FORM 10-K405
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 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 of (I.R.S. Employer
incorporation or organization) Identification No.)
Two West Second Street, Tulsa, Oklahoma 74103
---------------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (918) 583-1791
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act:
Depositary Units of Limited Partnership interest
Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
Registrant was required to file such reports) and (2) has been subject to the
filing requirements for the past 90 days. Yes X No
----- -----
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Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K (Sec. 229.405 of this chapter) is not contained herein,
and will not be contained, to the best of registrant's knowledge, in definitive
proxy or information statements incorporated by reference in Part III of this
Form 10-K405 or any amendment to this Form 10-K405.
X Disclosure is not contained herein.
-----
Disclosure is contained herein.
-----
The Depositary Units are not publicly traded, therefore, Registrant cannot
compute the aggregate market value of the voting units held by non-affiliates of
the Registrant.
DOCUMENTS INCORPORATED BY REFERENCE: None
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FORM 10-K405
TABLE OF CONTENTS
PART I.......................................................................4
ITEM 1. BUSINESS...................................................4
ITEM 2. PROPERTIES................................................10
ITEM 3. LEGAL PROCEEDINGS.........................................24
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF LIMITED PARTNERS.......24
PART II.....................................................................24
ITEM 5. MARKET FOR UNITS AND RELATED LIMITED PARTNER
MATTERS...................................................24
ITEM 6. SELECTED FINANCIAL DATA...................................28
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS.......................36
ITEM 7A QUANTITATIVE AND QUALITATIVE DISCLOSURES
ABOUT MARKET RISK.........................................65
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA...............65
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL DISCLOSURE.......................65
PART III....................................................................65
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE GENERAL
PARTNER...................................................65
ITEM 11. EXECUTIVE COMPENSATION....................................66
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
AND MANAGEMENT............................................75
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS............77
PART IV.....................................................................78
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND
REPORTS ON FORM 8-K.......................................78
SIGNATURES............................................................83
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PART I
ITEM 1. BUSINESS
General
The Geodyne Energy Income Limited Partnership III-A (the "III-A
Partnership"), Geodyne Energy Income Limited Partnership III-B (the "III-B
Partnership"), Geodyne Energy Income Limited Partnership III-C (the "III-C
Partnership"), Geodyne Energy Income Limited Partnership III-D (the "III-D
Partnership"), Geodyne Energy Income Limited Partnership III-E (the "III-E
Partnership"), Geodyne Energy Income Limited Partnership III-F (the "III-F
Partnership"), and Geodyne Energy Income Limited Partnership III-G (the "III-G
Partnership") (collectively, the "Partnerships") are limited partnerships formed
under the Oklahoma Revised Uniform Limited Partnership Act. Each Partnership is
composed of Geodyne Resources, Inc., a Delaware corporation, as general partner
("Geodyne" or the "General Partner"), Geodyne Depositary Company, a Delaware
corporation, as the sole initial limited partner, and public investors as
substitute limited partners (the "Limited Partners"). The Partnerships commenced
operations on the dates set forth below:
Date of
Partnership Activation
----------- ------------------
III-A November 21, 1989
III-B January 24, 1990
III-C February 27, 1990
III-D September 5, 1990
III-E December 26, 1990
III-F March 7, 1991
III-G September 20, 1991
The General Partner currently serves as general partner of 29 limited
partnerships and is a wholly-owned subsidiary of Samson Investment Company.
Samson Investment Company and its various corporate subsidiaries, including the
General Partner (collectively "Samson"), are primarily engaged in the production
and development of and exploration for oil and gas reserves and the acquisition
and operation of producing properties. At January 31, 1999, Samson owned
interests in approximately 10,500 oil and gas wells located in 19 states of the
United States and the countries of Canada, Venezuela, and Russia. At January 31,
1999, Samson operated approximately 2,900 oil and gas wells located in 15 states
of the United States as well as Canada, Venezuela, and Russia.
The Partnerships are currently engaged in the business of owning interests
in producing oil and gas properties located in the continental United States.
The Partnerships may also engage
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to a limited extent in development drilling on producing oil and gas properties
as required for the prudent management of the Partnerships.
As limited partnerships, the Partnerships have no officers, directors, or
employees. They rely instead on the personnel of the General Partner and the
other Samson Companies. As of February 15, 1999, Samson employed approximately
850 persons. No employees are covered by collective bargaining agreements, and
management believes that Samson provides a sound employee relations environment.
For information regarding the executive officers of the General Partner, see
"Item 10. Directors and Executive Officers of the General Partner."
The General Partner's and the Partnerships' principal place of business is
located at Samson Plaza, Two West Second Street, Tulsa, Oklahoma 74103, and
their telephone number is (918) 583-1791 or (888) 436-3963 [(888) GEODYNE].
Pursuant to the terms of the partnership agreements for the Partnerships
(the "Partnership Agreements") the Partnerships will terminate on the following
dates:
Partnership Termination Date
----------- ------------------
III-A November 28, 1999
III-B January 24, 2000
III-C February 28, 2000
III-D September 5, 2000
III-E December 26, 2000
III-F March 7, 2001
III-G September 20, 2001
However, the Partnership Agreements provide that the General Partner may extend
the term of each Partnership for up to five periods of two years each. As of the
date of this Annual Report on Form 10-K405 ("Annual Report"), the General
Partner intends to extend the term of the III-A, III-B, and III-C Partnerships
for the first two-year extension period, but has not determined whether it
intends to (i) further extend the term of such Partnerships or (ii) extend the
term of any other Partnership.
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Funding
Although the Partnership Agreements permit the Partnerships to incur
borrowings, operations and expenses are currently funded out of each
Partnership's revenues from oil and gas sales. The General Partner may, but is
not required to, advance funds to a Partnership for the same purposes for which
Partnership borrowings are authorized.
Principal Products Produced and Services Rendered
The Partnerships' sole business is the production of, and related
incidental development of, oil and gas. The Partnerships do not refine or
otherwise process crude oil and condensate. The Partnerships do not hold any
patents, trademarks, licenses, or concessions and are not a party to any
government contracts. The Partnerships have no backlog of orders and do not
participate in research and development activities. The Partnerships are not
presently encountering shortages of oilfield tubular goods, compressors,
production material, or other equipment.
Competition and Marketing
The domestic oil and gas industry is highly competitive, with a large
number of companies and individuals engaged in the exploration and development
of oil and gas properties. The ability of the Partnerships to produce and market
oil and gas profitably depends on a number of factors that are beyond the
control of the Partnerships. These factors include worldwide political
instability (especially in oil-producing regions), United Nations export
embargoes, the supply and price of foreign imports of oil and gas, the level of
consumer product demand (which can be heavily influenced by weather patterns),
government regulations and taxes, the price and availability of alternative
fuels, the overall economic environment, and the availability and capacity of
transportation and processing facilities. The effect of these factors on future
oil and gas industry trends cannot be accurately predicted or anticipated.
The most important variable affecting the Partnerships' revenues is the
prices received for the sale of oil and gas. Predicting future prices is not
possible. Concerning past trends, average yearly wellhead gas prices in the
United States have been volatile for a number of years. For the past ten years,
such average prices have generally been in the $1.40 to $2.40 per Mcf range. Gas
prices are currently in the lower half of the 10-year average range described
above.
Substantially all of the Partnerships' gas reserves are being sold on the
"spot market." Prices on the spot market are subject to wide seasonal and
regional pricing fluctuations due to the highly competitive nature of the spot
market. In addition, such
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spot market sales are generally short-term in nature and are dependent upon the
obtaining of transportation services provided by pipelines. Spot prices for the
Partnerships' gas decreased from approximately $2.32 per Mcf at December 31,
1997 to approximately $1.93 per Mcf at December 31, 1998. Such prices were on an
MMBTU basis and differ from the prices actually received by the Partnerships due
to transportation and marketing costs, BTU adjustments, and regional price and
quality differences. Continued very low oil prices as discussed below may cause
downward pressure on gas prices due to some users of gas converting to oil as a
cheaper fuel alternative.
For the past ten years, average oil prices have generally been in the
$16.00 to $24.00 per barrel range. Due to global consumption and supply trends
over the last year as well as a drop in Asian energy demand, oil prices over the
past year have reached historically low levels, dropping to as low as
approximately $9.25 per barrel. It is not known whether this trend will
continue. Prices for the Partnerships' oil decreased from approximately $16.25
per barrel at December 31, 1997 to approximately $9.50 per barrel at December
31, 1998.
Future prices for both oil and gas will likely be different from (and may
be lower than) the prices in effect on December 31, 1998. Management is unable
to predict whether future oil and gas prices will (i) stabilize, (ii) increase,
or (iii) decrease.
Significant Customers
The following customers accounted for ten percent or more of the
Partnerships' oil and gas sales during the year ended December 31, 1998:
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Partnership Purchaser Percentage
----------- ------------------------ ----------
III-A El Paso Energy Marketing
Company ("El Paso") 33.9%
Valero Industrial Gas L.P.
("Valero") 30.8%
Phibro Energy, Inc.
("Phibro") 17.0%
III-B El Paso 26.7%
Valero 23.9%
Phibro 18.7%
Sun Refining & Marketing
Company 14.4%
III-C El Paso 55.5%
III-D El Paso 54.9%
Eaglwing Trading, Inc.
("Eaglwing") 15.3%
III-E Eaglwing 30.1%
El Paso 12.6%
III-F El Paso 28.3%
III-G El Paso 24.5%
In the event of interruption of purchases by one or more of the
Partnerships' significant customers or the cessation or material change in
availability of open access transportation by the Partnerships' pipeline
transporters, the Partnerships may encounter difficulty in marketing their gas
and in maintaining historic sales levels. Management does not expect any of its
open access transporters to seek authorization to terminate their transportation
services. Even if the services were terminated, management believes that
alternatives would be available whereby the Partnerships would be able to
continue to market their gas.
The Partnerships' principal customers for crude oil production are
refiners and other companies which have pipeline facilities near the producing
properties of the Partnerships. In the event pipeline facilities are not
conveniently available to production areas, crude oil is usually trucked by
purchasers to storage facilities.
Oil, Gas, and Environmental Control Regulations
Regulation of Production Operations -- The production of oil and gas is
subject to extensive federal and state laws and
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regulations governing a wide variety of matters, including the drilling and
spacing of wells, allowable rates of production, prevention of waste and
pollution, and protection of the environment. In addition to the direct costs
borne in complying with such regulations, operations and revenues may be
impacted to the extent that certain regulations limit oil and gas production to
below economic levels.
Regulation of Sales and Transportation of Oil and Gas -- Sales of crude
oil and condensate are made by the Partnerships at market prices and are not
subject to price controls. The sale of gas may be subject to both federal and
state laws and regulations. The provisions of these laws and regulations are
complex and affect all who produce, resell, transport, or purchase gas,
including the Partnerships. Although virtually all of the Partnerships' gas
production is not subject to price regulation, other regulations affect the
availability of gas transportation services and the ability of gas consumers to
continue to purchase or use gas at current levels. Accordingly, such regulations
may have a material effect on the Partnerships' operations and projections of
future oil and gas production and revenues.
Future Legislation -- Legislation affecting the oil and gas industry is
under constant review for amendment or expansion. Because such laws and
regulations are frequently amended or reinterpreted, management is unable to
predict what additional energy legislation may be proposed or enacted or the
future cost and impact of complying with existing or future regulations.
Regulation of the Environment -- The Partnerships' operations are subject
to numerous laws and regulations governing the discharge of materials into the
environment or otherwise relating to environmental protection. Compliance with
such laws and regulations, together with any penalties resulting from
noncompliance, may increase the cost of the Partnerships' operations or may
affect the Partnerships' ability to timely complete existing or future
activities. Management anticipates that various local, state, and federal
environmental control agencies will have an increasing impact on oil and gas
operations.
Insurance Coverage
The Partnerships are subject to all of the risks inherent in the
exploration for and production of oil and gas including blowouts, pollution,
fires, and other casualties. The Partnerships maintain insurance coverage as is
customary for entities of a similar size engaged in operations similar to that
of the Partnerships, but losses can occur from uninsurable risks or in amounts
in excess of existing insurance coverage. The occurrence of an event which is
not fully covered by insurance could have a material adverse effect on the
Partnerships' financial condition and results of operations.
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ITEM 2. PROPERTIES
Well Statistics
The following table sets forth the number of productive wells of the
Partnerships as of December 31, 1998.
Well Statistics(1)
As of December 31, 1998
Number of Gross Wells(2) Number of Net Wells(3)
------------------------------ --------------------------------
P/ship Total Oil Gas N/A(4) Total Oil Gas N/A(4)
- -------- ----- ----- --- ------ ------ ------ ----- ------
III-A 192 101 90 1 10.43 2.80 7.60 .03
III-B 141 70 70 1 6.69 3.09 3.59 .01
III-C 170 68 101 1 20.29 11.57 8.71 .01
III-D 205 141 62 2 14.85 8.80 6.01 .04
III-E 260 119 138 3 51.76 25.79 25.66 .31
III-F 495 391 103 1 24.78 13.58 11.16 .04
III-G 2,048 1,657 390 1 16.53 10.21 6.30 .02
- ----------
(1) The designation of a well as an oil well or gas well is made by the
General Partner based on the relative amount of oil and gas reserves for
the well. Regardless of a well's oil or gas designation, it may produce
oil, gas, or both oil and gas.
(2) As used in this Annual Report, "gross well" refers to a well in which a
working interest is owned; accordingly, the number of gross wells is the
total number of wells in which a working interest is owned.
(3) As used in this Annual Report, "net well" refers to the sum of the
fractional working interests owned in gross wells. For example, a 15%
working interest in a well represents one gross well, but 0.15 net well.
(4) Wells which have not been designated as oil or gas.
Drilling Activities
During the year ended December 31, 1998, the Partnerships indirectly
participated in the developmental drilling activities described below. The
Partnerships do not own working interests in any of these wells; therefore, they
did not incur any costs associated with the drilling activity:
County/ Revenue
P/ship Well Name Parish St. Interest Type Status
- ------ --------- -------- --- -------- ---- ------
III-A Lemasters #1-9 Washita OK .0033 Gas Prod.
N.H. Clark #14 Webb TX .0075 Gas Prod.
J.M. Ruiz #5 Webb TX .0075 Gas Prod.
Prevost #6 Webb TX .0075 Gas Prod.
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III-B Lemasters #1-9 Washita OK .0022 Gas Prod.
N.H. Clark #14 Webb TX .0035 Gas Prod.
J.M. Ruiz #5 Webb TX .0035 Gas Prod.
Prevost #6 Webb TX .0035 Gas Prod.
III-C Carlisle
Trust 34 #1 Harper OK .0004 Gas Unknown
Poorbaugh
Trust #8-1 Beaver OK .0010 Gas Unknown
Follis #1-10 Roger Mills OK .0010 Unk Unknown
Pearson #2-28 Pittsburgh OK .0028 Gas Unknown
Thornton #2-5 Pittsburgh OK .0009 Gas Unknown
N.H. Clark #14 Webb TX .0015 Gas Prod.
J.M. Ruiz #5 Webb TX .0015 Gas Prod.
Prevost #6 Webb TX .0015 Gas Prod.
Canyon Ranch
83-10S Sutton TX .0010 Gas Unknown
III-D Carlisle
Trust 34 #1 Harper OK .0001 Gas Unknown
Poorbaugh
Trust #8-1 Beaver OK .0001 Gas Unknown
Follis #1-10 Roger Mills OK .0002 Unk Unknown
Pearson #2-28 Pittsburgh OK .0004 Gas Unknown
Thornton #2-5 Pittsburgh OK .0001 Gas Unknown
Canyon Ranch
83-10S Sutton TX .0001 Gas Unknown
III-E Culbertson B
No. 1-ALT Bienville LA .0062 Gas Prod.
III-F Culbertson B
No. 1-ALT Bienville LA .0052 Gas Prod.
III-G Culbertson B
No. 1-ALT Bienville LA .0026 Gas Prod.
Oil and Gas Production, Revenue, and Price History
The following tables set forth certain historical information concerning
the oil (including condensates) and gas production, net of all royalties,
overriding royalties, and other third party interests, of the Partnerships,
revenues attributable to such production, and certain price and cost
information. As used in the following tables, direct operating expenses include
lease operating expenses and production taxes. In addition, gas production is
converted to oil equivalents at the rate of six Mcf per barrel, representing the
estimated relative energy content of gas and oil, which rate is not necessarily
indicative of the relationship of oil and gas prices. The respective prices of
oil and gas are affected by market and other factors in addition to relative
energy content.
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Net Production Data
III-A Partnership
-----------------
Year Ended December 31,
-------------------------------------
1998 1997 1996
---------- ---------- ----------
Production:
Oil (Bbls) 34,689 40,468 46,923
Gas (Mcf) 741,990 1,031,152 1,268,943
Oil and gas sales:
Oil $ 434,592 $ 796,356 $ 975,701
Gas 1,595,205 2,532,278 2,658,303
--------- --------- ---------
Total $2,029,797 $3,328,634 $3,634,004
========= ========= =========
Total direct operating
Expenses $ 576,112 $ 719,090 $ 899,073
========= ========= =========
Direct operating expenses
as a percentage of oil
and gas sales 28.4% 21.6% 24.7%
Average sales price:
Per barrel of oil $12.53 $19.68 $20.79
Per Mcf of gas 2.15 2.46 2.09
Direct operating expenses
per equivalent Bbl of
oil $ 3.64 $ 3.39 $ 3.48
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Net Production Data
III-B Partnership
-----------------
Year Ended December 31,
-------------------------------------
1998 1997 1996
---------- ---------- ----------
Production:
Oil (Bbls) 34,221 37,216 37,849
Gas (Mcf) 355,197 518,891 642,152
Oil and gas sales:
Oil $ 441,820 $ 735,310 $ 794,186
Gas 759,598 1,236,812 1,319,321
--------- --------- ---------
Total $1,201,418 $1,972,122 $2,113,507
========= ========= =========
Total direct operating
Expenses $ 330,107 $ 419,217 $ 497,491
========= ========= =========
Direct operating expenses
as a percentage of oil
and gas sales 27.5% 21.3% 23.5%
Average sales price:
Per barrel of oil $12.91 $19.76 $20.98
Per Mcf of gas 2.14 2.38 2.05
Direct operating expenses
per equivalent Bbl of
oil $ 3.53 $ 3.39 $ 3.43
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Net Production Data
III-C Partnership
-----------------
Year Ended December 31,
-------------------------------------
1998 1997 1996
---------- ---------- ----------
Production:
Oil (Bbls) 22,980 27,069 27,429
Gas (Mcf) 1,156,387 1,124,237 1,351,525
Oil and gas sales:
Oil $ 312,050 $ 534,386 $ 567,261
Gas 2,134,955 2,537,465 2,692,354
--------- --------- ---------
Total $2,447,005 $3,071,851 $3,259,615
========= ========= =========
Total direct operating
Expenses $ 712,038 $ 749,102 $ 781,115
========= ========= =========
Direct operating expenses
as a percentage of oil
and gas sales 29.1% 24.4% 24.0%
Average sales price:
Per barrel of oil $13.58 $19.74 $20.68
Per Mcf of gas 1.85 2.26 1.99
Direct operating expenses
per equivalent Bbl of
oil $ 3.30 $ 3.49 $ 3.09
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Net Production Data
III-D Partnership
-----------------
Year Ended December 31,
-------------------------------------
1998 1997 1996
---------- ---------- ----------
Production:
Oil (Bbls) 35,908 40,758 41,351
Gas (Mcf) 767,089 708,262 760,593
Oil and gas sales:
Oil $ 413,658 $ 778,978 $ 832,109
Gas 1,375,913 1,556,567 1,504,599
--------- --------- ---------
Total $1,789,571 $2,335,545 $2,336,708
========= ========= =========
Total direct operating
Expenses $ 718,656 $ 867,060 $ 928,670
========= ========= =========
Direct operating expenses
as a percentage of oil
and gas sales 40.2% 37.1% 39.7%
Average sales price:
Per barrel of oil $11.52 $19.11 $20.12
Per Mcf of gas 1.79 2.20 1.98
Direct operating expenses
per equivalent Bbl of
oil $ 4.39 $ 5.46 $ 5.52
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Net Production Data
III-E Partnership
-----------------
Year Ended December 31,
-------------------------------------
1998 1997 1996
---------- ---------- ----------
Production:
Oil (Bbls) 223,936 235,152 229,226
Gas (Mcf) 1,974,917 2,189,619 2,152,599
Oil and gas sales:
Oil $2,542,259 $4,460,740 $4,572,097
Gas 3,858,330 4,581,069 4,458,018
--------- --------- ---------
Total $6,400,589 $9,041,809 $9,030,115
========= ========= =========
Total direct operating
Expenses $3,695,174 $4,513,216 $4,418,264
========= ========= =========
Direct operating expenses
as a percentage of oil
and gas sales 57.7% 49.9% 48.9%
Average sales price:
Per barrel of oil $11.35 $18.97 $19.95
Per Mcf of gas 1.95 2.09 2.07
Direct operating expenses
per equivalent Bbl of
oil $ 6.68 $ 7.52 $ 7.51
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Net Production Data
III-F Partnership
-----------------
Year Ended December 31,
-------------------------------------
1998 1997 1996
---------- ---------- ----------
Production:
Oil (Bbls) 54,002 65,787 74,064
Gas (Mcf) 787,609 898,447 924,827
Oil and gas sales:
Oil $ 678,439 $1,240,058 $1,494,695
Gas 1,470,754 1,751,392 1,600,043
--------- --------- ---------
Total $2,149,193 $2,991,450 $3,094,738
========= ========= =========
Total direct operating
Expenses $1,185,467 $1,332,931 $1,237,607
========= ========= =========
Direct operating expenses
as a percentage of oil
and gas sales 55.2% 44.6% 40.0%
Average sales price:
Per barrel of oil $12.56 $18.85 $20.18
Per Mcf of gas 1.87 1.95 1.73
Direct operating expenses
per equivalent Bbl of
oil $ 6.40 $ 6.18 $ 5.42
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Net Production Data
III-G Partnership
-----------------
Year Ended December 31,
-------------------------------------
1998 1997 1996
---------- ---------- ----------
Production:
Oil (Bbls) 38,858 47,493 54,083
Gas (Mcf) 419,813 500,966 499,884
Oil and gas sales:
Oil $ 487,855 $ 897,536 $1,091,687
Gas 784,720 947,728 870,868
--------- --------- ---------
Total $1,272,575 $1,845,264 $1,962,555
========= ========= =========
Total direct operating
Expenses $ 744,443 $ 854,673 $ 804,410
========= ========= =========
Direct operating expenses
as a percentage of oil
and gas sales 58.5% 46.3% 41.0%
Average sales price:
Per barrel of oil $12.55 $18.90 $20.19
Per Mcf of gas 1.87 1.89 1.74
Direct operating expenses
per equivalent Bbl of
oil $ 6.84 $ 6.52 $ 5.85
Proved Reserves and Net Present Value
The following table sets forth each Partnership's estimated proved oil and
gas reserves and net present value therefrom as of December 31, 1998. The
schedule of quantities of proved oil and gas reserves was prepared by the
General Partner in accordance with the rules prescribed by the Securities and
Exchange Commission (the "SEC"). Certain reserve information was reviewed by
Ryder Scott Company Petroleum Engineers ("Ryder Scott"), an independent
petroleum engineering firm. As used throughout this Annual Report, "proved
reserves" refers to those estimated quantities of crude oil, gas, and gas
liquids which geological and engineering data demonstrate with reasonable
certainty to be recoverable in future years from known oil and gas reservoirs
under existing economic and operating conditions.
Net present value represents estimated future gross cash flow from the
production and sale of proved reserves, net of estimated oil and gas production
costs (including production taxes, ad valorem taxes, and operating expenses) and
estimated future
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development costs, discounted at 10% per annum. Net present value attributable
to the Partnerships' proved reserves was calculated on the basis of current
costs and prices at December 31, 1998. Such prices were not escalated except in
certain circumstances where escalations were fixed and readily determinable in
accordance with applicable contract provisions. The prices used in calculating
the net present value attributable to the Partnerships' proved reserves do not
necessarily reflect market prices for oil and gas production subsequent to
December 31, 1998. There can be no assurance that the prices used in calculating
the net present value of the Partnerships' proved reserves at December 31, 1998
will actually be realized for such production.
The process of estimating oil and gas reserves is complex, requiring
significant subjective decisions in the evaluation of available geological,
engineering, and economic data for each reservoir. The data for a given
reservoir may change substantially over time as a result of, among other things,
additional development activity, production history, and viability of production
under varying economic conditions; consequently, it is reasonably possible that
material revisions to existing reserve estimates may occur in the near future.
Although every reasonable effort has been made to ensure that these reserve
estimates represent the most accurate assessment possible, the significance of
the subjective decisions required and variances in available data for various
reservoirs make these estimates generally less precise than other estimates
presented in connection with financial statement disclosures.
Proved Reserves and
Net Present Values
From Proved Reserves
As of December 31, 1998(1)
III-A Partnership:
-----------------
Estimated proved reserves:
Gas (Mcf) 4,729,415
Oil and liquids (Bbls) 92,124
Net present value (discounted at
10% per annum) $5,380,825
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III-B Partnership:
-----------------
Estimated proved reserves:
Gas (Mcf) 2,174,036
Oil and liquids (Bbls) 91,163
Net present value (discounted at
10% per annum) $2,667,687
III-C Partnership:
-----------------
Estimated proved reserves:
Gas (Mcf) 5,768,481
Oil and liquids (Bbls) 134,669
Net present value (discounted at
10% per annum) $5,428,869
III-D Partnership:
-----------------
Estimated proved reserves:
Gas (Mcf) 2,838,890
Oil and liquids (Bbls) 125,866
Net present value (discounted at
10% per annum) $2,727,210
III-E Partnership:
-----------------
Estimated proved reserves:
Gas (Mcf) 8,016,475
Oil and liquids (Bbls) 601,310
Net present value (discounted at
10% per annum) $6,856,657
III-F Partnership:
-----------------
Estimated proved reserves:
Gas (Mcf) 4,726,953
Oil and liquids (Bbls) 231,882
Net present value (discounted at
10% per annum) $4,163,015
20
<PAGE>
III-G Partnership:
-----------------
Estimated proved reserves:
Gas (Mcf) 2,525,720
Oil and liquids (Bbls) 171,790
Net present value (discounted at
10% per annum) $2,310,504
- ----------
(1) Includes certain gas balancing adjustments which cause the gas volumes and
net present values to differ from the reserve reports which were prepared
by the General Partner and reviewed by Ryder Scott.
No estimates of the proved reserves of the Partnerships comparable to
those included herein have been included in reports to any federal agency other
than the SEC. Additional information relating to the Partnerships' proved
reserves is contained in Note 4 to the Partnerships' financial statements,
included in Item 8 of this Annual Report.
Significant Properties
The following tables set forth certain well and reserve information as of
December 31, 1998 for the basins in which the Partnerships own a significant
amount of oil and gas properties. The tables contain the following information
for each significant basin: (i) the number of gross wells and net wells, (ii)
the number of wells in which only a non-working interest is owned, (iii) the
Partnership's total number of wells, (iv) the number of wells operated by the
Partnership's affiliates, (v) estimated proved oil reserves, (vi) estimated
proved gas reserves, and (vii) the present value (discounted at 10% per annum)
of estimated future net cash flow.
The Anadarko Basin is located in western Oklahoma and the Texas panhandle,
while the Arkla Basin is located in southern Arkansas and northern Louisiana.
The Gulf Coast Basin is located in southern Louisiana and southeast Texas, while
the Permian Basin straddles west Texas and southeast New Mexico. Southern
Oklahoma contains the Southern Oklahoma Folded Belt Basin. The Green River Basin
is located in southern Wyoming and Northwest Colorado.
21
<PAGE>
<TABLE>
<CAPTION>
Significant Properties as of December 31, 1998
----------------------------------------------
Wells
Operated by
Affiliates Oil Gas
Gross Net Other Total ------------- Reserves Reserves Present
Basin Wells Wells Wells(1) Wells Number % (Bbl) (Mcf) Value
- ------------------ ------ ------- -------- ------ ------ ---- -------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
III-A Partnership:
Gulf Coast 44 3.19 39 83 12 14% 68,122 2,313,328 $2,968,602
Anadarko 52 2.38 8 60 9 15% 11,542 1,516,854 1,494,255
Arkla 40 1.23 - 40 - -% 5,981 439,718 535,930
III-B Partnership:
Gulf Coast 40 1.66 39 79 8 10% 42,887 1,234,068 $1,601,413
Anadarko 37 2.58 6 43 2 5% 44,226 462,979 580,489
Arkla 40 .67 - 40 - -% 3,102 232,441 279,040
III-C Partnership:
Anadarko 53 5.97 53 106 29 27% 51,212 2,747,986 $2,847,442
Southern Okla.
