% for the three months ended September 30, 1997.
44
<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 $1,814,170 $2,234,020
Oil and gas production expenses $ 498,893 $ 521,732
Barrels produced 18,218 19,357
Mcf produced 843,070 842,571
Average price/Bbl $ 14.38 $ 20.22
Average price/Mcf $ 1.84 $ 2.19
As shown in the table above, oil and gas sales decreased $419,850 (18.8%)
for the nine months ended September 30, 1998 as compared to the nine
months ended September 30, 1997. Of this decrease, approximately $106,000
and $292,000, respectively, were related to decreases in the average
prices of oil and gas sold. Volumes of oil sold decreased 1,139 barrels
for the nine months ended September 30, 1998 as compared to the nine
months ended September 30, 1997. Volumes of gas sold increased 499 Mcf for
the nine months ended September 30, 1998 as compared to the nine months
ended September 30, 1997. Average oil and gas prices decreased to $14.38
per barrel and $1.84 per Mcf, respectively, for the nine months ended
September 30, 1998 from $20.22 per barrel and $2.19 per Mcf, respectively,
for the nine months ended September 30, 1997.
As discussed in Liquidity and Capital Resources above, the III-C
Partnership sold certain oil and gas properties during the nine months
ended September 30, 1998 and recognized a $439,894 gain on such sales.
Similar sales during the nine months ended September 30, 1997 resulted in
the III-C Partnership recognizing similar gains totaling $73,369.
Oil and gas production expenses (including lease operating expenses and
production taxes) decreased $22,839 (4.4%) 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
27.5% for the nine months ended September 30, 1998 from 23.4% 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.
45
<PAGE>
Depreciation, depletion, and amortization of oil and gas properties
decreased $124,363 (22.0%) for the nine months ended September 30, 1998 as
compared to the nine months ended September 30, 1997. This decrease
resulted primarily from upward revisions in the estimates of remaining oil
and gas reserves at December 31, 1997. As a percentage of oil and gas
sales, this expense decreased to 24.2% for the nine months ended September
30, 1998 from 25.2% for the nine months ended September 30, 1997.
The III-C Partnership recognized a non-cash charge against earnings of
$1,696,417 during the nine months ended September 30, 1997. Of this
amount, $234,271 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 $1,462,146 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 III-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.
General and administrative expenses decreased $4,314 (1.9%) 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 12.3% for the nine months ended September 30, 1998 from 10.1%
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 $16,798,795 or 68.70% of Limited Partners' capital
contributions.
46
<PAGE>
III-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 $436,235 $472,603
Oil and gas production expenses $176,221 $184,736
Barrels produced 8,152 9,749
Mcf produced 212,093 168,424
Average price/Bbl $ 10.70 $ 17.46
Average price/Mcf $ 1.65 $ 1.80
As shown in the table above, oil and gas sales decreased $36,368 (7.7%)
for the three months ended September 30, 1998 as compared to the three
months ended September 30, 1997. Of this decrease, approximately $28,000
was related to a decrease in the volumes of oil sold and approximately
$55,000 and $32,000, respectively, were related to decreases in the
average prices of oil and gas sold. These decreases were partially offset
by an increase of approximately $78,000 related to an increase in the
volumes of gas sold. Volumes of oil sold decreased 1,597 barrels, while
volumes of gas sold increased 43,669 Mcf for the three months ended
September 30, 1998 as compared to the three months ended September 30,
1997. The decrease in the volumes of oil sold resulted primarily from
normal declines in production due to diminishing reserves on several
wells. The increase in the volumes of gas sold resulted primarily from the
successful recompletion of one significant well during early 1998. Average
oil and gas prices decreased to $10.70 per barrel and $1.65 per Mcf,
respectively, for the three months ended September 30, 1998 from $17.46
per barrel and $1.80 per Mcf, respectively, for the three months ended
September 30, 1997.
Oil and gas production expenses (including lease operating expenses and
production taxes) decreased $8,515 (4.6%) 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
40.4% for the three months ended September 30, 1998 from 39.1% for the
three months ended September 30, 1997.
