SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarter ended June 30, 1998
Commission File Number: P-7: 0-20265 P-8: 0-20264
GEODYNE INSTITUTIONAL/PENSION ENERGY INCOME LIMITED PARTNERSHIP P-7
GEODYNE INSTITUTIONAL/PENSION ENERGY INCOME LIMITED PARTNERSHIP P-8
---------------------------------------------------------------------
(Exact name of Registrant as specified in its Articles)
P-7 73-1367186
Oklahoma P-8 73-1378683
---------------------------- -------------------------------
(State or other jurisdiction (I.R.S. Employer Identification
of incorporation or Number)
organization)
Two West Second Street, Tulsa, Oklahoma 74103
------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code:(918) 583-1791
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes X No
------ ------
1
<PAGE>
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
GEODYNE INSTITUTIONAL/PENSION ENERGY INCOME LIMITED PARTNERSHIP P-7
BALANCE SHEETS
(Unaudited)
ASSETS
June 30, December 31,
1998 1997
----------- ------------
CURRENT ASSETS:
Cash and cash equivalents $ 193,799 $ 517,144
---------- ----------
Total current assets $ 193,799 $ 517,144
NET PROFITS INTERESTS, net, utilizing
the successful efforts method 4,959,170 5,190,377
---------- ----------
$5,152,969 $5,707,521
========== ==========
PARTNERS' CAPITAL (DEFICIT)
CURRENT LIABILITIES:
Accounts payable - Net
Profits $ 68,298 $ 6,697
---------- ----------
Total current liabilities $ 68,298 $ 6,697
PARTNERS' CAPITAL (DEFICIT):
General Partner ($ 125,964) ($ 119,241)
Limited Partners, issued and
outstanding, 108,074 units 5,210,635 5,820,065
---------- ----------
Total Partners' capital $5,084,671 $5,700,824
---------- ----------
$5,152,969 $5,707,521
========== ==========
The accompanying condensed notes are an integral part of
these financial statements.
2
<PAGE>
GEODYNE INSTITUTIONAL/PENSION ENERGY INCOME LIMITED PARTNERSHIP P-7
STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED JUNE 30, 1998 AND 1997
(Unaudited)
1998 1997
-------- --------
REVENUES:
Net Profits $247,408 $468,770
Interest and other income 2,535 5,249
Gain on sale of Net Profits
Interests 29,117 102,507
-------- --------
$279,060 $576,526
COSTS AND EXPENSES:
Depletion of Net Profits
Interests $161,159 $208,993
General and administrative
(Note 2) 52,275 60,789
-------- --------
$213,434 $269,782
-------- --------
NET INCOME $ 65,626 $306,744
======== ========
GENERAL PARTNER - NET INCOME $ 9,601 $ 23,434
======== ========
LIMITED PARTNERS - NET INCOME $ 56,025 $283,310
======== ========
NET INCOME per unit $ .30 $ 1.50
======== ========
UNITS OUTSTANDING 188,702 188,702
======== ========
The accompanying condensed notes are an integral part of
these financial statements.
3
<PAGE>
GEODYNE INSTITUTIONAL/PENSION ENERGY INCOME LIMITED PARTNERSHIP P-7
STATEMENTS OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 1998 AND 1997
(Unaudited)
1998 1997
-------- ----------
REVENUES:
Net Profits $523,180 $1,129,889
Interest and other income 6,957 10,305
Gain on sale of Net Profits
Interests 138,382 102,507
-------- ----------
$668,519 $1,242,701
COSTS AND EXPENSES:
Depletion of Net Profits
Interests $331,648 $ 455,449
Impairment provision - 1,474,823
General and administrative
(Note 2) 117,410 122,398
-------- ----------
$449,058 $2,052,670
-------- ----------
NET INCOME (LOSS) $219,461 ($ 809,969)
======== ==========
GENERAL PARTNER - NET INCOME $ 23,891 $ 36,197
======== ==========
LIMITED PARTNERS - NET INCOME (LOSS) $195,570 ($ 846,166)
======== ==========
NET INCOME (LOSS) per unit $ 1.04 ($ 4.48)
======== ==========
UNITS OUTSTANDING 188,702 188,702
======== ==========
The accompanying condensed notes are an integral part of
these financial statements.