Folded Belt 38 7.34 59 97 22 23% 65,482 1,938,814 1,619,974
Permian 28 6.20 31 59 27 46% 15,208 715,280 516,828
III-D Partnership (2):
Anadarko 31 3.32 53 84 29 35% 4,753 2,033,715 $1,990,045
Permian 28 5.19 31 59 27 46% 10,441 577,579 394,082
- ---------------------
(1) Wells in which only a non-working (e.g. royalty) interest is owned.
(2) The Jay-Little Escambia Creek Field Unit located in Santa Rosa County,
Florida has historically been one of the III-D and III-E Partnerships'
most significant properties. This property is a large waterflood unit
which produces primarily oil. The very low oil prices as of December 31,
1998 have had a substantial negative impact on the present value of the
projected future cash flows from this property. As a result of such
depressed oil prices, this property is no longer a significant property of
the III-D and III-E Partnerships (based on present value of reserves) and
is therefore not listed in the foregoing table.
</TABLE>
22
<PAGE>
<TABLE>
<CAPTION>
Significant Properties as of December 31, 1998
----------------------------------------------
Wells
Operated by
Affiliates Oil Gas
Gross Net Other Total ------------- Reserves Reserves Present
Basin Wells Wells Wells(1) Wells Number % (Bbl) (Mcf) Value
- ------------------ ------ ------- -------- ------ ------ ---- -------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
III-E Partnership (2):
Green River 54 4.22 5 59 - -% 26,031 3,781,849 $2,958,647
Gulf Coast 66 29.40 5 71 35 49% 22,458 1,570,201 1,598,972
Permian 4 .98 - 4 2 50% 3,550 1,067,109 1,003,815
III-F Partnership:
Green River 62 6.35 5 67 8 12% 21,862 3,169,516 $2,479,908
Anadarko 29 6.45 1 30 25 83% 24,427 891,967 613,212
Gulf Coast 21 1.64 - 21 1 5% 4,984 414,682 398,816
III-G Partnership:
Green River 62 3.62 5 67 8 12% 10,875 1,576,055 $1,235,658
Anadarko 50 3.76 6 56 40 71% 15,451 527,773 368,525
Gulf Coast 21 .82 - 21 1 5% 2,476 206,193 198,935
- --------------------
(1) Wells in which only a non-working (e.g. royalty) interest is owned.
(2) The Jay-Little Escambia Creek Field Unit located in Santa Rosa County,
Florida has historically been one of the III-D and III-E Partnerships'
most significant properties. This property is a large waterflood unit
which produces primarily oil. The very low oil prices as of December 31,
1998 have had a substantial negative impact on the present value of the
projected future cash flows from this property. As a result of such
depressed oil prices, this property is no longer a significant property of
the III-D and III-E Partnerships (based on present value of reserves) and
is therefore not listed in the foregoing table.
</TABLE>
23
<PAGE>
Title to Oil and Gas Properties
Management believes that the Partnerships have satisfactory title to their
oil and gas properties. Record title to all of the Partnerships' properties is
held by either the Partnerships or Geodyne Nominee Corporation, an affiliate of
the General Partner.
Title to the Partnerships' properties is subject to customary royalty,
overriding royalty, carried, working, and other similar interests and
contractual arrangements customary in the oil and gas industry, to liens for
current taxes not yet due, and to other encumbrances. Management believes that
such burdens do not materially detract from the value of such properties or from
the Partnerships' interest therein or materially interfere with their use in the
operation of the Partnerships' business.
ITEM 3. LEGAL PROCEEDINGS
To the knowledge of the General Partner, neither the General Partner nor
the Partnerships or their properties are subject to any litigation, the results
of which would have a material effect on the Partnerships' or the General
Partner's financial condition or operations.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF LIMITED PARTNERS
There were no matters submitted to a vote of the Limited Partners of any
Partnership during 1998.
PART II
ITEM 5. MARKET FOR UNITS AND RELATED LIMITED PARTNER MATTERS
As of February 1, 1999, the number of Units outstanding and the
approximate number of Limited Partners of record in the Partnerships were as
follows:
Number of Number of
Partnership Units Limited Partners
----------- --------- ----------------
III-A 263,976 1,379
III-B 138,336 781
III-C 244,536 1,299
III-D 131,008 696
III-E 418,266 2,210
III-F 221,484 1,160
III-G 121,925 615
24
<PAGE>
Units were initially sold for a price of $100. Units are not traded on any
exchange and there is no public trading market for them. The General Partner is
aware of certain transfers of Units between unrelated parties, some of which are
facilitated by secondary trading firms and matching services. In addition, as
further described below, the General Partner is aware of certain "4.9% Tender
Offers" which have been made for the Units. The General Partner believes that
the transfers between unrelated parties have been limited and sporadic in number
and volume. Other than trades facilitated by certain secondary trading firms and
matching services, no organized trading market for Units exists and none is
expected to develop. Due to the nature of these transactions, the General
Partner has no verifiable information regarding prices at which Units have been
transferred. Further, a transferee may not become a substitute Limited Partner
without the consent of the General Partner.
Pursuant to the terms of the Partnership Agreements, the General Partner
is obligated to annually issue a repurchase offer which is based on the
estimated future net revenues from the Partnerships' reserves and is calculated
pursuant to the terms of the Partnership Agreements. Such repurchase offer is
recalculated monthly in order to reflect cash distributions to the Limited
Partners and extraordinary events. The following table sets forth the General
Partner's repurchase offer per Unit as of the periods indicated. For purpose of
this Annual Report, a Unit represents an initial subscription of $100 to a
Partnership.
Repurchase Offer Prices
-----------------------
1997 1998 1999
------------------------- ------------------------- ----
1st 2nd 3rd 4th 1st 2nd 3rd 4th 1st
P/ship Qtr. Qtr. Qtr. Qtr. Qtr. Qtr. Qtr. Qtr. Qtr.
- ------ ---- ---- ---- ---- ---- ---- ---- ---- ----
III-A $12 $16 $12 $10 $ 8 $16 $15 $14 $14
III-B 12 16 12 10 8 15 14 13 12
III-C 14 19 17 15 13 20 18 16 15
III-D 23 26 24 22 20 26 25 23 21
III-E 31 32 30 28 26 31 29 28 27
III-F 20 22 20 19 17 21 20 19 18
III-G 22 25 23 22 20 23 22 21 20
In addition to this repurchase offer, the Partnerships have been subject
to "4.9% tender offers" from several third parties during 1997 and 1998. The
General Partner does not know the terms of these offers or the prices received
by the Limited Partners who accepted these offers.
25
<PAGE>
Cash Distributions
Cash distributions are primarily dependent upon a Partnership's cash
receipts from the sale of oil and gas production and cash requirements of the
Partnership. Distributable cash is determined by the General Partner at the end
of each calendar quarter and distributed to the Limited Partners within 45 days
after the end of the quarter. Distributions are restricted to cash on hand less
amounts required to be retained out of such cash as determined in the sole
judgment of the General Partner to pay costs, expenses, or other Partnership
obligations whether accrued or anticipated to accrue. In certain instances, the
General Partner may not distribute the full amount of cash receipts which might
otherwise be available for distribution in an effort to equalize or stabilize
the amounts of quarterly distributions. Any available amounts not distributed
are invested and the interest or income thereon is for the accounts of the
Limited Partners.
The following is a summary of cash distributions paid to the Limited
Partners during 1997, 1998, and 1999:
Cash Distributions
-----------------
1997
------------------------------------------
1st 2nd 3rd 4th
P/ship Qtr.(1) Qtr.(2) Qtr.(1) Qtr.(1)
------ ------ --------- ------- -------
III-A $2.01 $3.24 $4.11 $1.75
III-B 2.49 3.57 4.32 1.97
III-C 2.05 3.26 2.39 1.36
III-D 2.31 3.68 2.42 1.92
III-E 2.55 3.59 2.34 1.81
III-F 1.55 2.98 1.50 1.12
III-G 1.55 3.20 1.82 1.23
1998 1999
------------------------------------------ ------
1st 2nd 3rd 4th 1st
P/ship Qtr.(1) Qtr.(3) Qtr.(4) Qtr.(5) Qtr.
------ ------ --------- ------- ------- ------
III-A $1.83 2.03 1.11 $1.09 $ .69
III-B 2.15 2.33 1.02 1.32 .73
III-C 2.09 2.62 2.07 1.72 1.29
III-D 2.27 1.85 1.80 1.96 1.28
III-E 1.70 2.16 1.90 1.59 .64
III-F 1.68 1.85 .94 .87 .65
III-G 2.18 1.94 .98 .85 .70
26
<PAGE>
- -------------------
(1) Amount of cash distribution includes proceeds from the sale of certain oil
and gas properties.
(2) Amount of cash distribution for the III-C and III-D Partnerships includes
proceeds from the sale of certain oil and gas properties.
(3) Amount of cash distribution for the III-A, III-C, III-D, III-E, III-F, and
III-G Partnerships includes proceeds from the sale of certain oil and gas
properties.
(4) Amount of cash distribution for the III-A, III-C, and III-D Partnerships
includes proceeds from the sale of certain oil and gas properties.
(5) Amount of cash distribution for the III-B and III-C Partnerships includes
proceeds from the sale of certain oil and gas properties.
27
<PAGE>
ITEM 6. SELECTED FINANCIAL DATA
The following tables present selected financial data for the Partnerships.
This data should be read in conjunction with the financial statements of the
Partnerships and the respective notes thereto, included elsewhere in this Annual
Report. See "Item 8. Financial Statements and Supplementary Data."
28
<PAGE>
<TABLE>
<CAPTION>
Selected Financial Data
III-A Partnership
-----------------
1998 1997 1996 1995 1994
------------- ------------- ------------- ------------- -------------
<S> <C> <C> <C> <C> <C>
Oil and Gas Sales $2,029,797 $3,328,634 $3,634,004 $3,647,607 $ 5,044,736
Net Income (Loss):
Limited Partners 628,357 33,066 1,109,284 ( 1,243,800) ( 86,676)
General Partner 53,190 98,919 104,949 76,804 145,059
Total 681,547 131,985 1,214,233 ( 1,166,996) 58,383
Limited Partners' Net
Income (Loss) per
Unit 2.38 .13 4.20 ( 4.71) ( .33)
Limited Partners' Cash
Distributions per
Unit 6.06 11.11 9.47 8.19 15.01
Total Assets 2,984,008 3,916,891 6,895,159 8,353,918 11,769,144
Partners' Capital
(Deficit):
Limited Partners 3,011,574 3,985,217 6,886,151 8,275,867 11,679,667
General Partner ( 197,325) ( 198,271) ( 198,911) ( 143,923) ( 111,727)
Number of Units
Outstanding 263,976 263,976 263,976 263,976 263,976
</TABLE>
29
<PAGE>
<TABLE>
<CAPTION>
Selected Financial Data
III-B Partnership
-----------------
1998 1997 1996 1995 1994
------------- ------------- ------------- ------------- -------------
<S> <C> <C> <C> <C> <C>
Oil and Gas Sales $1,201,418 $1,972,122 $2,113,507 $2,063,107 $2,717,108
Net Income (Loss):
Limited Partners 374,539 223,228 712,800 ( 296,132) ( 47,216)
General Partner 108,544 60,762 63,531 48,956 78,538
Total 483,083 283,990 776,331 ( 247,176) 31,322
Limited Partners' Net
Income (Loss) per
Unit 2.71 1.61 5.15 ( 2.14) ( .34)
Limited Partners' Cash
Distributions per
Unit 6.82 12.35 10.15 8.86 15.72
Total Assets 1,717,863 2,248,586 3,772,912 4,502,744 6,023,688
Partners' Capital
(Deficit):
Limited Partners 1,721,363 2,291,824 3,776,596 4,466,796 5,987,928
General Partner ( 85,016) ( 97,840) ( 97,092) ( 66,996) ( 52,952)
Number of Units
Outstanding 138,336 138,336 138,336 138,336 138,336
</TABLE>
30
<PAGE>
<TABLE>
<CAPTION>
Selected Financial Data
III-C Partnership
-----------------
1998 1997 1996 1995 1994
------------- ------------- ------------- ------------- -------------
<S> <C> <C> <C> <C> <C>
Oil and Gas Sales $2,447,005 $3,071,851 $3,259,615 $2,760,488 $ 3,229,521
Net Income (Loss):
Limited Partners 1,094,816 ( 196,027) 1,247,672 ( 1,322,234) ( 2,120,737)
General Partner 87,868 86,436 103,933 53,608 59,036
Total 1,182,684 ( 109,591) 1,351,605 ( 1,268,626) ( 2,061,701)
Limited Partners' Net
Income (Loss) per
Unit 4.48 ( .80) 5.10 ( 5.41) ( 8.67)
Limited Partners' Cash
Distributions per
Unit 8.50 9.06 7.26 5.76 9.50
Total Assets 3,572,389 4,567,928 7,009,782 7,572,561 10,499,912
Partners' Capital
(Deficit):
Limited Partners 3,531,812 4,512,996 6,924,023 7,451,351 10,183,585
General Partner ( 179,285) ( 171,438) ( 143,741) ( 125,913) ( 107,521)
Number of Units
Outstanding 244,536 244,536 244,536 244,536 244,536
</TABLE>
31
<PAGE>
<TABLE>
<CAPTION>
Selected Financial Data
III-D Partnership
-----------------
1998 1997 1996 1995 1994
------------- ------------- ------------- ------------- -------------
<S> <C> <C> <C> <C> <C>
Oil and Gas Sales $1,789,571 $2,335,545 $2,336,708 $2,087,482 $2,017,361
Net Income (Loss):
Limited Partners ( 84,498) 35,530 795,298 ( 234,478) ( 2,563,317)
General Partner 38,462 54,213 59,929 45,966 8,876
Total ( 46,036) 89,743 855,227 ( 188,512) ( 2,554,441)
Limited Partners' Net
Income (Loss) per
Unit ( .64) .27 6.07 ( 1.79) ( 19.57)
Limited Partners' Cash
Distributions per
Unit 7.88 10.33 8.33 6.30 8.21
Total Assets 1,687,823 2,890,862 4,241,190 4,463,897 5,787,787
Partners' Capital
(Deficit):
Limited Partners 1,518,235 2,636,733 3,953,203 4,248,905 5,308,383
General Partner ( 73,501) ( 62,091) ( 50,214) ( 36,176) ( 39,142)
Number of Units
Outstanding 131,008 131,008 131,008 131,008 131,008
</TABLE>
32
<PAGE>
<TABLE>
<CAPTION>
Selected Financial Data
III-E Partnership
-----------------
1998 1997 1996 1995 1994
------------- ------------- ------------- ------------- -------------
<S> <C> <C> <C> <C> <C>
Oil and Gas Sales $6,400,589 $ 9,041,809 $ 9,030,115 $ 8,676,047 $ 9,466,013
Net Income (Loss):
Limited Partners ( 3,260,925) ( 219,259) 2,275,698 ( 338,913) ( 1,853,838)
General Partner 57,256 158,394 191,012 136,202 124,584
Total ( 3,203,669) ( 60,865) 2,466,710 ( 202,711) ( 1,729,254)
Limited Partners' Net
Income (Loss) per
Unit ( 7.80) ( .52) 5.44 ( .81) ( 4.43)
Limited Partners' Cash
Distributions per
Unit 7.35 10.29 8.67 6.43 10.00
Total Assets 4,621,412 11,397,387 15,918,358 17,113,266 20,666,337
Partners' Capital
(Deficit):
Limited Partners 4,117,302 10,449,227 14,971,486 16,319,788 19,348,701
General Partner ( 275,783) ( 209,050) ( 187,947) ( 127,750) ( 124,952)
Number of Units
Outstanding 418,266 418,266 418,266 418,266 418,266
</TABLE>
33
<PAGE>
<TABLE>
<CAPTION>
Selected Financial Data
III-F Partnership
-----------------
1998 1997 1996 1995 1994
------------- ------------- ------------- ------------- -------------
<S> <C> <C> <C> <C> <C>
Oil and Gas Sales $2,149,193 $2,991,450 $3,094,738 $2,697,816 $ 3,517,877
Net Income (Loss):
Limited Partners ( 5,324) ( 2,273,148) 483,478 ( 1,521,469) ( 1,120,925)
General Partner 29,041 32,514 72,299 25,536 41,351
Total 23,717 ( 2,240,634) 555,777 ( 1,495,933) ( 1,079,574)
Limited Partners' Net
Income (Loss)
per Unit ( .02) ( 10.26) 2.18 ( 6.87) ( 5.06)
Limited Partners' Cash
Distributions per
Unit 5.34 7.15 5.23 2.05 8.58
Total Assets 3,533,814 4,752,817 8,632,813 9,438,169 11,599,217
Partners' Capital
(Deficit):
Limited Partners 3,268,818 4,454,142 8,310,290 8,986,812 10,963,281
General Partner ( 164,221) ( 146,427) ( 97,523) ( 70,576) ( 72,812)
Number of Units
Outstanding 221,484 221,484 221,484 221,484 221,484
</TABLE>
34
<PAGE>
<TABLE>
<CAPTION>
Selected Financial Data
III-G Partnership
-----------------
1998 1997 1996 1995 1994
------------- ------------- ------------- ------------- -------------
<S> <C> <C> <C> <C> <C>
Oil and Gas Sales $1,272,575 $1,845,264 $1,962,555 $1,694,847 $2,137,843
Net Income (Loss):
Limited Partners ( 308,749) ( 1,136,965) 380,060 ( 1,024,258) ( 572,690)
General Partner 13,093 22,672 47,089 15,638 27,083
Total ( 295,656) ( 1,114,293) 427,149 ( 1,008,620) ( 545,607)
Limited Partners' Net
Income (Loss)
per Unit ( 2.53) ( 9.33) 3.12 ( 8.40) ( 4.70)
Limited Partners' Cash
Distributions per
Unit 5.95 7.80 5.92 2.67 8.37
Total Assets 1,817,470 2,873,056 4,977,730 5,415,275 6,857,551
Partners' Capital
(Deficit):
Limited Partners 1,672,073 2,707,822 4,795,787 5,136,727 6,485,985
General Partner ( 99,974) ( 85,608) ( 58,669) ( 26,964) ( 26,102)
Number of Units
Outstanding 121,925 121,925 121,925 121,925 121,925
</TABLE>
35
<PAGE>
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
Use of Forward-Looking Statements and Estimates
This Annual Report contains certain forward-looking statements. The words
"anticipate," "believe," "expect," "plan," "intend," "estimate," "project,"
"could," "may," and similar expressions are intended to identify forward-looking
statements. Such statements reflect management's current views with respect to
future events and financial performance. This Annual Report also includes
certain information which is, or is based upon, estimates and assumptions. Such
estimates and assumptions are management's efforts to accurately reflect the
condition and operation of the Partnerships.
Use of forward-looking statements and estimates and assumptions involve
risks and uncertainties which include, but are not limited to, the volatility of
oil and gas prices, the uncertainty of reserve information, the operating risk
associated with oil and gas properties (including the risk of personal injury,
death, property damage, damage to the well or producing reservoir, environmental
contamination, and other operating risks), the prospect of changing tax and
regulatory laws, the availability and capacity of processing and transportation
facilities, the general economic climate, the supply and price of foreign
imports of oil and gas, the level of consumer product demand, and the price and
availability of alternative fuels. Should one or more of these risks or
uncertainties occur or should estimates or underlying assumptions prove
incorrect, actual conditions or results may vary materially and adversely from
those stated, anticipated, believed, estimated, or otherwise indicated.
General Discussion
The following general discussion should be read in conjunction with the
analysis of results of operations provided below. The most important variable
affecting the Partnerships' revenues is the prices received for the sale of oil
and gas. Predicting future prices is not possible. Concerning past trends,
average yearly wellhead gas prices in the United States have been volatile for a
number of years. For the past ten years, such average prices have generally been
in the $1.40 to $2.40 per Mcf range. Gas prices are currently in the lower half
of the 10-year average range described above.
Substantially all of the Partnerships' gas reserves are being sold on the
"spot market." Prices on the spot market are subject to wide seasonal and
regional pricing fluctuations due to the highly competitive nature of the spot
market. In addition, such spot market sales are generally short-term in nature
and are dependent upon the obtaining of transportation services provided
36
<PAGE>
by pipelines. Spot prices for the Partnerships' gas decreased from approximately
$2.32 per Mcf at December 31, 1997 to approximately $1.93 per Mcf at December
31, 1998. Such prices were on an MMBTU basis and differ from the prices actually
received by the Partnerships due to transportation and marketing costs, BTU
adjustments, and regional price and quality differences. Continued very low oil
prices as discussed below may cause downward pressure on gas prices due to some
users of gas converting to oil as a cheaper fuel alternative.
For the past ten years, average oil prices have generally been in the
$16.00 to $24.00 per barrel range. Due to global consumption and supply trends
over the last year as well as a drop in Asian energy demand, oil prices over the
past year have reached historically low levels, dropping to as low as
approximately $9.25 per barrel. It is not known whether this trend will
continue. Prices for the Partnerships' oil decreased from approximately $16.25
per barrel at December 31, 1997 to approximately $9.50 per barrel at December
31, 1998.
Future prices for both oil and gas will likely be different from (and may
be lower than) the prices in effect on December 31, 1998. Management is unable
to predict whether future oil and gas prices will (i) stabilize, (ii) increase,
or (iii) decrease.
As discussed in the "Results of Operations" section below, volumes of oil
and gas sold also significantly affect the Partnerships' revenues. Oil and gas
wells generally produce the most oil or gas in the earlier years of their lives
and, as production continues, the rate of production naturally declines. At some
point, production physically ceases or becomes no longer economic. The
Partnerships are not acquiring additional oil and gas properties, and the
existing properties are not experiencing significant additional production
through drilling or other capital projects. Therefore, volumes of oil and gas
produced naturally decline from year to year. While it is difficult for
management to predict future production from these properties, it is likely that
this general trend of declining production will continue.
Despite this general trend of declining production, several factors can
cause the volumes of oil and gas sold to increase or decrease at an even greater
rate over a given period. These factors include, but are not limited to, (i)
geophysical conditions which cause an acceleration of the decline in production,
(ii) the shutting in of wells (or the opening of previously shut-in wells) due
to low oil and gas prices, mechanical difficulties, loss of a market or
transportation, or performance of workovers, recompletions, or other operations
in the well, (iii) prior period volume adjustments (either positive or negative)
made by purchasers of the production, (iv) ownership adjustments in accordance
with agreements governing the operation or ownership of the well (such as
adjustments that occur at payout), and (v) completion of enhanced recovery
projects which
37
<PAGE>
increase production for the well. Many of these factors are very significant as
related to a single well or as related to many wells over a short period of
time. However, due to the large number of wells owned by the Partnerships, these
factors are generally not material as compared to the normal decline in
production experienced on all remaining wells.
Results of Operations
An analysis of the change in net oil and gas operations (oil and gas
sales, less lease operating expenses and production taxes), is presented in the
tables following "Results of Operations" under the heading "Average Sales
Prices, Production Volumes, and Average Production Costs." Following is a
discussion of each Partnerships' results of operations for the year ended
December 31, 1998 as compared to the year ended December 31, 1997, and for the
year ended December 31, 1997 as compared to the year ended December 31, 1996.
III-A Partnership
-----------------
Year Ended December 31, 1998 Compared
to Year Ended December 31, 1997
-------------------------------------
Total oil and gas sales decreased $1,298,837 (39.0%) in 1998 as compared
to 1997. Of this decrease, approximately $114,000 and $710,000, respectively,
were related to decreases in volumes of oil and gas sold and approximately
$248,000 and $227,000, respectively, were related to decreases in the average
prices of oil and gas sold. Volumes of oil and gas sold decreased 5,779 barrels
and 289,162 Mcf, respectively, in 1998 as compared to 1997. The decrease in the
volumes of oil and gas sold resulted primarily from normal declines in
production and the sale of several wells during both years. Average oil and gas
prices decreased to $12.53 per barrel and $2.15 per Mcf, respectively, in 1998
from $19.68 per barrel and $2.46 per Mcf, respectively, in 1997.
As discussed in "Liquidity and Capital Resources" below, the III-A
Partnership sold certain oil and gas properties during 1998 and recognized a
$21,281 gain on such sales. Sales of oil and gas properties during 1997 resulted
in the III-A Partnership recognizing similar gains totaling $148,602.
Oil and gas production expenses (including lease operating expenses and
production taxes) decreased $142,978 (19.9%) in 1998 as compared to 1997. This
decrease resulted primarily from decreases in (i) production taxes associated
with the decrease in oil and gas sales and (ii) lease operating expenses
associated with the decreases in volume of oil and gas sold. These decreases
were partially offset by workover expenses on several
38
<PAGE>
wells during 1998. As a percentage of oil and gas sales, these expenses
increased to 28.4% in 1998 from 21.6% in 1997. This percentage increase was
primarily due to the decreases in the average prices of oil and gas sold.
Depletion, depreciation, and amortization of oil and gas properties
decreased $226,800 (31.3%) in 1998 as compared to 1997. This decrease resulted
primarily from the decreases in volumes of oil and gas sold. As a percentage of
oil and gas sales, this expense increased to 24.6% in 1998 from 21.8% in 1997.
This percentage increase resulted primarily from the decreases in the average
prices of oil and gas sold.
The III-A Partnership recognized a non-cash charge against earnings of
$1,617,006 in the first quarter of 1997. Of this amount, $184,644 was related to
the decline in oil and gas prices used to determine the recoverability of proved
oil and gas reserves at March 31, 1997 and $1,432,362 was related to 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 low oil and gas prices and provisions in
the III-A Partnerships' Partnership Agreement which limit the level of
permissible drilling activity. No similar charge was necessary during 1998.
General and administrative expenses remained relatively constant in 1998
as compared to 1997. As a percentage of oil and gas sales, these expenses
increased to 15.3% in 1998 from 9.4% in 1997, primarily due to the decrease in
oil and gas sales.
The Limited Partners have received cash distributions through December 31,
1998 totaling $25,166,701 or 95.34% of the Limited Partners' capital
contributions.
Year Ended December 31, 1997 Compared
to Year Ended December 31, 1996
-------------------------------------
Total oil and gas sales decreased $305,370 (8.4%) in 1997 as compared to
1996. Of this decrease, approximately $134,000 and $497,000, respectively, were
related to decreases in volumes of oil and gas sold and $45,000 was related to a
decrease in the average price of oil sold, which decreases were partially offset
by an increase of approximately $382,000 related to an increase in the average
price of gas sold. Volumes of oil and gas sold decreased 6,455 barrels and
237,791 Mcf, respectively, in 1997 as compared to 1996. The decrease in volumes
of oil sold resulted primarily from (i) normal declines in production and (ii) a
negative prior period volume adjustment made by a purchaser on one significant
well in 1997. The decrease in volumes of gas sold resulted primarily from (i)
normal declines in production
39
<PAGE>
and (ii) a positive prior period volume adjustment made by a purchaser on one
significant well in 1996. Average oil prices decreased to $19.68 per barrel in
1997 from $20.79 per barrel in 1996. Average gas prices increased to $2.46 per
Mcf in 1997 from $2.09 per Mcf in 1996.
Oil and gas production expenses (including lease operating expenses and
production taxes) decreased $179,983 (20.0%) in 1997 as compared to 1996. This
decrease resulted primarily from (i) the decreases in volumes of oil and gas
sold in 1997 as compared to 1996, (ii) workover expenses incurred on two
significant wells during 1996 in order to improve the recovery of reserves, and
(iii) a decrease in production taxes associated with the decrease in oil and gas
sales. As a percentage of oil and gas sales, these expenses decreased to 21.6%
in 1997 from 24.7% in 1996. This percentage decrease was primarily due to the
dollar decrease in oil and gas production expenses and the increase in the
average price of gas sold in 1997.
Depreciation, depletion, and amortization of oil and gas properties
decreased $410,230 (36.1%) in 1997 as compared to 1996. This decrease resulted
primarily from (i) a reduction in the depletable base of oil and gas properties
due to the impairment provision recorded in the first quarter of 1997 as
discussed below, (ii) the decreases in volumes of oil and gas sold in 1997, and
(iii) 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 21.8% in 1997 from 31.3% in 1996. This percentage decrease resulted primarily
from (i) the dollar decrease in depreciation, depletion, and amortization and
(ii) the increases in the average prices of gas sold in 1997.
The III-A Partnership recognized a non-cash charge against earnings of
$1,617,006 in the first quarter of 1997. Of this amount, $184,644 was related to
the decline in oil and gas prices used to determine the recoverability of proved
oil and gas reserves at March 31, 1997 and $1,432,362 was related to 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 low oil and gas prices and provisions in
the III-A Partnership's Partnership Agreement which limit the level of
permissible drilling activity. No similar charges were necessary in 1996.