47
<PAGE>
Depreciation, depletion, and amortization of oil and gas properties
decreased $12,408 (12.4%) for the three months ended September 30, 1998 as
compared to the three months ended September 30, 1997. This decrease
resulted primarily from upward revisions in the estimates of remaining oil
and gas reserves at December 31, 1997. As a percentage of oil and gas
sales, this expense decreased to 20.0% for the three months ended
September 30, 1998 from 21.1% for the three months ended September 30,
1997.
General and administrative expenses increased $642 (1.7%) 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
remained relatively constant at 8.6% for the three months ended September
30, 1998 and 7.8% 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 $1,348,399 $1,734,127
Oil and gas production expenses $ 514,390 $ 599,212
Barrels produced 28,444 31,704
Mcf produced 560,692 530,916
Average price/Bbl $ 12.08 $ 19.51
Average price/Mcf $ 1.79 $ 2.10
As shown in the table above, oil and gas sales decreased $385,728 (22.2%)
for the nine months ended September 30, 1998 as compared to the nine
months ended September 30, 1997. Of this decrease, approximately $64,000
was related to a decrease in the volumes of oil sold and approximately
$211,000 and $173,000, respectively, were related to decreases in the
average prices of oil and gas sold. These decreases were partially offset
by an increase of approximately $63,000 relating to an increase in the
volumes of gas sold. Volumes of oil sold decreased 3,260 barrels, while
volumes of gas sold increased 29,776 Mcf for the nine months ended
September 30, 1998 as compared to the nine months ended September 30,
1997. The decrease in the volumes of oil sold resulted primarily from
normal declines in production due to diminishing reserves on several
wells. Average oil and gas prices decreased to $12.08 per barrel and $1.79
per Mcf, respectively, for the nine months ended September 30, 1998 from
$19.51 per barrel and $2.10 per Mcf, respectively, for the nine months
ended September 30, 1997.
48
<PAGE>
As discussed in Liquidity and Capital Resources above, the III-D
Partnership sold certain oil and gas properties during the nine months
ended September 30, 1998 and recognized a $56,646 gain on such sales.
Similar sales during the nine months ended September 30, 1997 resulted in
the III-D Partnership recognizing similar gains totaling $23,702.
Oil and gas production expenses (including lease operating expenses and
production taxes) decreased $84,822 (14.2%) 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
workover expenses incurred on one significant unit 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 38.1% for the nine months ended September 30, 1998 from 34.6% 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 $72,297 (22.8%) for the nine months ended September 30, 1998 as
compared to the nine months ended September 30, 1997. This decrease
resulted primarily from upward revisions in the estimates of remaining oil
and gas reserves at December 31, 1997. As a percentage of oil and gas
sales, this expense remained relatively constant at 18.2% for the nine
months ended September 30, 1998 and 18.3% for the nine months ended
September 30, 1997.
General and administrative expenses decreased $2,542 (2.1%) 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, these expenses
increased to 8.9% for the nine months ended September 30, 1998 from 7.0%
for the nine months ended September 30, 1997.
The Limited Partners have received cash distributions through September
30, 1998 totaling $8,272,669 or 63.15% of Limited Partners' capital
contributions.
49
<PAGE>
III-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 $1,373,883 $1,878,608
Oil and gas production expenses $ 904,399 $1,038,911
Barrels produced 50,991 56,012
Mcf produced 461,661 544,047
Average price/Bbl $ 10.47 $ 17.24
Average price/Mcf $ 1.82 $ 1.68
As shown in the table above, total oil and gas sales decreased $504,725
(26.9%) for the three months ended September 30, 1998 as compared to the
three months ended September 30, 1997. Of this decrease, approximately
$87,000 and $138,000 were related to decreases in the volumes of oil and
gas sold, respectively, and approximately $345,000 was related to a
decrease in the average price of oil sold. These decreases were partially
offset by an increase of approximately $65,000 related to an increase in
the average price of gas sold. Volumes of oil and gas sold decreased 5,021
barrels and 82,386 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 gas sold resulted primarily from a positive prior
period volume adjustment made by the purchaser on one significant well
during the three months ended September 30, 1997 and the shutting-in of
two significant wells for general repairs and maintenance during the three
months ended September 30, 1998. The average oil price decreased to $10.47
per barrel for the three months ended September 30, 1998 from $17.24 per
barrel for the three months ended September 30, 1997. The average gas
price increased to $1.82 per Mcf for the three months ended September 30,
1998 from $1.68 per Mcf for the three months ended September 30, 1997.
