SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarter ended June 30, 1998
Commission File Number:
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
June 30, December 31,
1998 1997
----------- ------------
CURRENT ASSETS:
Cash and cash equivalents $ 330,161 $ 522,371
Accounts receivable:
Oil and gas sales 347,765 524,541
Other - 308
---------- ----------
Total current assets $ 677,926 $1,047,220
NET OIL AND GAS PROPERTIES, utilizing
the successful efforts method 2,408,823 2,669,949
DEFERRED CHARGE 199,722 199,722
---------- ----------
$3,286,471 $3,916,891
========== ==========
LIABILITIES AND PARTNERS' CAPITAL (DEFICIT)
CURRENT LIABILITIES:
Accounts payable $ 33,357 $ 39,622
Gas imbalance payable 38,418 38,418
---------- ----------
Total current liabilities $ 71,775 $ 78,040
ACCRUED LIABILITY $ 51,905 $ 51,905
PARTNERS' CAPITAL (DEFICIT):
General Partner ($ 209,493) ($ 198,271)
Limited Partners, issued and
outstanding, 263,976 units 3,372,284 3,985,217
---------- ----------
Total Partners' capital $3,162,791 $3,786,946
---------- ----------
$3,286,471 $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 JUNE 30, 1998 AND 1997
(Unaudited)
1998 1997
---------- ---------
REVENUES:
Oil and gas sales $528,972 $850,857
Interest income 4,634 8,201
Gain on sale of oil and gas
properties 11,927 11,503
-------- --------
$545,533 $870,561
COSTS AND EXPENSES:
Lease operating $131,298 $131,357
Production tax 44,517 76,143
Depreciation, depletion, and
amortization of oil and gas
properties 127,805 237,375
General and administrative
(Note 2) 73,302 84,383
-------- --------
$376,922 $529,258
-------- --------
NET INCOME $168,611 $341,303
======== ========
GENERAL PARTNER - NET INCOME $ 13,311 $ 26,150
======== ========
LIMITED PARTNERS - NET INCOME $155,300 $315,153
======== ========
NET INCOME per unit $ .59 $ 1.19
======== ========
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 SIX MONTHS ENDED JUNE 30, 1998 AND 1997
(Unaudited)
1998 1997
---------- ----------
REVENUES:
Oil and gas sales $1,145,173 $1,866,601
Interest income 10,597 13,478
Gain (loss) on sale of oil and
gas properties 20,041 ( 10,455)
---------- ----------
$1,175,811 $1,869,624
COSTS AND EXPENSES:
Lease operating $ 210,655 $ 261,989
Production tax 88,936 148,238
Depreciation, depletion, and
amortization of oil and gas
properties 271,374 485,351
Impairment provision - 1,617,006
General and administrative
(Note 2) 164,433 164,737
---------- ----------
$ 735,398 $2,677,321
---------- ----------
NET INCOME (LOSS) $ 440,413 ($ 807,697)
========== ==========
GENERAL PARTNER - NET INCOME $ 32,346 $ 43,035
========== ==========
LIMITED PARTNERS - NET INCOME (LOSS) $ 408,067 ($ 850,732)
========== ==========
NET INCOME (LOSS) per unit $ 1.55 ($ 3.22)
========== ==========
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 SIX MONTHS ENDED JUNE 30, 1998 AND 1997
(Unaudited)
1998 1997
----------- ----------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) $ 440,413 ($ 807,697)
Adjustments to reconcile net income
(loss) to net cash provided by
operating activities:
Depreciation, depletion, and
amortization of oil and gas
properties 271,374 485,351
Impairment provision - 1,617,006
(Gain) loss on sale of oil and
gas properties ( 20,041) 10,455
Decrease in accounts receivable -
oil and gas sales 176,776 174,966
Decrease in accounts receivable -
other 308 -
Decrease in accounts payable ( 6,265) ( 4,825)
---------- ----------
Net cash provided by operating
activities $ 862,565 $1,475,256
---------- ----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures ($ 12,009) $ -
Proceeds from sale of oil and
gas properties 21,802 514,004
---------- ----------
Net cash provided by investing
activities $ 9,793 $ 514,004
---------- ----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Cash distributions ($1,064,568) ($1,457,030)
---------- ----------
Net cash used by financing activities ($1,064,568) ($1,457,030)
---------- ----------
NET INCREASE (DECREASE) IN CASH AND
CASH EQUIVALENTS ($ 192,210) $ 532,230
CASH AND CASH EQUIVALENTS AT
BEGINNING OF PERIOD 522,371 610,116
---------- ----------
CASH AND CASH EQUIVALENTS AT
END OF PERIOD $ 330,161 $1,142,346
========== ==========
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
June 30, December 31,
1998 1997
----------- ------------
CURRENT ASSETS:
Cash and cash equivalents $ 147,568 $ 305,288
Accounts receivable:
Oil and gas sales 204,642 307,724
Other - 130
---------- ----------
Total current assets $ 352,210 $ 613,142
NET OIL AND GAS PROPERTIES, utilizing
the successful efforts method 1,349,713 1,499,148
DEFERRED CHARGE 136,296 136,296
---------- ----------
$1,838,219 $2,248,586
========== ==========
LIABILITIES AND PARTNERS' CAPITAL (DEFICIT)
CURRENT LIABILITIES:
Accounts payable $ 19,773 $ 19,432
Gas imbalance payable 6,676 6,676
---------- ----------
Total current liabilities $ 26,449 $ 26,108
ACCRUED LIABILITY $ 28,494 $ 28,494
PARTNERS' CAPITAL (DEFICIT):
General Partner ($ 89,270) ($ 97,840)
Limited Partners, issued and
outstanding, 138,336 units 1,872,546 2,291,824
---------- ----------
Total Partners' capital $1,783,276 $2,193,984
---------- ----------
$1,838,219 $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 JUNE 30, 1998 AND 1997
(Unaudited)
1998 1997
---------- ---------
REVENUES:
Oil and gas sales $304,200 $501,249
Interest income 2,437 4,541
Gain on sale of oil and gas
properties - 2,520
-------- --------
$306,637 $508,310
COSTS AND EXPENSES:
Lease operating $ 87,537 $ 72,004
Production tax 25,488 43,524
Depreciation, depletion, and
amortization of oil and gas
properties 75,547 136,406
General and administrative
(Note 2) 38,360 44,220
-------- --------
$226,932 $296,154
-------- --------
NET INCOME $ 79,705 $212,156
======== ========
GENERAL PARTNER - NET INCOME $ 22,167 $ 15,837
======== ========
LIMITED PARTNERS - NET INCOME $ 57,538 $196,319
======== ========
NET INCOME per unit $ .42 $ 1.42
======== ========
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 SIX MONTHS ENDED JUNE 30, 1998 AND 1997
(Unaudited)
1998 1997
---------- ----------
REVENUES:
Oil and gas sales $690,483 $1,094,356
Interest income 5,890 7,661
Gain (loss) on sale of oil
and gas properties 815 ( 7,673)
-------- ----------
$697,188 $1,094,344
COSTS AND EXPENSES:
Lease operating $130,947 $ 158,262
Production tax 53,738 85,550
Depreciation, depletion, and
amortization of oil and gas
properties 163,207 275,709
Impairment provision - 738,122
General and administrative
(Note 2) 86,134 86,447
-------- ----------
$434,026 $1,344,090
-------- ----------
NET INCOME (LOSS) $263,162 ($ 249,746)
======== ==========
GENERAL PARTNER - NET INCOME $ 61,440 $ 27,683
======== ==========
LIMITED PARTNERS - NET INCOME (LOSS) $201,722 ($ 277,429)
======== ==========
NET INCOME (LOSS) per unit $ 1.46 ($ 2.01)
======== ==========
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 SIX MONTHS ENDED JUNE 30, 1998 AND 1997
(Unaudited)
1998 1997
--------- ---------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) $263,162 ($249,746)
Adjustments to reconcile net income
(loss) to net cash provided by
operating activities:
Depreciation, depletion, and
amortization of oil and gas
properties 163,207 275,709
Impairment provision - 738,122
(Gain) loss on sale of oil and
gas properties ( 815) 7,673
Decrease in accounts receivable -
oil and gas sales 103,082 97,603
Decrease in accounts receivable -
other 130 -
Increase (decrease) in accounts
payable 341 ( 1,159)
-------- --------
Net cash provided by operating
activities $529,107 $868,202
-------- --------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures ($ 13,772) $ -
Proceeds from sale of oil and
gas properties 815 251,187
-------- --------
Net cash provided (used) by
investing activities ($ 12,957) $251,187
-------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Cash distributions ($673,870) ($878,703)
-------- --------
Net cash used by financing activities ($673,870) ($878,703)
-------- --------
NET INCREASE (DECREASE) IN CASH AND
CASH EQUIVALENTS ($157,720) $240,686
CASH AND CASH EQUIVALENTS AT
BEGINNING OF PERIOD 305,288 376,603
-------- --------
CASH AND CASH EQUIVALENTS AT
END OF PERIOD $147,568 $617,289
======== ========
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
June 30, December 31,
1998 1997
----------- ------------
CURRENT ASSETS:
Cash and cash equivalents $ 534,505 $ 540,911
Accounts receivable:
Oil and gas sales 373,582 497,683
Other - 54
---------- ----------
Total current assets $ 908,087 $1,038,648
NET OIL AND GAS PROPERTIES, utilizing
the successful efforts method 3,235,610 3,442,631
DEFERRED CHARGE 86,649 86,649
---------- ----------
$4,230,346 $4,567,928
========== ==========
LIABILITIES AND PARTNERS' CAPITAL (DEFICIT)
CURRENT LIABILITIES:
Accounts payable $ 44,132 $ 53,049
Gas imbalance payable 30,493 30,493
---------- ----------
Total current liabilities $ 74,625 $ 83,542
ACCRUED LIABILITY $ 142,828 $ 142,828
PARTNERS' CAPITAL (DEFICIT):
General Partner ($ 180,817) ($ 171,438)
Limited Partners, issued and
outstanding, 244,536 units 4,193,710 4,512,996
---------- ----------
Total Partners' capital $4,012,893 $4,341,558
---------- ----------
$4,230,346 $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 JUNE 30, 1998 AND 1997
(Unaudited)
1998 1997
-------- ----------
REVENUES:
Oil and gas sales $553,291 $658,254
Interest income 5,201 6,155
Gain on sale of oil and gas
properties 238,632 59,929
-------- --------
$797,124 $724,338
COSTS AND EXPENSES:
Lease operating $134,020 $105,808
Production tax 41,763 49,743
Depreciation, depletion, and
amortization of oil and gas
properties 144,719 180,778
General and administrative
(Note 2) 68,021 77,297
-------- --------
$388,523 $413,626
-------- --------
NET INCOME $408,601 $310,712
======== ========
GENERAL PARTNER - NET INCOME $ 25,959 $ 22,166
======== ========
LIMITED PARTNERS - NET INCOME $382,642 $288,546
======== ========
NET INCOME per unit $ 1.57 $ 1.18
======== ========
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 SIX MONTHS ENDED JUNE 30, 1998 AND 1997
(Unaudited)
1998 1997
---------- ----------
REVENUES:
Oil and gas sales $1,234,156 $1,600,086
Interest income 10,949 10,692
Gain on sale of oil and gas
properties 405,333 55,672
---------- ----------
$1,650,438 $1,666,450
COSTS AND EXPENSES:
Lease operating $ 240,709 $ 252,645
Production tax 88,703 120,242
Depreciation, depletion, and
amortization of oil and gas
properties 282,806 387,216
Impairment provision - 1,696,417
General and administrative
(Note 2) 152,453 157,971
---------- ----------