General and administrative expenses decreased $12,979 (4.0%) in 1997 as
compared to 1996. This decrease resulted primarily from the reversal of a prior
charge which was recorded in error. As a percentage of oil and gas sales, these
expenses remained relatively constant at 9.4% in 1997 and 8.9% in 1996.
40
<PAGE>
III-B Partnership
-----------------
Year Ended December 31, 1998 Compared
to Year Ended December 31, 1997
-------------------------------------
Total oil and gas sales decreased $770,704 (39.1%) in 1998 as compared to
1997. Of this decrease, approximately $390,000 was related to a decrease in
volumes of gas sold and approximately $234,000 and $87,000, respectively, were
related to decreases in the average prices of oil and gas sold. Volumes of oil
and gas sold decreased 2,995 barrels and 163,694 Mcf, respectively, in 1998 as
compared to 1997. The decrease in the volumes of gas sold resulted primarily
from normal declines in production and the sale of several wells in both years.
Average oil and gas prices decreased to $12.91 per barrel and $2.14 per Mcf,
respectively, in 1998 from $19.76 per barrel and $2.38 per Mcf, respectively, in
1997.
As discussed in "Liquidity and Capital Resources" below, the III-B
Partnership sold certain oil and gas properties during 1998 and recognized a
$33,787 gain on such sales. Sales of oil and gas properties during 1997 resulted
in the III-B Partnership recognizing similar gains totaling $62,748.
Oil and gas production expenses (including lease operating expenses and
production taxes) decreased $89,110 (21.3%) in 1998 as compared to 1997. This
decrease resulted primarily from a decrease in production taxes associated with
the decrease in oil and gas sales and a decrease in lease operating expenses
associated with the decreases in volumes of oil and gas sold. These decreases
were partially offset by workover expenses on several wells during 1998. As a
percentage of oil and gas sales, these expenses increased to 27.5% in 1998 from
21.3% in 1997. This percentage increase was primarily due to the decreases in
the average prices of oil and gas sold.
Depreciation, depletion, and amortization of oil and gas properties
decreased $178,049 (40.0%) in 1998 as compared to 1997. This decrease resulted
primarily from the decreases in volumes of oil and gas sold and upward revisions
in the estimates of remaining oil and gas reserves at December 31, 1998. As a
percentage of oil and gas sales, this expense remained relatively constant at
22.2% in 1998 and 22.6% in 1997.
The III-B Partnership recognized a non-cash charge against earnings of
$738,122 in the first quarter of 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
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
41
<PAGE>
to low oil and gas prices and provisions in the III-B Partnerships' Partnership
Agreement which limit the level of permissible drilling activity. No similar
charge was necessary during 1998.
General and administrative expenses remained relatively constant in 1998
as compared to 1997. As a percentage of oil and gas sales, these expenses
increased to 13.6% in 1998 from 8.3% in 1997, primarily due to the decrease in
oil and gas sales.
The III-B Partnership achieved payout in the first quarter of 1998. After
payout, operations and revenues for the III-B Partnership have been and will be
allocated using the after payout percentages included in the III-B Partnership's
Partnership Agreement. After payout percentages allocate operating income and
expenses 15% to the General Partner and 85% to the Limited Partners. Before
payout, operating income and expenses were allocated 5% to the General Partner
and 95% to the Limited Partners.
The Limited Partners have received cash distributions through December 31,
1998 totaling $14,662,353 or 105.99% of Limited Partners' capital contributions.
Year Ended December 31, 1997 Compared
to Year Ended December 31, 1996
-------------------------------------
Total oil and gas sales decreased $141,385 (6.7%) in 1997 as compared to
1996. Of this decrease approximately $13,000 and $293,000, respectively, related
to decreases in volumes of oil and gas sold and $46,000 related to a decrease in
the average price of oil sold, which decreases were partially offset by an
increase of approximately $212,000 related to an increase in the average price
of gas sold in 1997. Volumes of oil and gas sold decreased 633 barrels and
123,261 Mcf, respectively, in 1997 as compared to 1996. The decrease in volumes
of gas sold resulted primarily from (i) normal declines in production and (ii) a
positive prior period volume adjustment made by the purchaser on one significant
well in 1996. Average oil prices decreased to $19.76 per barrel in 1997 from
$20.98 per barrel in 1996. Average gas prices increased to $2.38 per Mcf in 1997
from $2.05 per Mcf in 1996.
Oil and gas production expenses (including lease operating expenses and
production taxes) decreased $78,274 (15.7%) in 1997 as compared to 1996. This
decrease resulted primarily from (i) the decrease in volumes of gas sold in 1997
and (ii) workover expenses incurred on two wells during 1996 in order to improve
the recovery of reserves. As a percentage of oil and gas sales, these expenses
decreased to 21.3% in 1997 from 23.5% in 1996. This percentage decrease was
primarily due to the dollar decrease
42
<PAGE>
in oil and gas production expenses and the increase in the average price of gas
sold in 1997.
Depreciation, depletion, and amortization of oil and gas properties
decreased $188,404 (29.7%) in 1997 as compared to 1996. This decrease resulted
primarily from (i) a reduction in the depletable base of oil and gas properties
due to the impairment provision recorded in the first quarter of 1997 as
discussed below, (ii) the decreases in volumes of oil and gas sold in 1997, and
(iii) 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 22.6% in 1997 from 30.0% in 1996. This percentage decrease resulted primarily
from (i) the dollar decrease in depreciation, depletion, and amortization and
(ii) the increases in the average prices of gas sold in 1997.
The III-B Partnership recognized a non-cash charge against earnings of
$738,122 in the first quarter of 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
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 low oil and gas prices and provisions in
the III-B Partnership's Partnership Agreement which limit the level of
permissible drilling activity. No similar charges were necessary in 1996.
General and administrative expenses decreased $7,728 (4.5%) in 1997 as
compared to 1996. This decrease resulted primarily from the reversal of a prior
charge which was recorded in error. As a percentage of oil and gas sales, these
expenses remained relatively constant at 8.3% in 1997 and 8.1% in 1996.
III-C Partnership
-----------------
Year Ended December 31, 1998 Compared
to Year Ended December 31, 1997
-------------------------------------
Total oil and gas sales decreased $624,846 (20.3%) in 1998 as compared to
1997. Of this decrease, approximately $142,000 and $475,000, respectively, were
related to decreases in the average prices of oil and gas sold and approximately
$81,000 was related to a decrease in volumes of oil sold. These decreases were
partially offset by an increase of approximately $73,000 related to an increase
in volumes of gas sold. Volumes of oil sold decreased 4,089 barrels in 1998 as
compared to 1997. Volumes of gas sold increased 32,150 Mcf in 1998 as compared
to 1997. The decrease in the volumes of oil sold resulted primarily
43
<PAGE>
from normal declines in production and the sale of several wells in both years.
Average oil and gas prices decreased to $13.58 per barrel and $1.85 per Mcf,
respectively, in 1998 from $19.74 per barrel and $2.26 per Mcf, respectively, in
1997.
As discussed in "Liquidity and Capital Resources" below, the III-C
Partnership sold certain oil and gas properties during 1998 and recognized a
$459,040 gain on such sales. Sales of oil and gas properties during 1997
resulted in the III-C Partnership recognizing similar gains totaling $163,836.
Oil and gas production expenses (including lease operating expenses and
production taxes) decreased $37,064 (4.9%) in 1998 as compared to 1997. As a
percentage of oil and gas sales, these expenses increased to 29.1% in 1998 from
24.4% in 1997. This percentage increase was primarily due to the decreases in
the average prices of oil and gas sold.
Depreciation, depletion, and amortization of oil and gas properties
increased $116,636 (18.6%) in 1998 as compared to 1997. This increase resulted
primarily from downward revisions in the estimates of remaining oil and gas
reserves at December 31, 1998 on two significant wells. As a percentage of oil
and gas sales, this expense increased to 30.4% in 1998 from 20.4% in 1997. This
percentage increase was primarily due to the dollar increase in depreciation,
depletion, and amortization and the decreases in the average prices of oil and
gas sold.
The III-C Partnership recognized a non-cash charge against earnings of
$1,696,417 in the first quarter of 1997. Of this amount, $234,271 was related to
the decline in oil and gas prices used to determine the recoverability of proved
oil and gas reserves at March 31, 1997 and $1,462,146 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 low oil and gas prices and provisions in
the III-C Partnerships' partnership agreement which limit the level of
permissible drilling activity. No similar charge was necessary during 1998.
General and administrative expenses decreased $5,256 (1.8%) in 1998 as
compared to 1997. As a percentage of oil and gas sales, these expenses increased
to 11.8% in 1998 from 9.5% in 1997, primarily due to the decrease in oil and gas
sales.
The Limited Partners have received cash distributions through December 31,
1998 totaling $17,219,795 or 70.42% of the Limited Partners' capital
contributions.
44
<PAGE>
Year Ended December 31, 1997 Compared
to Year Ended December 31, 1996
-------------------------------------
Total oil and gas sales decreased $187,764 (5.8%) in 1997 as compared to
1996. Of this decrease, approximately $452,000 was related to a decrease in
volumes of gas sold and approximately $25,000 was related to a decrease in the
average price of oil sold, which decreases were partially offset by an increase
of approximately $304,000 related to an increase in the average price of gas
sold. Volumes of oil and gas sold decreased by 360 barrels and 227,288 Mcf,
respectively, in 1997 as compared to 1996. The decrease in volumes of gas sold
resulted primarily from (i) normal declines in production, (ii) a negative prior
period volume adjustment made by a purchaser on two significant wells in 1997,
and (iii) a positive prior period volume adjustment made by a purchaser on one
significant well in 1996. Average oil prices decreased to $19.74 per barrel in
1997 from $20.68 per barrel in 1996. Average gas prices increased to $2.26 per
Mcf in 1997 from $1.99 per Mcf in 1996.
Oil and gas production expenses (including lease operating expenses and
production taxes) decreased $32,013 (4.1%) in 1997 as compared to 1996. This
decrease resulted primarily from the decrease in volumes of gas sold in 1997,
which decrease was partially offset by (i) credits issued on one well during
1996 for prior period rental expenses and (ii) workover expenses incurred on
another well during 1997 in order to improve the recovery of reserves. As a
percentage of oil and gas sales, these expenses remained relatively constant at
24.4% in 1997 and 24.0% in 1996.
Depreciation, depletion, and amortization of oil and gas properties
decreased $303,665 (32.7%) in 1997 as compared to 1996. This decrease resulted
primarily from (i) a reduction in the depletable base of oil and gas properties
due to the impairment provision recorded in the first quarter of 1997 as
discussed below, (ii) decreases in volumes of oil and gas sold in 1997, and
(iii) upward revisions in the estimates of remaining oil and gas reserves at
December 31, 1997. As a percentage of oil and gas sales, this expense decreased
to 20.4% in 1997 from 28.5% in 1996. This percentage decrease resulted primarily
from (i) the dollar decrease in depreciation, depletion, and amortization and
(ii) the increases in the average prices of gas sold in 1997.
The III-C Partnership recognized a non-cash charge against earnings of
$1,696,417 in the first quarter of 1997. Of this amount, $234,271 was related to
the decline in oil and gas prices used to determine the recoverability of proved
oil and gas reserves at March 31, 1997 and $1,462,146 was related to the
writing-off of unproved properties. These unproved properties were written off
based on the General Partner's determination
45
<PAGE>
that it was unlikely that such properties would be developed due to low oil and
gas prices and provisions in the III-C Partnership's Partnership Agreement which
limit the level of permissible drilling activity. No similar charges were
necessary in 1996.
General and administrative expenses remained relatively constant in 1997
as compared to 1996. As a percentage of oil and gas sales, these expenses
remained relatively constant at 9.5% in 1997 and 9.0% in 1996.
III-D Partnership
-----------------
Year Ended December 31, 1998 Compared
to Year Ended December 31, 1997
-------------------------------------
Total oil and gas sales decreased $545,974 (23.4%) in 1998 as compared to
1997. Of this decrease, approximately $272,000 and $310,000, respectively, were
related to decreases in the average prices of oil and gas sold and approximately
$93,000 was related to a decrease in volumes of oil sold. These decreases were
partially offset by an increase of approximately $129,000 related to an increase
in volumes of gas sold. Volumes of oil sold decreased 4,850 barrels in 1998 as
compared to 1997. Volumes of gas sold increased 58,827 Mcf in 1998 as compared
to 1997. The decrease in volumes of oil sold resulted primarily from normal
declines in production. The increase in volumes of gas sold resulted primarily
from the successful recompletion of one well, which increase was partially
offset by normal declines in production and the sale of several wells in 1998
and 1997. Average oil and gas prices decreased to $11.52 per barrel and $1.79
per Mcf, respectively, in 1998 from $19.11 per barrel and $2.20 per Mcf,
respectively, in 1997.
As discussed in "Liquidity and Capital Resources" below, the III-D
Partnership sold certain oil and gas properties during 1998 and recognized a
$59,491 gain on such sales. Sales of oil and gas properties during 1997 resulted
in the III-D Partnership recognizing similar gains totaling $25,425.
Oil and gas production expenses (including lease operating expenses and
production taxes) decreased $148,404 (17.1%) in 1998 as compared to 1997. This
decrease resulted primarily from (i) a decrease in production taxes associated
with the decrease in oil and gas sales, (ii) a decrease in lease operating
expenses associated with the decreases in volumes of oil and gas sold, and (iii)
a decrease in workover expenses on one multi-well unit during 1998 as compared
to 1997. As a percentage of oil and gas sales, these expenses increased to 40.2%
in 1998 from 37.1% in 1997. This increase was primarily due to the decreases in
the average prices of oil and gas sold.
46
<PAGE>
Depreciation, depletion, and amortization of oil and gas properties
increased $197,979 (60.7%) in 1998 as compared to 1997. This increase resulted
primarily from significant downward revisions in the estimates of remaining oil
and gas reserves at December 31, 1998. As a percentage of oil and gas sales,
this expense increased to 29.3% in 1998 from 14.0% in 1997. This percentage
increase resulted primarily from the dollar increase in depreciation, depletion,
and amortization and the decreases in the average prices of oil and gas sold.
The III-D Partnership recognized a non-cash charge against earnings of
$506,636 in the fourth quarter of 1998. This charge was related to the decline
in oil and gas prices used to determine recoverability of oil and gas reserves
at December 31, 1998. In the first quarter of 1997, a non-cash charge against
earnings of $932,243 was also recognized. Of this amount, $485,820 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 $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 low oil and gas prices and provisions in
the III-D Partnerships' Partnership Agreement which limit the level of
permissible drilling activity.
General and administrative expenses decreased $2,958 (1.9%) in 1998 as
compared to 1997. As a percentage of oil and gas sales, these expenses increased
to 8.7% in 1998 from 6.8% in 1997, primarily due to the decrease in oil and gas
sales.
The Limited Partners have received cash distributions through December 31,
1998 totaling $8,529,669 or 65.11% of the Limited Partners' capital
contributions.
Year Ended December 31, 1997 Compared
to Year Ended December 31, 1996
-------------------------------------
Total oil and gas sales remained relatively constant in 1997 as compared
to 1996. Decreases of approximately $12,000 and $104,000, respectively, related
to decreases in volumes of oil and gas sold and a decrease of approximately
$41,000 related to a decrease in the average price of oil sold were
substantially offset by an increase of approximately $156,000 related to an
increase in the average price of gas sold. Volumes of oil and gas sold decreased
593 barrels and 52,331 Mcf, respectively, in 1997 as compared to 1996. Average
oil prices decreased to $19.11 per barrel in 1997 from $20.12 per barrel in
1996. Average gas prices increased to $2.20 per Mcf in 1997 from $1.98 per Mcf
in 1996.
47
<PAGE>
Oil and gas production expenses (including lease operating expenses and
production taxes) decreased $61,610 (6.6%) in 1997 as compared to 1996. This
decrease resulted primarily from (i) the decrease in volumes of gas sold during
1997 and (ii) a decrease in general repair and maintenance expenses incurred on
several wells during 1997 as compared to 1996. As a percentage of oil and gas
sales, these expenses decreased to 37.1% in 1997 from 39.7% in 1996. This
percentage decrease was primarily due to the dollar decrease in oil and gas
production expenses and the increase in the average price of gas sold during
1997.
Depreciation, depletion, and amortization of oil and gas properties
decreased $115,418 (26.1%) in 1997 as compared to 1996. This decrease resulted
primarily from (i) a reduction in the depletable base of oil and gas properties
due to the impairment provision recorded in the first quarter of 1997 as
discussed below, (ii) the decreases in volumes of oil and gas sold in 1997, and
(iii) 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 14.0% in 1997 from 18.9% in 1996. This percentage decrease resulted primarily
from (i) the dollar decrease in depreciation, depletion, and amortization
discussed above and (ii) the increases in the average prices of gas sold in
1997.
The III-D Partnership recognized a non-cash charge against earnings of
$932,243 in the first quarter of 1997. Of this amount, $485,820 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 $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 low oil and gas prices and provisions in
the III-D Partnership's Partnership Agreement which limit the level of
permissible drilling activity. No similar charges were necessary in 1996.
General and administrative expenses remained relatively constant in 1997
as compared to 1996. As a percentage of oil and gas sales, these expenses
remained relatively constant at 6.8% in 1997 and 6.8% in 1996.
III-E Partnership
-----------------
Year Ended December 31, 1998 Compared
to Year Ended December 31, 1997
-------------------------------------
Total oil and gas sales decreased $2,641,220 (29.2%) in 1998 as compared
to 1997. Of this decrease, approximately $1,706,000 and $274,000, respectively,
were related to decreases in the
48
<PAGE>
average prices of oil and gas sold and approximately $449,000 was related to a
decrease in the volumes of gas sold. Volumes of oil and gas sold decreased
11,216 barrels and 214,702 Mcf, respectively, in 1998 as compared to 1997.
Average oil and gas prices decreased to $11.35 per barrel and $1.95 per Mcf,
respectively, in 1998 from $18.97 per barrel and $2.09 per Mcf, respectively, in
1997.
As discussed in "Liquidity and Capital Resources" below, the III-E
Partnership sold certain oil and gas properties during 1998 and recognized a
$36,219 gain on such sales. Sales of oil and gas properties during 1997 resulted
in the III-E Partnership recognizing a $39,835 loss on such sales.
Oil and gas production expenses (including lease operating expenses and
production taxes) decreased $818,042 (18.1%) in 1998 as compared to 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 decrease in volumes of oil and gas sold, and (iii)
a decrease in workover expenses on one significant multi-well unit during 1998
as compared to 1997. As a percentage of oil and gas sales, these expenses
increased to 57.7% in 1998 from 49.9% in 1997. This percentage increase was
primarily due to the decreases in the average prices of oil and gas sold.
Depreciation, depletion, and amortization of oil and gas properties
increased $785,736 (65.6%) in 1998 as compared to 1997. This increase resulted
primarily from significant downward revisions in the estimates of remaining oil
and gas reserves at December 31, 1998. As a percentage of oil and gas sales,
this expense increased to 31.0% in 1998 from 13.3% in 1997. This percentage
increase resulted primarily from the dollar increase in depreciation, depletion,
and amortization and the decreases in the average prices of oil and gas sold.
The III-E Partnership recognized a non-cash charge against earnings of
$3,503,400 in the fourth quarter of 1998. This charge was related to the decline
in oil and gas prices used to determine recoverability of oil and gas reserves
at December 31, 1998. In the first quarter of 1997, a non-cash charge against
earnings of $2,893,438 was also recognized. Of this amount, $2,042,775 was
related to the decline in oil and gas prices used to determine the
recoverability of oil and gas reserves at March 31, 1997 and $850,663 was
related to the writing-off of unproved properties. These unproved properties
were written off based on the General Partner's determination that it was
unlikely that such properties would be developed due to low oil and gas prices
and provisions in the III-E Partnership's Partnership Agreement which limit the
level of permissible drilling activity.
General and administrative expenses remained relatively constant in 1998
as compared to 1997. As a percentage of oil and gas sales, these expenses
increased to 7.8% in 1998 from 5.6% in
49
<PAGE>
1997, primarily due to the decrease in oil and gas sales.
The Limited Partners have received cash distributions through December 31,
1998 totaling $30,221,016 or 72.25% of the Limited Partners' capital
contributions.
Year Ended December 31, 1997 Compared
to Year Ended December 31, 1996
-------------------------------------
Total oil and gas sales remained relatively constant in 1997 as compared
to 1996. Increases of approximately $118,000 and $77,000, respectively, related
to increases in volumes of oil and gas sold and an increase of approximately
$44,000 related to an increase in the average price of gas sold were
substantially offset by a decrease of approximately $230,000 related to a
decrease in the average price of oil sold. Volumes of oil and gas sold increased
5,926 barrels and 37,020 Mcf, respectively, in 1997 as compared to 1996. Average
oil prices decreased to $18.97 per barrel in 1997 from $19.95 per barrel in
1996. Average gas prices increased to $2.09 per Mcf in 1997 from $2.07 in 1996.
Oil and gas production expenses (including lease operating expenses and
production taxes) increased $94,952 (2.1%) in 1997 as compared to 1996. This
increase resulted primarily from the increases in volumes of oil and gas sold in
1997. As a percentage of oil and gas sales, these expenses remained relatively
constant at 49.9% in 1997 and 48.9% in 1996.
Depreciation, depletion, and amortization of oil and gas properties
decreased $539,246 (31.0%) in 1997 as compared to 1996. This decrease resulted
primarily from (i) a reduction in the depletable base of oil and gas properties
due to the impairment provision recorded in the first quarter of 1997 as
discussed below 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 13.3% in 1997 from 19.2% in 1996. This percentage decrease
resulted primarily from the dollar decrease in depreciation, depletion, and
amortization discussed above.
The III-E Partnership recognized a non-cash charge against earnings of
$2,893,438 in the first quarter of 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 March 31, 1997 and $850,663 was related to the
writing-off of unproved properties. These unproved properties were written off
based on the General Partner's determination that it was unlikely that such
properties would be developed due to low oil and gas prices and provisions in
the III-E
50
<PAGE>
Partnership's Partnership Agreement which limit the level of permissible
drilling activity. No similar charges were necessary in 1996.
General and administrative expenses remained relatively constant in 1997
as compared to 1996. As a percentage of oil and gas sales, these expenses
remained relatively constant at 5.6% in 1997 and 5.6% in 1996.
III-F Partnership
-----------------
Year Ended December 31, 1998 Compared
to Year Ended December 31, 1997
-------------------------------------
Total oil and gas sales decreased $842,257 (28.2%) for 1998 as compared to
1997. Of this decrease, approximately $222,000 and $216,000, respectively, were
related to decreases in volumes of oil and gas sold and approximately $339,000
and $65,000, respectively, were related to decreases in the average prices of
oil and gas sold. Volumes of oil and gas sold decreased 11,785 barrels and
110,838 Mcf, respectively, for 1998 as compared to 1997. The decrease in volumes
of oil sold resulted primarily from normal declines in production and the sale
of several wells during 1998 and 1997. The decrease in volumes of gas sold
resulted primarily from (i) normal declines in production, (ii) the shutting-in
of two significant wells during a portion of 1998 in order to perform a workover
on one well and repairs on the other well, and (iii) the sale of several wells
during 1998 and 1997. Average oil and gas prices decreased to $12.56 per barrel
and $1.87 per Mcf, respectively, for 1998 from $18.85 per barrel and $1.95 per
Mcf, respectively, for 1997.
As discussed in "Liquidity and Capital Resources" below, the III-F
Partnership sold certain oil and gas properties during 1998 and recognized a
$22,073 gain on such sales. Sales of oil and gas properties during 1997 resulted
in the III-F Partnership recognizing losses totaling $14,411 on such sales.
Oil and gas production expenses (including lease operating expenses and
production taxes) decreased $147,464 (11.1%) for 1998 as compared to 1997. This
decrease resulted primarily from (i) workover expenses incurred on several wells
during 1997 in order to improve the recovery of reserves and (ii) the sale of
one significant well during 1997. These decreases were partially offset by
workover expenses and repair and maintenance expenses incurred during 1998 on
several wells. As a percentage of oil and gas sales, these expenses increased to
55.2% for 1998 from 44.6% for 1997. This percentage increase was primarily due
to (i) the decreases in the average prices of oil and gas sold during 1998 and
(ii) the workover expenses and repair and maintenance expenses incurred during
1998.
51
<PAGE>
Depreciation, depletion, and amortization of oil and gas properties
decreased $34,359 (4.5%) for 1998 as compared to 1997. This decrease was
primarily due to the decreases in volumes of oil and gas sold, which decrease
was partially offset by downward revisions in the estimates of remaining oil
reserves at December 31, 1998 on two significant wells. As a percentage of oil
and gas sales, this expense increased to 33.6% for 1998 from 25.3% for 1997.
This percentage increase resulted primarily from the decreases in the average
prices of oil and gas sold.
The III-F Partnership recognized a non-cash charge against earnings of
$2,884,405 in the first quarter of 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 low oil and gas prices and provisions in
the III-F Partnership's Partnership Agreement which limit the level of
permissible drilling activity. No similar charges were necessary in 1998.
General and administrative expenses decreased $5,087 (1.9%) for 1998 as
compared to 1997. As a percentage of oil and gas sales, these expenses increased
to 12.1% for 1998 from 8.9% for 1997, primarily due to the decrease in oil and
gas sales.
The Limited Partners have received cash distributions through December 31,
1998 totaling $11,129,904 or 50.25% of Limited Partners' capital contributions.
Year Ended December 31, 1997 Compared
to Year Ended December 31, 1996
-------------------------------------
Total oil and gas sales decreased $103,288 (3.3%) in 1997 as compared to
1996. Of this decrease, approximately $167,000 and $46,000, respectively,
related to decreases in volumes of oil and gas sold and approximately $87,000
related to a decrease in the average price of oil sold, which decreases were
partially offset by an increase of approximately $198,000 related to an increase
in the average price of gas sold. Volumes of oil and gas sold decreased by 8,277
barrels and 26,380 Mcf, respectively, in 1997 as compared to 1996. The decrease
in volumes of oil sold resulted primarily from (i) normal declines in production
and (ii) the sale of two significant wells in mid-1996. Average oil prices
decreased to $18.85 per barrel in 1997 from $20.18 per barrel in 1996. Average
gas prices increased to $1.95 per Mcf in 1997 from $1.73 per Mcf in 1996.
52
<PAGE>
Oil and gas production expenses (including lease operating expenses and
production taxes) increased $95,324 (7.7%) in 1997 as compared to 1996. This
increase resulted primarily from (i) workover expenses incurred on three wells
during 1997 in order to improve the recovery of reserves and (ii) credits issued
on one well during 1996 for prior period rental expenses, which increases were
partially offset by the decreases in volumes of oil and gas sold during 1997. As
a percentage of oil and gas sales, these expenses increased to 44.6% in 1997
from 40.0% in 1996. This percentage increase was primarily due to the dollar
increase in oil and gas production expenses discussed above and the decrease in
the average price of oil sold during 1997.
Depreciation, depletion, and amortization of oil and gas properties
decreased $374,649 (33.1%) in 1997 as compared to 1996. This decrease resulted
primarily from (i) a reduction in the depletable base of oil and gas properties
due to the impairment provision recorded in the first quarter of 1997 as
discussed below, (ii) the decreases in volumes of oil and gas sold in 1997, and
(iii) 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 25.3%
in 1997 from 36.5% in 1996. This percentage decrease resulted primarily from (i)
the dollar decrease in depreciation, depletion, and amortization discussed above
and (ii) the increases in the average prices of gas sold in 1997.
The III-F Partnership recognized a non-cash charge against earnings of
$2,884,405 in the first quarter of 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 low oil and gas prices and provisions in
the III-F Partnership's Partnership Agreement which limit the level of
permissible drilling activity. No similar charges were necessary in 1996.
General and administrative expenses remained relatively constant in 1997
as compared to 1996. As a percentage of oil and gas sales, these expenses
remained relatively constant at 8.9% in 1997 and 8.6% in 1996.
53
<PAGE>
III-G Partnership
-----------------
Year Ended December 31, 1998 Compared
to Year Ended December 31, 1997
-------------------------------------
Total oil and gas sales decreased $572,689 (31.0%) for 1998 as compared to
1997. Of this decrease, approximately $163,000 and $154,000, respectively, were
related to decreases in volumes of oil and gas sold and approximately $246,000
was related to a decrease in the average price of oil sold. Volumes of oil and
gas sold decreased 8,635 barrels and 81,153 Mcf, respectively, for 1998 as
compared to 1997. The decrease in volumes of oil sold resulted primarily from
normal declines in production and the sale of several wells during 1998 and
1997. The decrease in volumes of gas sold resulted primarily from (i) normal
declines in production, (ii) the shutting-in of two significant wells during a
portion of 1998 in order to perform a workover on one well and repairs on the
other well, and (iii) the sale of several wells during 1998 and 1997. Average
oil and gas prices decreased to $12.55 per barrel and $1.87 per Mcf,
respectively, for 1998 from $18.90 per barrel and $1.89 per Mcf, respectively,
for 1997.