Oil and gas production expenses (including lease operating expenses and
production taxes) decreased $134,512 (12.9%) for the three months ended
September 30, 1998 as compared to the three months ended September 30,
1997. This decrease resulted primarily from (i) a decrease in workover
expenses incurred on one significant multi-well unit and on one
significant well during the three months ended September 30, 1998 as
compared to the three months ended September 30, 1997 and (ii) credits
received during the three months ended September 30, 1998 from the
operator on one well for prior period lease operating expenses. As a
percentage of oil and gas sales, these expenses increased to 65.8% for the
three
50
<PAGE>
months ended September 30, 1998 from 55.3% for the three months ended
September 30, 1997. This percentage increase was primarily due to the
decrease in the average price of oil 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 $174,827 (41.0%) for the three months ended September 30, 1998
as compared to the three months ended September 30, 1997. This decrease
resulted primarily from upward revisions in the estimates of remaining oil
and gas reserves at December 31, 1997. As a percentage of oil and gas
sales, this expense decreased to 18.3% for the three months ended
September 30, 1998 from 22.7% for the three months ended September 30,
1997. This percentage decrease was primarily due to the dollar decrease in
depreciation, depletion, and amortization.
General and administrative expenses increased $2,043 (1.7%) 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 8.7% for the three months ended September 30, 1998 from 6.3%
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 $4,995,623 $6,914,717
Oil and gas production expenses $2,675,967 $3,196,748
Barrels produced 170,935 183,253
Mcf produced 1,583,559 1,697,392
Average price/Bbl $ 11.71 $ 19.30
Average price/Mcf $ 1.89 $ 1.99
As shown in the table above, total oil and gas sales decreased $1,919,094
(27.8%) for the nine months ended September 30, 1998 as compared to the
nine months ended September 30, 1997. Of this decrease, approximately
$238,000 and $227,000, respectively, were related to decreases in volumes
of oil and gas sold and approximately $1,297,000 was related to a decrease
in the average price of oil sold. Volumes of oil and gas sold decreased
12,318 barrels and 113,833 Mcf, respectively, for the nine months ended
September 30, 1998 as compared to the nine months ended September 30,
1997. Average oil and gas prices decreased to $11.71 per barrel and $1.89
per Mcf, respectively, for the nine months ended September 30, 1998
51
<PAGE>
from $19.30 per barrel and $1.99 per Mcf, respectively, for the nine
months ended September 30, 1997.
Oil and gas production expenses (including lease operating expenses and
production taxes) decreased $520,781 (16.3%) 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) a decrease in workover expenses incurred on
one significant multi-well unit and two wells 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
53.6% for the nine months ended September 30, 1998 from 46.2% 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 $499,824 (36.8%) for the nine months ended September 30, 1998 as
compared to the nine months ended September 30, 1997. This decrease
resulted primarily from upward revisions in the estimates of remaining oil
and gas reserves at December 31, 1997. As a percentage of oil and gas
sales, this expense decreased to 17.1% for the nine months ended September
30, 1998 from 19.6% for the nine months ended September 30, 1997. This
percentage decrease was primarily due to the dollar decrease in
depreciation, depletion and amortization.
The III-E Partnership recognized a non-cash charge against earnings of
$2,893,438 during the nine months ended September 30, 1997. Of this
amount, $2,042,775 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 $850,663 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 III-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.
52
<PAGE>
General and administrative expenses remained relatively constant 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 7.7% for the nine months ended September 30, 1998 from 5.6%
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 $29,557,016 or 70.67% of Limited Partners' capital
contributions.