4
<PAGE>
GEODYNE INSTITUTIONAL/PENSION ENERGY INCOME LIMITED PARTNERSHIP P-7
STATEMENTS OF CASH FLOWS
FOR THE SIX MONTHS ENDED JUNE 30, 1998 AND 1997
(Unaudited)
1998 1997
--------- ----------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) $219,461 ($ 809,969)
Adjustments to reconcile net income
(loss) to net cash provided by
operating activities:
Depletion of Net Profits
Interests 331,648 455,449
Impairment provision - 1,474,823
Gain on sale of Net Profits
Interests ( 138,382) ( 102,507)
Decrease in accounts receivable - 232,945
Increase in accounts payable 61,601 -
-------- ----------
Net cash provided by operating
activities $474,328 $1,250,741
-------- ----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures ($133,716) ($ 150,214)
Proceeds from sale of Net Profits
Interests 171,657 208,014
-------- ----------
Net cash provided by investing
activities $ 37,941 $ 57,800
-------- ----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Cash distributions ($835,614) ($1,236,621)
-------- ----------
Net cash used by financing activities ($835,614) ($1,236,621)
-------- ----------
NET INCREASE (DECREASE) IN CASH AND
CASH EQUIVALENTS ($323,345) $ 71,920
CASH AND CASH EQUIVALENTS AT
BEGINNING OF PERIOD 517,144 643,415
-------- ----------
CASH AND CASH EQUIVALENTS AT
END OF PERIOD $193,799 $ 715,335
======== ==========
The accompanying condensed notes are an integral part of
these financial statements.
5
<PAGE>
GEODYNE INSTITUTIONAL/PENSION ENERGY INCOME LIMITED PARTNERSHIP P-8
BALANCE SHEETS
(Unaudited)
ASSETS
June 30, December 31,
1998 1997
----------- ------------
CURRENT ASSETS:
Cash and cash equivalents $ 209,878 $ 382,448
Accounts receivable:
Net Profits 19,197 57,019
---------- ----------
Total current assets $ 229,075 $ 439,467
NET PROFITS INTERESTS, net, utilizing
the successful efforts method 2,640,934 2,756,057
---------- ----------
$2,870,009 $3,195,524
========== ==========
PARTNERS' CAPITAL (DEFICIT)
PARTNERS' CAPITAL (DEFICIT):
General Partner ($ 60,503) ($ 56,764)
Limited Partners, issued and
outstanding, 90,094 units 2,930,512 3,252,288
---------- ----------
Total Partners' capital $2,870,009 $3,195,524
---------- ----------
$2,870,009 $3,195,524
========== ==========
The accompanying condensed notes are an integral part of
these financial statements.
6
<PAGE>
GEODYNE INSTITUTIONAL/PENSION ENERGY INCOME LIMITED PARTNERSHIP P-8
STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED JUNE 30, 1998 AND 1997
(Unaudited)
1998 1997
---------- ---------
REVENUES:
Net Profits $178,480 $300,445
Interest and other income 2,332 4,317
Gain on sale of Net Profits
Interests 35,928 53,099
-------- --------
$216,740 $357,861
COSTS AND EXPENSES:
Depletion of Net Profits
Interests $ 82,629 $142,057
General and administrative
(Note 2) 32,181 37,329
-------- --------
$114,810 $179,386
-------- --------
NET INCOME $101,930 $178,475
======== ========
GENERAL PARTNER - NET INCOME $ 8,285 $ 14,390
======== ========
LIMITED PARTNERS - NET INCOME $ 93,645 $164,085
======== ========
NET INCOME per unit $ .81 $ 1.41
======== ========
UNITS OUTSTANDING 116,168 116,168
======== ========
The accompanying condensed notes are an integral part of
these financial statements.