$ 764,671 $2,614,491
---------- ----------
NET INCOME (LOSS) $ 885,767 ($ 948,041)
========== ==========
GENERAL PARTNER - NET INCOME $ 55,053 $ 35,409
========== ==========
LIMITED PARTNERS - NET INCOME (LOSS) $ 830,714 ($ 983,450)
========== ==========
NET INCOME (LOSS) per unit $ 3.40 ($ 4.02)
========== ==========
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 SIX MONTHS ENDED JUNE 30, 1998 AND 1997
(Unaudited)
1998 1997
----------- ----------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) $ 885,767 ($ 948,041)
Adjustments to reconcile net income
(loss) to net cash provided by
operating activities:
Depreciation, depletion, and
amortization of oil and gas
properties 282,806 387,216
Impairment provision - 1,696,417
Gain on sale of oil and gas
properties ( 405,333) ( 55,672)
Decrease in accounts receivable -
oil and gas sales 124,101 186,766
Decrease in accounts receivable -
General Partner - 35,086
Decrease in accounts receivable -
other 54 -
Decrease in accounts payable ( 8,917) ( 15,381)
---------- ----------
Net cash provided by operating
activities $ 878,478 $1,286,391
---------- ----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures ($ 114,444) $ -
Proceeds from sale of oil and
gas properties 443,992 151,318
---------- ----------
Net cash provided by investing
activities $ 329,548 $ 151,318
---------- ----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Cash distributions ($1,214,432) ($1,365,150)
---------- ----------
Net cash used by financing activities ($1,214,432) ($1,365,150)
---------- ----------
NET INCREASE (DECREASE) IN CASH AND
CASH EQUIVALENTS ($ 6,406) $ 72,559
CASH AND CASH EQUIVALENTS AT
BEGINNING OF PERIOD 540,911 537,233
---------- ----------
CASH AND CASH EQUIVALENTS AT
END OF PERIOD $ 534,505 $ 609,792
========== ==========
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
June 30, December 31,
1998 1997
----------- ------------
CURRENT ASSETS:
Cash and cash equivalents $ 236,221 $ 298,964
Accounts receivable:
Oil and gas sales 307,552 361,775
---------- ----------
Total current assets $ 543,773 $ 660,739
NET OIL AND GAS PROPERTIES, utilizing
the successful efforts method 2,108,673 2,211,248
DEFERRED CHARGE 18,875 18,875
---------- ----------
$2,671,321 $2,890,862
========== ==========
LIABILITIES AND PARTNERS' CAPITAL (DEFICIT)
CURRENT LIABILITIES:
Accounts payable $ 65,274 $ 114,286
---------- ----------
Total current liabilities $ 65,274 $ 114,286
ACCRUED LIABILITY $ 201,934 $ 201,934
PARTNERS' CAPITAL (DEFICIT):
General Partner ($ 63,538) ($ 62,091)
Limited Partners, issued and
outstanding, 131,008 units 2,467,651 2,636,733
---------- ----------
Total Partners' capital $2,404,113 $2,574,642
---------- ----------
$2,671,321 $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 JUNE 30, 1998 AND 1997
(Unaudited)
1998 1997
-------- ---------
REVENUES:
Oil and gas sales $434,401 $490,474
Interest income 1,973 3,982
Gain on sale of oil and
gas properties 34,618 18,488
-------- --------
$470,992 $512,944
COSTS AND EXPENSES:
Lease operating $130,236 $146,648
Production tax 30,165 33,046
Depreciation, depletion, and
amortization of oil and gas
properties 80,961 102,659
General and administrative
(Note 2) 36,314 41,933
-------- --------
$277,676 $324,286
-------- --------
NET INCOME $193,316 $188,658
======== ========
GENERAL PARTNER - NET INCOME $ 12,806 $ 13,340
======== ========
LIMITED PARTNERS - NET INCOME $180,510 $175,318
======== ========
NET INCOME per unit $ 1.38 $ 1.34
======== ========
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 SIX MONTHS ENDED JUNE 30, 1998 AND 1997
(Unaudited)
1998 1997
-------- ----------
REVENUES:
Oil and gas sales $912,164 $1,261,524
Interest income 4,770 6,417
Gain on sale of oil and
gas properties 58,772 20,468
-------- ----------
$975,706 $1,288,409
COSTS AND EXPENSES:
Lease operating $278,473 $ 324,874
Production tax 59,696 89,602
Depreciation, depletion, and
amortization of oil and gas
properties 157,568 217,457
Impairment provision - 932,243
General and administrative
(Note 2) 82,093 85,277
-------- ----------
$577,830 $1,649,453
-------- ----------
NET INCOME (LOSS) $397,876 ($ 361,044)
======== ==========
GENERAL PARTNER - NET INCOME $ 25,958 $ 27,615
======== ==========
LIMITED PARTNERS - NET INCOME (LOSS) $371,918 ($ 388,659)
======== ==========
NET INCOME (LOSS) per unit $ 2.84 ($ 2.97)
======== ==========
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 SIX MONTHS ENDED JUNE 30, 1998 AND 1997
(Unaudited)
1998 1997
--------- ----------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) $397,876 ($361,044)
Adjustments to reconcile net income
(loss) to net cash provided by
operating activities:
Depreciation, depletion, and
amortization of oil and gas
properties 157,568 217,457
Impairment provision - 932,243
Gain on sale of oil and gas
properties ( 58,772) ( 20,468)
Decrease in accounts receivable -
oil and gas sales 54,223 95,612
Decrease in accounts payable ( 49,012) ( 56,355)
-------- --------
Net cash provided by operating
activities $501,883 $807,445
-------- --------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures ($ 58,992) ($ 3,630)
Proceeds from sale of oil and
gas properties 62,771 22,200
-------- --------
Net cash provided by investing
activities $ 3,779 $ 18,570
-------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Cash distributions ($568,405) ($824,492)
-------- --------
Net cash used by financing activities ($568,405) ($824,492)
-------- --------
NET INCREASE (DECREASE) IN CASH AND
CASH EQUIVALENTS ($ 62,743) $ 1,523
CASH AND CASH EQUIVALENTS AT
BEGINNING OF PERIOD 298,964 319,245
-------- --------
CASH AND CASH EQUIVALENTS AT
END OF PERIOD $236,221 $320,768
======== ========
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
June 30, December 31,
1998 1997
----------- ------------
CURRENT ASSETS:
Cash and cash equivalents $ 975,322 $ 1,114,574
Accounts receivable:
Oil and gas sales 1,213,109 1,361,797
----------- -----------
Total current assets $ 2,188,431 $ 2,476,371
NET OIL AND GAS PROPERTIES,
utilizing the successful
efforts method 8,080,674 8,716,929
DEFERRED CHARGE 204,087 204,087
----------- -----------
$10,473,192 $11,397,387
=========== ===========
LIABILITIES AND PARTNERS' CAPITAL (DEFICIT)
CURRENT LIABILITIES:
Accounts payable $ 417,520 $ 693,518
Gas imbalance payable 142,749 142,749
----------- -----------
Total current liabilities $ 560,269 $ 836,267
ACCRUED LIABILITY $ 320,943 $ 320,943
PARTNERS' CAPITAL (DEFICIT):
General Partner ($ 209,949) ($ 209,050)
Limited Partners, issued and
outstanding, 418,266 units 9,801,929 10,449,227
----------- -----------
Total Partners' capital $ 9,591,980 $10,240,177
----------- -----------
$10,473,192 $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 JUNE 30, 1998 AND 1997
(Unaudited)
1998 1997
---------- ----------
REVENUES:
Oil and gas sales $1,848,422 $2,106,131
Interest income 11,826 14,349
Loss on sale of oil and
gas properties - ( 310)
---------- ----------
$1,860,248 $2,120,170
COSTS AND EXPENSES:
Lease operating $ 787,494 $ 878,585
Production tax 136,632 146,797
Depreciation, depletion, and
amortization of oil and gas
properties 308,628 439,561
General and administrative
(Note 2) 115,908 134,109
---------- ----------
$1,348,662 $1,599,052
---------- ----------
NET INCOME $ 511,586 $ 521,118
========== ==========
GENERAL PARTNER - NET INCOME $ 37,333 $ 42,920
========== ==========
LIMITED PARTNERS - NET INCOME $ 474,253 $ 478,198
========== ==========
NET INCOME per unit $ 1.14 $ 1.14
========== ==========
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 SIX MONTHS ENDED JUNE 30, 1998 AND 1997
(Unaudited)
1998 1997
---------- ----------
REVENUES:
Oil and gas sales $3,621,740 $5,036,109
Interest income 24,028 23,361
Gain (loss) on sale of oil
and gas properties 37,161 ( 310)
---------- ----------
$3,682,929 $5,059,160
COSTS AND EXPENSES:
Lease operating $1,520,705 $1,802,566
Production tax 250,863 355,271
Depreciation, depletion, and
amortization of oil and gas
properties 604,646 929,643
Impairment provision - 2,893,438
General and administrative
(Note 2) 267,045 271,154
---------- ----------
$2,643,259 $6,252,072
---------- ----------
NET INCOME (LOSS) $1,039,670 ($1,192,912)
========== ==========
GENERAL PARTNER - NET INCOME $ 74,968 $ 92,110
========== ==========
LIMITED PARTNERS - NET INCOME (LOSS) $ 964,702 ($1,285,022)
========== ==========
NET INCOME (LOSS) per unit $ 2.31 ($ 3.07)
========== ==========
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 SIX MONTHS ENDED JUNE 30, 1998 AND 1997
(Unaudited)
1998 1997
----------- ----------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) $1,039,670 ($1,192,912)
Adjustments to reconcile net income
(loss) to net cash provided by
operating activities:
Depreciation, depletion, and
amortization of oil and gas
properties 604,646 929,643
Impairment provision - 2,893,438
(Gain) loss on sale of oil and
gas properties ( 37,161) 310
Decrease in accounts receivable -
oil and gas sales 148,688 253,271
Decrease in accounts payable ( 275,998) ( 271,385)
---------- ----------
Net cash provided by operating
activities $1,479,845 $2,612,365
---------- ----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures ($ 2,013) ($ 55,330)
Proceeds from sale of oil and
gas properties 70,783 6,050
---------- ----------
Net cash provided (used) by
investing activities $ 68,770 ($ 49,280)
---------- ----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Cash distributions ($1,687,867) ($2,694,993)
---------- ----------
Net cash used by financing activities ($1,687,867) ($2,694,993)
---------- ----------
NET DECREASE IN CASH AND CASH
EQUIVALENTS ($ 139,252) ($ 131,908)
CASH AND CASH EQUIVALENTS AT
BEGINNING OF PERIOD 1,114,574 1,243,143
---------- ----------
CASH AND CASH EQUIVALENTS AT
END OF PERIOD $ 975,322 $1,111,235
========== ==========
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
June 30, December 31,
1998 1997
----------- ------------
CURRENT ASSETS:
Cash and cash equivalents $ 376,216 $ 541,382
Accounts receivable:
Oil and gas sales 314,020 472,746
Other 9,631 9,631
---------- ----------
Total current assets $ 699,867 $1,023,759
NET OIL AND GAS PROPERTIES, utilizing
the successful efforts method 3,271,383 3,604,665
DEFERRED CHARGE 124,393 124,393
---------- ----------
$4,095,643 $4,752,817
========== ==========
LIABILITIES AND PARTNERS' CAPITAL (DEFICIT)
CURRENT LIABILITIES:
Accounts payable $ 147,048 $ 165,963
Gas imbalance payable 119,864 119,864
---------- ----------
Total current liabilities $ 266,912 $ 285,827