III-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 $425,564 $656,490
Oil and gas production expenses $240,447 $333,065
Barrels produced 11,651 14,744
Mcf produced 176,592 252,745
Average price/Bbl $ 11.10 $ 17.82
Average price/Mcf $ 1.68 $ 1.56
As shown in the table above, total oil and gas sales decreased $230,926
(35.2%) for the three months ended September 30, 1998 as compared to the
three months ended September 30, 1997. Of this decrease, approximately
$55,000 and $119,000, respectively, were related to decreases in the
volumes of oil and gas sold and approximately $78,000 was related to a
decrease in the average price of oil sold. These decreases were partially
offset by an increase of approximately $21,000 related to an increase in
the average price of gas sold. Volumes of oil and gas sold decreased 3,093
barrels and 76,153 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) a positive
prior period volume adjustment made by a purchaser on one significant well
during the three months ended September 30, 1997 and (ii) a negative prior
period volume adjustment made by a purchaser on another significant well
during the three months ended September 30, 1998. The decrease in volumes
of gas sold resulted primarily from (i) the shutting-in of two significant
wells during a portion of the three months ended September 30, 1998 in
order to perform workovers to improve the recovery of reserves and (ii)
positive prior period volume adjustments made by the purchasers on two
significant
53
<PAGE>
wells during the three months ended September 30, 1997. Average oil prices
decreased to $11.10 per barrel for the three months ended September 30,
1998 from $17.82 per barrel for the three months ended September 30, 1997.
Average gas prices increased to $1.68 per Mcf for the three months ended
September 30, 1998 from $1.56 per Mcf for the three months ended September
30, 1997.
Oil and gas production expenses (including lease operating expenses and
production taxes) decreased $92,618 (27.8%) 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 increase the recovery of reserves and (ii) the sale of one
significant well during 1998. As a percentage of oil and gas sales, these
expenses increased to 56.5% for the three months ended September 30, 1998
from 50.7% for the three months ended September 30, 1997. This percentage
increase was primarily due to the decrease in the average price of oil
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 $149,276 (55.6%) 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) upward revisions in the estimates
of remaining gas reserves at December 31, 1997. As a percentage of oil and
gas sales, this expense decreased to 28.0% for the three months ended
September 30, 1998 from 40.9% for the three months ended September 30,
1997. This percentage decrease resulted primarily from the dollar decrease
in depreciation, depletion, and amortization.
General and administrative expenses increased $1,083 (1.7%) 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 14.9% for the three months ended September 30, 1998 from 9.5%
for the three months ended September 30, 1997. This percentage increase
was primarily due to the decrease in oil and 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 $1,660,573 $2,281,635
Oil and gas production expenses $ 900,148 $ 950,471
Barrels produced 42,624 49,722
Mcf produced 619,604 722,858
Average price/Bbl $ 12.99 $ 19.30
Average price/Mcf $ 1.79 $ 1.83
As shown in the table above, total oil and gas sales decreased $621,062
(27.2%) for the nine months ended September 30, 1998 as compared to the
nine months ended September 30, 1997. Of this decrease, approximately
$137,000 and $189,000, respectively, were related to decreases in the
volumes of oil and gas sold and approximately $269,000 and $26,000,
respectively, were related to decreases in the average prices of oil and
gas sold. Volumes of oil and gas sold decreased 7,098 barrels and 103,254
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) positive prior period
volume adjustments made by the purchasers on two significant wells during
the nine months ended September 30, 1997, (ii) a negative prior period
volume adjustment made by a purchaser on one significant well during the
nine months ended September 30, 1998, and (iii) the normal decline in
production on one significant well due to diminishing reserves. The
decrease in volumes of gas sold resulted primarily from (i) the
shutting-in of two significant wells during a portion of the nine months
ended September 30, 1998 in order to perform workovers to improve the
recovery of reserves and (ii) the sale of one significant well during
1998. Average oil and gas prices decreased to $12.99 per barrel and $1.79
per Mcf, respectively, for the nine months ended September 30, 1998 from
$19.30 per barrel and $1.83 per Mcf, respectively, for the nine months
ended September 30, 1997.
As discussed in Liquidity and Capital Resources above, the III-F
Partnership sold certain oil and gas properties during the nine months
ended September 30, 1998 and recognized a $27,168 gain on such sales.
Similar sales during the nine months ended September 30, 1997 resulted in
the III-F Partnership recognizing losses totaling $120.
55
<PAGE>
Oil and gas production expenses (including lease operating expenses and
production taxes) decreased $50,323 (5.3%) 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
54.2% for the nine months ended September 30, 1998 from 41.7% 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.