7
<PAGE>
GEODYNE INSTITUTIONAL/PENSION ENERGY INCOME LIMITED PARTNERSHIP P-8
STATEMENTS OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 1998 AND 1997
(Unaudited)
1998 1997
---------- ----------
REVENUES:
Net Profits $370,301 $ 753,303
Interest and other income 5,895 8,258
Gain on sale of Net Profits
Interests 96,723 53,099
-------- ----------
$472,919 $ 814,660
COSTS AND EXPENSES:
Depletion of Net Profits
Interests $173,410 $ 316,387
Impairment provision - 1,052,542
General and administrative
(Note 2) 72,282 75,247
-------- ----------
$245,692 $1,444,176
-------- ----------
NET INCOME (LOSS) $227,227 ($ 629,516)
======== ==========
GENERAL PARTNER - NET INCOME $ 18,003 $ 22,868
======== ==========
LIMITED PARTNERS - NET INCOME (LOSS) $209,224 ($ 652,384)
======== ==========
NET INCOME (LOSS) per unit $ 1.80 ($ 5.62)
======== ==========
UNITS OUTSTANDING 116,168 116,168
======== ==========
The accompanying condensed notes are an integral part of
these financial statements.
8
<PAGE>
GEODYNE INSTITUTIONAL/PENSION ENERGY INCOME LIMITED PARTNERSHIP P-8
STATEMENTS OF CASH FLOWS
FOR THE SIX MONTHS ENDED JUNE 30, 1998 AND 1997
(Unaudited)
1998 1997
-------- ----------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) $227,227 ($ 629,516)
Adjustments to reconcile net income
(loss) to net cash provided by
operating activities:
Depletion of Net Profits
Interests 173,410 316,387
Impairment provision - 1,052,542
Gain on sale of Net Profits
Interests ( 96,723) ( 53,099)
Decrease in accounts receivable 37,822 88,232
Increase in accounts payable - 83,311
-------- ----------
Net cash provided by operating
activities $341,736 $ 857,857
-------- ----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures ($ 75,691) ($ 90,312)
Proceeds from sale of Net Profits
Interests 114,127 118,106
-------- ----------
Net cash provided by investing
activities $ 38,436 $ 27,794
-------- ----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Cash distributions ($552,742) ($ 868,653)
-------- ----------
Net cash used by financing activities ($552,742) ($ 868,653)
-------- ----------
NET INCREASE (DECREASE) IN CASH AND
CASH EQUIVALENTS ($172,570) $ 16,998
CASH AND CASH EQUIVALENTS AT
BEGINNING OF PERIOD 382,448 488,063
-------- ----------
CASH AND CASH EQUIVALENTS AT
END OF PERIOD $209,878 $ 505,061
======== ==========
The accompanying condensed notes are an integral part of
these financial statements.
9
<PAGE>
GEODYNE INSTITUTIONAL/PENSION ENERGY INCOME PROGRAM II LIMITED PARTNERSHIPS
CONDENSED NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 1998
(Unaudited)
1. ACCOUNTING POLICIES
-------------------
The balance sheets as of June 30, 1998, statements of operations for the
three and six months ended June 30, 1998 and 1997, and statements of cash
flows for the six months ended June 30, 1998 and 1997 have been prepared
by Geodyne Resources, Inc., the General Partner (the "General Partner") of
the Geodyne Institutional/Pension Energy Income Program II Limited
Partnerships (individually, the "P-7 Partnership" or the "P-8
Partnership", as the case may be, or, collectively, the "Partnerships"),
without audit. In the opinion of management the financial statements
referred to above include all necessary adjustments, consisting of normal
recurring adjustments, to present fairly the financial position at June
30, 1998, the results of operations for the three and six months ended
June 30, 1998 and 1997, and the cash flows for the six months ended June
30, 1998 and 1997.