ACCRUED LIABILITY $ 159,275 $ 159,275
PARTNERS' CAPITAL (DEFICIT):
General Partner ($ 157,905) ($ 146,427)
Limited Partners, issued and
outstanding, 221,484 units 3,827,361 4,454,142
---------- ----------
Total Partners' capital $3,669,456 $4,307,715
---------- ----------
$4,095,643 $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 JUNE 30, 1998 AND 1997
(Unaudited)
1998 1997
-------- ---------
REVENUES:
Oil and gas sales $570,778 $691,158
Interest income 5,604 6,846
Loss on sale of oil and gas
properties - ( 233)
-------- --------
$576,382 $697,771
COSTS AND EXPENSES:
Lease operating $321,279 $245,827
Production tax 48,942 39,891
Depreciation, depletion, and
amortization of oil and gas
properties 156,742 263,240
General and administrative
(Note 2) 61,324 70,982
-------- --------
$588,287 $619,940
-------- --------
NET INCOME (LOSS) ($ 11,905) $ 77,831
======== ========
GENERAL PARTNER - NET INCOME $ 5,394 $ 14,079
======== ========
LIMITED PARTNERS - NET INCOME (LOSS) ($ 17,299) $ 63,752
======== ========
NET INCOME (LOSS) per unit ($ .08) $ .29
======== ========
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 SIX MONTHS ENDED JUNE 30, 1998 AND 1997
(Unaudited)
1998 1997
---------- ----------
REVENUES:
Oil and gas sales $1,235,009 $1,625,145
Interest income 11,810 11,424
Gain (loss) on sale of oil and
gas properties 28,061 ( 233)
---------- ----------
$1,274,880 $1,636,336
COSTS AND EXPENSES:
Lease operating $ 568,306 $ 530,658
Production tax 91,395 86,748
Depreciation, depletion, and
amortization of oil and gas
properties 303,943 534,918
Impairment provision - 2,884,405
General and administrative
(Note 2) 137,777 143,163
---------- ----------
$1,101,421 $4,179,892
---------- ----------
NET INCOME (LOSS) $ 173,459 ($2,543,556)
========== ==========
GENERAL PARTNER - NET INCOME $ 20,240 $ 9,024
========== ==========
LIMITED PARTNERS - NET INCOME (LOSS) $ 153,219 ($2,552,580)
========== ==========
NET INCOME (LOSS) per unit $ .69 ($ 11.52)
========== ==========
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 SIX MONTHS ENDED JUNE 30, 1998 AND 1997
(Unaudited)
1998 1997
--------- ----------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) $173,459 ($2,543,556)
Adjustments to reconcile net income
(loss) to net cash provided by
operating activities:
Depreciation, depletion, and
amortization of oil and gas
properties 303,943 534,918
Impairment provision - 2,884,405
(Gain) loss on sale of oil and
gas properties ( 28,061) 233
Decrease in accounts receivable -
oil and gas sales 158,726 183,475
Decrease in accounts payable ( 18,915) ( 18,730)
-------- ----------
Net cash provided by operating
activities $589,152 $1,040,745
-------- ----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures ($ 9) ($ 9,285)
Proceeds from sale of oil and
gas properties 57,409 5,567
-------- ----------
Net cash provided (used) by
investing activities $ 57,400 ($ 3,718)
-------- ----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Cash distributions ($811,718) ($1,054,457)
-------- ----------
Net cash used by financing activities ($811,718) ($1,054,457)
-------- ----------
NET DECREASE IN CASH AND CASH
EQUIVALENTS ($165,166) ($ 17,430)
CASH AND CASH EQUIVALENTS AT
BEGINNING OF PERIOD 541,382 504,658
-------- ----------
CASH AND CASH EQUIVALENTS AT
END OF PERIOD $376,216 $ 487,228
======== ==========
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
June 30, December 31,
1998 1997
----------- ------------
CURRENT ASSETS:
Cash and cash equivalents $ 203,724 $ 351,163
Accounts receivable:
Oil and gas sales 200,660 285,689
General Partner - 13,140
Other 6,369 6,369
---------- ----------
Total current assets $ 410,753 $ 656,361
NET OIL AND GAS PROPERTIES, utilizing
the successful efforts method 1,950,861 2,141,289
DEFERRED CHARGE 75,406 75,406
---------- ----------
$2,437,020 $2,873,056
========== ==========
LIABILITIES AND PARTNERS' CAPITAL (DEFICIT)
CURRENT LIABILITIES:
Accounts payable $ 88,735 $ 101,925
Gas imbalance payable 59,607 59,607
---------- ----------
Total current liabilities $ 148,342 $ 161,532
ACCRUED LIABILITY $ 89,310 $ 89,310
PARTNERS' CAPITAL (DEFICIT):
General Partner ($ 92,187) ($ 85,608)
Limited Partners, issued and
outstanding, 121,925 units 2,291,555 2,707,822
---------- ----------
Total Partners' capital $2,199,368 $2,622,214
---------- ----------
$2,437,020 $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 JUNE 30, 1998 AND 1997
(Unaudited)
1998 1997
-------- ---------
REVENUES:
Oil and gas sales $349,671 $434,013
Interest income 3,008 4,431
Gain on sale of oil and
gas properties 1,415 4,943
-------- --------
$354,094 $443,387
COSTS AND EXPENSES:
Lease operating $196,420 $158,170
Production tax 27,760 24,255
Depreciation, depletion, and
amortization of oil and gas
properties 96,515 147,683
General and administrative
(Note 2) 33,773 39,131
-------- --------
$354,468 $369,239
-------- --------
NET INCOME (LOSS) ($ 374) $ 74,148
======== ========
GENERAL PARTNER - NET INCOME $ 3,691 $ 9,394
======== ========
LIMITED PARTNERS - NET INCOME (LOSS) ($ 4,065) $ 64,754
======== ========
NET INCOME per unit $ .03 $ .53
======== ========
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 SIX MONTHS ENDED JUNE 30, 1998 AND 1997
(Unaudited)
1998 1997
--------- ----------
REVENUES:
Oil and gas sales $745,490 $1,007,130
Interest income 6,758 7,392
Gain on sale of oil and
gas properties 23,189 4,943
-------- ----------
$775,437 $1,019,465
COSTS AND EXPENSES:
Lease operating $361,084 $ 345,188
Production tax 52,305 52,422
Depreciation, depletion, and
amortization of oil and gas
properties 187,342 300,196
Impairment provision - 1,449,404
General and administrative
(Note 2) 75,876 78,891
-------- ----------
$676,607 $2,226,101
-------- ----------
NET INCOME (LOSS) $ 98,830 ($1,206,636)
======== ==========
GENERAL PARTNER - NET INCOME $ 12,097 $ 9,283
======== ==========
LIMITED PARTNERS - NET INCOME (LOSS) $ 86,733 ($1,215,919)
======== ==========
NET INCOME (LOSS) per unit $ .71 ($ 9.97)
======== ==========
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 SIX MONTHS ENDED JUNE 30, 1998 AND 1997
(Unaudited)
1998 1997
--------- ----------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) $ 98,830 ($1,206,636)
Adjustments to reconcile net income
(loss) to net cash provided by
operating activities:
Depreciation, depletion, and
amortization of oil and gas
properties 187,342 300,196
Impairment provision - 1,449,404
Gain on sale of oil and gas
properties ( 23,189) ( 4,943)
Decrease in accounts receivable -
oil and gas sales 85,029 111,963
Decrease in accounts receivable -
General Partner 13,140 -
Decrease in accounts payable ( 13,190) ( 11,037)
-------- ----------
Net cash provided by operating
activities $347,962 $ 638,947
-------- ----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures ($ 7,543) ($ 11,956)
Proceeds from sale of oil and
gas properties 33,818 12,817
-------- ----------
Net cash provided by investing
activities $ 26,275 $ 861
-------- ----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Cash distributions ($521,676) ($ 610,610)
-------- ----------
Net cash used by financing activities ($521,676) ($ 610,610)
-------- ----------
NET INCREASE (DECREASE) IN CASH AND
CASH EQUIVALENTS ($147,439) $ 29,198
CASH AND CASH EQUIVALENTS AT
BEGINNING OF PERIOD 351,163 315,955
-------- ----------
CASH AND CASH EQUIVALENTS AT
END OF PERIOD $203,724 $ 345,153
======== ==========
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
JUNE 30, 1998
(Unaudited)
1. ACCOUNTING POLICIES
-------------------
The balance sheets as of June 30, 1998, statements of operations for the
three and six months ended June 30, 1998 and 1997, and statements of cash
flows for the six months ended June 30, 1998 and 1997 have been prepared
by Geodyne Resources, Inc., the General Partner of the 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 June 30, 1998, the results of operations for the
three and six months ended June 30, 1998 and 1997, and the cash flows for
the six months ended June 30, 1998 and 1997.
Information and footnote disclosures normally included in financial
statements prepared in accordance with generally accepted accounting
principles have been condensed or omitted. The accompanying interim
financial statements should be read in conjunction with the Partnerships'
Annual Report on Form 10-K filed for the year ended December 31, 1997. The
results of operations for the period ended June 30, 1998 are not
necessarily indicative of the results to be expected for the full year.
The Limited Partners' net income or loss per unit is based upon each $100
initial capital contribution.
OIL AND GAS PROPERTIES
----------------------
The Partnerships follow the successful efforts method of accounting for
their oil and gas properties. Under the successful efforts method, the
Partnerships capitalize all property acquisition costs and development
costs incurred in connection with the further development of oil and gas
reserves. Property acquisition costs include costs incurred by the
Partnerships or the General Partner to acquire producing properties,
including related title insurance or examination costs, commissions,
engineering, legal and accounting fees, and similar costs directly related
to the acquisitions, plus an allocated portion, of the General Partner's
property screening costs. The acquisition cost to the Partnerships of
properties acquired by the General Partner is adjusted to reflect the net
cash results of operations, including interest incurred to finance the
30
<PAGE>
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 six months ended June 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 six months ended June 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 June 30, 1998 the following payments were made to the
General Partner or its affiliates by the Partnerships:
Direct General Administrative
Partnership and Administrative Overhead
----------- ------------------- ---------------
III-A $3,834 $ 69,468
III-B 1,955 36,405
III-C 3,668 64,353
III-D 1,838 34,476
III-E 5,838 110,070
III-F 3,040 58,284
III-G 1,688 32,085
During the six months ended June 30, 1998 the following payments were made
to the General Partner or its affiliates by the Partnerships:
Direct General Administrative
Partnership and Administrative Overhead
----------- ------------------- ---------------
III-A $25,497 $138,936
III-B 13,324 72,810
III-C 23,747 128,706
III-D 13,141 68,952
III-E 46,905 220,140
III-F 21,209 116,568
III-G 11,706 64,170
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 Program.