Depreciation, depletion, and amortization of oil and gas properties
decreased $380,251 (47.3%) 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 decrease 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) upward revisions in the estimates
of remaining gas reserves at December 31, 1997. As a percentage of oil and
gas sales, this expense decreased to 25.5% for the nine months ended
September 30, 1998 from 35.2% for the nine months ended September 30,
1997. This percentage decrease resulted primarily from the dollar decrease
in depreciation, depletion, and amortization.
The III-F Partnership recognized a non-cash charge against earnings of
$2,884,405 during the nine months ended September 30, 1997. Of this
amount, $2,078,019 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 $806,386 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 III-F 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 $4,303 (2.1%) 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, these expenses
increased to 12.1% for the nine months ended September 30, 1998 from 9.0%
for the nine months ended September 30, 1997. This percentage increase was
primarily due to the decrease in oil and sales.
56
<PAGE>
The Limited Partners have received cash distributions through September
30, 1998 totaling $10,937,904 or 49.38% of Limited Partners' capital
contributions.
III-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 $246,676 $398,505
Oil and gas production expenses $146,913 $207,950
Barrels produced 8,422 10,451
Mcf produced 92,235 134,769
Average price/Bbl $ 11.17 $ 17.74
Average price/Mcf $ 1.65 $ 1.58
As shown in the table above, total oil and gas sales decreased $151,829
(38.1%) for the three months ended September 30, 1998 as compared to the
three months ended September 30, 1997. Of this decrease, approximately
$36,000 and $67,000, respectively, were related to decreases in the
volumes of oil and gas sold and approximately $55,000 was related to a
decrease in the average price of oil sold. Volumes of oil and gas sold
decreased 2,029 barrels and 42,534 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 (i) a
positive prior period volume adjustment made by a purchaser on one
significant well during the three months ended September 30, 1997 and (ii)
a negative prior period volume adjustment made by a purchaser on another
significant well during the three months ended September 30, 1998. The
decrease in volumes of gas sold resulted primarily from (i) the
shutting-in of two significant wells during a portion of the three months
ended September 30, 1998 in order to perform workovers to improve the
recovery of reserves and (ii) positive prior period volume adjustments
made by the purchasers on three significant wells during the three months
ended September 30, 1997. Average oil prices decreased to $11.17 per
barrel for the three months ended September 30, 1998 from $17.74 per
barrel for the three months ended September 30, 1997. Average gas prices
increased to $1.65 per Mcf for the three months ended September 30, 1998
from $1.58 per Mcf for the three months ended September 30, 1997.
57
<PAGE>
Oil and gas production expenses (including lease operating expenses and
production taxes) decreased $61,037 (29.4%) 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 several wells during the three months ended September 30, 1997 in order
to improve the recovery of reserves and (ii) the sale of one significant
well during 1998. As a percentage of oil and gas sales, these expenses
increased to 59.6% for the three months ended September 30, 1998 from
52.2% for the three months ended September 30, 1997. This percentage
increase was primarily due to the decrease in the average price of oil
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 $75,826 (51.4%) 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 decrease 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) upward revisions in the estimates
of remaining gas reserves at December 31, 1997. As a percentage of oil and
gas sales, this expense decreased to 29.0% for the three months ended
September 30, 1998 from 37.0% for the three months ended September 30,
1997. This percentage decrease resulted primarily from the dollar decrease
in depreciation, depletion, and amortization.
General and administrative expenses increased $598 (1.7%) 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 14.1% for the three months ended September 30, 1998 from 8.6%
for the three months ended September 30, 1997. This percentage increase
was primarily due to the decrease in oil and sales.
58
<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 $992,166 $1,405,635
Oil and gas production expenses $560,302 $ 605,560
Barrels produced 30,438 35,841
Mcf produced 333,578 384,476
Average price/Bbl $ 12.97 $ 19.35
Average price/Mcf $ 1.79 $ 1.85
As shown in the table above, total oil and gas sales decreased $413,469
(29.4%) for the nine months ended September 30, 1998 as compared to the
nine months ended September 30, 1997. Of this decrease, approximately
$105,000 and $94,000, respectively, were related to decreases in the
volumes of oil and gas sold and approximately $194,000 was related to a
decrease in the average price of oil sold. Volumes of oil and gas sold
decreased 5,403 barrels and 50,898 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 a purchaser on one
significant well during the nine months ended September 30, 1997, (ii) a
negative prior period volume adjustment made by the purchasers on two
significant wells during the nine months ended September 30, 1998, and
(iii) the normal decline in production on one significant well due to
diminishing reserves. The decrease in volumes of gas sold resulted
primarily from (i) the shutting-in of two significant wells during a
portion of the nine months ended September 30, 1998 in order to perform
workovers to improve the recovery of reserves and (ii) the sale of one
significant well during the nine months ended September 30, 1998. Average
oil and gas prices decreased to $12.97 per barrel and $1.79 per Mcf,
respectively, for the nine months ended September 30, 1998 from $19.35 per
barrel and $1.85 per Mcf, respectively, for the nine months ended
September 30, 1997.