Information and footnote disclosures normally included in financial
statements prepared in accordance with generally accepted accounting
principles have been condensed or omitted. The accompanying interim
financial statements should be read in conjunction with the Partnerships'
Annual Report on Form 10-K filed for the year ended December 31, 1997. The
results of operations for the period ended June 30, 1998 are not
necessarily indicative of the results to be expected for the full year.
As used in these financial statements, the Partnerships' net profits and
royalty interests in oil and gas sales are referred to as "Net Profits"
and the Partnerships' net profits and royalty interests in oil and gas
properties are referred to as "Net Profits Interests". The working
interests from which Partnerships' Net Profits Interests are carved are
referred to as "Working Interests".
The Limited Partners' net income or loss per unit is based upon each $100
initial capital contribution.
10
<PAGE>
NET PROFITS INTERESTS
---------------------
The Partnerships follow the successful efforts method of accounting for
their Net Profits Interests. Under the successful efforts method, the
Partnerships capitalize all acquisition costs. Property acquisition costs
include costs incurred by the Partnerships or the General Partner to
acquire a net profits interest or other non-operating interest in
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 Net Profits Interests acquired by the General Partner
is adjusted to reflect the net cash results of operations, including
interest incurred to finance the acquisition, for the period of time the
properties are held by the General Partner prior to their transfer to the
Partnerships. Impairment of Net Profits Interests is recognized based upon
an individual property assessment.
Depletion of the costs of Net Profits Interests is computed on the
unit-of-production method. The Partnerships' calculation of depletion of
its Net Profits Interests includes estimated dismantlement and abandonment
costs, net of estimated salvage value.
The Partnerships do not directly bear capital costs. However, the
Partnerships indirectly bear certain capital costs incurred by the owners
of the Working Interests to the extent such capital costs are charged
against the applicable oil and gas revenues in calculating the net profits
payable to the Partnerships. For financial reporting purposes only, such
capital costs are reported as capital expenditures in the Partnerships'
Statements of Cash Flows.
Statement of Financial Accounting Standards ("SFAS") No. 121, "Accounting
for the Impairment of Long Lived Assets and Assets Held for Disposal",
requires successful efforts companies, like the Partnerships, to evaluate
the recoverability of the carrying costs of their proved oil and gas
properties at the lowest level for which there are identifiable cash flows
that are largely independent of the cash flows of other groups of oil and
gas properties. With respect to the Partnerships' oil and gas properties,
this evaluation was performed for each field. SFAS No. 121, provides that
if the unamortized costs of oil and gas properties for each field exceed
the expected undiscounted future cash flows from such properties, the cost
of the properties is written down to fair value, which is determined by
using the discounted future cash flows from
11
<PAGE>
the properties. The Partnerships recorded a non-cash charge against
earnings (impairment provision) during the six months ended June 30,
1997 pursuant to SFAS No. 121 as follows:
Partnership Amount
----------- -----------
P-7 $1,474,823
P-8 1,052,542
No such charge was recorded in the six months ended June 30, 1998. The
risk that the Partnerships will be required to record such impairment
provisions in the future increases when oil and gas prices are depressed.
2. TRANSACTIONS WITH RELATED PARTIES
---------------------------------
The Partnerships' partnership agreements provide for reimbursement
to the General Partner for all direct general and administrative expenses
and for the general and administrative overhead applicable to the
Partnerships based on an allocation of actual costs incurred. During the
three months ended June 30, 1998 the following payments were made to the
General Partner or its affiliates by the Partnerships:
Direct General Administrative
Partnership and Administrative Overhead
----------- ------------------- ---------------
P-7 $2,616 $49,659
P-8 1,611 30,570
During the six months ended June 30, 1998 the following payments were made
to the General Partner or its affiliates by the Partnerships:
Direct General Administrative
Partnership and Administrative Overhead
----------- ------------------- ---------------
P-7 $18,092 $99,318
P-8 11,142 61,140
Affiliates of the Partnerships operate certain of the Partnerships'
properties and their policy is to bill the Partnerships for all customary
charges and cost reimbursements associated with their activities.