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 June 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 six months ended June
30, 1998 include proceeds from the sale of oil and gas properties during
the six months ended June 30, 1998. These proceeds received during the
first quarter were included in the Partnerships' cash distributions paid
during May 1998, and the proceeds received during the second quarter will
be included in the Partnerships' cash distributions to be paid in August
1998. It is possible that the Partnerships' repurchase values and future
cash distributions could decline as a result of the disposition of these
properties. On the other hand, the General Partner believes there will be
beneficial operating efficiencies related to the Partnerships' remaining
properties. This is primarily due to the fact that the properties sold
generally bore a higher ratio of operating expenses as compared to
reserves than the Partnerships' remaining properties.
34
<PAGE>
During the six months ended June 30, 1998 capital expenditures incurred by
the III-C and III-D Partnerships totaled $114,444 and $58,992,
respectively. The expenditures in the III-C Partnership resulted primarily
from the successful recompletion attempt of the Hefley No. 2-37 well
located in Wheeler County, Texas, and the unsuccessful recompletion
attempt of the Denson No. 1-17 well located in Garvin County, Oklahoma.
The III-C Partnership has a 17.1% and 24.3% interest, respectively, in the
Hefley No. 2-37 and Denson No. 1-17 wells. The expenditures in the III-D
Partnership resulted primarily from the successful recompletion attempt of
the Hefley No. 2-37 well mentioned above. The III-D Partnership has a
14.3% interest in the Hefley No. 2-37 well. These recompletions were
attempted in order to improve the recovery of reserves.
RESULTS OF OPERATIONS
- ---------------------
GENERAL DISCUSSION
The following general discussion should be read in conjunction with the
analysis of results of operations provided below. The most important
variable affecting the Partnerships' revenues is the prices received for
the sale of oil and gas. Predicting future prices is very difficult.
Substantially all of the Partnerships' gas reserves are being sold 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 JUNE 30, 1998 AS COMPARED TO THE THREE MONTHS ENDED
JUNE 30, 1997.
Three Months Ended June 30,
---------------------------
1998 1997
-------- --------
Oil and gas sales $528,972 $850,857
Oil and gas production expenses $175,815 $207,500
Barrels produced 9,156 10,493
Mcf produced 186,967 274,541
Average price/Bbl $ 12.26 $ 18.88
Average price/Mcf $ 2.23 $ 2.38
As shown in the table above, total oil and gas sales decreased $321,885
(37.8%) for the three months ended June 30, 1998 as compared to the three
months ended June 30, 1997. Of this decrease, approximately $61,000 was
related to a decrease in the average price of oil sold and $208,000 was
related to a decrease in the volumes of gas sold. Volumes of oil and gas
sold decreased 1,337 barrels and 87,574 Mcf, respectively, for the three
months ended June 30, 1998 as compared to the three months ended June 30,
1997. The decrease in volumes of oil sold resulted primarily from normal
declines in production due to diminished reserves on two significant wells
during the three months ended June 30, 1998. The decrease in the volume of
gas sold resulted primarily from (i) normal declines in production due to
diminished reserves on several wells during the three months ended June
30, 1998, (ii) the sale of several wells during 1997, and (iii) positive
prior period volume adjustments made by a purchaser on one significant
well during the three months ended June 30, 1997. Average oil and gas
prices decreased to $12.26 per barrel and $2.23 per Mcf, respectively, for
the three months ended June 30, 1998 from $18.88 per barrel and $2.38 per
Mcf, respectively, for the three months ended June 30, 1997.
Oil and gas production expenses (including lease operating expenses and
production taxes) decreased $31,685 (15.3%) for the three months ended
June 30, 1998 as compared to the three months ended June 30, 1997. This
decrease resulted primarily from a decrease in production taxes associated
with the decrease in oil and gas sales and a decrease in lease operating
expenses associated with the decrease in volumes of oil and gas sold.
These decreases were partially offset by (i) an increase in general repair
and maintenance expenses on several wells during the three months ended
June 30, 1998 as compared to the three months ended June 30, 1997 and (ii)
positive prior period ad valorem tax adjustments on several wells during
the three months ended June 30, 1998.
36
<PAGE>
As a percentage of oil and gas sales, these expenses increased to 33.2%
for the three months ended June 30, 1998 from 24.4% for the three months
ended June 30, 1997. This percentage increase was primarily due to the
decreases in the average prices of oil and gas sold during the three
months ended June 30, 1998 as compared to the three months ended June 30,
1997 and the factors discussed above which partially offset the decrease
in oil and gas production expenses.
Depreciation, depletion, and amortization of oil and gas properties
decreased $109,570 (46.2%) for the three months ended June 30, 1998 as
compared to the three months ended June 30,1997. This decrease resulted
primarily from (i) the decreases in volumes of oil and gas sold during the
three months ended June 30, 1998 as compared to the three months ended
June 30, 1997 and (ii) upward revisions in the estimates of remaining oil
and gas reserves at December 31, 1997. As a percentage of oil and gas
sales, this expense decreased to 24.2% for the three months ended June 30,
1998 from 27.9% for the three months ended June 30, 1997. This percentage
decrease was primarily related to the upward revisions in the estimates of
remaining oil and gas reserves discussed above.
General and administrative expenses decreased $11,081 (13.1%) for the
three months ended June 30, 1998 as compared to the three months ended
June 30, 1997. This decrease resulted primarily from a decrease in
professional fees during the three months ended June 30, 1998 as compared
to the three months ended June 30, 1997. As a percentage of oil and gas
sales, these expenses increased to 13.9% for the three months ended June
30, 1998 from 9.9% for the three months ended June 30, 1997. This
percentage increase was primarily due to the decrease in oil and gas sales
discussed above.
SIX MONTHS ENDED JUNE 30, 1998 AS COMPARED TO THE SIX MONTHS ENDED JUNE
30, 1997.
Six Months Ended June 30,
---------------------------
1998 1997
---------- ----------
Oil and gas sales $1,145,173 $1,866,601
Oil and gas production expenses $ 299,591 $ 410,227
Barrels produced 19,117 21,627
Mcf produced 398,938 560,309
Average price/Bbl $ 13.46 $ 20.35
Average price/Mcf $ 2.23 $ 2.55
As shown in the table above, total oil and gas sales decreased $721,428
(38.6%) for the six months ended June 30, 1998 as compared to the six
months ended June 30, 1997. Of
37
<PAGE>
this decrease, approximately $411,000 was related to a decrease in the
volumes of gas sold and approximately $132,000 and $128,000, respectively,
were related to decreases in the average prices of oil and gas sold.
Volumes of oil and gas sold decreased 2,510 barrels and 161,371 Mcf,
respectively, for the six months ended June 30, 1998 as compared to the
six months ended June 30, 1997. The decreases in the volumes of oil sold
resulted primarily from normal declines in production due to diminished
reserves on two significant wells during the six months ended June 30,
1998. The decreases in the volumes of gas sold resulted primarily from (i)
normal declines in production due to diminished reserves on several wells
during the six months ended June 30, 1998 and (ii) the sale of several
wells during 1997. Average oil and gas prices decreased to $13.46 per
barrel and $2.23 per Mcf, respectively, for the six months ended June 30,
1998 from $20.35 per barrel and $2.55 per Mcf, respectively, for the six
months ended June 30, 1997.
Oil and gas production expenses (including lease operating expenses and
production taxes) decreased $110,636 (27.0%) for the six months ended June
30, 1998 as compared to the six months ended June 30, 1997. This decrease
resulted primarily from a decrease in both production taxes associated
with the decrease in oil and gas sales and lease operating expenses
associated with the decreases in volumes of oil and gas sold during the
six months ended June 30, 1998 as compared to the six months ended June
30, 1997. As a percentage of oil and gas sales, these expenses increased
to 26.2% for the six months ended June 30, 1998 from 22.0% for the six
months ended June 30, 1997. This percentage increase was primarily due to
the decreases in the average prices of oil and gas sold during the six
months ended June 30, 1998 as compared to the six months ended June 30,
1997.
Depreciation, depletion, and amortization of oil and gas properties
decreased $213,977 (44.1%) for the six months ended June 30, 1998 as
compared to the six months ended June 30, 1997. This decrease resulted
primarily from (i) the decrease in volumes of oil and gas sold during the
six months ended June 30, 1998 as compared to the six months ended June
30, 1997 and (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 23.7% for the six months ended June 30, 1998
from 26.0% for the six months ended June 30, 1997. This percentage
decrease was primarily due to the upward revisions in the estimates of
remaining oil and gas reserves discussed above.
38
<PAGE>
The III-A Partnership recognized a non-cash charge against earnings of
$1,617,006 during the six months ended June 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 June 30,
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
and provisions in the III-A Partnership's partnership agreement which
limit the level of permissible drilling activity. No similar charges were
necessary during the six months ended June 30, 1998.
General and administrative expenses remained relatively constant for the
six months ended June 30, 1998 as compared to the six months ended June
30, 1997. As a percentage of oil and gas sales, these expenses increased
to 14.4% for the six months ended June 30, 1998 from 8.8% for the six
months ended June 30, 1997. This percentage increase was primarily due to
the decrease in oil and gas sales discussed above.
The Limited Partners have received cash distributions through June 30,
1998 totaling $24,585,701 or 93.14% of Limited Partners' capital
contributions.
III-B PARTNERSHIP
THREE MONTHS ENDED JUNE 30, 1998 AS COMPARED TO THE THREE MONTHS ENDED
JUNE 30, 1997.
Three Months Ended June 30,
---------------------------
1998 1997
-------- --------
Oil and gas sales $304,200 $501,249
Oil and gas production expenses $113,025 $115,528
Barrels produced 8,637 9,601
Mcf produced 91,166 138,193
Average price/Bbl $ 12.68 $ 19.08
Average price/Mcf $ 2.14 $ 2.30
As shown in the table above, total oil and gas sales decreased $197,049
(39.3%) for the three months ended June 30, 1998 as compared to the three
months ended June 30, 1997. Of this decrease, approximately $108,000 was
related to a decrease in volumes of 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 964 barrels and 47,027 Mcf, respectively, for the three
months ended June 30, 1998 as compared to the three months ended June 30,
1997. The decrease in volumes of oil sold resulted
39
<PAGE>
primarily from normal declines in production due to diminished reserves on
three significant wells during the three months ended June 30, 1998. The
decrease in volumes of gas sold resulted primarily from (i) normal
declines in production due to diminished reserves on several wells during
the three months ended June 30, 1998, (ii) the sale of several wells in
1997, and (iii) positive prior period volume adjustments made by a
purchaser on one significant well during the three months ended June 30,
1997. Average oil and gas prices decreased to $12.68 per barrel and $2.14
per Mcf, respectively, for the three months ended June 30, 1998 from
$19.08 per barrel and $2.30 per Mcf, respectively, for the three months
ended June 30, 1997.