As discussed in "Liquidity and Capital Resources" below, the III-G
Partnership sold certain oil and gas properties during 1998 and recognized a
$19,340 gain on such sales. Sales of oil and gas properties during 1997 resulted
in the III-G Partnership recognizing similar gains totaling $4,685.
Oil and gas production expenses (including lease operating expenses and
production taxes) decreased $110,230 (12.9%) for 1998 as compared to 1997. This
decrease resulted primarily from (i) workover expenses incurred on several wells
during 1997 in order to improve the recovery of reserves and (ii) the sale of
one significant well during 1997. These decreases were partially offset by
workover expenses and repair and maintenance expenses incurred during 1998 on
several wells. As a percentage of oil and gas sales, these expenses increased to
58.5% for 1998 from 46.3% for 1997. This percentage increase was primarily due
to (i) the decrease in the average price of oil sold and (ii) the workover
expenses and repair and maintenance expenses incurred during 1998.
Depreciation, depletion, and amortization of oil and gas properties
decreased $25,309 (5.9%) for 1998 as compared to 1997. This decrease was
primarily due to the decreases in volumes of oil and gas sold, which decrease
was partially offset by downward revisions in the estimates of remaining oil
reserves at December 31, 1998 on two significant wells. As a percentage of oil
and gas sales, this expense increased to 31.5% for 1998 from 23.1% for 1997.
This percentage increase resulted primarily from the decrease in the average
price of oil sold.
54
<PAGE>
The III-G Partnership recognized a non-cash charge against earnings of
$310,413 in the fourth quarter of 1998. This charge was related to the decline
in oil and gas prices used to determine the recoverability of oil and gas
reserves at December 31, 1998. The III-G Partnership also recognized non-cash
charges against earnings totaling $1,551,780 in 1997. Of this amount, $1,449,404
was recognized in the first quarter of 1997 and $102,376 was recognized in the
fourth quarter of 1997. Of the first quarter charge in 1997, $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 low oil and gas prices
and provisions in the III-G Partnership's Partnership Agreement which limit the
level of permissible drilling activity. The charge in the fourth quarter of 1997
was related to the decline in oil prices used to determine the recoverability of
proved oil reserves at December 31, 1997.
General and administrative expenses decreased $2,876 (2.0%) for 1998 as
compared to 1997. As a percentage of oil and gas sales, these expenses increased
to 11.3% for 1998 from 7.9% for 1997, primarily due to the decrease in oil and
gas sales.
The Limited Partners have received cash distributions through December 31,
1998 totaling $5,847,287 or 47.96% of Limited Partners' capital contributions.
Year Ended December 31, 1997 Compared
to Year Ended December 31, 1996
-------------------------------------
Total oil and gas sales decreased $117,291 (6.0%) in 1997 as compared to
1996. Of this decrease, approximately $133,000 related to a decrease in volumes
of oil sold and approximately $61,000 related to a decrease in the average price
of oil sold, which decreases were partially offset by an increase of
approximately $75,000 related to an increase in the average price of gas sold.
Volumes of oil sold decreased 6,590 barrels in 1997 as compared to 1996. Volumes
of gas sold increased 1,082 Mcf in 1997 as compared to 1996. The decrease in
volumes of oil sold resulted primarily from (i) a normal decline in production
and (ii) the sale of several wells in 1996. Average oil prices decreased to
$18.90 per barrel in 1997 from $20.19 per barrel in 1996. Average gas prices
increased to $1.89 per Mcf in 1997 from $1.74 per Mcf in 1996.
Oil and gas production expenses (including lease operating expenses and
production taxes) increased $50,263 (6.2%) in 1997 as compared to 1996. This
increase resulted primarily from (i)
55
<PAGE>
workover expenses incurred on three wells during 1997 in order to improve the
recovery of reserves and (ii) an increase in general repair and maintenance
expenses incurred on one significant well during 1997 as compared to 1996, which
increase was partially offset by the decrease in volumes of oil sold during
1997. As a percentage of oil and gas sales, these expenses increased to 46.3% in
1997 from 41.0% in 1996. This percentage increase was primarily due to the
dollar increase in oil and gas production expenses discussed above and the
decrease in the average price of oil sold during 1997.
Depreciation, depletion, and amortization of oil and gas properties
decreased $227,810 (34.9%) in 1997 as compared to 1996. This decrease resulted
primarily from (i) a reduction in the depletable base of oil and gas properties
due to the impairment provision recorded in the first quarter of 1997 as
discussed below, (ii) the decreases in volumes of oil sold in 1997, and (iii)
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 23.1% in
1997 from 33.3% in 1996. This percentage decrease resulted primarily from (i)
the dollar decrease in depreciation, depletion, and amortization discussed above
and (ii) the increases in the average prices of gas sold in 1997.
The III-G Partnership recognized a non-cash charge against earnings of
$1,449,404 in the first quarter of 1997 and $102,376 in the fourth quarter of
1997. Of the first quarter charge, $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 low oil and gas prices and provisions in the III-G
Partnership's Partnership Agreement which limit the level of permissible
drilling activity. The fourth quarter charge of $102,376 was primarily related
to the decline in oil prices used to determine the recoverability of proved oil
and gas reserves at December 31, 1997. No similar charges were necessary in
1996.
General and administrative expenses remained relatively constant in 1997
as compared to 1996. As a percentage of oil and gas sales, these expenses
remained relatively constant at 7.9% in 1997 and 7.5% in 1996.
Average Sale Prices, Production Volumes, and Average Production Costs
The following tables are comparisons of annual average oil and gas sales
prices, production volumes, and average production costs (lease operating
expenses and production taxes) per
56
<PAGE>
equivalent unit (one barrel or 6 Mcf of gas) for 1998, 1997, and 1996. These
factors comprise the change in net oil and gas operations discussed in the
"Results of Operations" section above.
1998 Compared to 1997
---------------------
Average Sales Prices
- ----------------------------------------------------------------------------
P/ship 1998 1997 % Change
- ------ ------------------- ----------------- -------------
Oil Gas Oil Gas
($/Bbl) ($/Mcf) ($/Bbl) ($/Mcf) Oil Gas
------- ------- ------- ------- ----- ----
III-A $12.53 $2.15 $19.68 $2.46 (36%) (13%)
III-B 12.91 2.14 19.76 2.38 (35%) (10%)
III-C 13.58 1.85 19.74 2.26 (31%) (18%)
III-D 11.52 1.79 19.11 2.20 (40%) (19%)
III-E 11.35 1.95 18.97 2.09 (40%) ( 7%)
III-F 12.56 1.87 18.85 1.95 (33%) ( 4%)
III-G 12.55 1.87 18.90 1.89 (34%) ( 1%)
Production Volumes
- ----------------------------------------------------------------------------
P/ship 1998 1997 % Change
- ------ --------------------- ------------------- -------------
Oil Gas Oil Gas Oil Gas
(Bbls) (Mcf) (Bbls) (Mcf) (Bbls) (Mcf)
------- --------- ------- --------- ------ -----
III-A 34,689 741,990 40,468 1,031,152 (14%) (28%)
III-B 34,221 355,197 37,216 518,891 ( 8%) (32%)
III-C 22,980 1,156,387 27,069 1,124,237 (15%) 3%
III-D 35,908 767,089 40,758 708,262 (12%) 8%
III-E 223,936 1,974,917 235,152 2,189,619 ( 5%) (10%)
III-F 54,002 787,609 65,787 898,447 (18%) (12%)
III-G 38,858 419,813 47,493 500,966 (18%) (16%)
Average Production Costs
per Equivalent Barrel of Oil
-----------------------------------
P/ship 1998 1997 % Change
------ ----- ----- --------
III-A $3.64 $3.39 7%
III-B 3.53 3.39 4%
III-C 3.30 3.49 ( 5%)
III-D 4.39 5.46 (20%)
III-E 6.68 7.52 (11%)
III-F 6.40 6.18 4%
III-G 6.84 6.52 5%
57
<PAGE>
1997 Compared to 1996
---------------------
Average Sales Prices
- ----------------------------------------------------------------------------
P/ship 1997 1996 % Change
- ------ ------------------- ----------------- -------------
Oil Gas Oil Gas
($/Bbl) ($/Mcf) ($/Bbl) ($/Mcf) Oil Gas
------- ------- ------- ------- ----- ----
III-A $19.68 $2.46 $20.79 $2.09 (5%) 18%
III-B 19.76 2.38 20.98 2.05 (6%) 16%
III-C 19.74 2.26 20.68 1.99 (5%) 14%
III-D 19.11 2.20 20.12 1.98 (5%) 11%
III-E 18.97 2.09 19.95 2.07 (5%) 1%
III-F 18.85 1.95 20.18 1.73 (7%) 13%
III-G 18.90 1.89 20.19 1.74 (6%) 9%
Production Volumes
- ----------------------------------------------------------------------------
P/ship 1997 1996 % Change
- ------ --------------------- ------------------- -------------
Oil Gas Oil Gas Oil Gas
(Bbls) (Mcf) (Bbls) (Mcf) (Bbls) (Mcf)
------- --------- ------- --------- ------ -----
III-A 40,468 1,031,152 46,923 1,268,943 (14%) (19%)
III-B 37,216 518,891 37,849 642,152 ( 2%) (19%)
III-C 27,069 1,124,237 27,429 1,351,525 ( 1%) (17%)
III-D 40,758 708,262 41,351 760,593 ( 1%) ( 7%)
III-E 235,152 2,189,619 229,226 2,152,599 3% 2%
III-F 65,787 898,447 74,064 924,827 (11%) ( 3%)
III-G 47,493 500,966 54,083 499,884 (12%) -%
Average Production Costs
per Equivalent Barrel of Oil
-----------------------------------
P/ship 1997 1996 % Change
------ ----- ----- --------
III-A $3.39 $3.48 ( 3%)
III-B 3.39 3.43 ( 1%)
III-C 3.49 3.09 13%
III-D 5.46 5.52 ( 1%)
III-E 7.52 7.51 -%
III-F 6.18 5.42 14%
III-G 6.52 5.85 11%
58
<PAGE>
Liquidity and Capital Resources
Net proceeds from operations less necessary operating capital are
distributed to the Limited Partners on a quarterly basis. See "Item 5. Market
for Units and Related Limited Partner Matters." The net proceeds from production
are not reinvested in productive assets, except to the extent that producing
wells are improved, or where methods are employed to permit more efficient
recovery of reserves, thereby resulting in a positive economic impact. Assuming
1998 production levels for future years, the Partnerships' proved reserve
quantities at December 31, 1998 would have the following remaining lives:
Partnership Gas-Years Oil-Years
----------- --------- ---------
III-A 6.4 2.7
III-B 6.1 2.7
III-C 5.0 5.9
III-D 3.7 3.5
III-E 4.1 2.7
III-F 6.0 4.3
III-G 6.0 4.4
The Partnerships' available capital from the Limited Partners'
subscriptions has been spent on oil and gas properties and there should be no
further material capital resource commitments in the future. Occasional
expenditures by the Partnerships for new wells or well completions or workovers,
however, may reduce or eliminate cash available for a particular quarterly cash
distribution. The Partnerships have no debt commitments. Cash for operational
purposes will be provided by current oil and gas production.
The Partnerships sold certain oil and gas properties during 1997 and 1998.
The sale of the Partnerships' properties was made by the General Partner after
giving due consideration to both the offer price and the General Partner's
estimate of the property's remaining proved reserves and future operating costs.
Net proceeds from the sale of such properties were included in the calculation
of the Partnerships' cash distributions for the quarter immediately following
the Partnerships' receipt of the proceeds. The amount of such proceeds from the
sale of oil and gas properties during 1998 and 1997 were as follows:
Partnership 1998 1997
----------- ---------- --------
III-A $ 25,815 $572,237
III-B 35,047 278,513
III-C 501,935 231,006
III-D 67,181 26,912
III-E 77,860 38,925
III-F 56,560 83,156
III-G 33,830 65,190
59
<PAGE>
The General Partner believes that the sale of these properties will be
beneficial to the Partnerships in the long-term since the properties sold
generally had a higher ratio of future operating expenses as compared to
reserves than the properties not sold.
There can be no assurance as to the amount of the Partnerships' future
cash distributions. The Partnerships' ability to make cash distributions depends
primarily upon the level of available cash flow generated by the Partnerships'
operating activities, which will be affected (either positively or negatively)
by many factors beyond the control of the Partnerships, including the price of
and demand for oil and gas and other market and economic conditions. Even if
prices and costs remain stable, the amount of cash available for distributions
will decline over time (as the volume of production from producing properties
declines) since the Partnerships are not replacing production through
acquisitions of producing properties and drilling. The Partnerships' quantity of
proved reserves has been reduced by the sale of oil and gas properties as
described above; therefore, it is possible that the Partnerships' future cash
distributions will decline as a result of a reduction of the Partnerships'
reserve base.
The Partnerships will terminate on the following dates in accordance with
the Partnership Agreements:
Partnership Termination Date
----------- -----------------
III-A November 28, 1999
III-B January 24, 2000
III-C February 28, 2000
III-D September 5, 2000
III-E December 26, 2000
III-F March 7, 2001
III-G September 20, 2001
However, the Partnership Agreements provide that the General Partner may extend
the term of each Partnership for five periods of two years each. As of the date
of this Annual Report, the General Partner intends to extend the term of the
III-A, III-B, and III-C Partnerships for the first two-year extension period,
but has not determined whether it intends to (i) further extend the term of such
Partnerships or (ii) extend the term of any other Partnership.
60
<PAGE>
Inflation and Changing Prices
Prices obtained for oil and gas production depend upon numerous factors,
including the extent of domestic and foreign production, foreign imports of oil,
market demand, domestic and foreign economic conditions in general, and
governmental regulations and tax laws. The general level of inflation in the
economy did not have a material effect on the operations of the Partnerships in
1998. Oil and gas prices have fluctuated during recent years and generally have
not followed the same pattern as inflation. See "Item 2. Properties - Oil and
Gas Production, Revenue, and Price History."
Year 2000
In General
The Year 2000 Issue ("Y2K") refers to the inability of computer and other
information technology systems to properly process date and time information,
stemming from the earlier programming practice of using two digits rather than
four to represent the year in a date. For example, computer programs and
imbedded chips that are date sensitive may recognize a date using (00) as the
year 1900 rather than the year 2000. The consequence of Y2K is that computer and
imbedded processing systems may be at risk of malfunctioning, particularly
during the transition from 1999 to 2000.
The effects of Y2K are exacerbated by the interdependence of computer and
telecommunication systems throughout the world. This interdependence also exists
among the Partnerships, Samson, and their vendors, customers, and business
partners, as well as with regulators. The potential risks associated with Y2K
for an oil and gas production company fall into three general areas: (i)
financial, leasehold and administrative computer systems, (ii) imbedded systems
in field process control units, and (iii) third party exposures. As discussed
below, the General Partner does not believe that these risks will be material to
the Partnerships' operations.
The Partnerships' business is producing oil and gas. The day-to-day
production of the Partnerships' oil and gas is not dependent on computers or
equipment with imbedded chips. As further discussed below, management
anticipates that the Partnerships' daily business activities will not be
materially affected by Y2K.
The Partnerships rely on Samson to provide all of its operational and
administrative services on either a direct or indirect basis. Samson is
addressing each of the three Y2K areas discussed above through a readiness
process that seeks to:
61
<PAGE>
1. increase the awareness of the issue among key employees;
2. identify areas of potential risk;
3. assess the relative impact of these risks and Samson's ability to manage
them; and
4. remediate these risks on a priority basis wherever possible.
Samson Investment Company's Chief Financial Officer is responsible for
communicating to its Board of Directors Y2K actions and for the ultimate
implementation of its Y2K plan. He has delegated to Samson Investment Company's
Senior Vice President-Technology and Administrative Services principal
responsibility for ensuring Y2K compliance within Samson.
Samson has been planning for the impact of Y2K on its information
technology systems since 1993. As of February 1, 1999, Samson is in the final
stages of implementation of a Y2K plan, as summarized below:
Financial and Administrative Systems
1. Awareness. Samson has alerted its officers, managers and supervisors of
Y2K issues and asked them to have their employees participate in the
identification of potential Y2K risks which might otherwise go unnoticed by
higher level employees and officers. As a result, awareness of the issue is
considered high.
2. Risk Identification. Samson's most significant financial and
administrative systems exposure is the Y2K status of the accounting and land
administration system used to collect and manage data for internal management
decision making and for external revenue and accounts payable purposes. Other
concerns include network hardware and software, desktop computing hardware and
software, telecommunications, and office space readiness.
3. Risk Assessment. The failure to identify and correct a material Y2K
problem could result in inaccurate or untimely financial information for
management decision-making or cash flow and payment purposes, including
maintaining oil and gas leases.
4. Remediation. Since 1993, Samson has been upgrading its accounting and
land administration software. Substantially all of the Y2K upgrades have been
completed, with the remainder scheduled to be completed during the 1st quarter
of 1999. In addition, in 1997 and 1998 Samson replaced or applied software
patches to substantially all of its network and desktop software applications
and believes them to be generally Y2K compliant. Additional patches or software
upgrades will be applied no later than March 31, 1999 to complete this process.
The costs of all such risk assessments and remediation are not expected to be
material to the Partnerships.
62
<PAGE>
5. Contingency Planning. Notwithstanding the foregoing, should there be
significant unanticipated disruptions in Samson's financial and administrative
systems, all of the accounting processes that are currently automated will need
to be performed manually. Samson will consider in the second half of 1999 its
options with respect to contingency arrangements for temporary staffing to
accommodate such situations.
Imbedded Systems
1. Awareness. Samson's Y2K program has involved all levels of field
personnel from production foremen and higher. Employees at all levels of the
organization have been asked to participate in the identification of potential
Y2K risks, which might otherwise go unnoticed by higher level employees and
officers of Samson, and as a result, awareness of the issue is considered high.
2. Risk Identification. Samson has inventoried all possible exposures to
imbedded chips and systems. Such exposures can be classified as either (i) oil
and gas production and processing equipment or (ii) office machines such as
faxes, copiers, phones, etc.
With respect to oil and gas production and processing equipment, neither
Samson nor the Partnerships operate offshore wells, significant processing
plants, or wells with older electronic monitoring systems. As a result, Samson's
inventory identified less than 10 applications using imbedded chips. All of
these are in the process of being tested by the respective vendors and are
expected to be Y2K compliant or replaced no later than May 30, 1999. Oil and gas
production related to such equipment is very minor with respect to the entire
Samson group, and, in fact, the Partnerships' production may not use such
equipment at all.
Office machines are currently being tested by Samson and vendors. It is
expected that such machines will be made compliant or replaced no later than
March 31, 1999.
3. Risk Assessment and Remediation. The failure to identify and correct a
material Y2K problem in an imbedded system could result in outcomes ranging from
errors in data reporting to curtailments or shutdowns in production. As noted
above, Samson has identified less than 10 imbedded system applications that may
have a Y2K problem. None of these applications are believed to be material to
Samson or the Partnerships. Once identified, assessed and prioritized, Samson
intends to test and upgrade imbedded components and systems in field process
control units deemed to pose the greatest risk of significant non-compliance and
capable of testing. Samson believes that sufficient manual processes are
available to minimize any such field level risk and that there will be no
material impact on the Partnerships with respect to these applications.
63
<PAGE>
4. Contingency Planning. Should material production disruptions occur as a
result of Y2K failures in field operations, Samson will utilize its existing
field personnel in an attempt to avoid any material impact on operating cash
flow. Samson is not able to quantify any potential exposure in the event of
systems failure or inadequate manual alternatives.
Third Party Exposures
1. Awareness. Samson has advised management to consider Y2K implications
with its outside vendors, customers, and business partners. Management has been
asked to participate in the identification of potential third party Y2K risks
and, as a result, awareness of the issue is considered high.
2. Risk Identification. Samson's most significant third party Y2K exposure
is its dependence on third parties for the receipt of revenues from oil and gas
sales. However, virtually all of these purchasers are very large and
sophisticated companies. Other Y2K concerns include the availability of electric
power to Samson's field operations, the integrity of telecommunication systems,
and the readiness of commercial banks to execute electronic fund transfers.
3. Risk Assessment. Because of the high awareness of the Y2K problem in
the U.S., Samson has not undertaken and does not plan to undertake a formal
company wide plan to make inquiries of third parties on the subject of Y2K
readiness. If it did so, Samson has no ability to require responses to such
inquiries or to independently verify their accuracy. Samson has, however,
received oral assurances from its significant oil and gas purchasers of Y2K
compliance. If significant disruptions from major purchasers were to occur,
however, there could be a material and adverse impact on the Partnerships'
results of operations, liquidity, and financial conditions.
It is important to note that third party oil and gas purchasers have
significant incentives to avoid disruptions arising from a Y2K failure. For
example, most of these parties are under contractual obligations to purchase oil
and gas or disperse revenues to Samson. The failure to do so will result in
contractual and statutory penalties. Therefore, the General Partner believes
that it is unlikely that there will be material third party non-compliance with
purchase and remittance obligations as a result of Y2K issues.
4. Remediation. Where Samson perceives significant risk of Y2K
non-compliance that may have a material impact on it, and where the relationship
between Samson and a vendor, customer, or business partner permits, joint
testing may be undertaken during 1999 to further identify these risks.
64
<PAGE>
5. Contingency Planning. In the unlikely event that material production
disruptions occur as a result of Y2K failures of third parties, the
Partnerships' operating cash flow could be impacted. This contingency will be
factored into deliberations on the level of quarterly cash distributions paid
out during any such period of cash flow disruption.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
The Partnerships do not hold any market risk sensitive instruments.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The financial statements and supplementary data are indexed in Item 14
hereof.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
None.
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE GENERAL PARTNER
The Partnerships have no directors or executive officers. The following
individuals are directors and executive officers of the General Partner. The
business address of such director and executive officers is Two West Second
Street, Tulsa, Oklahoma 74103.
Name Age Position with Geodyne
---------------- --- --------------------------------
Dennis R. Neill 46 President and Director
Judy K. Fox 47 Secretary
The director will hold office until the next annual meeting of shareholders of
Geodyne and until his successor has been duly elected and qualified. All
executive officers serve at the discretion of the Board of Directors.
Dennis R. Neill joined Samson in 1981, was named Senior Vice President and
Director of Geodyne on March 3, 1993, and was named President of Geodyne and its
subsidiaries on June 30, 1996. Prior to joining Samson, he was associated with a
Tulsa law firm, Conner and Winters, where his principal practice was in the
65
<PAGE>
securities area. He received a Bachelor of Arts degree in political science from
Oklahoma State University and a Juris Doctorate degree from the University of
Texas. Mr. Neill also serves as Senior Vice President of Samson Investment
Company and as President and Director of Samson Properties Incorporated, Samson
Hydrocarbons Company, Dyco Petroleum Corporation, Berry Gas Company, Circle L
Drilling Company, Snyder Exploration Company, and Compression, Inc.
Judy K. Fox joined Samson in 1990 and was named Secretary of Geodyne and
its subsidiaries on June 30, 1996. Prior to joining Samson, she served as Gas
Contract Manager for Ely Energy Company. Ms. Fox is also Secretary of Berry Gas
Company, Circle L Drilling Company, Compression, Inc., Dyco Petroleum
Corporation, Samson Hydrocarbons Company, Snyder Exploration Company, and Samson
Properties Incorporated.
Section 16(a) Beneficial Ownership Reporting Compliance
To the best knowledge of the Partnerships and the General Partner, there
were no officers, directors, or ten percent owners who were delinquent filers
during 1998 of reports required under Section 16 of the Securities Exchange Act
of 1934.
ITEM 11. EXECUTIVE COMPENSATION
The General Partner and its affiliates are reimbursed for actual general
and administrative costs and operating costs incurred and attributable to the
conduct of the business affairs and operations of the Partnerships, computed on
a cost basis, determined in accordance with generally accepted accounting
principles. Such reimbursed costs and expenses allocated to the Partnerships
include office rent, secretarial, employee compensation and benefits, travel and
communication costs, fees for professional services, and other items generally
classified as general or administrative expense. The amount of general and
administrative expense allocated to the General Partner and its affiliates which
was charged to each Partnership during 1998, 1997, and 1996 is set forth in the
table below. Although the actual costs incurred by the General Partner and its
affiliates have fluctuated during the three years presented, the amounts charged
to the Partnerships have not fluctuated due to expense limitations imposed by
the Partnership Agreements.
Partnership 1998 1997 1996
----------- -------- -------- --------
III-A $277,872 $277,872 $277,872
III-B 145,620 145,620 145,620
III-C 257,412 257,412 257,412
III-D 137,904 137,904 137,904
III-E 440,280 440,280 440,280
III-F 233,136 233,136 233,136
III-G 128,340 128,340 128,340
66
<PAGE>
None of the officers or directors of the General Partner receive
compensation directly from the Partnerships. The Partnerships reimburse the
General Partner or its affiliates for that portion of such officers' and
directors' salaries and expenses attributable to time devoted by such
individuals to the Partnerships' activities. The following tables indicate the
approximate amount of general and administrative expense reimbursement
attributable to the salaries of the directors, officers, and employees of the
General Partner and its affiliates during 1998, 1997, and 1996:
67
<PAGE>
<TABLE>
<CAPTION>
Salary Reimbursements
III-A Partnership
-----------------
Three Years Ended December 31, 1998
Long Term Compensation
-----------------------------------
Annual Compensation Awards Payouts
------------------------------ ---------------------- -------
Securi-
Other ties All
Name Annual Restricted Under- Other
and Compen- Stock lying LTIP Compen-
Principal Salary Bonus sation Award(s) Options/ Payouts sation
Position Year ($) ($) ($) ($) SARs(#) ($) ($)
- --------------- ---- ------- ------- ------- ---------- -------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
C. Philip
Tholen,
President,
Chief Executive
Officer(1)(2) 1996 - - - - - - -
Dennis R. Neill,
President(2)(3) 1996 - - - - - - -
1997 - - - - - - -
1998 - - - - - - -
All Executive
Officers,
Directors,
and Employees
as a group(4) 1996 $162,555 - - - - - -
1997 $166,001 - - - - - -
1998 $164,445 - - - - - -
- ----------
(1) Mr. Tholen served as President and Chief Executive Officer of Geodyne
until July 1, 1996.
(2) The general and administrative expenses paid by the III-A Partnership and
attributable to salary reimbursements do not include any salary or other
compensation attributable to Mr. Tholen or Mr. Neill.
(3) Mr. Neill became President of Geodyne on July 1, 1996.
(4) No officer or director of Geodyne or its affiliates provides full-time
services to the III-A Partnership and no individual's salary or other
compensation reimbursement from the III-A Partnership equals or exceeds
$100,000 per annum.
</TABLE>
68
<PAGE>
<TABLE>
<CAPTION>
Salary Reimbursements
III-B Partnership
-----------------
Three Years Ended December 31, 1998
Long Term Compensation
-----------------------------------
Annual Compensation Awards Payouts
------------------------------ ----------------------- -------
Securi-
Other ties All
Name Annual Restricted Under- Other
and Compen- Stock lying LTIP Compen-
Principal Salary Bonus sation Award(s) Options/ Payouts sation
Position Year ($) ($) ($) ($) SARs(#) ($) ($)
- --------------- ---- ------- ------- ------- ---------- -------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
C. Philip
Tholen,
President,
Chief Executive
Officer(1)(2) 1996 - - - - - - -
Dennis R. Neill,
President(2)(3) 1996 - - - - - - -
1997 - - - - - - -
1998 - - - - - - -
All Executive
Officers,
Directors,
and Employees
as a group(4) 1996 $85,188 - - - - - -
1997 $86,993 - - - - - -
1998 $86,178 - - - - - -
- ----------
(1) Mr. Tholen served as President and Chief Executive Officer of Geodyne
until July 1, 1996.
(2) The general and administrative expenses paid by the III-B Partnership and
attributable to salary reimbursements do not include any salary or other
compensation attributable to Mr. Tholen or Mr. Neill.
(3) Mr. Neill became President of Geodyne on July 1, 1996.
(4) No officer or director of Geodyne or its affiliates provides full-time
services to the III-B Partnership and no individual's salary or other
compensation reimbursement from the III-B Partnership equals or exceeds
$100,000 per annum.