12
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
USE OF FORWARD-LOOKING STATEMENTS AND ESTIMATES
- -----------------------------------------------
This Quarterly Report contains certain forward-looking statements. The
words "anticipate", "believe", "expect", "plan", "intend", "estimate",
"project", "could", "may" and similar expressions are intended to identify
forward-looking statements. Such statements reflect management's current
views with respect to future events and financial performance. This
Quarterly Report also includes certain information, which is, or is based
upon, estimates and assumptions. Such estimates and assumptions are
management's efforts to accurately reflect the condition and operation of
the Partnerships.
Use of forward-looking statements and estimates and assumptions involve
risks and uncertainties which include, but are not limited to, the
volatility of oil and gas prices, the uncertainty of reserve information,
the operating risk associated with oil and gas properties (including the
risk of personal injury, death, property damage, damage to the well or
producing reservoir, environmental contamination, and other operating
risks), the prospect of changing tax and regulatory laws, the availability
and capacity of processing and transportation facilities, the general
economic climate, the supply and price of foreign imports of oil and gas,
the level of consumer product demand, and the price and availability of
alternative fuels. Should one or more of these risks or uncertainties
occur or should estimates or underlying assumptions prove incorrect,
actual conditions or results may vary materially and adversely from those
stated, anticipated, believed, estimated, and otherwise indicated.
GENERAL
- -------
The Partnerships were formed for the purpose of acquiring Net Profits
Interests located in the continental United States. In general, each
Partnership acquired passive interests in producing properties and does
not directly engage in development drilling or enhanced recovery projects.
Therefore, the economic life of each Partnership is limited to the period
of time required to fully produce its acquired oil and gas reserves. A Net
Profits Interest entitles the Partnerships to a portion of the oil and gas
sales less operating and production expenses and development costs
generated by the owner of the underlying Working Interests. The net
proceeds from the oil and gas operations
13
<PAGE>
are distributed to the Limited Partners and General Partner in accordance
with the terms of the Partnerships' Partnership Agreements.
LIQUIDITY AND CAPITAL RESOURCES
- -------------------------------
The Partnerships began operations and investors were assigned their rights
as Limited Partners, having made capital contributions in the amounts and
on the dates set forth below:
Limited
Date of Partner Capital
Partnership Activation Contributions
----------- ------------------ ---------------
P-7 February 28, 1992 $18,870,200
P-8 February 28, 1998 11,616,800
In general, the amount of funds available for acquisition of producing
properties was equal to the capital contributions of the Limited Partners,
less 15% for sales commissions and organization and management fees. All
of the Partnerships have fully invested their capital contributions.
Net proceeds from the Partnerships' Net Profits Interests less necessary
operating capital are distributed to the Limited Partners on a quarterly
basis. Revenues and net proceeds of a Partnership are largely dependent
upon the volumes of oil and gas sold and the prices received for such oil
and gas. While the General Partner cannot predict future pricing trends,
it believes the working capital available as of June 30, 1998 and the net
revenue generated from future operations will provide sufficient working
capital to meet current and future obligations.
The Partnerships' Statements of Cash Flows for the six months ended June
30, 1998 include proceeds from the sale of Net Profits Interests during
the six months ended June 30, 1998. These proceeds received during the
first quarter were included in Partnerships' cash distributions paid
during May 1998, and the proceeds received during the second quarter will
be included in the Partnerships' cash distributions to be paid in August
1998. It is possible that the Partnerships' repurchase values and future
cash distributions could decline as a result of the disposition of these
properties. On the other hand, the General Partner believes there will be
beneficial operating efficiencies related to the Partnerships' remaining
properties. This is primarily due to the fact that the properties sold
generally bore a higher ratio of operating expenses as compared to
reserves than the Partnerships' remaining properties.