Oil and gas production expenses (including lease operating expenses and
production taxes) decreased $2,503 (2.2%) for the three months ended June
30, 1998 as compared to the three months ended June 30, 1997. This
decrease resulted primarily from a decrease in both production taxes
associated with the decrease in oil and gas sales and lease operating
expenses associated with the decrease in volumes of oil and gas sold.
These decreases were partially offset by (i) an increase in general repair
and maintenance expenses on several wells during the three months ended
June 30, 1998 as compared to the three months ended June 30, 1997 and (ii)
positive prior period ad valorem tax adjustments on several wells during
the three months ended June 30, 1998. As a percentage of oil and gas
sales, these expenses increased to 37.2% for the three months ended June
30, 1998 from 23.0% for the three months ended June 30, 1997. This
percentage increase was primarily due to the decreases in the average
prices of oil and gas sold for the three months ended June 30, 1998 as
compared to the three months ended June 30, 1997.
Depreciation, depletion, and amortization of oil and gas properties
decreased $60,859 (44.6%) for the three months ended June 30, 1998 as
compared to the three months ended June 30, 1997. This decrease resulted
primarily from (i) the decreases in volumes of oil and gas sold during the
three months ended June 30, 1998 as compared to the three months ended
June 30, 1997 and (ii) upward revisions in the estimates of remaining oil
and gas reserves at December 31, 1997. As a percentage of oil and gas
sales, this expense decreased to 24.8% for the three months ended June 30,
1998 from 27.2% for the three months ended June 30, 1997. The percentage
decrease was primarily due to the upward revisions in the estimates of
remaining oil and gas reserves discussed above.
40
<PAGE>
General and administrative expenses decreased $5,860 (13.3%) for the three
months ended June 30, 1998 as compared to the three months ended June 30,
1997. This decrease resulted primarily from a decrease in professional
fees during the three months ended June 30, 1998 as compared to the three
months ended June 30, 1997. As a percentage of oil and gas sales, these
expenses increased to 12.6% for the three months ended June 30, 1998 from
8.8% for the three months ended June 30, 1997. This percentage increase
was primarily due to the decrease in oil and gas sales discussed above.
SIX MONTHS ENDED JUNE 30, 1998 AS COMPARED TO THE SIX MONTHS ENDED JUNE
30, 1997.
Six Months Ended June 30,
--------------------------
1998 1997
-------- ----------
Oil and gas sales $690,483 $1,094,356
Oil and gas production expenses $184,685 $ 243,812
Barrels produced 18,645 19,258
Mcf produced 197,037 280,208
Average price/Bbl $ 13.88 $ 20.45
Average price/Mcf $ 2.19 $ 2.50
As shown in the table above, total oil and gas sales decreased $403,873
(36.9%) for the six months ended June 30, 1998 as compared to the six
months ended June 30, 1997. Of this decrease, approximately $208,000 was
related to a decrease in volumes of gas sold and approximately $123,000
and $61,000, respectively, were related to decreases in the average prices
of oil and gas sold. Volumes of oil and gas sold decreased 613 barrels and
83,171 Mcf, respectively, for the six months ended June 30, 1998 as
compared to the six months ended June 30, 1997. The decrease in volumes of
gas sold resulted primarily from (i) normal declines in production due to
diminished reserves on several wells during the six months ended June 30,
1998, (ii) the sale of several wells in 1997, and (iii) positive prior
period volume adjustments made by a purchaser on one significant well
during the six months ended June 30, 1997. Average oil and gas prices
decreased to $13.88 per barrel and $2.19 per Mcf, respectively, for the
six months ended June 30, 1998 from $20.45 per barrel and $2.50 per Mcf,
respectively, for the six months ended June 30, 1997.
41
<PAGE>
Oil and gas production expenses (including lease operating expenses and
production taxes) decreased $59,127 (24.3%) for the six months ended June
30, 1998 as compared to the six months ended June 30, 1997. This decrease
resulted primarily from (i) a decrease in production taxes associated with
the decrease in oil and gas sales discussed above, (ii) the sale of
several wells in 1997, and (iii) the refund of prior period lease
operating expenses by the operator on one significant well during the six
months ended June 30, 1998. As a percentage of oil and gas sales, these
expenses increased to 26.7% for the six months ended June 30, 1998 from
22.3% for the six months ended June 30, 1997. This percentage increase was
primarily due to the decreases in the average prices of oil and gas sold
for the six months ended June 30, 1998 as compared to the six months ended
June 30, 1997.
Depreciation, depletion, and amortization of oil and gas properties
decreased $112,502 (40.8%) for the six months ended June 30, 1998 as
compared to the six months ended June 30, 1997. This decrease resulted
primarily from (i) the decrease in volumes of oil and gas sold during the
six months ended June 30, 1998 as compared to the six months ended June
30, 1997 and (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 23.6% for the six months ended June 30, 1998
from 25.2% for the six months ended June 30, 1997.
The III-B Partnership recognized a non-cash charge against earnings of
$738,122 during the six months ended June 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 six months ended June 30, 1998.
General and administrative expenses remained relatively constant for the
six months ended June 30, 1998 as compared to the six months ended June
30, 1997. As a percentage of oil and gas sales, these expenses increased
to 12.5% for the six months ended June 30, 1998 from 7.9% for the six
months ended June 30, 1997. This percentage increase was primarily due to
the decrease in oil and gas sales discussed above.
42
<PAGE>
The Limited Partners have received cash distributions through June 30,
1998 totaling $14,338,353 or 103.65% of Limited Partners' capital
contributions.
III-C PARTNERSHIP
THREE MONTHS ENDED JUNE 30, 1998 AS COMPARED TO THE THREE MONTHS ENDED
JUNE 30, 1997.
Three Months Ended June 30,
---------------------------
1998 1997
-------- --------
Oil and gas sales $553,291 $658,254
Oil and gas production expenses $175,783 $155,551
Barrels produced 5,887 6,448
Mcf produced 278,152 268,585
Average price/Bbl $ 13.01 $ 20.11
Average price/Mcf $ 1.71 $ 1.97
As shown in the table above, total oil and gas sales decreased $104,963
(15.9%) for the three months ended June 30, 1998 as compared to the three
months ended June 30, 1997. Of this decrease, approximately $42,000 and
$71,000, respectively, were related to decreases in the average prices of
oil and gas sold and approximately $11,000 was related to a decrease in
the volumes of oil sold. These decreases were partially offset by an
increase of approximately $19,000 due to an increase in the volumes of gas
sold. Volumes of oil sold decreased 561 barrels, while volumes of gas sold
increased 9,567 Mcf for the three months ended June 30, 1998 as compared
to the three months ended June 30, 1997. Average oil and gas prices
decreased to $13.01 per barrel and $1.71 per Mcf, respectively, for the
three months ended June 30, 1998 from $20.11 per barrel and $1.97 per Mcf,
respectively, for the three months ended June 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 June 30, 1998 and recognized a $238,632 gain on such sales. Similar
sales during the three months ended June 30, 1997 resulted in the III-C
Partnership recognizing similar gains totaling $59,929.
Oil and gas production expenses (including lease operating expenses and
production taxes) increased $20,232 (13.0%) for the three months ended
June 30, 1998 as compared to the three months ended June 30, 1997. This
increase resulted primarily from (i) an increase in general repair and
maintenance expenses on one significant well during the three months ended
June 30, 1998 and (ii) positive prior period ad valorem tax adjustments on
several wells during the three months ended June 30, 1998. As a percentage
of
43
<PAGE>
oil and gas sales, these expenses increased to 31.8% for the three months
ended June 30, 1998 from 23.6% for the three months ended June 30, 1997.
This percentage increase was primarily due to the dollar increase in oil
and gas production expenses discussed above and decreases in the average
prices of oil and gas sold for the three months ended June 30, 1998 as
compared to the three months ended June 30, 1997.
Depreciation, depletion, and amortization of oil and gas properties
decreased $36,059 (19.9%) for the three months ended June 30, 1998 as
compared to the three months ended June 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 26.2% for the three months ended June 30, 1998 from
27.5% for the three months ended June 30, 1997.
General and administrative expenses decreased $9,276 (12.0%) for the three
months ended June 30, 1998 as compared to the three months ended June 30,
1997. This decrease resulted primarily from a decrease in professional
fees during the three months ended June 30, 1998 as compared to the three
months ended June 30, 1997. As a percentage of oil and gas sales, these
expenses increased to 12.3% for the three months ended June 30, 1998 from
11.7% for the three months ended June 30, 1997.
SIX MONTHS ENDED JUNE 30, 1998 AS COMPARED TO THE SIX MONTHS ENDED JUNE
30, 1997.
Six Months Ended June 30,
---------------------------
1998 1997
---------- ----------
Oil and gas sales $1,234,156 $1,600,086
Oil and gas production expenses $ 329,412 $ 372,887
Barrels produced 12,794 13,182
Mcf produced 535,813 579,067
Average price/Bbl $ 14.55 $ 20.79
Average price/Mcf $ 1.96 $ 2.29
As shown in the above table, total oil and gas sales decreased $365,930
(22.9%) for the six months ended June 30, 1998 as compared to the six
months ended June 30, 1997. Of this decrease, approximately $80,000 and
$177,000, respectively, were related to decreases in the average prices of
oil and gas sold and approximately $99,000 was related to a decrease in
the volumes of gas sold. Volumes of oil and gas sold decreased 388 barrels
and 43,254 Mcf, respectively, for the six months ended June 30, 1998 as
compared to the six months ended June 30, 1997. Average oil and gas prices
decreased to $14.55 per barrel and $1.96 per
44
<PAGE>
Mcf, respectively, for the six months ended June 30, 1998 from $20.79 per
barrel and $2.29 per Mcf, respectively, for the six months ended June 30,
1997.
As discussed in Liquidity and Capital Resources above, the III-C
Partnership sold certain oil and gas properties during the six months
ended June 30, 1998 and recognized a $405,333 gain on such sales. Similar
sales during the six months ended June 30, 1997 resulted in the III-C
Partnership recognizing similar gains totaling $55,672.
Oil and gas production expenses (including lease operating expenses and
production taxes) decreased $43,475 (11.7%) for the six months ended June
30, 1998 as compared to the six months ended June 30, 1997. This decrease
resulted primarily from a decrease in both production taxes associated
with the decrease in oil and gas sales and lease operating expenses
associated with the decreases in volumes of oil and gas sold during the
six months ended June 30, 1998 as compared to the six months ended June
30, 1997. As a percentage of oil and gas sales, these expenses increased
to 26.7% for the six months ended June 30, 1998 from 23.3% for the six
months ended June 30, 1997. This percentage increase was primarily due to
the decreases in the average prices of oil and gas sold for the six months
ended June 30, 1998 as compared to the six months ended June 30, 1997.