</TABLE>
69
<PAGE>
<TABLE>
<CAPTION>
Salary Reimbursements
III-C Partnership
-----------------
Three Years Ended December 31, 1998
Long Term Compensation
----------------------------------
Annual Compensation Awards Payouts
------------------------------ ---------------------- -------
Securi-
Other ties All
Name Annual Restricted Under- Other
and Compen- Stock lying LTIP Compen-
Principal Salary Bonus sation Award(s) Options/ Payouts sation
Position Year ($) ($) ($) ($) SARs(#) ($) ($)
- --------------- ---- ------- ------- ------- ---------- -------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
C. Philip
Tholen,
President,
Chief Executive
Officer(1)(2) 1996 - - - - - - -
Dennis R. Neill,
President(2)(3) 1996 - - - - - - -
1997 - - - - - - -
1998 - - - - - - -
All Executive
Officers,
Directors,
and Employees
as a group(4) 1996 $150,586 - - - - - -
1997 $153,778 - - - - - -
1998 $152,336 - - - - - -
- ----------
(1) Mr. Tholen served as President and Chief Executive Officer of Geodyne
until July 1, 1996.
(2) The general and administrative expenses paid by the III-C Partnership and
attributable to salary reimbursements do not include any salary or other
compensation attributable to Mr. Tholen or Mr. Neill.
(3) Mr. Neill became President of Geodyne on July 1, 1996.
(4) No officer or director of Geodyne or its affiliates provides full-time
services to the III-C Partnership and no individual's salary or other
compensation reimbursement from the III-C Partnership equals or exceeds
$100,000 per annum.
</TABLE>
70
<PAGE>
<TABLE>
<CAPTION>
Salary Reimbursements
III-D Partnership
-----------------
Three Years Ended December 31, 1998
Long Term Compensation
----------------------------------
Annual Compensation Awards Payouts
------------------------------ ---------------------- -------
Securi-
Other ties All
Name Annual Restricted Under- Other
and Compen- Stock lying LTIP Compen-
Principal Salary Bonus sation Award(s) Options/ Payouts sation
Position Year ($) ($) ($) ($) SARs(#) ($) ($)
- --------------- ---- ------- ------- ------- ---------- -------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
C. Philip
Tholen,
President,
Chief Executive
Officer(1)(2) 1996 - - - - - - -
Dennis R. Neill,
President(2)(3) 1996 - - - - - - -
1997 - - - - - - -
1998 - - - - - - -
All Executive
Officers,
Directors,
and Employees
as a group(4) 1996 $80,674 - - - - - -
1997 $82,384 - - - - - -
1998 $81,612 - - - - - -
- ----------
(1) Mr. Tholen served as President and Chief Executive Officer of Geodyne
until July 1, 1996.
(2) The general and administrative expenses paid by the III-D Partnership and
attributable to salary reimbursements do not include any salary or other
compensation attributable to Mr. Tholen or Mr. Neill.
(3) Mr. Neill became President of Geodyne on July 1, 1996.
(4) No officer or director of Geodyne or its affiliates provides full-time
services to the III-D Partnership and no individual's salary or other
compensation reimbursement from the III-D Partnership equals or exceeds
$100,000 per annum.
</TABLE>
71
<PAGE>
<TABLE>
<CAPTION>
Salary Reimbursements
III-E Partnership
-----------------
Three Years Ended December 31, 1998
Long Term Compensation
------------------------------------
Annual Compensation Awards Payouts
------------------------------ ---------------------- -------
Securi-
Other ties All
Name Annual Restricted Under- Other
and Compen- Stock lying LTIP Compen-
Principal Salary Bonus sation Award(s) Options/ Payouts sation
Position Year ($) ($) ($) ($) SARs(#) ($) ($)
- --------------- ---- ------- ------- ------- ---------- -------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
C. Philip
Tholen,
President,
Chief Executive
Officer(1)(2) 1996 - - - - - - -
Dennis R. Neill,
President(2)(3) 1996 - - - - - - -
1997 - - - - - - -
1998 - - - - - - -
All Executive
Officers,
Directors,
and Employees
as a group(4) 1996 $257,564 - - - - - -
1997 $263,023 - - - - - -
1998 $260,558 - - - - - -
- ----------
(1) Mr. Tholen served as President and Chief Executive Officer of Geodyne
until July 1, 1996.
(2) The general and administrative expenses paid by the III-E Partnership and
attributable to salary reimbursements do not include any salary or other
compensation attributable to Mr. Tholen or Mr. Neill.
(3) Mr. Neill became President of Geodyne on July 1, 1996.
(4) No officer or director of Geodyne or its affiliates provides full-time
services to the III-E Partnership and no individual's salary or other
compensation reimbursement from the III-E Partnership equals or exceeds
$100,000 per annum.
</TABLE>
72
<PAGE>
<TABLE>
<CAPTION>
Salary Reimbursements
III-F Partnership
-----------------
Three Years Ended December 31, 1998
Long Term Compensation
-----------------------------------
Annual Compensation Awards Payouts
------------------------------ --------------------- -------
Securi-
Other ties All
Name Annual Restricted Under- Other
and Compen- Stock lying LTIP Compen-
Principal Salary Bonus sation Award(s) Options/ Payouts sation
Position Year ($) ($) ($) ($) SARs(#) ($) ($)
- --------------- ---- ------- ------- ------- ---------- -------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
C. Philip
Tholen,
President,
Chief Executive
Officer(1)(2) 1996 - - - - - - -
Dennis R. Neill,
President(2)(3) 1996 - - - - - - -
1997 - - - - - - -
1998 - - - - - - -
All Executive
Officers,
Directors,
and Employees
as a group(4) 1996 $136,385 - - - - - -
1997 $139,275 - - - - - -
1998 $137,970 - - - - - -
- ----------
(1) Mr. Tholen served as President and Chief Executive Officer of Geodyne
until July 1, 1996.
(2) The general and administrative expenses paid by the III-F Partnership and
attributable to salary reimbursements do not include any salary or other
compensation attributable to Mr. Tholen or Mr. Neill.
(3) Mr. Neill became President of Geodyne on July 1, 1996.
(4) No officer or director of Geodyne or its affiliates provides full-time
services to the III-F Partnership and no individual's salary or other
compensation reimbursement from the III-F Partnership equals or exceeds
$100,000 per annum.
</TABLE>
73
<PAGE>
<TABLE>
<CAPTION>
Salary Reimbursements
III-G Partnership
-----------------
Three Years Ended December 31, 1998
Long Term Compensation
-----------------------------------
Annual Compensation Awards Payouts
------------------------------ --------------------- -------
Securi-
Other ties All
Name Annual Restricted Under- Other
and Compen- Stock lying LTIP Compen-
Principal Salary Bonus sation Award(s) Options/ Payouts sation
Position Year ($) ($) ($) ($) SARs(#) ($) ($)
- --------------- ---- ------- ------- ------- ---------- -------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
C. Philip
Tholen,
President,
Chief Executive
Officer(1)(2) 1996 - - - - - - -
Dennis R. Neill,
President(2)(3) 1996 - - - - - - -
1997 - - - - - - -
1998 - - - - - - -
All Executive
Officers,
Directors,
and Employees
as a group(4) 1996 $75,079 - - - - - -
1997 $76,670 - - - - - -
1998 $75,952 - - - - - -
- ----------
(1) Mr. Tholen served as President and Chief Executive Officer of Geodyne
until July 1, 1996.
(2) The general and administrative expenses paid by the III-G Partnership and
attributable to salary reimbursements do not include any salary or other
compensation attributable to Mr. Tholen or Mr. Neill.
(3) Mr. Neill became President of Geodyne on July 1, 1996.
(4) No officer or director of Geodyne or its affiliates provides full-time
services to the III-G Partnership and no individual's salary or other
compensation reimbursement from the III-G Partnership equals or exceeds
$100,000 per annum.
</TABLE>
74
<PAGE>
Affiliates of the Partnerships serve as operator of some of the
Partnerships' wells. The General Partner contracts with such affiliates for
services as operator of the wells. As operator, such affiliates are compensated
at rates provided in the operating agreements in effect and charged to all
parties to such agreement. Such compensation may occur both prior and subsequent
to the commencement of commercial marketing of production of oil or gas. The
dollar amount of such compensation paid by the Partnerships to the affiliates is
impossible to quantify as of the date of this Annual Report.
Samson maintains necessary inventories of new and used field equipment.
Samson may have provided some of this equipment for wells in which the
Partnerships have an interest. This equipment was provided at prices or rates
equal to or less than those normally charged in the same or comparable
geographic area by unaffiliated persons or companies dealing at arm's length.
The operators of these wells billed the Partnerships for a portion of such costs
based upon the Partnerships' interest in the well.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table provides information as to the beneficial ownership of
the Units as of February 1, 1999 (i) each beneficial owner of more than five
percent of the issued and outstanding Units, (ii) the directors and officers of
the General Partner, and (iii) the General Partner and its affiliates. The
address of each of such persons is Samson Plaza, Two West Second Street, Tulsa,
Oklahoma 74103.
Number of Units
Beneficially
Owned (Percent
Beneficial Owner of Outstanding)
- ------------------------------------ ------------------
III-A Partnership:
- -----------------
Samson Resources Company 31,866 (12.1%)
All affiliates, directors,
and officers of the General
Partner as a group and
the General Partner (4 persons) 31,866 (12.1%)
III-B Partnership:
- -----------------
Samson Resources Company 18,856 (13.6%)
75
<PAGE>
All affiliates, directors,
and officers of the General
Partner as a group and
the General Partner (4 persons) 18,856 (13.6%)
III-C Partnership:
- -----------------
Samson Resources Company 34,335 (14.0%)
All affiliates, directors,
and officers of the General
Partner as a group and
the General Partner (4 persons) 34,335 (14.0%)
III-D Partnership:
- -----------------
Samson Resources Company 21,975 (16.8%)
All affiliates, directors,
and officers of the General
Partner as a group and
the General Partner (4 persons) 21,975 (16.8%)
III-E Partnership:
- -----------------
Samson Resources Company 95,390 (22.8%)
All affiliates, directors,
and officers of the General
Partner as a group and
the General Partner (4 persons) 95,390 (22.8%)
III-F Partnership:
- -----------------
Samson Resources Company 37,905 (17.1%)
All affiliates, directors,
and officers of the General
Partner as a group and
the General Partner (4 persons) 37,905 (17.1%)
III-G Partnership:
- -----------------
Samson Resources Company 18,242 (15.0%)
All affiliates, directors,
and officers of the General
Partner as a group and
the General Partner (4 persons) 18,242 (15.0%)
76
<PAGE>
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The General Partner and certain of its affiliates engage in oil and gas
activities independently of the Partnerships which result in conflicts of
interest that cannot be totally eliminated. The allocation of acquisition and
drilling opportunities and the nature of the compensation arrangements between
the Partnerships and the General Partner also create potential conflicts of
interest. An affiliate of the Partnerships owns some of the Partnerships' Units
and therefore has an identity of interest with other Limited Partners with
respect to the operations of the Partnerships.
In order to attempt to assure limited liability for Limited Partners as
well as an orderly conduct of business, management of the Partnerships is
exercised solely by the General Partner. The Partnership Agreements grant the
General Partner broad discretionary authority with respect to the Partnerships'
participation in drilling prospects and expenditure and control of funds,
including borrowings. These provisions are similar to those contained in
prospectuses and partnership agreements for other public oil and gas
partnerships. Broad discretion as to general management of the Partnerships
involves circumstances where the General Partner has conflicts of interest and
where it must allocate costs and expenses, or opportunities, among the
Partnerships and other competing interests.
The General Partner does not devote all of its time, efforts, and
personnel exclusively to the Partnerships. Furthermore, the Partnerships do not
have any employees, but instead rely on the personnel of Samson. The
Partnerships thus compete with Samson (including other oil and gas partnerships)
for the time and resources of such personnel. Samson devotes such time and
personnel to the management of the Partnerships as are indicated by the
circumstances and as are consistent with the General Partner's fiduciary duties.
Affiliates of the Partnerships are solely responsible for the negotiation,
administration, and enforcement of oil and gas sales agreements covering the
Partnerships' leasehold interests. Because affiliates of the Partnerships who
provide services to the Partnerships have fiduciary or other duties to other
members of Samson, contract amendments and negotiating positions taken by them
in their effort to enforce contracts with purchasers may not necessarily
represent the positions that the Partnerships would take if they were to
administer their own contracts without involvement with other members of Samson.
On the other hand, management believes that the Partnerships' negotiating
strength and contractual positions have been enhanced by virtue of their
affiliation with Samson.
PART I
77
<PAGE>
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K
(a) Financial Statements, Financial Statement Schedules, and Exhibits.
(1) Financial Statements: The following financial statements for the
Geodyne Energy Income Limited Partnership 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
as of December 31, 1998 and 1997 and for each of the three years
in the period ended December 31, 1998 are filed as part of this
report:
Report of Independent Accountants
Balance Sheets
Statements of Operations
Statements of Changes in Partners' Capital (Deficit)
Statements of Cash Flows
Notes to Financial Statements
(2) Financial Statement Schedules:
None.
(3) Exhibits:
4.1 The Certificate and Agreements of Limited Partnership for
the following Partnerships have been previously filed with
the Securities and Exchange Commission as Exhibit 2.1 to
Form 8-A filed by each Partnership on the dates shown below
and are hereby incorporated by reference.
78
<PAGE>
Partnership Filing Date File No.
----------- ----------- --------
III-A February 20, 1990 0-18302
III-B March 30, 1990 0-18636
III-C March 30, 1990 0-18634
III-D November 14, 1990 0-18936
III-E January 22, 1991 0-19010
III-F March 25, 1991 0-19102
III-G September 30, 1991 0-19563
4.2 Second Amendment to Agreement of Limited Partnership of
Geodyne Energy Income Limited Partnership III-A, filed as
Exhibit 4.1 to Registrant's Current Report on Form 8-K dated
August 2, 1993 filed with the SEC on August 10, 1993 and is
hereby incorporated by reference.
4.3 Second Amendment to Agreement of Limited Partnership of
Geodyne Energy Income Limited Partnership III-B, filed as
Exhibit 4.2 to Registrant's Current Report on Form 8-K dated
August 2, 1993 filed with the SEC on August 10, 1993 and is
hereby incorporated by reference.
4.4 Second Amendment to Agreement of Limited Partnership of
Geodyne Energy Income Limited Partnership III-C, filed as
Exhibit 4.3 to Registrant's Current Report on Form 8-K dated
August 2, 1993 filed with the SEC on August 10, 1993 and is
hereby incorporated by reference.
4.5 Second Amendment to Agreement of Limited Partnership of
Geodyne Energy Income Limited Partnership III-D, filed as
Exhibit 4.4 to Registrant's Current Report on Form 8-K dated
August 2, 1993 filed with the SEC on August 10, 1993 and is
hereby incorporated by reference.
4.6 Second Amendment to Agreement of Limited Partnership of
Geodyne Energy Income Limited Partnership III-E, filed as
Exhibit 4.5 to Registrant's Current Report on Form 8-K dated
August 2, 1993 filed with the SEC on August 10, 1993 and is
hereby incorporated by reference.
4.7 Second Amendment to Agreement of Limited Partnership of
Geodyne Energy Income Limited Partnership III-F, filed as
Exhibit 4.6 to
79
<PAGE>
Registrant's Current Report on Form 8-K dated August 2, 1993
filed with the SEC on August 10, 1993 and is hereby
incorporated by reference.
4.8 Second Amendment to Agreement of Limited Partnership of
Geodyne Energy Income Limited Partnership III-G, filed as
Exhibit 4.7 to Registrant's Current Report on Form 8-K dated
August 2, 1993 filed with the SEC on August 10, 1993 and is
hereby incorporated by reference.
4.9 Third Amendment to Agreement of Limited Partnership of
Geodyne Energy Income Limited Partnership III-A, filed as
Exhibit 4.10 to Registrant's Annual Report on Form 10-K for
the year ended December 31, 1995 filed with the SEC on April
1, 1996 and is hereby incorporated by reference.
4.10 Third Amendment to Agreement of Limited Partnership of
Geodyne Energy Income Limited Partnership III-B, filed as
Exhibit 4.11 to Registrant's Annual Report on Form 10-K for
the year ended December 31, 1995 filed with the SEC on April
1, 1996 and is hereby incorporated by reference.
4.11 Third Amendment to Agreement of Limited Partnership of
Geodyne Energy Income Limited Partnership III-C, filed as
Exhibit 4.12 to Registrant's Annual Report on Form 10-K for
the year ended December 31, 1995 filed with the SEC on April
1, 1996 and is hereby incorporated by reference.
4.12 Third Amendment to Agreement of Limited Partnership of
Geodyne Energy Income Limited Partnership III-D, filed as
Exhibit 4.13 to Registrant's Annual Report on Form 10-K for
the year ended December 31, 1995 filed with the SEC on April
1, 1996 and is hereby incorporated by reference.
4.13 Third Amendment to Agreement of Limited Partnership of
Geodyne Energy Income Limited Partnership III-E, filed as
Exhibit 4.14 to Registrant's Annual Report on Form 10-K for
the year ended December 31, 1995 filed with the SEC on April
1, 1996 and is hereby incorporated by reference.
80
<PAGE>
4.14 Third Amendment to Agreement of Limited Partnership of
Geodyne Energy Income Limited Partnership III-F, filed as
Exhibit 4.15 to Registrant's Annual Report on Form 10-K for
the year ended December 31, 1995 filed with the SEC on April
1, 1996 and is hereby incorporated by reference.
4.15 Third Amendment to Agreement of Limited Partnership of
Geodyne Energy Income Limited Partnership III-G, filed as
Exhibit 4.16 to Registrant's Annual Report on Form 10-K for
the year ended December 31, 1995 filed with the SEC on April
1, 1996 and is hereby incorporated by reference.
* 23.1 Consent of Ryder Scott Company, Petroleum Engineers for
Geodyne Energy Income Limited Partnership III-A.
* 23.2 Consent of Ryder Scott Company, Petroleum Engineers for
Geodyne Energy Income Limited Partnership III-B.
* 23.3 Consent of Ryder Scott Company, Petroleum Engineers for
Geodyne Energy Income Limited Partnership III-C.
* 23.4 Consent of Ryder Scott Company, Petroleum Engineers for
Geodyne Energy Income Limited Partnership III-D.
* 23.5 Consent of Ryder Scott Company, Petroleum Engineers for
Geodyne Energy Income Limited Partnership III-E.
* 23.6 Consent of Ryder Scott Company, Petroleum Engineers for
Geodyne Energy Income Limited Partnership III-F.
* 23.7 Consent of Ryder Scott Company, Petroleum Engineers for
Geodyne Energy Income Limited Partnership III-G.
* 27.1 Financial Data Schedule containing summary financial
information extracted from the Geodyne Energy Income
Limited Partnership III-A's financial statements as of
December 31, 1998 and for the year ended December 31, 1998.
* 27.2 Financial Data Schedule containing summary financial
information extracted from the Geodyne Energy Income
Limited Partnership
81
<PAGE>
III-B's financial statements as of December 31, 1998 and
for the year ended December 31, 1998.
* 27.3 Financial Data Schedule containing summary financial
information extracted from the Geodyne Energy Income
Limited Partnership III-C's financial statements as of
December 31, 1998 and for the year ended December 31, 1998.
* 27.4 Financial Data Schedule containing summary financial
information extracted from the Geodyne Energy Income
Limited Partnership III-D's financial statements as of
December 31, 1998 and for the year ended December 31, 1998.
* 27.5 Financial Data Schedule containing summary financial
information extracted from the Geodyne Energy Income
Limited Partnership III-E's financial statements as of
December 31, 1998 and for the year ended December 31, 1998.
* 27.6 Financial Data Schedule containing summary financial
information extracted from the Geodyne Energy Income
Limited Partnership III-F's financial statements as of
December 31, 1998 and for the year ended December 31, 1998.
* 27.7 Financial Data Schedule containing summary financial
information extracted from the Geodyne Energy Income
Limited Partnership III-G's financial statements as of
December 31, 1998 and for the year ended December 31, 1998.
All other Exhibits are omitted as inapplicable.
----------
*Filed herewith.
(b) Reports on Form 8-K filed during the fourth quarter of 1998:
None.
82
<PAGE>
SIGNATURES
Pursuant to the requirements of Sections 13 or 15(d) of the Securities Exchange
Act of 1934, the registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly organized.
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP 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
By: GEODYNE RESOURCES, INC.
General Partner
February 23, 1999
By: /s/Dennis R. Neill
------------------------------
Dennis R. Neill
President
Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following persons on behalf of the registrant and
in the capacities on the dates indicated.
By: /s/Dennis R. Neill President and February 23, 1999
------------------- Director (Principal
Dennis R. Neill Executive Officer)
/s/Patrick M. Hall (Principal February 23, 1999
------------------- Financial and
Patrick M. Hall Accounting Officer)
/s/Judy K. Fox Secretary February 23, 1999
-------------------
Judy K. Fox
83
<PAGE>
Item 8: Financial Statements and Supplementary Data
REPORT OF INDEPENDENT ACCOUNTANTS
TO THE PARTNERS
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-A
In our opinion, the accompanying balance sheets and the related statements
of operations, changes in partners' capital (deficit) and cash flows present
fairly, in all material respects, the financial position of the Geodyne Energy
Income Limited Partnership III-A, an Oklahoma limited partnership, at December
31, 1998 and 1997, and the results of its operations and its cash flows for each
of the three years in the period ended December 31, 1998, in conformity with
generally accepted accounting principles. These financial statements are the
responsibility of the Partnership's management; our responsibility is to express
an opinion on these financial statements based on our audits. We conducted our
audits of these financial statements in accordance with generally accepted
auditing standards which require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements, assessing the
accounting principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for the opinion expressed above.
PricewaterhouseCoopers LLP
Tulsa, Oklahoma
February 13, 1999
F-1
<PAGE>
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-A
Balance Sheets
December 31, 1998 and 1997
ASSETS
------
1998 1997
------------ ------------
CURRENT ASSETS:
Cash and cash equivalents $ 212,695 $ 522,371
Accounts receivable:
Oil and gas sales 282,108 524,541
Other - 308
--------- ---------
Total current assets $ 494,803 $1,047,220
NET OIL AND GAS PROPERTIES,
utilizing the successful
efforts method 2,222,673 2,669,949
DEFERRED CHARGE 266,532 199,722
--------- ---------
$2,984,008 $3,916,891
========= =========
LIABILITIES AND PARTNERS' CAPITAL (DEFICIT)
-------------------------------------------
CURRENT LIABILITIES:
Accounts payable $ 62,011 $ 39,622
Gas imbalance payable 30,903 38,418
--------- ---------
Total current liabilities $ 92,914 $ 78,040
ACCRUED LIABILITY $ 76,845 $ 51,905
PARTNERS' CAPITAL (DEFICIT):
General Partner ($ 197,325) ($ 198,271)
Limited Partners, issued and
outstanding, 263,976 Units 3,011,574 3,985,217
--------- ---------
Total Partners' capital $2,814,249 $3,786,946
--------- ---------
$2,984,008 $3,916,891
========= =========
The accompanying notes are an integral part of these
financial statements.
F-2
<PAGE>
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-A
Statements of Operations
For the Years Ended December 31, 1998, 1997, and 1996
1998 1997 1996
----------- ----------- -----------
REVENUES:
Oil and gas sales $2,029,797 $3,328,634 $3,634,004
Interest income 16,726 27,613 23,840
Gain (loss) on sale of
oil and gas properties 21,281 148,602 ( 84,561)
--------- --------- ---------
$2,067,804 $3,504,849 $3,573,283
COSTS AND EXPENSES:
Lease operating $ 412,509 $ 463,734 $ 644,998
Production tax 163,603 255,356 254,075
Depreciation, deple-
tion, and amorti-
zation of oil and
gas properties 498,715 725,515 1,135,745
Impairment provision - 1,617,006 -
General and
administrative 311,430 311,253 324,232
--------- --------- ---------
$1,386,257 $3,372,864 $2,359,050
--------- --------- ---------
NET INCOME $ 681,547 $ 131,985 $1,214,233
========= ========= =========
GENERAL PARTNER - NET
INCOME $ 53,190 $ 98,919 $ 104,949
========= ========= =========
LIMITED PARTNERS - NET
INCOME $ 628,357 $ 33,066 $1,109,284
========= ========= =========
NET INCOME per Unit $ 2.38 $ .13 $ 4.20
========= ========= =========
UNITS OUTSTANDING 263,976 263,976 263,976
========= ========= =========
The accompanying notes are an integral
part of these financial statements.
F-3
<PAGE>
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-A
Statements of Partners' Capital (Deficit)
For the Years Ended December 31, 1998, 1997, and 1996
Limited General
Partners Partner Total
------------- ----------- -------------
Balance, Dec. 31, 1995 $ 8,275,867 ($143,923) $8,131,944
Net income 1,109,284 104,949 1,214,233
Cash distributions ( 2,499,000) ( 159,937) ( 2,658,937)
---------- ------- ---------
Balance, Dec. 31, 1996 $ 6,886,151 ($198,911) $6,687,240
Net income 33,066 98,919 131,985
Cash distributions ( 2,934,000) ( 98,279) ( 3,032,279)
---------- ------- ---------
Balance, Dec. 31, 1997 $ 3,985,217 ($198,271) $3,786,946
Net income 628,357 53,190 681,547
Cash distributions ( 1,602,000) ( 52,244) ( 1,654,244)
---------- ------- ---------
Balance, Dec. 31, 1998 $ 3,011,574 ($197,325) $2,814,249
========== ======= =========
The accompanying notes are an integral part of these
financial statements.
F-4
<PAGE>
<TABLE>
<CAPTION>
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-A
Statements of Cash Flows
For the Years Ended December 31, 1998, 1997, and 1996
1998 1997 1996
------------ ------------ ------------
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING
ACTIVITIES:
Net income $ 681,547 $ 131,985 $1,214,233
Adjustments to reconcile
net income to
net cash provided by
operating activities:
Depreciation, deple-
tion, and amortiza-
tion of oil and gas
properties 498,715 725,515 1,135,745
Impairment provision - 1,617,006 -
(Gain) loss on sale of
oil and gas properties ( 21,281) ( 148,602) 84,561
(Increase) decrease in
accounts receivable -
oil and gas sales 242,433 155,626 ( 40,380)
(Increase) decrease in
accounts receivable -
other 308 ( 308) -
(Increase) decrease in
deferred charge ( 66,810) 44,498 34,609
Increase (decrease) in
accounts payable 22,389 ( 11,104) ( 39,770)
Increase (decrease) in
gas imbalance payable ( 7,515) ( 38,379) 32,943
Increase (decrease) in
accrued liability 24,940 ( 28,491) ( 7,228)
--------- --------- ---------
Net cash provided by
operating activities $1,374,726 $2,447,746 $2,414,713
--------- --------- ---------
CASH FLOWS FROM INVESTING
ACTIVITIES:
Capital expenditures ($ 55,973) ($ 75,449) ($ 4,548)
Proceeds from sale of oil
and gas properties 25,815 572,237 297,982
--------- --------- ---------
Net cash provided (used)
by investing activities ($ 30,158) $ 496,788 $ 293,434
--------- --------- ---------
CASH FLOWS FROM FINANCING
ACTIVITIES:
Cash distributions ($1,654,244) ($3,032,279) ($2,658,937)
--------- --------- ---------
</TABLE>
F-5
<PAGE>
<TABLE>
<CAPTION>
Net cash used by
financing activities ($1,654,244) ($3,032,279) ($2,658,937)
--------- --------- ---------
<S> <C> <C> <C>
NET INCREASE (DECREASE) IN
CASH AND CASH EQUIVALENTS ($ 309,676) ($ 87,745) $ 49,210
CASH AND CASH EQUIVALENTS
AT BEGINNING OF PERIOD 522,371 610,116 560,906
--------- --------- ---------
CASH AND CASH EQUIVALENTS
AT END OF PERIOD $ 212,695 $ 522,371 $ 610,116
========= ========= =========
The accompanying notes are an integral
part of these financial statements.
</TABLE>
F-6
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
TO THE PARTNERS
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-B
In our opinion, the accompanying balance sheets and the related statements
of operations, changes in partners' capital (deficit) and cash flows present
fairly, in all material respects, the financial position of the Geodyne Energy
Income Limited Partnership III-B, an Oklahoma limited partnership, at December
31, 1998 and 1997, and the results of its operations and its cash flows for each
of the three years in the period ended December 31, 1998, in conformity with
generally accepted accounting principles. These financial statements are the
responsibility of the Partnership's management; our responsibility is to express
an opinion on these financial statements based on our audits. We conducted our
audits of these financial statements in accordance with generally accepted
auditing standards which require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements, assessing the
accounting principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for the opinion expressed above.