As discussed in Liquidity and Capital Resources above, the III-G
Partnership sold certain oil and gas properties during the nine months
ended September 30, 1998 and recognized a $23,094 gain on such sales.
Similar sales during the nine months ended September 30, 1997 resulted in
the III-G Partnership recognizing similar gains totaling $4,974.
59
<PAGE>
Oil and gas production expenses (including lease operating expenses and
production taxes) decreased $45,258 (7.5%) 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
56.5% for the nine months ended September 30, 1998 from 43.1% 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.
Depreciation, depletion, and amortization of oil and gas properties
decreased $188,680 (42.1%) for the nine months ended September 30, 1998 as
compared to the nine months ended September 30, 1997. This decrease
resulted primarily from (i) the decrease 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) upward revisions in the estimates
of remaining gas reserves at December 31, 1997. As a percentage of oil and
gas sales, this expense decreased to 26.1% for the nine months ended
September 30, 1998 from 31.8% for the nine months ended September 30,
1997. This percentage decrease resulted primarily from the dollar decrease
in depreciation, depletion, and amortization.
The III-G Partnership recognized a non-cash charge against earnings of
$1,449,404 during the nine months ended September 30, 1997. Of this
amount, $1,010,738 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 $438,666 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 III-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 $2,417 (2.1%) 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, these expenses
increased to 11.2% for the nine months ended September 30, 1998 from 8.1%
for the nine months ended September 30, 1997. This percentage increase was
primarily due to the decrease in oil and sales.
The Limited Partners have received cash distributions through September
30, 1998 totaling $5,743,287 or 47.11% of Limited Partners' capital
contributions.
60
<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 III-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 III-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 III-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 III-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 III-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 III-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 III-G 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.
None.
61
<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 III-A
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-B
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-C
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-D
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-E
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-F
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-G
(Registrant)
BY: GEODYNE RESOURCES, INC.
General Partner
Date: November 12, 1998 By: /s/Dennis R. Neill
--------------------------------
(Signature)
Dennis R. Neill
President
Date: November 12, 1998 By: /s/Patrick M. Hall
--------------------------------
(Signature)
Patrick M. Hall
Principal Accounting Officer
62
<PAGE>
INDEX TO EXHIBITS
NUMBER DESCRIPTION
- ------ -----------
27.1 Financial Data Schedule containing summary financial information
extracted from the Geodyne Energy Income Limited Partnership III-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 III-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 III-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 III-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 III-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 III-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 III-G'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.
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0000860745
<NAME> GEODYNE ENERGY INCOME LTD PARTNERSHIP III-A
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> SEP-30-1998
<CASH> 324,860
<SECURITIES> 0
<RECEIVABLES> 265,218
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 590,078
<PP&E> 17,208,053
<DEPRECIATION> 14,914,578
<TOTAL-ASSETS> 3,083,275
<CURRENT-LIABILITIES> 69,283
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 2,962,087
<TOTAL-LIABILITY-AND-EQUITY> 3,083,275
<SALES> 1,573,580
<TOTAL-REVENUES> 1,607,573
<CGS> 0
<TOTAL-COSTS> 1,064,956
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 542,617
<INCOME-TAX> 0
<INCOME-CONTINUING> 542,617
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 542,617
<EPS-PRIMARY> 1.90
<EPS-DILUTED> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0000863835
<NAME> GEODYNE ENERGY INCOME LTD PARTNERSHIP III-B
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> SEP-30-1998
<CASH> 189,312
<SECURITIES> 0
<RECEIVABLES> 163,539
<ALLOWANCES> 0
<INVENTORY> 0
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