Depreciation, depletion, and amortization of oil and gas properties
decreased $104,410 (27.0%) for the six months ended June 30, 1998 as
compared to the six months ended June 30, 1997. This decrease resulted
primarily from upward revisions in the estimates of remaining oil and gas
reserves at December 31, 1997 and decreases in volumes of oil and gas sold
during the six months ended June 30, 1998 as compared to the six months
ended June 30, 1997. As a percentage of oil and gas sales, this expense
decreased to 22.9% for the six months ended June 30, 1998 from 24.2% for
the six months ended June 30, 1997.
The III-C Partnership recognized a non-cash charge against earnings of
$1,696,417 during the six months ended June 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 six months ended June 30, 1998.
45
<PAGE>
General and administrative expenses decreased $5,518 (3.5%) for the six
months ended June 30, 1998 as compared to the six months ended June 30,
1997. As a percentage of oil and gas sales, this expense increased to
12.4% for the six months ended June 30, 1998 from 9.9% for the six months
ended June 30, 1997. This percentage increase was primarily due to the
decrease in oil and gas sales discussed above.
The Limited Partners have received cash distributions through June 30,
1998 totaling $16,293,795 or 66.63% of Limited Partners' capital
contributions.
III-D PARTNERSHIP
THREE MONTHS ENDED JUNE 30, 1998 AS COMPARED TO THE THREE MONTHS ENDED
JUNE 30, 1997.
Three Months Ended June 30,
---------------------------
1998 1997
-------- --------
Oil and gas sales $434,401 $490,474
Oil and gas production expenses $160,401 $179,694
Barrels produced 8,409 9,513
Mcf produced 191,222 176,235
Average price/Bbl $ 11.29 $ 18.85
Average price/Mcf $ 1.78 $ 1.77
As shown in the table above, total oil and gas sales decreased $56,073
(11.4%) for the three months ended June 30, 1998 as compared to the three
months ended June 30, 1997. Of this decrease, approximately $21,000 was
related to a decrease in the volumes of oil sold and approximately $64,000
was related to a decrease in the average price of oil sold, which
decreases were partially offset by an increase of approximately $27,000
related to an increase in the volumes of gas sold. Volumes of oil sold
decreased 1,104 barrels, while volumes of gas sold increased 14,987 Mcf
for the three months ended June 30, 1998 as compared to the three months
ended June 30, 1997. The decrease in the volumes of oil sold resulted
primarily from normal declines in production due to diminished reserves on
several wells during the three months ended June 30, 1998 as compared to
the three months ended June 30, 1997. Average oil prices decreased to
$11.29 per barrel for the three months ended June 30, 1998 from $18.85 per
barrel for the three months ended June 30, 1997. Average gas prices
remained relatively constant at $1.78 per Mcf for the three months ended
June 30, 1998 and $1.77 per Mcf for the three months ended June 30, 1997.
46
<PAGE>
As discussed in Liquidity and Capital Resources above, the III-D
Partnership sold certain oil and gas properties during the three months
ended June 30, 1998 and recognized a $34,618 gain on such sales. Similar
sales during the three months ended June 30, 1997 resulted in the III-D
Partnership recognizing similar gains totaling $18,488.
Oil and gas production expenses (including lease operating expenses and
production taxes) decreased $19,293 (10.7%) for the three months ended
June 30, 1998 as compared to the three months ended June 30, 1997. This
decrease resulted primarily from a decrease in production taxes associated
with the decrease in oil and gas sales discussed above and workover
expenses incurred on one significant well during the three months ended
June 30, 1997. As a percentage of oil and gas sales this expense remained
relatively constant at 36.9% for the three months ended June 30, 1998 and
36.6% for the three months ended June 30, 1997.
Depreciation, depletion, and amortization of oil and gas properties
decreased $21,698 (21.1%) for the three months ended June 30, 1998 as
compared to the three months ended June 30, 1997. This decrease resulted
primarily from an upward revision 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 18.6% for the three months ended June 30, 1998
from 20.9% for the three months ended June 30, 1997. This percentage
decrease was primarily due to the dollar decrease in depreciation,
depletion, and amortization discussed above.
General and administrative expenses decreased $5,619 (13.4%) for the three
months ended June 30, 1998 as compared to the three months ended June 30,
1997. This decrease resulted primarily from a decrease in professional
fees during the three months ended June 30, 1998 as compared to the three
months ended June 30, 1997. As a percentage of oil and gas sales, these
expenses remained relatively constant at 8.4% for the three months ended
June 30, 1998 and 8.5% for the three months ended June 30, 1997.
47
<PAGE>
SIX MONTHS ENDED JUNE 30, 1998 AS COMPARED TO THE SIX MONTHS ENDED JUNE
30, 1997.
Six Months Ended June 30,
-------------------------
1998 1997
-------- ----------
Oil and gas sales $912,164 $1,261,524
Oil and gas production expenses $338,169 $ 414,476
Barrels produced 20,292 21,955
Mcf produced 348,599 362,492
Average price/Bbl $ 12.63 $ 20.42
Average price/Mcf $ 1.88 $ 2.24
As shown in the table above, total oil and gas sales decreased $349,360
(27.7%) for the six months ended June 30, 1998 as compared to the six
months ended June 30, 1997. Of this decrease, approximately $158,000 and
$126,000, respectively, were related to decreases in the average prices of
oil and gas sold, and approximately $34,000 and $31,000, respectively,
were related to decreases in volumes of oil and gas sold. Volumes of oil
and gas sold decreased 1,663 barrels and 13,893 Mcf, respectively, for the
six months ended June 30, 1998 as compared to the six months ended June
30, 1997. Average oil and gas prices decreased to $12.63 per barrel and
$1.88 per Mcf, respectively, for the six months ended June 30, 1998 from
$20.42 per barrel and $2.24 per Mcf, respectively, for the six months
ended June 30, 1997.
As discussed in Liquidity and Capital Resources above, the III-D
Partnership sold certain oil and gas properties during the six months
ended June 30, 1998 and recognized a $58,772 gain on such sales. Similar
sales during the six months ended June 30, 1997 resulted in the III-D
Partnership recognizing similar gains totaling $20,468.
Oil and gas production expenses (including lease operating expenses and
production taxes) decreased $74,307 (18.4%) for the six months ended June
30, 1998 as compared to the six months ended June 30, 1997. This decrease
resulted primarily from a decrease in production taxes associated with the
decrease in oil and gas sales discussed above and workover expenses
incurred on one well during the six months ended June 30, 1997. As a
percentage of oil and gas sales, these expenses increased to 37.1% for the
six months ended June 30, 1998 from 32.9% for the six months ended June
30, 1997. This percentage increase was primarily due to the decreases in
the average prices of oil and gas sold during the six months ended June
30, 1998 as compared to six months ended June 30, 1997.
48
<PAGE>
Depreciation, depletion, and amortization of oil and gas properties
decreased $59,889 (27.5%) for the six months ended June 30, 1998 as
compared to the six months ended June 30, 1997. This decrease resulted
primarily from 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 17.3% for the six months ended
June 30, 1998 and 17.2% for the six months ended June 30, 1997.
The III-D Partnership recognized a non-cash charge against earnings of
$932,243 during the six months ended June 30, 1997. Of this amount,
$485,820 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
$446,423 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-D Partnership's partnership agreement which
limit the level of permissible drilling activity. No similar charges were
necessary during the six months ended June 30, 1998.
General and administrative expenses decreased $3,184 (3.7%) for the six
months ended June 30, 1998 as compared to the six months ended June 30,
1997. As a percentage of oil and gas sales, these expenses increased to
9.0% for the six months ended June 30, 1998 from 6.8% for the six months
ended June 30, 1997. This percentage increase was primarily due to the
decrease in oil and gas sales discussed above.
The Limited Partners have received cash distributions through June 30,
1998 totaling $8,036,669 or 61.34% of Limited Partners' capital
contributions.
49
<PAGE>
III-E PARTNERSHIP
THREE MONTHS ENDED JUNE 30, 1998 AS COMPARED TO THE THREE MONTHS ENDED
JUNE 30, 1997.
Three Months Ended June 30,
---------------------------
1998 1997
---------- ----------
Oil and gas sales $1,848,422 $2,106,131
Oil and gas production expenses $ 924,126 $1,025,382
Barrels produced 55,248 53,422
Mcf produced 608,497 585,780
Average price/Bbl $ 11.07 $ 18.22
Average price/Mcf $ 2.03 $ 1.93
As shown in the table above, total oil and gas sales decreased $257,709
(12.2%) for the three months ended June 30, 1998 as compared to the three
months ended June 30, 1997. Of this decrease, approximately $395,000 was
related to a decrease in the average price of oil sold. This decrease was
partially offset by increases of approximately $33,000 and $ 44,000,
respectively, related to increases in volumes of oil and gas sold and
approximately $61,000 related to an increase in the average price of gas
sold. Volumes of oil and gas sold increased 1,826 barrels and 22,717 Mcf,
respectively, for the three months ended June 30, 1998 as compared to the
three months ended June 30, 1997. The increase in volumes of oil sold
resulted primarily from positive prior period volume adjustments made by a
purchaser on one significant well during the three months ended June 30,
1998. This increase in volumes of oil sold was partially offset by
decreases which resulted primarily from normal declines in production due
to diminished reserves on several wells. The increase in volumes of gas
sold resulted primarily from positive prior period volume adjustments made
by purchasers on three significant wells during the three months ended
June 30, 1998. This increase in volumes of gas sold was partially offset
by decreases which resulted primarily from normal declines in production
due to diminished reserves on several wells and positive prior period
volume adjustments made by a purchaser on one significant well during the
three months ended June 30, 1997. The average oil price decreased to
$11.07 per barrel for the three months ended June 30, 1998 from $18.22 per
barrel for the three months ended June 30, 1997. The average gas price
increased to $2.03 per Mcf for the three months ended June 30, 1998 from
$1.93 per Mcf for the three months ended June 30, 1997.
50
<PAGE>
Oil and gas production expenses (including lease operating expenses and
production taxes) decreased $101,256 (9.9%) for the three months ended
June 30, 1998 as compared to the three months ended June 30, 1997. This
decrease resulted primarily from a decrease in lease operating expenses
associated with the decrease in volumes of oil and gas sold and workover
expenses incurred on one well during the three months ended June 30, 1997
in order to improve the recovery of reserves. As a percentage of oil and
gas sales, these expenses increased to 50.0% for the three months ended
June 30, 1998 from 48.7% for the three months ended June 30, 1997.
Depreciation, depletion, and amortization of oil and gas properties
decreased $130,933 (29.8%) for the three months ended June 30, 1998 as
compared to the three months ended June 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 16.7% for the three months ended June 30, 1998 as
compared to 20.9% for the three months ended June 30, 1997. This
percentage decrease was primarily due to the dollar decrease in
depreciation, depletion, and amortization discussed above.
General and administrative expenses decreased $18,201 (13.6%) for the
three months ended June 30, 1998 as compared to the three months ended
June 30, 1997. This decrease resulted primarily from a decrease in
professional fees during the three months ended June 30, 1998 as compared
to the three months ended June 30, 1997. As a percentage of oil and gas
sales, these expenses remained relatively constant at 6.3% for the three
months ended June 30, 1998 and 6.4% for the three months ended June 30,
1997.