PricewaterhouseCoopers LLP
Tulsa, Oklahoma
February 13, 1999
F-7
<PAGE>
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-B
Balance Sheets
December 31, 1998 and 1997
ASSETS
------
1998 1997
------------ ------------
CURRENT ASSETS:
Cash and cash equivalents $ 117,355 $ 305,288
Accounts receivable:
Oil and gas sales 164,818 307,724
Other - 130
--------- ---------
Total current assets $ 282,173 $ 613,142
NET OIL AND GAS PROPERTIES,
utilizing the successful
efforts method 1,242,380 1,499,148
DEFERRED CHARGE 193,310 136,296
--------- ---------
$1,717,863 $2,248,586
========= =========
LIABILITIES AND PARTNERS' CAPITAL (DEFICIT)
-------------------------------------------
CURRENT LIABILITIES:
Accounts payable $ 21,658 $ 19,432
Gas imbalance payable 18,422 6,676
--------- ---------
Total current liabilities $ 40,080 $ 26,108
ACCRUED LIABILITY $ 41,436 $ 28,494
PARTNERS' CAPITAL (DEFICIT):
General Partner ($ 85,016) ($ 97,840)
Limited Partners, issued and
outstanding, 138,336 Units 1,721,363 2,291,824
--------- ---------
Total Partners' capital $1,636,347 $2,193,984
--------- ---------
$1,717,863 $2,248,586
========= =========
The accompanying notes are an integral part of these
financial statements.
F-8
<PAGE>
<TABLE>
<CAPTION>
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-B
Statements of Operations
For the Years Ended December 31, 1998, 1997, and 1996
1998 1997 1996
------------ ------------ -----------
<S> <C> <C> <C>
REVENUES:
Oil and gas sales $1,201,418 $1,972,122 $2,113,507
Interest income 8,819 15,422 12,611
(Gain) loss on sale of
oil and gas properties 33,787 62,748 ( 47,201)
--------- --------- ---------
$1,244,024 $2,050,292 $2,078,917
COSTS AND EXPENSES:
Lease operating $ 233,081 $ 268,642 $ 345,352
Production tax 97,026 150,575 152,139
Depreciation, deple-
tion, and amorti-
zation of oil and
gas properties 267,175 445,224 633,628
Impairment provision - 738,122 -
General and
administrative 163,659 163,739 171,467
--------- --------- ---------
$ 760,941 $1,766,302 $1,302,586
--------- --------- ---------
NET INCOME $ 483,083 $ 283,990 $ 776,331
========= ========= =========
GENERAL PARTNER - NET
INCOME $ 108,544 $ 60,762 $ 63,531
========= ========= =========
LIMITED PARTNERS - NET
INCOME $ 374,539 $ 223,228 $ 712,800
========= ========= =========
NET INCOME per Unit $ 2.71 $ 1.61 $ 5.15
========= ========= =========
UNITS OUTSTANDING 138,336 138,336 138,336
========= ========= =========
The accompanying notes are an integral
part of these financial statements.
</TABLE>
F-9
<PAGE>
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-B
Statements of Partners' Capital (Deficit)
For the Years Ended December 31, 1998, 1997, and 1996
Limited General
Partners Partner Total
------------ ---------- -------------
Balance, Dec. 31, 1995 $4,466,796 ($ 66,996) $4,399,800
Net income 712,800 63,531 776,331
Cash distributions ( 1,403,000) ( 93,627) ( 1,496,627)
--------- ------- ---------
Balance, Dec. 31, 1996 $3,776,596 ($ 97,092) $3,679,504
Net income 223,228 60,762 283,990
Cash distributions ( 1,708,000) ( 61,510) ( 1,769,510)
--------- ------- ---------
Balance, Dec. 31, 1997 $2,291,824 ($ 97,840) $2,193,984
Net income 374,539 108,544 483,083
Cash distributions ( 945,000) ( 95,720) ( 1,040,720)
--------- ------- ---------
Balance, Dec. 31, 1998 $1,721,363 ($ 85,016) $1,636,347
========= ======= =========
The accompanying notes are an integral part of these
financial statements.
F-10
<PAGE>
<TABLE>
<CAPTION>
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-B
Statements of Cash Flows
For the Years Ended December 31, 1998, 1997, and 1996
1998 1997 1996
------------ ------------ ------------
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING
ACTIVITIES:
Net income $ 483,083 $ 283,990 $ 776,331
Adjustments to reconcile
net income to
net cash provided by
operating activities:
Depreciation, deple-
tion, and amortiza-
tion of oil and gas
properties 267,175 445,224 633,628
Impairment provision - 738,122 -
(Gain) loss on sale of
oil and gas properties ( 33,787) ( 62,748) 47,201
(Increase) decrease in
accounts receivable -
oil and gas sales 142,906 89,246 ( 23,294)
(Increase )decrease in
accounts receivable -
other 130 ( 130) -
(Increase) decrease in
deferred charge ( 57,014) 8,523 24,270
Increase (decrease) in
accounts payable 2,226 ( 8,551) ( 21,399)
Increase (decrease) in
gas imbalance payable 11,746 ( 20,059) 20,533
Increase (decrease) in
accrued liability 12,942 ( 10,196) ( 8,670)
--------- --------- ---------
Net cash provided by
operating activities $ 829,407 $1,463,421 $1,448,600
--------- --------- ---------
CASH FLOWS FROM INVESTING
ACTIVITIES:
Capital expenditures ($ 11,667) ($ 43,739) ($ 21,881)
Proceeds from sale of oil
and gas properties 35,047 278,513 134,926
--------- --------- ---------
Net cash provided
by investing activities $ 23,380 $ 234,774 $ 113,045
--------- --------- ---------
</TABLE>
F-11
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
CASH FLOWS FROM FINANCING
ACTIVITIES:
Cash distributions ($1,040,720) ($1,769,510) ($1,496,627)
--------- --------- ---------
Net cash used by
financing activities ($1,040,720) ($1,769,510) ($1,496,627)
--------- --------- ---------
NET INCREASE (DECREASE) IN
CASH AND CASH EQUIVALENTS ($ 187,933) ($ 71,315) $ 65,018
CASH AND CASH EQUIVALENTS
AT BEGINNING OF PERIOD 305,288 376,603 311,585
--------- --------- ---------
CASH AND CASH EQUIVALENTS
AT END OF PERIOD $ 117,355 $ 305,288 $ 376,603
========= ========= =========
The accompanying notes are an integral
part of these financial statements.
</TABLE>
F-12
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
TO THE PARTNERS
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-C
In our opinion, the accompanying balance sheets and the related statements
of operations, changes in partners' capital (deficit) and cash flows present
fairly, in all material respects, the financial position of the Geodyne Energy
Income Limited Partnership III-C, an Oklahoma limited partnership, at December
31, 1998 and 1997, and the results of its operations and its cash flows for each
of the three years in the period ended December 31, 1998, in conformity with
generally accepted accounting principles. These financial statements are the
responsibility of the Partnership's management; our responsibility is to express
an opinion on these financial statements based on our audits. We conducted our
audits of these financial statements in accordance with generally accepted
auditing standards which require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements, assessing the
accounting principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for the opinion expressed above.
PricewaterhouseCoopers LLP
Tulsa, Oklahoma
February 13, 1999
F-13
<PAGE>
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-C
Balance Sheets
December 31, 1998 and 1997
ASSETS
------
1998 1997
------------ ------------
CURRENT ASSETS:
Cash and cash equivalents $ 340,720 $ 540,911
Accounts receivable:
Oil and gas sales 380,975 497,683
Other - 54
--------- ---------
Total current assets $ 721,695 $1,038,648
NET OIL AND GAS PROPERTIES,
utilizing the successful
efforts method 2,779,845 3,442,631
DEFERRED CHARGE 70,849 86,649
--------- ---------
$3,572,389 $4,567,928
========= =========
LIABILITIES AND PARTNERS' CAPITAL (DEFICIT)
-------------------------------------------
CURRENT LIABILITIES:
Accounts payable $ 42,712 $ 53,049
Gas imbalance payable 25,479 30,493
--------- ---------
Total current liabilities $ 68,191 $ 83,542
ACCRUED LIABILITY $ 151,671 $ 142,828
PARTNERS' CAPITAL (DEFICIT):
General Partner ($ 179,285) ($ 171,438)
Limited Partners, issued and
outstanding, 244,536 Units 3,531,812 4,512,996
--------- ---------
Total Partners' capital $3,352,527 $4,341,558
--------- ---------
$3,572,389 $4,567,928
========= =========
The accompanying notes are an integral part of these
financial statements.
F-14
<PAGE>
<TABLE>
<CAPTION>
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-C
Statements of Operations
For the Years Ended December 31, 1998, 1997, and 1996
1998 1997 1996
------------ ------------ ------------
<S> <C> <C> <C>
REVENUES:
Oil and gas sales $2,447,005 $3,071,851 $3,259,615
Interest income 19,716 19,900 16,964
Gain on sale of
oil and gas properties 459,040 163,836 79,865
--------- --------- ---------
$2,925,761 $3,255,587 $3,356,444
COSTS AND EXPENSES:
Lease operating $ 532,167 $ 520,672 $ 544,593
Production tax 179,871 228,430 236,522
Depreciation, deple-
tion, and amorti-
zation of oil and
gas properties 742,986 626,350 930,015
Impairment provision - 1,696,417 -
General and
administrative 288,053 293,309 293,709
--------- --------- ---------
$1,743,077 $3,365,178 $2,004,839
--------- --------- ---------
NET INCOME (LOSS) $1,182,684 ($ 109,591) $1,351,605
========= ========= =========
GENERAL PARTNER - NET
INCOME $ 87,868 $ 86,436 $ 103,933
========= ========= =========
LIMITED PARTNERS - NET
INCOME (LOSS) $1,094,816 ($ 196,027) $1,247,672
========= ========= =========
NET INCOME (LOSS)
per Unit $ 4.48 ($ .80) $ 5.10
========= ========= =========
UNITS OUTSTANDING 244,536 244,536 244,536
========= ========= =========
The accompanying notes are an integral
part of these financial statements.
</TABLE>
F-15
<PAGE>
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-C
Statements of Partners' Capital (Deficit)
For the Years Ended December 31, 1998, 1997, and 1996
Limited General
Partners Partner Total
------------- ---------- -------------
Balance, Dec. 31, 1995 $7,451,351 ($125,913) $7,325,438
Net income 1,247,672 103,933 1,351,605
Cash distributions ( 1,775,000) ( 121,761) ( 1,896,761)
--------- ------- ---------
Balance, Dec. 31, 1996 $6,924,023 ($143,741) $6,780,282
Net income (loss) ( 196,027) 86,436 ( 109,591)
Cash distributions ( 2,215,000) ( 114,133) ( 2,329,133)
---------- ------- ---------
Balance, Dec. 31, 1997 $4,512,996 ($171,438) $4,341,558
Net income 1,094,816 87,868 1,182,684
Cash distributions ( 2,076,000) ( 95,715) ( 2,171,715)
--------- ------- ---------
Balance, Dec. 31, 1998 $3,531,812 ($179,285) $3,352,527
========= ======= =========
The accompanying notes are an integral part of these
financial statements.
F-16
<PAGE>
<TABLE>
<CAPTION>
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-C
Statements of Cash Flows
For the Years Ended December 31, 1998, 1997, and 1996
1998 1997 1996
------------ ------------ ------------
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING
ACTIVITIES:
Net income (loss) $1,182,684 ($ 109,591) $1,351,605
Adjustments to reconcile
net income (loss) to net
cash provided by operating
activities:
Depreciation, deple-
tion, and amortiza-
tion of oil and gas
properties 742,986 626,350 930,015
Impairment provision - 1,696,417 -
Gain on sale of
oil and gas properties ( 459,040) ( 163,836) ( 79,865)
(Increase) decrease in
accounts receivable -
oil and gas sales 116,708 130,014 ( 166,004)
(Increase) decrease in
accounts receivable
- General Partner - 40,940 ( 40,940)
(Increase) decrease in
accounts receivable -
other 54 ( 54) -
(Increase) decrease in
deferred charge 15,800 ( 10,635) ( 8,168)
Decrease in
accounts payable ( 10,337) ( 4,308) ( 27,403)
Increase (decrease) in
gas imbalance payable ( 5,014) ( 256) 8,195
Increase in
accrued liability 8,843 1,434 1,585
--------- --------- ---------
Net cash provided by
operating activities $1,592,684 $2,206,475 $1,969,020
--------- --------- ---------
CASH FLOWS FROM INVESTING
ACTIVITIES:
Capital expenditures ($ 123,095) ($ 104,670) ($ 24,068)
Proceeds from sale of oil
and gas properties 501,935 231,006 169,312
--------- --------- ---------
Net cash provided
by investing activities $ 378,840 $ 126,336 $ 145,244
--------- --------- ---------
</TABLE>
F-17
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
CASH FLOWS FROM FINANCING
ACTIVITIES:
Cash distributions ($2,171,715) ($2,329,133) ($1,896,761)
--------- --------- ---------
Net cash used by
financing activities ($2,171,715) ($2,329,133) ($1,896,761)
--------- --------- ---------
NET INCREASE (DECREASE) IN
CASH AND CASH EQUIVALENTS ($ 200,191) $ 3,678 $ 217,503
CASH AND CASH EQUIVALENTS
AT BEGINNING OF PERIOD 540,911 537,233 319,730
--------- --------- ---------
CASH AND CASH EQUIVALENTS
AT END OF PERIOD $ 340,720 $ 540,911 $ 537,233
========= ========= =========
The accompanying notes are an integral
part of these financial statements.
</TABLE>
F-18
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
TO THE PARTNERS
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-D
In our opinion, the accompanying balance sheets and the related statements
of operations, changes in partners' capital (deficit) and cash flows present
fairly, in all material respects, the financial position of the Geodyne Energy
Income Limited Partnership III-D, an Oklahoma limited partnership, at December
31, 1998 and 1997, and the results of its operations and its cash flows for each
of the three years in the period ended December 31, 1998, in conformity with
generally accepted accounting principles. These financial statements are the
responsibility of the Partnership's management; our responsibility is to express
an opinion on these financial statements based on our audits. We conducted our
audits of these financial statements in accordance with generally accepted
auditing standards which require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements, assessing the
accounting principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for the opinion expressed above.
PricewaterhouseCoopers LLP
Tulsa, Oklahoma
February 13, 1999
F-19
<PAGE>
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-D
Balance Sheets
December 31, 1998 and 1997
ASSETS
------
1998 1997
------------ ------------
CURRENT ASSETS:
Cash and cash equivalents $ 172,776 $ 298,964
Accounts receivable:
Oil and gas sales 268,703 361,775
--------- ---------
Total current assets $ 441,479 $ 660,739
NET OIL AND GAS PROPERTIES,
utilizing the successful
efforts method 1,236,882 2,211,248
DEFERRED CHARGE 9,462 18,875
--------- ---------
$1,687,823 $2,890,862
========= =========
LIABILITIES AND PARTNERS' CAPITAL (DEFICIT)
-------------------------------------------
CURRENT LIABILITIES:
Accounts payable $ 55,996 $ 114,286
Gas imbalance payable 4,454 -
--------- ---------
Total current liabilities $ 60,450 $ 114,286
ACCRUED LIABILITY $ 182,639 $ 201,934
PARTNERS' CAPITAL (DEFICIT):
General Partner ($ 73,501) ($ 62,091)
Limited Partners, issued and
outstanding, 131,008 Units 1,518,235 2,636,733
--------- ---------
Total Partners' capital $1,444,734 $2,574,642
--------- ---------
$1,687,823 $2,890,862
========= =========
The accompanying notes are an integral part of these
financial statements.
F-20
<PAGE>
<TABLE>
<CAPTION>
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-D
Statements of Operations
For the Years Ended December 31, 1998, 1997, and 1996
1998 1997 1996
------------ ------------ ------------
<S> <C> <C> <C>
REVENUES:
Oil and gas sales $1,789,571 $2,335,545 $2,336,708
Interest income 9,293 12,154 9,848
Gain on sale of
oil and gas properties 59,491 25,425 37,737
--------- --------- ---------
$1,858,355 $2,373,124 $2,384,293
COSTS AND EXPENSES:
Lease operating $ 596,143 $ 699,449 $ 763,477
Production tax 122,513 167,611 165,193
Depreciation, deple-
tion, and amorti-
zation of oil and
gas properties 524,074 326,095 441,513
Impairment provision 506,636 932,243 -
General and
administrative 155,025 157,983 158,883
--------- --------- ---------
$1,904,391 $2,283,381 $1,529,066
--------- --------- ---------
NET INCOME (LOSS) ($ 46,036) $ 89,743 $ 855,227
========= ========= =========
GENERAL PARTNER - NET
INCOME 38,462 $ 54,213 $ 59,929
========= ========= =========
LIMITED PARTNERS - NET
INCOME (LOSS) ($ 84,498) $ 35,530 $ 795,298
========= ========= =========
NET INCOME (LOSS) per Unit ($ .64) $ .27 $ 6.07
========= ========= =========
UNITS OUTSTANDING 131,008 131,008 131,008
========= ========= =========
The accompanying notes are an integral
part of these financial statements.
</TABLE>
F-21
<PAGE>
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-D
Statements of Partners' Capital (Deficit)
For the Years Ended December 31, 1998, 1997, and 1996
Limited General
Partners Partner Total
------------ --------- ------------
Balance, Dec. 31, 1995 $4,248,905 ($36,176) $4,212,729
Net income 795,298 59,929 855,227
Cash distributions ( 1,091,000) ( 73,967) ( 1,164,967)
--------- ------ ---------
Balance, Dec. 31, 1996 $3,953,203 ($50,214) $3,902,989
Net income 35,530 54,213 89,743
Cash distributions ( 1,352,000) ( 66,090) ( 1,418,090)
--------- ------ ---------
Balance, Dec. 31, 1997 $2,636,733 ($62,091) $2,574,642
Net income (loss) ( 84,498) 38,462 ( 46,036)
Cash distributions ( 1,034,000) ( 49,872) ( 1,083,872)
--------- ------ ---------
Balance, Dec. 31, 1998 $1,518,235 ( 73,501) $1,444,734
========= ====== =========
The accompanying notes are an integral part of these
financial statements.
F-22
<PAGE>
<TABLE>
<CAPTION>
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-D
Statements of Cash Flows
For the Years Ended December 31, 1998, 1997, and 1996
1998 1997 1996
------------ ------------ ------------
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING
ACTIVITIES:
Net income (loss) ($ 46,036) $ 89,743 $ 855,227
Adjustments to reconcile
net income (loss) to net
cash provided by
operating activities:
Depreciation, deple-
tion, and amortiza-
tion of oil and gas
properties 524,074 326,095 441,513
Impairment provision 506,636 932,243 -
Gain on sale of oil
and gas properties ( 59,491) ( 25,425) ( 37,737)
(Increase) decrease in
accounts receivable -
oil and gas sales 93,072 63,537 ( 60,304)
Decrease in
deferred charge 9,413 7,264 15,439
Increase (decrease) in
accounts payable ( 58,290) 2,065 45,023
Increase (decrease) in
gas imbalance payable 4,454 ( 5,694) ( 3,743)
Increase (decrease) in
accrued liability ( 19,295) ( 18,352) 45,753
--------- --------- ---------
Net cash provided by
operating activities $ 954,537 $1,371,476 $1,301,171
--------- --------- ---------
CASH FLOWS FROM INVESTING
ACTIVITIES:
Capital expenditures ($ 64,034) ($ 579) ($ 24,953)
Proceeds from sale of oil
and gas properties 67,181 26,912 38,599
--------- --------- ---------
Net cash provided
by investing activities $ 3,147 $ 26,333 $ 13,646
--------- --------- ---------
CASH FLOWS FROM FINANCING
ACTIVITIES:
Cash distributions ($1,083,872) ($1,418,090) ($1,164,967)
--------- --------- ---------
Net cash used by
financing activities ($1,083,872) ($1,418,090) ($1,164,967)
--------- --------- ---------
</TABLE>
F-23
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
NET INCREASE (DECREASE) IN
CASH AND CASH EQUIVALENTS ($ 126,188) ($ 20,281) $ 149,850
CASH AND CASH EQUIVALENTS
AT BEGINNING OF PERIOD 298,964 319,245 169,395
--------- --------- ---------
CASH AND CASH EQUIVALENTS
AT END OF PERIOD $ 172,776 $ 298,964 $ 319,245
========= ========= =========
The accompanying notes are an integral
part of these financial statements.
</TABLE>
F-24
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
TO THE PARTNERS
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-E
In our opinion, the accompanying balance sheets and the related statements
of operations, changes in partners' capital (deficit) and cash flows present
fairly, in all material respects, the financial position of the Geodyne Energy
Income Limited Partnership III-E, an Oklahoma limited partnership, at December
31, 1998 and 1997, and the results of its operations and its cash flows for each
of the three years in the period ended December 31, 1998, in conformity with
generally accepted accounting principles. These financial statements are the
responsibility of the Partnership's management; our responsibility is to express
an opinion on these financial statements based on our audits. We conducted our
audits of these financial statements in accordance with generally accepted
auditing standards which require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements, assessing the
accounting principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for the opinion expressed above.
PricewaterhouseCoopers LLP
Tulsa, Oklahoma
February 13, 1999
F-25
<PAGE>
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-E
Balance Sheets
December 31, 1998 and 1997
ASSETS
------
1998 1997
------------- -------------
CURRENT ASSETS:
Cash and cash equivalents $ 483,197 $ 1,114,574
Accounts receivable:
Oil and gas sales 820,078 1,361,797
---------- ----------
Total current assets $1,303,275 $ 2,476,371
NET OIL AND GAS PROPERTIES,
utilizing the successful
efforts method 3,190,480 8,716,929
DEFERRED CHARGE 127,657 204,087
--------- ----------
$4,621,412 $11,397,387
========= ==========
LIABILITIES AND PARTNERS' CAPITAL (DEFICIT)
-------------------------------------------
CURRENT LIABILITIES:
Accounts payable $ 302,889 $ 693,518
Gas imbalance payable 178,518 142,749
---------- ----------
Total current liabilities $ 481,407 $ 836,267
ACCRUED LIABILITY $ 298,486 $ 320,943
PARTNERS' CAPITAL (DEFICIT):
General Partner ($ 275,783) ($ 209,050)
Limited Partners, issued and
outstanding, 418,266 Units 4,117,302 10,449,227
--------- ----------
Total Partners' capital $3,841,519 $10,240,177
--------- ----------
$4,621,412 $11,397,387
========= ==========
The accompanying notes are an integral part of these
financial statements.
F-26
<PAGE>
<TABLE>
<CAPTION>
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-E
Statements of Operations
For the Years Ended December 31, 1998, 1997, and 1996
1998 1997 1996
------------ ------------- -------------
<S> <C> <C> <C>
REVENUES:
Oil and gas sales $6,400,589 $9,041,809 $9,030,115
Interest income 41,408 44,879 36,750
Gain (loss) on sale of
oil and gas properties 36,219 ( 39,835) 58,579
--------- --------- ---------
$6,478,216 $9,046,853 $9,125,444
COSTS AND EXPENSES:
Lease operating $3,253,691 $3,867,517 $3,785,813
Production tax 441,483 645,699 632,451
Depreciation, deple-
tion, and amorti-
zation of oil and
gas properties 1,984,334 1,198,598 1,737,844
Impairment provision 3,503,400 2,893,438 -
General and
administrative 498,977 502,466 502,626
--------- --------- ---------
$9,681,885 $9,107,718 $6,658,734
--------- --------- ---------
NET INCOME (LOSS) ($3,203,669) ($ 60,865) $2,466,710
========= ========= =========
GENERAL PARTNER - NET
INCOME $ 57,256 $ 158,394 $ 191,012
========= ========= =========
LIMITED PARTNERS - NET
INCOME (LOSS) ($3,260,925) ($ 219,259) $2,275,698
========= ========= =========
NET INCOME (LOSS)
per Unit ($ 7.80) ($ .52) $ 5.44
========= ========= =========
UNITS OUTSTANDING 418,266 418,266 418,266
========= ========= =========
The accompanying notes are an integral
part of these financial statements.
</TABLE>
F-27
<PAGE>
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-E
Statements of Partners' Capital (Deficit)
For the Years Ended December 31, 1998, 1997, and 1996
Limited General
Partners Partner Total
------------- ---------- -------------
Balance, Dec. 31, 1995 $16,319,788 ($127,750) $16,192,038
Net income 2,275,698 191,012 2,466,710
Cash distributions ( 3,624,000) ( 251,209) ( 3,875,209)
---------- ------- -----------
Balance, Dec. 31, 1996 $14,971,486 ($187,947) $14,783,539
Net income (loss) ( 219,259) 158,394 ( 60,865)
Cash distributions ( 4,303,000) ( 179,497) ( 4,482,497)
---------- ------- ----------
Balance, Dec. 31, 1997 $10,449,227 ($209,050) $10,240,177
Net income (loss) ( 3,260,925) 57,256 ( 3,203,669)
Cash distributions ( 3,071,000) ( 123,989) ( 3,194,989)
---------- ------- ----------
Balance, Dec. 31, 1998 $ 4,117,302 ($275,783) $ 3,841,519
========== ======= ==========
The accompanying notes are an integral part of these
financial statements.
F-28
<PAGE>
<TABLE>
<CAPTION>
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-E
Statements of Cash Flows
For the Years Ended December 31, 1998, 1997, and 1996
1998 1997 1996
------------ ------------ ------------
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING
ACTIVITIES:
Net income (loss) ($3,203,669) ($ 60,865) $2,466,710
Adjustments to reconcile
net income (loss) to net
cash provided by operating
activities:
Depreciation, deple-
tion, and amortiza-
tion of oil and gas
properties 1,984,334 1,198,598 1,737,844
Impairment provision 3,503,400 2,893,438 -
(Gain) loss on sale of
oil and gas properties ( 36,219) 39,835 ( 58,579)
Decrease in
accounts receivable -
oil and gas sales 541,719 192,951 19,717
Decrease in deferred charge 76,430 94,271 53,411
Increase (decrease) in
accounts payable ( 390,629) 70,431 234,315
Increase (decrease) in
gas imbalance payable 35,769 ( 13,748) 36,225
Decrease in accrued
liability ( 22,457) ( 34,292) ( 56,949)
--------- --------- ---------
Net cash provided by
operating activities $2,488,678 $4,380,619 $4,432,694
--------- --------- ---------
CASH FLOWS FROM INVESTING
ACTIVITIES:
Capital expenditures ($ 2,926) ($ 65,616) ($ 37,987)
Proceeds from sale of oil
and gas properties 77,860 38,925 58,595
--------- --------- ---------
Net cash provided (used)
by investing activities $ 74,934 ($ 26,691) $ 20,608
--------- --------- ---------
CASH FLOWS FROM FINANCING
ACTIVITIES:
Cash distributions ($3,194,989) ($4,482,497) ($3,875,209)
--------- --------- ---------
Net cash used by
financing activities ($3,194,989) ($4,482,497) ($3,875,209)
--------- --------- ---------
</TABLE>
F-29
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
NET INCREASE (DECREASE) IN
CASH AND CASH EQUIVALENTS ($ 631,377) ($ 128,569) $ 578,093
CASH AND CASH EQUIVALENTS
AT BEGINNING OF PERIOD 1,114,574 1,243,143 665,050
--------- --------- ---------
CASH AND CASH EQUIVALENTS
AT END OF PERIOD $ 483,197 $1,114,574 $1,243,143
========= ========= =========
The accompanying notes are an integral
part of these financial statements.
</TABLE>
F-30
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
TO THE PARTNERS
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-F
In our opinion, the accompanying balance sheets and the related statements
of operations, changes in partners' capital (deficit) and cash flows present
fairly, in all material respects, the financial position of the Geodyne Energy
Income Limited Partnership III-F, an Oklahoma limited partnership, at December
31, 1998 and 1997, and the results of its operations and its cash flows for each
of the three years in the period ended December 31, 1998, in conformity with
generally accepted accounting principles. These financial statements are the
responsibility of the Partnership's management; our responsibility is to express
an opinion on these financial statements based on our audits. We conducted our
audits of these financial statements in accordance with generally accepted
auditing standards which require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements, assessing the
accounting principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for the opinion expressed above.
PricewaterhouseCoopers LLP
Tulsa, Oklahoma
February 13, 1999
F-31
<PAGE>
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-F
Balance Sheets
December 31, 1998 and 1997
ASSETS
------
1998 1997
------------ -------------
CURRENT ASSETS:
Cash and cash equivalents $ 316,761 $ 541,382
Accounts receivable:
Oil and gas sales 279,590 472,746
Other 9,631 9,631
--------- ---------
Total current assets $ 605,982 $1,023,759
NET OIL AND GAS PROPERTIES,
utilizing the successful
efforts method 2,848,735 3,604,665
DEFERRED CHARGE 79,097 124,393
--------- ---------
$3,533,814 $4,752,817
========= =========
LIABILITIES AND PARTNERS' CAPITAL (DEFICIT)
-------------------------------------------
CURRENT LIABILITIES:
Accounts payable $ 133,841 $ 165,963
Gas imbalance payable 123,641 119,864
--------- ---------
Total current liabilities $ 257,482 $ 285,827
ACCRUED LIABILITY $ 171,735 $ 159,275
PARTNERS' CAPITAL (DEFICIT):
General Partner ($ 164,221) ($ 146,427)
Limited Partners, issued and
outstanding, 221,484 Units 3,268,818 4,454,142
--------- ---------
Total Partners' capital $3,104,597 $4,307,715
--------- ---------
$3,533,814 $4,752,817
========= =========
The accompanying notes are an integral part of these
financial statements.