During the six months ended June 30, 1998 capital expenditures indirectly
incurred by the P-7 and P-8 Partnerships totaled $133,716 and $75,691,
respectively. These expenditures resulted primarily from indirect
participation in an infill drilling operation, which is still in progress,
which includes the drilling of 24 wells in the large unitized property of
the Goldsmith Adobe Unit located in Ector County, Texas and the successful
recompletion attempt of two wells in the Pecos Valley Unit located in
Pecos County, Texas. The P-7 Partnership has a 2.4% interest in the
Goldsmith Adobe Unit and a 10.9% interest in the Pecos Valley Unit. The
P-8 Partnership has a 1.2% interest in the Goldsmith Adobe Unit and a 6.2%
interest in the Pecos Valley Unit. These wells and recompletions were
attempted in order to improve the recovery of reserves.
RESULTS OF OPERATIONS
- ---------------------
GENERAL DISCUSSION
The following general discussion should be read in conjunction with the
analysis of results of operations provided below. The most important
variable affecting the Partnerships' revenues is the prices received for
the sale of oil and gas. Predicting future prices is very difficult.
Substantially all of the Partnerships' gas reserves are being sold in the
"spot market". Prices on the spot market are subject to wide seasonal and
regional pricing fluctuations due to the highly competitive nature of the
spot market. Such spot market sales are generally short-term in nature and
are dependent upon the obtaining of transportation services provided by
pipelines. In addition, crude oil prices are at or near their lowest level
in the past decade due primarily to the global surplus of crude oil.
Management is unable to predict whether future oil and gas prices will (i)
stabilize, (ii) increase, or (iii) decrease.
14
<PAGE>
P-7 PARTNERSHIP
THREE MONTHS ENDED JUNE 30, 1998 AS COMPARED TO THE THREE MONTHS ENDED
JUNE 30, 1997.
Three Months Ended June 30,
---------------------------
1998 1997
-------- --------
Net Profits $247,408 $468,770
Barrels produced 24,740 28,868
Mcf produced 120,909 126,067
Average price/Bbl $ 12.73 $ 20.10
Average price/Mcf $ 1.83 $ 1.82
As shown in the table above, Net Profits decreased $221,362 (47.2%) for
the three months ended June 30, 1998 as compared to the three months ended
June 30, 1997. Of this decrease, approximately $83,000 was related to a
decrease in volumes of oil sold and approximately $182,000 was related to
a decrease in the average price of oil sold. These decreases were
partially offset by an increase of approximately $51,000 related to
decreases in production expenses incurred by the owners of the Working
Interests. Volumes of oil and gas sold decreased 4,128 barrels and 5,158
Mcf, respectively, for the three months ended June 30, 1998 as compared to
the three months ended June 30, 1997. The decrease in volumes of oil sold
resulted primarily from a negative prior period volume adjustment made by
a purchaser on one significant well during the three months ended June 30,
1998. The decrease in production expenses resulted primarily from (i)
workover expenses incurred on one significant well during the three months
ended June 30, 1997 and (ii) a decrease in production taxes associated
with the decrease in Net Profits discussed above. Average oil prices
decreased to $12.73 per barrel for the three months ended June 30, 1998
from $20.10 per barrel for the three months ended June 30, 1997, while
average gas prices remained relatively constant at $1.83 per Mcf for the
three months ended June 30, 1998 and $1.82 per Mcf for the three months
ended June 30, 1997.
As discussed in Liquidity and Capital Resources above, the P-7 Partnership
sold certain Net Profits Interests during the three months ended June 30,
1998 and recognized a $29,117 gain on such sales. Similar sales during the
three months ended June 30, 1997 resulted in the P-7 Partnership
recognizing similar gains totaling $102,507.