SIX MONTHS ENDED JUNE 30, 1998 AS COMPARED TO THE SIX MONTHS ENDED JUNE
30, 1997.
Six Months Ended June 30,
---------------------------
1998 1997
---------- ----------
Oil and gas sales $3,621,740 $5,036,109
Oil and gas production expenses $1,771,568 $2,157,837
Barrels produced 119,944 127,241
Mcf produced 1,121,898 1,153,345
Average price/Bbl $ 12.24 $ 20.22
Average price/Mcf $ 1.92 $ 2.14
As shown in the table above, total oil and gas sales decreased $1,414,369
(28.1%) for the six months ended June 30, 1998 as compared to the six
months ended June 30, 1997. Of this decrease, approximately $148,000 was
related to a decrease in volumes of gas sold and approximately $957,000
51
<PAGE>
and $247,000, respectively, were related to decreases in the average
prices of oil and gas sold. Volumes of oil and gas sold decreased 7,297
barrels and 31,447 Mcf, respectively, for the six months ended June 30,
1998 as compared to the six months ended June 30, 1997. The decrease in
volumes of gas sold was primarily a result of normal declines in
production due to diminished reserves on several wells and positive prior
period volume adjustments made by a purchaser on one significant well
during the six months ended June 30, 1997. These decreases were partially
offset by positive prior period volume adjustments made by purchasers on
three significant wells during the six months ended June 30, 1998. Average
oil and gas prices decreased to $12.24 per barrel and $1.92 per Mcf,
respectively, for the six months ended June 30, 1998 from $20.22 per
barrel and $2.14 per Mcf, respectively, for the six months ended June 30,
1997.
Oil and gas production expenses (including lease operating expenses and
production taxes) decreased $386,249 (17.9%) for the six months ended June
30, 1998 as compared to the six months ended June 30, 1997. This decrease
resulted primarily from (i) a decrease in production taxes associated with
the decrease in oil and gas sales, (ii) a decrease in lease operating
expenses associated with the decreases in volumes of oil and gas sold,
(iii) workover expenses incurred on three significant wells during the six
months ended June 30, 1997 in order to improve the recovery of reserves,
and (iv) the shutting-in of one significant well during the six months
ended June 30, 1998. As a percentage of oil and gas sales, these expenses
increased to 48.9% for the six months ended June 30, 1998 from 42.8% for
the six months ended June 30, 1997. This percentage increase was primarily
due to the decreases in the average prices of oil and gas sold during the
six months ended June 30, 1998 as compared to the six months ended June
30, 1997.
Depreciation, depletion, and amortization of oil and gas properties
decreased $324,997 (35.0%) for the six months ended June 30, 1998 as
compared to the six months ended June 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 16.7% for the six months ended June 30, 1998 from
18.5% for the six months ended June 30, 1997.
52
<PAGE>
The III-E Partnership recognized a non-cash charge against earnings of
$2,893,438 during the six months ended June 30, 1997. Of this amount,
$2,042,775 was related to the decline in oil and gas prices used to
determine the recoverability of proved oil and gas reserves at June 30,
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 six months ended June 30, 1998.
General and administrative expenses increased $4,109 (1.5%) for the six
months ended June 30, 1998 as compared to the six months ended June 30,
1997. As a percentage of oil and gas sales, these expenses increased to
7.4% for the six months ended June 30, 1998 from 5.4% for the six months
ended June 30, 1997. This percentage increase was primarily due to the
decrease in oil and gas sales discussed above.
The Limited Partners have received cash distributions through June 30,
1998 totaling $28,762,016 or 68.76% of Limited Partners' capital
contributions.
III-F PARTNERSHIP
THREE MONTHS ENDED JUNE 30, 1998 AS COMPARED TO THE THREE MONTHS ENDED
JUNE 30, 1997.
Three Months Ended June 30,
---------------------------
1998 1997
-------- --------
Oil and gas sales $570,778 $691,158
Oil and gas production expenses $370,221 $285,718
Barrels produced 15,011 18,583
Mcf produced 234,242 223,129
Average price/Bbl $ 12.14 $ 18.86
Average price/Mcf $ 1.66 $ 1.53
As shown in the table above, total oil and gas sales decreased $120,380
(17.4%) for the three months ended June 30, 1998 as compared to the three
months ended June 30, 1997. Of this decrease, approximately $67,000 and
$101,000, respectively, were related to decreases in the volumes and
average prices of oil sold, which decreases were partially offset by
increases of approximately $17,000 and $31,000, respectively, related to
increases in the volumes and average prices of gas sold. Volumes of oil
sold decreased by 3,572 barrels while volumes of gas sold increased 11,113
Mcf for
53
<PAGE>
the three months ended June 30, 1998 as compared to the three months ended
June 30, 1997. The decrease in volumes of oil sold resulted primarily from
(i) a positive prior period volume adjustment by a purchaser on one
significant well during the three months ended June 30, 1997, (ii) the
normal decline in production on one significant well due to diminished
reserves during the three months ended June 30, 1998, and (iii) the sale
of one significant well in 1997. Average oil prices decreased to $12.14
per barrel for the three months ended June 30, 1998 from $18.86 per barrel
for the three months ended June 30, 1997. Average gas prices increased to
$1.66 per Mcf for the three months ended June 30, 1998 from $1.53 per Mcf
for the three months ended June 30, 1997.
Oil and gas production expenses (including lease operating expenses and
production taxes) increased $84,503 (29.6%) for the three months ended
June 30, 1998 as compared to the three months ended June 30, 1997. This
increase resulted primarily from (i) workover expenses incurred on two
significant wells during the three months ended June 30, 1998 in order to
increase the recovery of reserves, (ii) increased general repair and
maintenance expenses on one significant well during the three months ended
June 30, 1998, and (iii) abandonment expenses on one significant well
during the three months ended June 30, 1998. As a percentage of oil and
gas sales, these expenses increased to 64.9% for the three months ended
June 30, 1998 from 41.3% for the three months ended June 30, 1997. This
percentage increase was primarily due to the decrease in the average price
of oil sold during the three months ended June 30, 1998 as compared to the
three months ended June 30, 1997 and the dollar increase in oil and gas
production expenses discussed above.
Depreciation, depletion, and amortization of oil and gas properties
decreased $106,498 (40.5%) for the three months ended June 30, 1998 as
compared to the three months ended June 30, 1997. This decrease resulted
primarily from (i) the decrease in volumes of oil sold during the three
months ended June 30, 1998 as compared to the three months ended June 30,
1997 and (ii) an upward revision in the estimate of remaining gas reserves
at December 31, 1997. As a percentage of oil and gas sales, this expense
decreased to 27.5% for the three months ended June 30, 1998 from 38.1% for
the three months ended June 30, 1997. This percentage decrease resulted
primarily from the dollar decrease in depreciation, depletion, and
amortization discussed above.
54
<PAGE>
General and administrative expenses decreased $9,658 (13.6%) for the three
months ended June 30, 1998 as compared to the three months ended June 30,
1997. This decrease resulted primarily from a decrease in professional
fees for the three months ended June 30, 1998 as compared to the three
months ended June 30, 1997. As a percentage of oil and gas sales, these
expenses remained relatively constant at 10.7% for the three months ended
June 30, 1998 and 10.3% for the three months ended June 30, 1997.
SIX MONTHS ENDED JUNE 30, 1998 AS COMPARED TO THE SIX MONTHS ENDED JUNE
30, 1997.
Six Months Ended June 30,
-------------------------
1998 1997
---------- ----------
Oil and gas sales $1,235,009 $1,625,145
Oil and gas production expenses $ 659,701 $ 617,406
Barrels produced 30,973 34,978
Mcf produced 443,012 470,113
Average price/Bbl $ 13.70 $ 19.92
Average price/Mcf $ 1.83 $ 1.98
As shown in the table above, total oil and gas sales decreased $390,136
(24.0%) for the six months ended June 30, 1998 as compared to the six
months ended June 30, 1997. Of this decrease, approximately $80,000 and
$54,000, respectively, were related to decreases in volumes of oil and gas
sold and approximately $192,000 and $64,000, respectively, were related to
decreases in the average prices of oil and gas sold. Volumes of oil and
gas sold decreased 4,005 barrels and 27,101 Mcf, respectively, for the six
months ended June 30, 1998 as compared to the six months ended June 30,
1997. The decrease in volumes of oil sold resulted primarily from (i) a
positive prior period volume adjustment by a purchaser during the six
months ended June 30, 1997 on one significant well, (ii) the normal
decline in production on one significant well due to diminished reserves
during the six months ended June 30, 1998 as compared to the six months
ended June 30, 1997, and (iii) the shutting-in of one significant well
during a portion of the six months ended June 30, 1998 in order to perform
a workover to improve the recovery of reserves. Average oil and gas prices
decreased to $13.70 per barrel and $1.83 per Mcf, respectively, for the
six months ended June 30, 1998 from $19.92 per barrel and $1.98 per Mcf,
respectively, for the six months ended June 30, 1997.
55
<PAGE>
As discussed in Liquidity and Capital Resources above, the III-F
Partnership sold certain oil and gas properties during the six months
ended June 30, 1998 and recognized a $28,061 gain on such sales. Similar
sales during the six months ended June 30, 1997 resulted in the III-F
Partnership recognizing similar gains totaling $233.
Oil and gas production expenses (including lease operating expenses and
production taxes) increased $42,295 (6.9%) for the six months ended June
30, 1998 as compared to the six months ended June 30, 1997. As a
percentage of oil and gas sales, these expenses increased to 53.4% for the
six months ended June 30, 1998 from 38.0% for the six months ended June
30, 1997. This percentage increase was primarily due to the decreases in
the average prices of oil and gas sold during the six months ended June
30, 1998 as compared to the six months ended June 30, 1997.
Depreciation, depletion, and amortization of oil and gas properties
decreased $230,975 (43.2%) for the six months ended June 30, 1998 as
compared to the six months ended June 30, 1997. This decrease resulted
primarily from (i) the decrease in volumes of oil and gas sold during the
six months ended June 30, 1998 as compared to the six months ended June
30, 1997 and (ii) an upward revision in the estimate of remaining gas
reserves at December 31, 1997. As a percentage of oil and gas sales, this
expense decreased to 24.6% for the six months ended June 30, 1998 from
32.9% for the six months ended June 30, 1997. This percentage decrease
resulted primarily from the dollar decrease in depreciation, depletion,
and amortization discussed above.
The III-F Partnership recognized a non-cash charge against earnings of
$2,884,405 during the six months ended June 30, 1997. Of this amount,
$2,078,019 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 $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 six months ended June 30, 1998.
56
<PAGE>
General and administrative expenses decreased $5,386 (3.8%) for the six
months ended June 30, 1998 as compared to the six months ended June 30,
1997. As a percentage of oil and gas sales, these expenses increased to
11.2% for the six months ended June 30, 1998 from 8.8% for the six months
ended June 30, 1997. This percentage increase was primarily due to the
decrease in oil and gas sales discussed above.
The Limited Partners have received cash distributions through June 30,
1998 totaling $10,729,904 or 48.45% of Limited Partners' capital
contributions.