F-32
<PAGE>
<TABLE>
<CAPTION>
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-F
Statements of Operations
For the Years Ended December 31, 1998, 1997, and 1996
1998 1997 1996
------------ ------------- -------------
<S> <C> <C> <C>
REVENUES:
Oil and gas sales $2,149,193 $2,991,450 $3,094,738
Interest income 20,060 21,251 14,160
Gain (loss) on sale of
oil and gas properties 22,073 ( 14,411) 81,481
--------- --------- ---------
$2,191,326 $2,998,290 $3,190,379
COSTS AND EXPENSES:
Lease operating $1,036,153 $1,166,776 $1,075,305
Production tax 149,314 166,155 162,302
Depreciation, deple-
tion, and amorti-
zation of oil and
gas properties 721,443 755,802 1,130,451
Impairment provision - 2,884,405 -
General and
administrative 260,699 265,786 266,544
--------- --------- ---------
$2,167,609 $5,238,924 $2,634,602
--------- --------- ---------
NET INCOME (LOSS) $ 23,717 ($2,240,634) $ 555,777
========= ========= =========
GENERAL PARTNER - NET
INCOME $ 29,041 $ 32,514 $ 72,299
========= ========= =========
LIMITED PARTNERS - NET
INCOME (LOSS) ($ 5,324) ($2,273,148) $ 483,478
========= ========= =========
NET INCOME (LOSS)
per Unit ($ .02) ($ 10.26) $ 2.18
========= ========= =========
UNITS OUTSTANDING 221,484 221,484 221,484
========= ========= =========
The accompanying notes are an integral
part of these financial statements.
</TABLE>
F-33
<PAGE>
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-F
Statements of Partners' Capital (Deficit)
For the Years Ended December 31, 1998, 1997, and 1996
Limited General
Partners Partner Total
------------- ---------- -------------
Balance, Dec. 31, 1995 $8,986,812 ($ 70,576) $8,916,236
Net income 483,478 72,299 555,777
Cash distributions ( 1,160,000) ( 99,246) ( 1,259,246)
--------- ------- ---------
Balance, Dec. 31, 1996 $8,310,290 ($ 97,523) $8,212,767
Net income (loss) ( 2,273,148) 32,514 ( 2,240,634)
Cash distributions ( 1,583,000) ( 81,418) ( 1,664,418)
--------- ------- ---------
Balance, Dec. 31, 1997 $4,454,142 ($146,427) $4,307,715
Net income (loss) ( 5,324) 29,041 23,717
Cash distributions ( 1,180,000) ( 46,835) ( 1,226,835)
--------- ------- ---------
Balance, Dec. 31, 1998 $3,268,818 ($164,221) $3,104,597
========= ======= =========
The accompanying notes are an integral part of these
financial statements.
F-34
<PAGE>
<TABLE>
<CAPTION>
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-F
Statements of Cash Flows
For the Years Ended December 31, 1998, 1997, and 1996
1998 1997 1996
------------ ------------ ------------
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING
ACTIVITIES:
Net income (loss) $ 23,717 ($2,240,634) $ 555,777
Adjustments to reconcile
net income (loss) to net
cash provided by operating
activities:
Depreciation, deple-
tion, and amortiza-
tion of oil and gas
properties 721,443 755,802 1,130,451
Impairment provision - 2,884,405 -
(Gain) loss on sale of
oil and gas properties ( 22,073) 14,411 ( 81,481)
(Increase) decrease in
accounts receivable -
oil and gas sales 193,156 188,469 ( 247,966)
Increase in accounts
receivable - other - ( 9,631) -
Decrease in
deferred charge 45,296 35,060 77,816
Increase (decrease) in
accounts payable ( 32,122) ( 2,353) 5,027
Increase in gas imbalance
Payable 3,777 10,820 11,811
Increase (decrease) in
accrued liability 12,460 16,589 ( 118,725)
--------- --------- ---------
Net cash provided by
operating activities $ 945,654 $1,652,938 $1,332,710
--------- --------- ---------
CASH FLOWS FROM INVESTING
ACTIVITIES:
Capital expenditures $ - ($ 34,952) ($ 12,107)
Proceeds from sale of oil
and gas properties 56,560 83,156 118,685
--------- --------- ---------
Net cash provided
by investing activities $ 56,560 $ 48,204 $ 106,578
--------- --------- ---------
</TABLE>
F-35
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
CASH FLOWS FROM FINANCING
ACTIVITIES:
Cash distributions ($1,226,835) ($1,664,418) ($1,259,246)
--------- --------- ---------
Net cash used by
financing activities ($1,226,835) ($1,664,418) ($1,259,246)
--------- --------- ---------
NET INCREASE (DECREASE) IN
CASH AND CASH EQUIVALENTS ($ 224,621) $ 36,724 $ 180,042
CASH AND CASH EQUIVALENTS
AT BEGINNING OF PERIOD 541,382 504,658 324,616
--------- --------- ---------
CASH AND CASH EQUIVALENTS
AT END OF PERIOD $ 316,761 $ 541,382 $ 504,658
========= ========= =========
The accompanying notes are an integral
part of these financial statements.
</TABLE>
F-36
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
TO THE PARTNERS
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-G
In our opinion, the accompanying balance sheets and the related statements
of operations, changes in partners' capital (deficit) and cash flows present
fairly, in all material respects, the financial position of the Geodyne Energy
Income Limited Partnership III-G, an Oklahoma limited partnership, at December
31, 1998 and 1997, and the results of its operations and its cash flows for each
of the three years in the period ended December 31, 1998, in conformity with
generally accepted accounting principles. These financial statements are the
responsibility of the Partnership's management; our responsibility is to express
an opinion on these financial statements based on our audits. We conducted our
audits of these financial statements in accordance with generally accepted
auditing standards which require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements, assessing the
accounting principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for the opinion expressed above.
PricewaterhouseCoopers LLP
Tulsa, Oklahoma
February 13, 1999
F-37
<PAGE>
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-G
Balance Sheets
December 31, 1998 and 1997
ASSETS
------
1998 1997
------------ -------------
CURRENT ASSETS:
Cash and cash equivalents $ 169,558 $ 351,163
Accounts receivable:
Oil and gas sales 163,801 285,689
General Partner - 13,140
Other 6,369 6,369
--------- ---------
Total current assets $ 339,728 $ 656,361
NET OIL AND GAS PROPERTIES,
utilizing the successful
efforts method 1,427,362 2,141,289
DEFERRED CHARGE 50,380 75,406
--------- ---------
$1,817,470 $2,873,056
========= =========
LIABILITIES AND PARTNERS' CAPITAL (DEFICIT)
-------------------------------------------
CURRENT LIABILITIES:
Accounts payable $ 73,835 $ 101,925
Gas imbalance payable 60,315 59,607
--------- ---------
Total current liabilities $ 134,150 $ 161,532
ACCRUED LIABILITY $ 111,221 $ 89,310
PARTNERS' CAPITAL (DEFICIT):
General Partner ($ 99,974) ($ 85,608)
Limited Partners, issued and
outstanding, 121,925 Units 1,672,073 2,707,822
--------- ---------
Total Partners' capital $1,572,099 $2,622,214
--------- ---------
$1,817,470 $2,873,056
========= =========
The accompanying notes are an integral part of these
financial statements.
F-38
<PAGE>
<TABLE>
<CAPTION>
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-G
Statements of Operations
For the Years Ended December 31, 1998, 1997, and 1996
1998 1997 1996
------------ ------------ ------------
<S> <C> <C> <C>
REVENUES:
Oil and gas sales $1,272,575 $1,845,264 $1,962,555
Interest income 11,090 14,201 8,144
Gain on sale of oil
and gas properties 19,340 4,685 61,146
--------- --------- ---------
$1,303,005 $1,864,150 $2,031,845
COSTS AND EXPENSES:
Lease operating $ 660,066 $ 755,242 $ 703,303
Production tax 84,377 99,431 101,107
Depreciation, deple-
tion, and amorti-
zation of oil and
gas properties 400,340 425,649 653,459
Impairment provision 310,413 1,551,780 -
General and
administrative 143,465 146,341 146,827
--------- --------- ---------
$1,598,661 $2,978,443 $1,604,696
--------- --------- ---------
NET INCOME (LOSS) ($ 295,656) ($1,114,293) $ 427,149
========= ========= =========
GENERAL PARTNER - NET
INCOME $ 13,093 $ 22,672 $ 47,089
========= ========= =========
LIMITED PARTNERS - NET
INCOME (LOSS) ($ 308,749) ($1,136,965) $ 380,060
========= ========= =========
NET INCOME (LOSS)
per Unit ($ 2.53) ($ 9.33) $ 3.12
========= ========= =========
UNITS OUTSTANDING 121,925 121,925 121,925
========= ========= =========
The accompanying notes are an integral
part of these financial statements.
</TABLE>
F-39
<PAGE>
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-G
Statements of Partners' Capital (Deficit)
For the Years Ended December 31, 1998, 1997, and 1996
Limited General
Partners Partner Total
------------- ---------- ------------
Balance, Dec. 31, 1995 $5,136,727 ($26,964) $5,109,763
Net income 380,060 47,089 427,149
Cash distributions ( 721,000) ( 78,794) ( 799,794)
--------- ------ ---------
Balance, Dec. 31, 1996 $4,795,787 ($58,669) $4,737,118
Net income (loss) ( 1,136,965) 22,672 ( 1,114,293)
Cash distributions ( 951,000) ( 49,611) ( 1,000,611)
--------- ------ ---------
Balance, Dec. 31, 1997 $2,707,822 ($85,608) $2,622,214
Net income (loss) ( 308,749) 13,093 ( 295,656)
Cash distributions ( 727,000) ( 27,459) ( 754,459)
--------- ------ ---------
Balance, Dec. 31, 1998 $1,672,073 ($99,974) $1,572,099
========= ====== =========
The accompanying notes are an integral part of these
financial statements.
F-40
<PAGE>
<TABLE>
<CAPTION>
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-G
Statements of Cash Flows
For the Years Ended December 31, 1998, 1997, and 1996
1998 1997 1996
------------ ---------- ------------
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING
ACTIVITIES:
Net income (loss) ($295,656) ($1,114,293) $427,149
Adjustments to reconcile
net income (loss) to net
cash provided by operating
activities:
Depreciation, deple-
tion, and amortiza-
tion of oil and gas
properties 400,340 425,649 653,459
Impairment provision 310,413 1,551,780 -
Gain on sale of oil and
gas properties ( 19,340) ( 4,685) ( 61,146)
(Increase) decrease in
accounts receivable -
oil and gas sales 121,888 122,426 ( 149,791)
(Increase) decrease in
accounts receivable -
General Partner 13,140 ( 13,140) -
Increase in accounts
receivable - other - ( 6,369) -
Decrease in
deferred charge 25,026 27,369 45,459
Increase (decrease) in
accounts payable ( 28,090) 2,385 ( 38)
Increase in gas imbalance
Payable 708 5,388 5,619
Increase (decrease) in
accrued liability 21,911 2,457 ( 70,481)
------- --------- -------
Net cash provided by
operating activities $550,340 $ 998,967 $850,230
------- --------- -------
CASH FLOWS FROM INVESTING
ACTIVITIES:
Capital expenditures ($ 11,316) ($ 28,338) ($ 19,668)
Proceeds from sale of oil
and gas properties 33,830 65,190 96,713
------- --------- -------
Net cash provided
by investing activities $ 22,514 $ 36,852 $ 77,045
------- --------- -------
</TABLE>
F-41
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
CASH FLOWS FROM FINANCING
ACTIVITIES:
Cash distributions ($754,459) ($1,000,611) ($799,794)
------- --------- -------
Net cash used by
financing activities ($754,459) ($1,000,611) ($799,794)
------- --------- -------
NET INCREASE (DECREASE) IN
CASH AND CASH EQUIVALENTS ($181,605) $ 35,208 $127,481
CASH AND CASH EQUIVALENTS
AT BEGINNING OF PERIOD 351,163 315,955 188,474
------- --------- -------
CASH AND CASH EQUIVALENTS
AT END OF PERIOD $169,558 $ 351,163 $315,955
======= ========= =======
The accompanying notes are an integral
part of these financial statements.
</TABLE>
F-42
<PAGE>
GEODYNE ENERGY INCOME PROGRAM III LIMITED PARTNERSHIPS
Notes to Financial Statements
For the Years Ended December 31, 1998, 1997, and 1996
1. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Organization and Nature of Operations
The Geodyne Energy Income Limited Partnerships (the "Partnerships") were
formed pursuant to a public offering of depositary units ("Units"). Upon
formation, investors became limited partners (the "Limited Partners") and held
Units issued by each Partnership. Geodyne Resources, Inc. (the "General
Partner") is the general partner of each Partnership. Limited Partner capital
contributions were invested in producing oil and gas properties. The
Partnerships were activated on the following dates with the following Limited
Partner capital contributions.
Limited Partner
Date of Capital
Partnership Activation Contributions
----------- ------------------ ---------------
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
Pursuant to the terms of the partnership agreements for the Partnerships,
the Partnerships will terminate on the following dates:
Partnerships Termination Date
------------ -----------------
III-A November 28, 1999
III-B January 24, 2000
III-C February 28, 2000
III-D September 5, 2000
III-E December 26, 2000
III-F March 7, 2001
III-G September 20, 2001
However, the General Partner may extend the term of each Partnership for up to
five periods of two years each. As of the date of these financial statements,
the General Partner intends to extend the term of the III-A, III-B, and III-C
Partnerships for the first two-year extension period, but has not determined
F-43
<PAGE>
whether it intends to (i) further extend the term of such Partnerships or (ii)
extend the term of any other Partnership.
An affiliate of the General Partner owned the following Units at December
31, 1998:
Number of Percent of
Partnership Units Owned Outstanding
----------- ----------- -----------
III-A 31,866 12.1%
III-B 18,756 13.6%
III-C 34,205 14.0%
III-D 21,975 16.8%
III-E 65,290 15.6%
III-F 37,305 16.8%
III-G 18,142 14.9%
The Partnerships' sole business is the development and production of oil
and gas. Substantially all of the Partnerships' gas reserves are being sold
regionally on the "spot market." Due to the highly competitive nature of the
spot market, prices on the spot market are subject to wide seasonal and regional
pricing fluctuations. In addition, such spot market sales are generally short
term in nature and are dependent upon the obtaining of transportation services
provided by pipelines. The Partnerships' oil is sold at or near the
Partnerships' wells under short-term purchase contracts at prevailing
arrangements which are customary in the oil industry. The prices received for
the Partnerships' oil and gas are subject to influences such as global
consumption and supply trends. In 1998, the price of oil decreased to
historically low levels. If the price of oil remains low, or if it decreases
further, there may be a significant impact on the Partnerships' near-term
results of operations and cash flows.
Allocation of Costs and Revenues
The terms of each Partnership's Limited Partnership Agreement (the
"Partnership Agreement") allocate costs and income between the Limited Partners
and the General Partner as follows:
F-44
<PAGE>
Before Payout (1) After Payout(1)
-------------------- --------------------
General Limited General Limited
Partner Partners Partner Partners
-------- -------- -------- --------
Costs(2)
- ------------------------
Sales commissions, pay-
ment for organization
and offering costs
and management fee 1% 99% - -
Property acquisition
costs 1% 99% 1% 99%
Identified development
drilling 1% 99% 1% 99%
Development drilling(2) 5% 95% 15% 85%
General and administra-
tive costs, direct
administrative costs
and operating costs(2) 5% 95% 15% 85%
Income(2)
- ------------------------
Temporary investments of
Limited Partners'
subscriptions 1% 99% 1% 99%
Income from oil and gas
production(2) 5% 95% 15% 85%
Gain on sale of
producing properties(2) 5% 95% 15% 85%
All other income(2) 5% 95% 15% 85%
- ----------
(1) Payout occurs when total distributions to Limited Partners equal total
original Limited Partner subscriptions.
(2) If, at payout, the Limited Partners have received distributions at an
annual rate less than 12% of their subscriptions, the percentage of income
and costs allocated to the General Partner will increase to only 10% and
the Limited Partners will be allocated 90%. Thereafter, if the
distribution to Limited Partners reaches an average annual rate of 12% the
allocation will change to 15% to the General Partner and 85% to the
Limited Partners.
The III-B Partnership achieved payout during the first quarter of 1998.
Beginning with the first quarter of 1998, operations for the III-B Partnership
were allocated using the after payout percentages.
Cash and Cash Equivalents
F-45
<PAGE>
The Partnerships consider all highly liquid investments with a maturity of
three months or less when purchased to be cash equivalents. Cash equivalents are
not insured, which cause the Partnerships to be subject to risk.
Credit Risks
Accrued oil and gas sales which are due from a variety of oil and gas
purchasers subject the Partnerships to a concentration of credit risk. Some of
these purchasers are discussed in Note 3 - Major Customers.
Oil and Gas Properties
The Partnerships follow the successful efforts method of accounting for
their oil and gas properties. Under the successful efforts method, the
Partnerships capitalize all property acquisition costs and development costs
incurred in connection with the further development of oil and gas reserves.
Property acquisition costs include costs incurred by the Partnerships or the
General Partner to acquire producing properties, including related title
insurance or examination costs, commissions, engineering, legal and accounting
fees, and similar costs directly related to the acquisitions, plus an allocated
portion of the General Partner's property screening costs. The acquisition cost
to the Partnerships of properties acquired by the General Partner is adjusted to
reflect the net cash results of operations, including interest incurred to
finance the acquisition, for the period of time the properties are held by the
General Partner. Leasehold impairment of unproved properties is recognized based
upon an individual property assessment and exploratory experience. Upon
discovery of commercial reserves, leasehold costs are transferred to producing
properties.
Depletion of the 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 units-of-production
method. The Partnerships' calculation of depreciation, depletion, and
amortization includes estimated dismantlement and abandonment costs, net of
estimated salvage values. The depreciation, depletion, and amortization rates
per equivalent barrel of oil produced during the years ended December 31, 1998,
1997, and 1996 were as follows:
Partnership 1998 1997 1996
----------- ----- ----- -----
III-A $3.15 $3.42 $4.40
III-B 2.86 3.60 4.37
III-C 3.44 2.92 3.68
III-D 3.20 2.05 2.63
III-E 3.59 2.00 2.96
III-F 3.89 3.51 4.95
III-G 3.68 3.25 4.76
F-46
<PAGE>
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 proceeds are credited to oil and gas properties.
The Partnerships evaluate the recoverability of the carrying costs of
their proved oil and gas properties at the field level. If the unamortized costs
of oil and gas properties within a 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. During 1998, 1997,and 1996, the Partnerships recorded the
following non-cash charges against earnings (impairment provisions):
Partnership 1998 1997 1996
----------- ---------- ---------- ----
III-A $ - $ 184,644 $ -
III-B - 77,653 -
III-C - 234,271 -
III-D 506,636 485,820 -
III-E 3,503,400 2,042,775 -
III-F - 2,078,019 -
III-G 310,413 1,113,114 -
The risk that the Partnerships will be required to record similar impairment
provisions in the future increases as oil and gas prices decrease.
In addition, during 1997 the General Partner determined that the
Partnerships' unproved properties would be uneconomic to develop and, therefore,
of little or no value. This determination was based on an evaluation by the
General Partner that it was unlikely that these unproved properties would be
developed due to low oil and gas prices and provisions in the Partnership
Agreements which limit the level of permissible drilling activity. As a result
of this determination, the Partnership recorded the following noncash charges
against earnings at March 31, 1997 in order to reflect the writing-off of the
Partnerships' unproved properties:
F-47
<PAGE>
Partnerships Amount
----------- ----------
III-A $1,432,362
III-B 660,469
III-C 1,462,146
III-D 446,423
III-E 850,663
III-F 806,386
III-G 438,666
Deferred Charge
Deferred Charge represents costs deferred for lease operating expenses
incurred in connection with the Partnerships' underproduced gas imbalance
positions. The rate used in calculating the deferred charge is the average of
the annual production costs per Mcf. At December 31, 1998 and 1997, cumulative
total gas sales volumes for underproduced wells were less than the Partnerships'
pro-rata share of total gas production from these wells by the following
amounts:
1998 1997
-------------------- --------------------
Partnership Mcf Amount Mcf Amount
----------- ------- -------- ------- --------
III-A 435,225 $266,532 469,603 $199,722
III-B 247,738 193,310 261,654 136,296
III-C 161,424 70,849 188,244 86,649
III-D 11,977 9,462 20,653 18,875
III-E 78,791 127,657 129,793 204,087
III-F 63,675 79,097 101,297 124,393
III-G 34,495 50,380 53,170 75,406
Accrued Liability
Accrued liability represents charges accrued for lease operating expenses
incurred in connection with the Partnerships' overproduced gas imbalance
positions. The rate used in calculating the accrued liability is the average of
the annual production costs per Mcf. At December 31, 1998 and 1997, cumulative
total gas sales volumes for overproduced wells exceeded the Partnerships'
pro-rata share of total gas production from these wells by the following
amounts:
F-48
<PAGE>
1998 1997
-------------------- --------------------
Partnership Mcf Amount Mcf Amount
----------- ------- -------- ------- --------
III-A 125,481 $ 76,845 122,044 $ 51,905
III-B 53,103 41,436 54,702 28,494
III-C 345,570 151,671 310,293 142,828
III-D 231,188 182,639 220,959 201,934
III-E 184,228 298,486 204,110 320,943
III-F 138,251 171,735 129,703 159,275
III-G 76,153 111,221 62,974 89,310
Oil and Gas Sales and Gas Imbalance Payable
The Partnerships' oil and condensate production is sold, title passed, and
revenue recognized at or near the Partnerships' wells under short-term purchase
contracts at prevailing prices in accordance with arrangements which are
customary in the oil and gas industry. Sales of gas applicable to the
Partnerships' interest in producing oil and gas leases are recorded as revenue
when the gas is metered and title transferred pursuant to the gas sales
contracts covering the Partnerships' interest in gas reserves. During such times
as a Partnership's sales of gas exceed its pro rata ownership in a well, such
sales are recorded as revenue unless total sales from the well have exceeded the
Partnership's share of estimated total gas reserves underlying the property, at
which time such excess is recorded as a liability. The rates per Mcf used to
calculate this liability are based on the average gas prices received for the
volumes at the time the overproduction occurred. This also approximates the
price for which the Partnerships are currently settling this liability. At
December 31, 1998 and 1997 total sales exceeded the Partnerships' share of
estimated total gas reserves as follows:
1998 1997
-------------------- --------------------
Partnership Mcf Amount Mcf Amount
----------- ------- -------- ------- --------
III-A 20,602 $ 30,903 25,612 $ 38,418
III-B 12,281 18,422 4,451 6,676
III-C 16,986 25,479 20,329 30,493
III-D 2,969 4,454 - -
III-E 119,012 178,518 95,166 142,749
III-F 82,427 123,641 79,909 119,864
III-G 40,210 60,315 39,738 59,607
These amounts were recorded as gas imbalance payables in accordance with the
sales method. These gas imbalance payables will be settled by either gas
production by the underproduced
F-49
<PAGE>
party in excess of the current estimates of total gas reserves for the well or
by a negotiated or contractual payment to the underproduced party.
General and Administrative Overhead
The General Partner and its affiliates are reimbursed for actual general
and administrative costs incurred and attributable to the conduct of the
business affairs and operations of the Partnerships.
Use of Estimates in Financial Statements
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates. Further, the
deferred charge, the gas imbalance payable, and the accrued liability all
involve estimates which could materially differ from the actual amounts
ultimately realized or incurred in the near term. Oil and gas reserves (see Note
4) also involve significant estimates which could materially differ from the
actual amounts ultimately realized.
Income Taxes
Income or loss for income tax purposes is includable in the income tax
returns of the partners. Accordingly, no recognition has been given to income
taxes in these financial statements.
2. TRANSACTIONS WITH RELATED PARTIES
The Partnerships reimburse the General Partner for the general and
administrative overhead applicable to the Partnerships, based on an allocation
of actual costs incurred by the General Partner. When actual costs incurred
benefit other Partnerships and affiliates, the allocation of costs is based on
the relationship of the Partnerships' reserves to the total reserves owned by
all Partnerships and affiliates. The General Partner believes this allocation
method is reasonable. Although the actual costs incurred by the General Partner
and its affiliates have fluctuated during the three years presented, the amounts
charged to the Partnerships have not fluctuated due to the expense limitations
imposed by the Partnership Agreement. The following is a summary of payments
made to the General Partner or its affiliates by the Partnerships for general
and
F-50
<PAGE>
administrative overhead costs for the years ended December 31, 1998, 1997, and
1996:
Partnership 1998 1997 1996
----------- -------- -------- --------
III-A $277,872 $277,872 $277,872
III-B 145,620 145,620 145,620
III-C 257,412 257,412 257,412
III-D 137,904 137,904 137,904
III-E 440,280 440,280 440,280
III-F 233,136 233,136 233,136
III-G 128,340 128,340 128,340
Affiliates of the Partnerships operate certain of the Partnerships'
properties and their policy is to bill the Partnerships for all customary
charges and cost reimbursements associated with these activities, together with
any compressor rentals, consulting, or other services provided. Such charges are
comparable to third party charges in the area where the wells are located and
are the same as charged to other working interest owners in the wells.
3. MAJOR CUSTOMERS
The following table sets forth purchasers who individually accounted for
ten percent or more of each Partnership's combined oil and gas sales during
1998, 1997, and 1996:
Partnership Purchaser Percentage
----------- ------------------------ --------------------------
1998 1997 1996
----- ----- -----
III-A El Paso Energy Marketing
Company ("El Paso") 33.9% 47.2% 59.2%
Valero Industrial Gas
L.P. ("Valero") 30.8% 14.4% - %
Phibro Energy, Inc.
("Phibro") 17.0% - % - %
Mesa Operating Ltd.
Partnership ("Mesa") - % - % 19.4%
III-B El Paso 26.7% 37.9% 47.9%
Valero 23.9% 11.4% - %
Phibro 18.7% 12.7% - %
Sun Refining & Marketing
Company 14.4% 13.1% 10.3%
Mesa - % - % 22.0%
III-C El Paso 55.5% 49.8% 51.2%
F-51
<PAGE>
III-D El Paso 54.9% 45.6% 44.4%
Eaglwing Trading, Inc.
("Eaglwing") 15.3% 18.3% - %
Oryx Energy Company
("Oryx") - % - % 19.9%
III-E Eaglwing 30.1% 33.3% - %
El Paso 12.6% 12.4% 12.3%
Oryx - % - % 36.5%
Hunt Energy Corp. - % - % 10.0%
III-F El Paso 28.3% 28.5% 25.9%
Amoco Production
Company ("Amoco") - % - % 10.4%
III-G El Paso 24.5% 23.9% 21.6%
Amoco - % - % 10.9%
In the event of interruption of purchases by one or more of these
significant customers or the cessation or material change in availability of
open access transportation by the Partnerships' pipeline transporters, the
Partnerships may encounter difficulty in marketing their gas and in maintaining
historic sales levels. Alternative purchasers or transporters may not be readily
available.
4. SUPPLEMENTAL OIL AND GAS INFORMATION
The following supplemental information regarding the oil and gas
activities of the Partnerships is presented pursuant to the disclosure
requirements promulgated by the SEC.