III-G PARTNERSHIP
THREE MONTHS ENDED JUNE 30, 1998 AS COMPARED TO THE THREE MONTHS ENDED
JUNE 30, 1997.
Three Months Ended June 30,
---------------------------
1998 1997
-------- --------
Oil and gas sales $349,671 $434,013
Oil and gas production expenses $224,180 $182,425
Barrels produced 10,660 13,330
Mcf produced 128,428 117,810
Average price/Bbl $ 12.17 $ 18.99
Average price/Mcf $ 1.71 $ 1.54
As shown in the table above, total oil and gas sales decreased $84,342
(19.4%) for the three months ended June 30, 1998 as compared to the three
months ended June 30, 1997. Of this decrease, approximately $50,000 and
$73,000, respectively, were related to decreases in the volumes and
average prices of oil sold, which decreases were partially offset by
increases of approximately $16,000 and $23,000, respectively, related to
increases in the volumes and average prices of gas sold. Volumes of oil
sold decreased by 2,670 barrels while volumes of gas sold increased by
10,618 Mcf for the three months ended June 30, 1998 as compared to the
three months ended June 30, 1997. The decrease in volumes of oil sold
resulted primarily from (i) a positive prior period volume adjustment by a
purchaser during the three months ended June 30, 1997 on one significant
well, (ii) a negative prior period volume adjustment by a purchaser during
the three months ended June 30, 1998 on one significant well, and (iii)
the normal decline in production on one significant well due to diminished
reserves during the three months ended June 30, 1998. Average oil prices
decreased to $12.17 per barrel for the three months ended June 30, 1998
from $18.99 per barrel for the three months ended June 30, 1997. Average
gas prices increased to $1.71 per Mcf for the three months ended June 30,
1998 from $1.54 per Mcf for the three months ended June 30, 1997.
57
<PAGE>
As discussed in Liquidity and Capital Resources above, the III-G
Partnership sold certain oil and gas properties during the three months
ended June 30, 1998 and recognized a $1,415 gain on such sales. Similar
sales during the three months ended June 30, 1997 resulted in the III-G
Partnership recognizing similar gains totaling $4,943.
Oil and gas production expenses (including lease operating expenses and
production taxes) increased $41,755 (22.9%) for the three months ended
June 30, 1998 as compared to the three months ended June 30, 1997. This
increase resulted primarily from (i) workover expenses incurred on several
wells during the three months ended June 30, 1998 in order to increase the
recovery of reserves and (ii) an increase in general repair and
maintenance expenses on a significant salt water disposal well during the
three months ended June 30, 1998 as compared to the three months ended
June 30, 1997. As a percentage of oil and gas sales, these expenses
increased to 64.1% for the three months ended June 30, 1998 from 42.0% for
the three months ended June 30, 1997. This percentage increase was
primarily due to the decrease in the average price of oil sold during the
three months ended June 30, 1998 as compared to the three months ended
June 30, 1997 and the dollar increase in oil and gas production expenses
discussed above.
Depreciation, depletion, and amortization of oil and gas properties
decreased $51,168 (34.6%) for the three months ended June 30, 1998 as
compared to the three months ended June 30, 1997. This decrease resulted
primarily from (i) the decrease in volumes of oil sold during the three
months ended June 30, 1998 as compared to the three months ended June 30,
1997 and (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 27.6% for the three months ended June 30, 1998 from 34.0% for
the three months ended June 30, 1997. This percentage decrease resulted
primarily from the dollar decrease in depreciation, depletion, and
amortization discussed above.
General and administrative expenses decreased $5,358 (13.7%) for the three
months ended June 30, 1998 as compared to the three months ended June 30,
1997. This decrease resulted primarily from a decrease in professional
fees for the three months ended June 30, 1998 as compared to the three
months ended June 30, 1997. As a percentage of oil and gas sales, these
expenses remained relatively constant at 9.7% for the three months ended
June 30, 1998 and 9.0% for the three months ended June 30, 1997.
58
<PAGE>
SIX MONTHS ENDED JUNE 30, 1998 AS COMPARED TO THE SIX MONTHS ENDED JUNE
30, 1997.
Six Months Ended June 30,
-------------------------
1998 1997
-------- ----------
Oil and gas sales $745,490 $1,007,130
Oil and gas production expenses $413,389 $ 397,610
Barrels produced 22,016 25,390
Mcf produced 241,343 249,707
Average price/Bbl $ 13.66 $ 20.01
Average price/Mcf $ 1.84 $ 2.00
As shown in the table above, total oil and gas sales decreased $261,640
(26.0%) for the six months ended June 30, 1998 as compared to the six
months ended June 30, 1997. Of this decrease, approximately $67,000 and
$17,000, respectively, were related to decreases in volumes of oil and gas
sold and approximately $140,000 and $38,000, respectively, were related to
decreases in the average prices of oil and gas sold. Volumes of oil and
gas sold decreased 3,374 barrels and 8,364 Mcf, respectively, for the six
months ended June 30, 1998 as compared to the six months ended June 30,
1997. The decrease in volumes of oil sold resulted primarily from (i) a
positive prior period volume adjustment during the six months ended June
30, 1997 on one significant well, (ii) a negative prior period volume
adjustment by a purchaser during the six months ended June 30, 1998 on one
significant well, and (iii) the normal decline in production on one
significant well due to diminished reserves during the six months ended
June 30, 1998. Average oil and gas prices decreased to $13.66 per barrel
and $1.84 per Mcf, respectively, for the six months ended June 30, 1998
from $20.01 per barrel and $2.00 per Mcf, respectively, for the six months
ended June 30, 1997.
As discussed in Liquidity and Capital Resources above, the III-G
Partnership sold certain oil and gas properties during the six months
ended June 30, 1998 recognized a $23,189 gain on such sales. Similar sales
during the six months ended June 30, 1997 resulted in the III-G
Partnership recognizing similar gains totaling $4,943.
59
<PAGE>
Oil and gas production expenses (including lease operating expenses and
production taxes) increased $15,779 (4.0%) for the six months ended June
30, 1998 as compared to the six months ended June 30, 1997. This increase
resulted primarily from (i) workover expenses incurred on several wells
during the six months ended June 30, 1998 in order to increase the
recovery of reserves and (ii) an increase in general repair and
maintenance expenses on a significant salt water disposal well during the
six months ended June 30, 1998 as compared to the six months ended June
30, 1997, which increases were partially offset by the decrease in volumes
of oil and gas sold during the six months ended June 30, 1998 as compared
to the six months ended June 30, 1997. As a percentage of oil and gas
sales, these expenses increased to 55.5% for the six months ended June 30,
1998 from 39.5% for the six months ended June 30, 1997. This percentage
increase was primarily due to the decreases in the average prices of oil
and gas sold during the six months ended June 30, 1998 as compared to the
six months ended June 30, 1997 and the dollar increase in oil and gas
production expenses discussed above.
Depreciation, depletion, and amortization of oil and gas properties
decreased $112,854 (37.6%) for the six months ended June 30, 1998 as
compared to the six months ended June 30, 1997. This decrease resulted
primarily from (i) the decrease in volumes of oil and gas sold during the
six months ended June 30, 1998 as compared to the six months ended June
30, 1997 and (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 25.1% for the six months ended June 30, 1998 from
29.8% for the six months ended June 30, 1997. This percentage decrease
resulted primarily from the dollar decrease in depreciation, depletion,
and amortization discussed above.
The III-G Partnership recognized a non-cash charge against earnings of
$1,449,404 during the six months ended June 30, 1997. Of this amount,
$1,010,738 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 $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 six months ended June 30, 1998.
60
<PAGE>
General and administrative expenses decreased $3,015 (3.8%) for the six
months ended June 30, 1998 as compared to the six months ended June 30,
1997. As a percentage of oil and gas sales, these expenses increased to
10.2% for the six months ended June 30, 1998 from 7.8% for the six months
ended June 30, 1997. This percentage increase was primarily due to the
decrease in oil and gas sales discussed above.
The Limited Partners have received cash distributions through June 30,
1998 totaling $5,623,287 or 46.12% of Limited Partners' capital
contributions.
61
<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 June 30, 1998 and for the six
months ended June 30, 1998, filed herewith.
27.2 Financial Data Schedule containing summary financial
information extracted from the III-B Partnership's
financial statements as of June 30, 1998 and for the six
months ended June 30, 1998, filed herewith.
27.3 Financial Data Schedule containing summary financial
information extracted from the III-C Partnership's
financial statements as of June 30, 1998 and for the six
months ended June 30, 1998, filed herewith.
27.4 Financial Data Schedule containing summary financial
information extracted from the III-D Partnership's
financial statements as of June 30, 1998 and for the six
months ended June 30, 1998, filed herewith.
27.5 Financial Data Schedule containing summary financial
information extracted from the III-E Partnership's
financial statements as of June 30, 1998 and for the six
months ended June 30, 1998, filed herewith.
27.6 Financial Data Schedule containing summary financial
information extracted from the III-F Partnership's
financial statements as of June 30, 1998 and for the six
months ended June 30, 1998, filed herewith.
27.7 Financial Data Schedule containing summary financial
information extracted from the III-G Partnership's
financial statements as of June 30, 1998 and for the six
months ended June 30, 1998, filed herewith.
All other exhibits are omitted as inapplicable.
(b) Reports on Form 8-K.
None.
62
<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: August 13, 1998 By: /s/Dennis R. Neill
--------------------------------
(Signature)
Dennis R. Neill
President
Date: August 13, 1998 By: /s/Patrick M. Hall
--------------------------------
(Signature)
Patrick M. Hall
Principal Accounting Officer
63
<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 June 30, 1998 and for the six months
ended June 30, 1998, filed herewith.
27.2 Financial Data Schedule containing summary financial information
extracted from the Geodyne Energy Income Limited Partnership III-B's
financial statements as of June 30, 1998 and for the six months
ended June 30, 1998, filed herewith.
27.3 Financial Data Schedule containing summary financial information
extracted from the Geodyne Energy Income Limited Partnership III-C's
financial statements as of June 30, 1998 and for the six months
ended June 30, 1998, filed herewith.
27.4 Financial Data Schedule containing summary financial information
extracted from the Geodyne Energy Income Limited Partnership III-D's
financial statements as of June 30, 1998 and for the six months
ended June 30, 1998, filed herewith.
27.5 Financial Data Schedule containing summary financial information
extracted from the Geodyne Energy Income Limited Partnership III-E's
financial statements as of June 30, 1998 and for the six months
ended June 30, 1998, filed herewith.
27.6 Financial Data Schedule containing summary financial information
extracted from the Geodyne Energy Income Limited Partnership III-F's
financial statements as of June 30, 1998 and for the six months
ended June 30, 1998, filed herewith.
27.7 Financial Data Schedule containing summary financial information
extracted from the Geodyne Energy Income Limited Partnership III-G's
financial statements as of June 30, 1998 and for the six months
ended June 30, 1998, filed herewith.
All other exhibits are omitted as inapplicable.
64
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0000860745
<NAME> GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-A
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> JUN-30-1998
<CASH> 330,161
<SECURITIES> 0
<RECEIVABLES> 347,765
<ALLOWANCES> 0
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