Capitalized Costs
Capitalized costs and accumulated depreciation, depletion, amortization,
and valuation allowance at December 31, 1998 and 1997 were as follows:
F-52
<PAGE>
III-A Partnership
-----------------
1998 1997
------------- -------------
Proved properties $15,792,267 $15,907,665
Less accumulated
depreciation,
depletion, amorti-
zation, and valua-
tion allowance ( 13,569,594) ( 13,237,716)
---------- ----------
Net oil and gas
Properties $ 2,222,673 $ 2,669,949
========== ==========
III-B Partnership
-----------------
1998 1997
------------ -------------
Proved properties $ 9,325,381 $9,402,262
Less accumulated
depreciation,
depletion, amorti-
zation, and valua-
tion allowance ( 8,083,001) ( 7,903,114)
---------- ----------
Net oil and gas
Properties $ 1,242,380 $1,499,148
========== ==========
F-53
<PAGE>
III-C Partnership
-----------------
1998 1997
------------- -------------
Proved properties $19,181,561 $19,627,883
Less accumulated
depreciation,
depletion, amorti-
zation, and valua-
tion allowance ( 16,401,716) ( 16,185,252)
---------- ----------
Net oil and gas
Properties $ 2,779,845 $ 3,442,631
========== ==========
III-D Partnership
-----------------
1998 1997
------------- -------------
Proved properties $12,039,032 $12,187,201
Less accumulated
depreciation,
depletion, amorti-
zation, and valua-
tion allowance ( 10,802,150) ( 9,975,953)
---------- ----------
Net oil and gas
Properties $ 1,236,882 $ 2,211,248
========== ==========
F-54
<PAGE>
III-E Partnership
-----------------
1998 1997
------------- -------------
Proved properties $34,096,393 $34,159,634
Less accumulated
depreciation,
depletion, amorti-
zation, and valua-
tion allowance ( 30,905,913) ( 25,442,705)
---------- ----------
Net oil and gas
Properties $ 3,190,480 $ 8,716,929
========== ==========
III-F Partnership
-----------------
1998 1997
------------- -------------
Proved properties $16,559,050 $16,673,217
Less accumulated
depreciation,
depletion, amorti-
zation, and valua-
tion allowance ( 13,710,315) ( 13,068,552)
---------- ----------
Net oil and gas
Properties $ 2,848,735 $ 3,604,665
========== ==========
F-55
<PAGE>
III-G Partnership
-----------------
1998 1997
------------ -------------
Proved properties $ 9,515,195 $9,602,310
Less accumulated
depreciation,
depletion, amorti-
zation, and valua-
tion allowance ( 8,087,833) ( 7,461,021)
---------- ---------
Net oil and gas
properties $ 1,427,362 $2,141,289
========== =========
Costs Incurred
The III-A and III-B Partnerships incurred acquisition costs of $35,246 and
$23,248, respectively, during the year ended December 31, 1997 for additional
acreage underlying the Lebleu No. 4 well. The Partnerships incurred no other
costs in connection with oil and gas acquisition or exploration activities
during the years ended December 31, 1998, 1997, and 1996. Costs incurred by the
Partnerships in connection with oil and gas property development activities for
the years ended December 31, 1998, 1997, and 1996 were as follows:
Partnership 1998 1997 1996
----------- -------- -------- --------
III-A $ 55,973 $ 40,203 $ 4,548
III-B 11,667 20,491 21,881
III-C 123,095 104,670 24,068
III-D 64,034 579 24,953
III-E 2,926 65,616 37,987
III-F - 34,952 12,107
III-G 11,316 28,338 19,668
Quantities of Proved Oil and Gas Reserves - Unaudited
The following tables summarize changes in net quantities of the
Partnerships' proved reserves, all of which are located in the United States,
for the periods indicated. The proved reserves at December 31, 1998, 1997, and
1996 were estimated by petroleum engineers employed by affiliates of the
Partnerships. Certain reserve information was reviewed by Ryder Scott Company
Petroleum Engineers, an independent petroleum engineering firm. The following
information includes certain gas balancing adjustments which caused the gas
volumes to differ from the
F-56
<PAGE>
reserve reports prepared by the General Partner and reviewed by Ryder Scott.
III-A Partnership
-----------------
Crude Natural
Oil Gas
(Barrels) (Mcf)
--------- -----------
Proved reserves, Dec. 31, 1995 173,001 6,996,352
Production ( 46,923) (1,268,943)
Sale of minerals in place ( 1,434) ( 417,113)
Revision of previous
estimates 29,255 871,973
------- ---------
Proved reserves, Dec. 31, 1996 153,899 6,182,269
Production ( 40,468) (1,031,152)
Sale of minerals in place ( 4,695) ( 661,004)
Extensions and discoveries 6 915
Revision of previous
estimates 4,121 740,812
------- ---------
Proved reserves, Dec. 31, 1997 112,863 5,231,840
Production ( 34,689) ( 741,990)
Sale of minerals in place ( 170) ( 37,253)
Extensions and discoveries 7,433 175,973
Revision of previous
estimates 6,687 100,845
------- ---------
Proved reserves, Dec. 31, 1998 92,124 4,729,415
======= =========
PROVED DEVELOPED RESERVES:
December 31, 1996 142,520 5,999,778
======= =========
December 31, 1997 101,190 5,027,338
======= =========
December 31, 1998 86,204 4,604,490
======= =========
F-57
<PAGE>
III-B Partnership
-----------------
Crude Natural
Oil Gas
(Barrels) (Mcf)
--------- ------------
Proved reserves, Dec. 31, 1995 122,916 3,464,971
Production ( 37,849) ( 642,152)
Sale of minerals in place ( 624) ( 186,418)
Revision of previous
estimates 36,520 331,501
------- ---------
Proved reserves, Dec. 31, 1996 120,963 2,967,902
Production ( 37,216) ( 518,891)
Sale of minerals in place ( 2,009) ( 285,841)
Revision of previous
estimates 11,805 370,683
------- ---------
Proved reserves, Dec. 31, 1997 93,543 2,533,853
Production ( 34,221) ( 355,197)
Sale of minerals in place ( 98) ( 46,674)
Revision of previous
estimates 31,939 42,054
------- ---------
Proved reserves, Dec. 31, 1998 91,163 2,174,036
======= =========
PROVED DEVELOPED RESERVES:
December 31, 1996 117,345 2,906,514
======= =========
December 31, 1997 89,784 2,462,219
======= =========
December 31, 1998 87,403 2,105,919
======= =========
F-58
<PAGE>
III-C Partnership
-----------------
Crude Natural
Oil Gas
(Barrels) (Mcf)
--------- ------------
Proved reserves, Dec. 31, 1995 108,468 7,902,210
Production ( 27,429) (1,351,525)
Sale of minerals in place ( 1,266) ( 132,327)
Extensions and discoveries 10,541 157,345
Revision of previous
estimates 72,173 1,144,100
------- ---------
Proved reserves, Dec. 31, 1996 162,487 7,719,803
Production ( 27,069) (1,124,237)
Sale of minerals in place ( 4,753) ( 197,339)
Extensions and discoveries 447 -
Revision of previous
estimates 22,200 781,366
------- ---------
Proved reserves, Dec. 31, 1997 153,312 7,179,593
Production ( 22,980) (1,156,387)
Sale of minerals in place ( 5,849) ( 322,985)
Extensions and discoveries 444 443,959
Revision of previous
estimates 9,742 ( 375,699)
------- ---------
Proved reserves, Dec. 31, 1998 134,669 5,768,481
======= =========
PROVED DEVELOPED RESERVES:
December 31, 1996 162,235 7,673,323
======= =========
December 31, 1997 153,112 7,157,512
======= =========
December 31, 1998 134,527 5,754,200
======= =========
F-59
<PAGE>
III-D Partnership
-----------------
Crude Natural
Oil Gas
(Barrels) (Mcf)
--------- ------------
Proved reserves, Dec. 31, 1995 421,914 3,970,007
Production ( 41,351) ( 760,593)
Sale of minerals in place ( 427) ( 25,031)
Extensions and discoveries 1,509 27,059
Revision of previous
estimates 48,985 558,104
------- ---------
Proved reserves, Dec. 31, 1996 430,630 3,769,546
Production ( 40,758) ( 708,262)
Sale of minerals in place ( 396) ( 18,762)
Extensions and discoveries 94 1,797
Revision of previous
estimates 88,825 760,231
------- ---------
Proved reserves, Dec. 31, 1997 478,395 3,804,550
Production ( 35,908) ( 767,089)
Sale of minerals in place ( 1,822) ( 48,776)
Extensions and discoveries 370 361,916
Revision of previous
estimates (315,169) ( 511,711)
------- ---------
Proved reserves, Dec. 31, 1998 125,866 2,838,890
======= =========
PROVED DEVELOPED RESERVES:
December 31, 1996 430,606 3,764,539
======= =========
December 31, 1997 478,386 3,803,645
======= =========
December 31, 1998 125,866 2,838,890
======= =========
F-60
<PAGE>
III-E Partnership
-----------------
Crude Natural
Oil Gas
(Barrels) (Mcf)
----------- ------------
Proved reserves, Dec. 31, 1995 2,587,479 12,820,859
Production ( 229,226) ( 2,152,599)
Sale of minerals in place ( 3,259) ( 190)
Extensions and discoveries 4,252 30,349
Revision of previous
estimates 258,393 ( 922,682)
--------- ----------
Proved reserves, Dec. 31, 1996 2,617,639 9,775,737
Production ( 235,152) ( 2,189,619)
Sale of minerals in place ( 2,156) ( 245,398)
Extensions and discoveries - 11,997
Revision of previous
estimates 631,209 2,780,432
--------- ----------
Proved reserves, Dec. 31, 1997 3,011,540 10,133,149
Production ( 223,936) ( 1,974,917)
Sale of minerals in place ( 669) ( 57,652)
Revision of previous
estimates (2,185,625) ( 84,105)
--------- ----------
Proved reserves, Dec. 31, 1998 601,310 8,016,475
========= ==========
PROVED DEVELOPED RESERVES:
December 31, 1996 2,617,639 9,775,737
========= ==========
December 31, 1997 3,011,540 10,133,149
========= ==========
December 31, 1998 601,310 8,016,475
========= ==========
F-61
<PAGE>
III-F Partnership
-----------------
Crude Natural
Oil Gas
(Barrels) (Mcf)
--------- ------------
Proved reserves, Dec. 31, 1995 467,066 7,054,686
Production ( 74,064) ( 924,827)
Sale of minerals in place ( 14,255) ( 8,294)
Extensions and discoveries 3,560 -
Revision of previous
estimates 109,006 ( 454,833)
------- ---------
Proved reserves, Dec. 31, 1996 491,313 5,666,732
Production ( 65,787) ( 898,447)
Sale of minerals in place ( 5,981) ( 169,022)
Extensions and discoveries 10,573 99,305
Revision of previous
estimates ( 30,372) 905,241
------- ---------
Proved reserves, Dec. 31, 1997 399,746 5,603,809
Production ( 54,002) ( 787,609)
Sale of minerals in place ( 854) ( 49,751)
Revision of previous
estimates (113,008) ( 39,496)
------- ---------
Proved reserves, Dec. 31, 1998 231,882 4,726,953
======= =========
PROVED DEVELOPED RESERVES:
December 31, 1996 491,313 5,666,732
======= =========
December 31, 1997 399,746 5,603,809
======= =========
December 31, 1998 231,882 4,726,953
======= =========
F-62
<PAGE>
III-G Partnership
-----------------
Crude Natural
Oil Gas
(Barrels) (Mcf)
--------- ----------
Proved reserves, Dec. 31, 1995 352,310 3,865,551
Production ( 54,083) ( 499,884)
Sale of minerals in place ( 11,160) ( 10,142)
Extensions and discoveries 5,358 3,275
Revision of previous
estimates 77,164 ( 321,474)
------- ---------
Proved reserves, Dec. 31, 1996 369,589 3,037,326
Production ( 47,493) ( 500,966)
Sale of minerals in place ( 6,363) ( 92,435)
Extensions and discoveries 7,164 66,081
Revision of previous
estimates ( 19,969) 486,311
------- ---------
Proved reserves, Dec. 31, 1997 302,928 2,996,317
Production ( 38,858) ( 419,813)
Sale of minerals in place ( 489) ( 29,446)
Extensions and discoveries 693 19,866
Revision of previous
estimates ( 92,484) ( 41,204)
------- ---------
Proved reserves, Dec. 31, 1998 171,790 2,525,720
======= =========
PROVED DEVELOPED RESERVES:
December 31, 1996 369,589 3,037,326
======= =========
December 31, 1997 302,928 2,996,317
======= =========
December 31, 1998 171,790 2,525,720
======= =========
Standardized Measure of Discounted Future Net Cash Flows of Proved Oil and
Gas Reserves - Unaudited
The following tables set forth each of the Partnerships' estimated future
net cash flows as of December 31, 1998 relating to proved oil and gas reserves
based on the standardized measure as prescribed in SFAS No. 69:
F-63
<PAGE>
Partnership
--------------------------------
III-A III-B
------------- ------------
Future cash inflows $11,039,349 $5,528,827
Future production and
development costs ( 3,235,761) ( 1,700,915)
---------- ---------
Future net cash
flows $ 7,803,588 $3,827,912
10% discount to
reflect timing of
cash flows ( 2,422,763) ( 1,160,225)
---------- ---------
Standardized measure
of discounted
future net cash
flows $ 5,380,825 $2,667,687
========== =========
Partnership
---------------------------------
III-C III-D
------------- -------------
Future cash inflows $12,793,855 $6,796,300
Future production and
development costs ( 4,531,622) ( 3,014,891)
---------- ---------
Future net cash
flows $ 8,262,233 $3,781,409
10% discount to
reflect timing of
cash flows ( 2,833,364) ( 1,054,199)
---------- ---------
Standardized measure
of discounted
future net cash
flows $ 5,428,869 $2,727,210
========== =========
F-64
<PAGE>
Partnership
---------------------------------
III-E III-F
------------- -------------
Future cash inflows $23,118,031 $11,451,629
Future production and
development costs ( 12,488,333) ( 4,745,163)
---------- ----------
Future net cash
flows $10,629,698 $ 6,706,466
10% discount to
reflect timing of
cash flows ( 3,773,041) ( 2,543,451)
---------- ----------
Standardized measure
of discounted
future net cash
flows $ 6,856,657 $ 4,163,015
========== ==========
Partnership
-------------
III-G
-------------
Future cash inflows $ 6,602,025
Future production and
development costs ( 2,876,655)
----------
Future net cash
flows $ 3,725,370
10% discount to
reflect timing of
cash flows ( 1,414,866)
----------
Standardized measure
of discounted
future net cash
flows $ 2,310,504
==========
The process of estimating oil and gas reserves is complex, requiring significant
subjective decisions in the evaluation of available geological, engineering, and
economic data for each reservoir. The data for a given reservoir may change
substantially over time as a result of, among other things,
F-65
<PAGE>
additional development activity, production history, and viability of production
under varying economic conditions; consequently, it is reasonably possible that
material revisions to existing reserve estimates may occur in the near future.
Although every reasonable effort has been made to ensure that the reserve
estimates reported herein represent the most accurate assessment possible, the
significance of the subjective decisions required and variances in available
data for various reservoirs make these estimates generally less precise than
other estimates presented in connection with financial statement disclosures.
The Partnerships' reserves were determined at December 31, 1998 using oil and
gas prices of $9.50 per barrel and $2.03 per Mcf, respectively.
<PAGE>
INDEX TO EXHIBITS
-----------------
Number Description
- ------ -----------
4.1 The Certificate and Agreements of Limited Partnership for the
following Partnerships have been previously filed with the
Securities and Exchange Commission as Exhibit 2.1 to Form 8-A filed
by each Partnership on the dates shown below and are hereby
incorporated by reference.
Partnership Filing Date File No.
----------- ----------- --------
III-A February 20, 1990 0-18302
III-B March 30, 1990 0-18636
III-C March 30, 1990 0-18634
III-D November 14, 1990 0-18936
III-E January 22, 1991 0-19010
III-F March 25, 1991 0-19102
III-G September 30, 1991 0-19563
4.2 Second Amendment to Agreement of Limited Partnership of Geodyne
Energy Income Limited Partnership III-A, filed as Exhibit 4.1 to
Registrant's Current Report on Form 8-K dated August 2, 1993 filed
with the SEC on August 10, 1993 and is hereby incorporated by
reference.
4.3 Second Amendment to Agreement of Limited Partnership of Geodyne
Energy Income Limited Partnership III-B, filed as Exhibit 4.2 to
Registrant's Current Report on Form 8-K dated August 2, 1993 filed
with the SEC on August 10, 1993 and is hereby incorporated by
reference.
4.4 Second Amendment to Agreement of Limited Partnership of Geodyne
Energy Income Limited Partnership III-C, filed as Exhibit 4.3 to
Registrant's Current Report on Form 8-K dated August 2, 1993 filed
with the SEC on August 10, 1993 and is hereby incorporated by
reference.
4.5 Second Amendment to Agreement of Limited Partnership of Geodyne
Energy Income Limited Partnership III-D, filed as Exhibit 4.4 to
Registrant's Current Report on Form 8-K dated August 2, 1993 filed
with the SEC on August 10, 1993 and is hereby incorporated by
reference.
4.6 Second Amendment to Agreement of Limited Partnership of Geodyne
Energy Income Limited Partnership III-E, filed as Exhibit 4.5 to
Registrant's Current Report on Form
F-66
<PAGE>
8-K dated August 2, 1993 filed with the SEC on August 10, 1993 and
is hereby incorporated by reference.
4.7 Second Amendment to Agreement of Limited Partnership of Geodyne
Energy Income Limited Partnership III-F, filed as Exhibit 4.6 to
Registrant's Current Report on Form 8-K dated August 2, 1993 filed
with the SEC on August 10, 1993 and is hereby incorporated by
reference.
4.8 Second Amendment to Agreement of Limited Partnership of Geodyne
Energy Income Limited Partnership III-G, filed as Exhibit 4.7 to
Registrant's Current Report on Form 8-K dated August 2, 1993 filed
with the SEC on August 10, 1993 and is hereby incorporated by
reference.
4.9 Third Amendment to Agreement of Limited Partnership of Geodyne
Energy Income Limited Partnership III-A, filed as Exhibit 4.10 to
Registrant's Annual Report on Form 10-K for the year ended December
31, 1995 filed with the SEC on April 1, 1996 and is hereby
incorporated by reference.
4.10 Third Amendment to Agreement of Limited Partnership of Geodyne
Energy Income Limited Partnership III-B, filed as Exhibit 4.11 to
Registrant's Annual Report on Form 10-K for the year ended December
31, 1995 filed with the SEC on April 1, 1996 and is hereby
incorporated by reference.
4.11 Third Amendment to Agreement of Limited Partnership of Geodyne
Energy Income Limited Partnership III-C, filed as Exhibit 4.12 to
Registrant's Annual Report on Form 10-K for the year ended December
31, 1995 filed with the SEC on April 1, 1996 and is hereby
incorporated by reference.
4.12 Third Amendment to Agreement of Limited Partnership of Geodyne
Energy Income Limited Partnership III-D, filed as Exhibit 4.13 to
Registrant's Annual Report on Form 10-K for the year ended December
31, 1995 filed with the SEC on April 1, 1996 and is hereby
incorporated by reference.
4.13 Third Amendment to Agreement of Limited Partnership of Geodyne
Energy Income Limited Partnership III-E, filed as Exhibit 4.14 to
Registrant's Annual Report on Form 10-K for the year ended December
31, 1995 filed with the SEC on April 1, 1996 and is hereby
incorporated by reference.
4.14 Third Amendment to Agreement of Limited Partnership of Geodyne
Energy Income Limited Partnership III-F, filed as Exhibit 4.15 to
Registrant's Annual Report on Form 10-K for the year ended December
31, 1995 filed with
F-67
<PAGE>
the SEC on April 1, 1996 and is hereby incorporated by reference.
4.15 Third Amendment to Agreement of Limited Partnership of Geodyne
Energy Income Limited Partnership III-G, filed as Exhibit 4.16 to
Registrant's Annual Report on Form 10-K for the year ended December
31, 1995 filed with the SEC on April 1, 1996 and is hereby
incorporated by reference.
*23.1 Consent of Ryder Scott Company, Petroleum Engineers for Geodyne
Energy Income Limited Partnership III-A.
*23.2 Consent of Ryder Scott Company, Petroleum Engineers for Geodyne
Energy Income Limited Partnership III-B.
*23.3 Consent of Ryder Scott Company, Petroleum Engineers for Geodyne
Energy Income Limited Partnership III-C.
*23.4 Consent of Ryder Scott Company, Petroleum Engineers for Geodyne
Energy Income Limited Partnership III-D.
*23.5 Consent of Ryder Scott Company, Petroleum Engineers for Geodyne
Energy Income Limited Partnership III-E.
*23.6 Consent of Ryder Scott Company, Petroleum Engineers for Geodyne
Energy Income Limited Partnership III-F.
*23.7 Consent of Ryder Scott Company, Petroleum Engineers for Geodyne
Energy Income Limited Partnership III-G.
*27.1 Financial Data Schedule containing summary financial information
extracted from the Geodyne Energy Income Limited Partnership III-A's
financial statements as of December 31, 1998 and for the year ended
December 31, 1998.
*27.2 Financial Data Schedule containing summary financial information
extracted from the Geodyne Energy Income Limited Partnership III-B's
financial statements as of December 31, 1998 and for the year ended
December 31, 1998.
*27.3 Financial Data Schedule containing summary financial information
extracted from the Geodyne Energy Income Limited Partnership III-C's
financial statements as of December 31, 1998 and for the year ended
December 31, 1998.
*27.4 Financial Data Schedule containing summary financial information
extracted from the Geodyne Energy Income Limited Partnership III-D's
financial statements as of December 31, 1998 and for the year ended
December 31, 1998.
F-68
<PAGE>
*27.5 Financial Data Schedule containing summary financial information
extracted from the Geodyne Energy Income Limited Partnership III-E's
financial statements as of December 31, 1998 and for the year ended
December 31, 1998.
*27.6 Financial Data Schedule containing summary financial information
extracted from the Geodyne Energy Income Limited Partnership III-F's
financial statements as of December 31, 1998 and for the year ended
December 31, 1998.
*27.7 Financial Data Schedule containing summary financial information
extracted from the Geodyne Energy Income Limited Partnership III-G's
financial statements as of December 31, 1998 and for the year ended
December 31, 1998.
All other Exhibits are omitted as inapplicable.
----------
* Filed herewith.
RYDER SCOTT COMPANY Fax (713) 651-0849
PETROLEUM ENGINEERS
1100 Louisiana Suite 3800 Houston, Texas 77002-5218 Telephone (713) 651-9191
CONSENT OF PETROLEUM ENGINEERING FIRM
We consent to the reference to our name included in this Annual Report on
Form 10-K for the year ended December 31, 1998 for Geodyne Energy Income Limited
Partnership III-A.
//s// Ryder Scott Company
Petroleum Engineers
RYDER SCOTT COMPANY
PETROLEUM ENGINEERS
Houston, Texas
January 19, 1999
RYDER SCOTT COMPANY Fax (713) 651-0849
PETROLEUM ENGINEERS
1100 Louisiana Suite 3800 Houston, Texas 77002-5218 Telephone (713) 651-9191
CONSENT OF PETROLEUM ENGINEERING FIRM
We consent to the reference to our name included in this Annual Report on
Form 10-K for the year ended December 31, 1998 for Geodyne Energy Income Limited
Partnership III-B.
//s// Ryder Scott Company
Petroleum Engineers
RYDER SCOTT COMPANY
PETROLEUM ENGINEERS
Houston, Texas
January 19, 1999
RYDER SCOTT COMPANY Fax (713) 651-0849
PETROLEUM ENGINEERS
1100 Louisiana Suite 3800 Houston, Texas 77002-5218 Telephone (713) 651-9191
CONSENT OF PETROLEUM ENGINEERING FIRM
We consent to the reference to our name included in this Annual Report on
Form 10-K for the year ended December 31, 1998 for Geodyne Energy Income Limited
Partnership III-C.
//s// Ryder Scott Company
Petroleum Engineers
RYDER SCOTT COMPANY
PETROLEUM ENGINEERS
Houston, Texas
January 19, 1999
RYDER SCOTT COMPANY Fax (713) 651-0849
PETROLEUM ENGINEERS
1100 Louisiana Suite 3800 Houston, Texas 77002-5218 Telephone (713) 651-9191
CONSENT OF PETROLEUM ENGINEERING FIRM
We consent to the reference to our name included in this Annual Report on
Form 10-K for the year ended December 31, 1998 for Geodyne Energy Income Limited
Partnership III-D.
//s// Ryder Scott Company
Petroleum Engineers
RYDER SCOTT COMPANY
PETROLEUM ENGINEERS
Houston, Texas
January 19, 1999
RYDER SCOTT COMPANY Fax (713) 651-0849
PETROLEUM ENGINEERS
1100 Louisiana Suite 3800 Houston, Texas 77002-5218 Telephone (713) 651-9191
CONSENT OF PETROLEUM ENGINEERING FIRM
We consent to the reference to our name included in this Annual Report on
Form 10-K for the year ended December 31, 1998 for Geodyne Energy Income Limited
Partnership III-E.
//s// Ryder Scott Company
Petroleum Engineers
RYDER SCOTT COMPANY
PETROLEUM ENGINEERS
Houston, Texas
January 19, 1999
RYDER SCOTT COMPANY Fax (713) 651-0849
PETROLEUM ENGINEERS
1100 Louisiana Suite 3800 Houston, Texas 77002-5218 Telephone (713) 651-9191
CONSENT OF PETROLEUM ENGINEERING FIRM
We consent to the reference to our name included in this Annual Report on
Form 10-K for the year ended December 31, 1998 for Geodyne Energy Income Limited
Partnership III-F.
//s// Ryder Scott Company
Petroleum Engineers
RYDER SCOTT COMPANY
PETROLEUM ENGINEERS
Houston, Texas
January 19, 1999
RYDER SCOTT COMPANY Fax (713) 651-0849
PETROLEUM ENGINEERS
1100 Louisiana Suite 3800 Houston, Texas 77002-5218 Telephone (713) 651-9191
CONSENT OF PETROLEUM ENGINEERING FIRM
We consent to the reference to our name included in this Annual Report on
Form 10-K for the year ended December 31, 1998 for Geodyne Energy Income Limited
Partnership III-G.
//s// Ryder Scott Company
Petroleum Engineers
RYDER SCOTT COMPANY
PETROLEUM ENGINEERS
Houston, Texas
January 19, 1999
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0000860745
<NAME> GEODYNE ENERGY INCOME LIMITED PTSP III-A
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> DEC-31-1998
<CASH> 212,695
<SECURITIES> 0
<RECEIVABLES> 282,108
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 494,803
<PP&E> 17,224,629
<DEPRECIATION> 15,001,956
<TOTAL-ASSETS> 2,984,008
<CURRENT-LIABILITIES> 92,914
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 2,814,249
<TOTAL-LIABILITY-AND-EQUITY> 2,984,008
<SALES> 2,029,797
<TOTAL-REVENUES> 2,067,804
<CGS> 0
<TOTAL-COSTS> 1,386,257
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 681,547
<INCOME-TAX> 0
<INCOME-CONTINUING> 681,547
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 681,547
<EPS-PRIMARY> 2.38
<EPS-DILUTED> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0000863835
<NAME> GEODYNE ENERGY INCOME LIMITED PTSP III-B
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> DEC-31-1998
<CASH> 117,355
<SECURITIES> 0
<RECEIVABLES> 164,818
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 282,173
<PP&E> 9,985,850
<DEPRECIATION> 8,743,470
<TOTAL-ASSETS> 1,717,863
<CURRENT-LIABILITIES> 40,080
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 1,636,347
<TOTAL-LIABILITY-AND-EQUITY> 1,717,863
<SALES> 1,201,418
<TOTAL-REVENUES> 1,244,024
<CGS> 0
<TOTAL-COSTS> 760,941
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 483,083
<INCOME-TAX> 0
<INCOME-CONTINUING> 483,083
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 483,083
<EPS-PRIMARY> 2.71
<EPS-DILUTED> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0000863837
<NAME> GEODYNE ENERGY INCOME LIMITED PTSP III-C
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> DEC-31-1998
<CASH> 340,720
<SECURITIES> 0
<RECEIVABLES> 380,975
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 721,695
<PP&E> 20,643,708
<DEPRECIATION> 17,863,863
<TOTAL-ASSETS> 3,572,389
<CURRENT-LIABILITIES> 68,191
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 3,352,527
<TOTAL-LIABILITY-AND-EQUITY> 3,572,389
<SALES> 2,447,005
<TOTAL-REVENUES> 2,925,761
<CGS> 0
<TOTAL-COSTS> 1,743,077
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 1,182,684
<INCOME-TAX> 0
<INCOME-CONTINUING> 1,182,684
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,182,684
<EPS-PRIMARY> 4.48
<EPS-DILUTED> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0000870229
<NAME> GEODYNE ENERGY INCOME LIMITED PTSP III-D
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> DEC-31-1998
<CASH> 172,776
<SECURITIES> 0
<RECEIVABLES> 268,703
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 441,479
<PP&E> 12,485,454
<DEPRECIATION> 11,248,572
<TOTAL-ASSETS> 1,687,823
<CURRENT-LIABILITIES> 60,450
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 1,444,734
<TOTAL-LIABILITY-AND-EQUITY> 1,687,823
<SALES> 1,789,571
<TOTAL-REVENUES> 1,858,355
<CGS> 0
<TOTAL-COSTS> 1,904,391
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (46,036)
<INCOME-TAX> 0
<INCOME-CONTINUING> (46,036)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (46,036)
<EPS-PRIMARY> (0.64)
<EPS-DILUTED> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
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<NAME> GEODYNE ENERGY INCOME LIMITED PTSP III-E
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> DEC-31-1998
<CASH> 483,197
<SECURITIES> 0
<RECEIVABLES> 820,078
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 1,303,275
<PP&E> 34,947,056
<DEPRECIATION> 31,756,576
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