15
<PAGE>
Depletion of Net Profits Interests decreased $47,834 (22.9%) for the three
months ended June 30, 1998 as compared to the three months ended June 30,
1997. This decrease resulted primarily from (i) the decreases in volumes
of oil and gas sold during the three months ended June 30, 1998 as
compared to the three months ended June 30, 1997 and (ii) upward revisions
in the estimates of remaining gas reserves at December 31, 1997. As a
percentage of Net Profits, this expense increased to 65.1% for the three
months ended June 30, 1998 from 44.6% for the three months ended June 30,
1997. This percentage increase was primarily due to the decrease in the
average price of oil sold during the three months ended June 30, 1998 as
compared to the three months ended June 30, 1997.
General and administrative expenses decreased $8,514 (14.0%) for the three
months ended June 30, 1998 as compared to the three months ended June 30,
1997. This decrease resulted primarily from a decrease in professional
fees during the three months ended June 30, 1998 as compared to the three
months ended June 30, 1997. As a percentage of Net Profits, this expense
increased to 21.1% for the three months ended June 30, 1998 from 13.0% for
the three months ended June 30, 1997. This percentage increase was
primarily due to the decrease in Net Profits discussed above.
SIX MONTHS ENDED JUNE 30, 1998 AS COMPARED TO THE SIX MONTHS ENDED JUNE
30, 1997.
Six Months Ended June 30,
-------------------------
1998 1997
-------- ----------
Net Profits $523,180 $1,129,889
Barrels produced 49,003 63,515
Mcf produced 260,270 271,104
Average price/Bbl $ 13.57 $ 20.67
Average price/Mcf $ 1.95 $ 2.24
As shown in the table above, Net Profits decreased $606,709 (53.7%) for
the six months ended June 30, 1998 as compared to the six months ended
June 30, 1997. Of this decrease, approximately $300,000 and $24,000,
respectively, were related to decreases in volumes of oil and gas sold and
approximately $348,000 and $74,000, respectively, were related to
decreases in the average prices of oil and gas sold. These decreases in
Net Profits were partially offset by an increase of approximately $139,000
related to decreases in production expenses incurred by the owners of the
Working Interests. Volumes of oil and gas sold decreased 14,512 barrels
and 10,834 Mcf, respectively, for the six months ended June 30, 1998 as
compared to the six months ended June 30, 1997. The decrease in volumes of
oil sold resulted
16
<PAGE>
primarily from (i) a negative prior period volume adjustment made by a
purchaser on one significant well during the six months ended June 30,
1998 and (ii) a positive prior period volume adjustment made by a
purchaser on another significant well during the six months ended June 30,
1997. The decrease in production expenses resulted primarily from (i)
workover expenses incurred on two significant wells during the six months
ended June 30, 1997 and (ii) a decrease in production taxes associated
with the decrease in Net Profits discussed above. Average oil and gas
prices decreased to $13.57 per barrel and $1.95 per Mcf, respectively, for
the six months ended June 30, 1998 from $20.67 per barrel and $2.24 per
Mcf, respectively, for the six months ended June 30, 1997.
As discussed in Liquidity and Capital Resources above, the P-7 Partnership
sold certain Net Profits Interests during the six months ended June 30,
1998 and recognized a $138,382 gain on such sales. Similar sales during
the six months ended June 30, 1997 resulted in the P-7 Partnership
recognizing similar gains totaling $102,507.
Depletion of Net Profits Interests decreased $123,801 (27.2%) for the six
months ended June 30, 1998 as compared to the six months ended June 30,
1997. This decrease resulted primarily from (i) decreases in volumes of
oil and gas sold during the six months ended June 30, 1998 as compared to
the six months ended June 30, 1997 and (ii) upward revisions in the
estimates of remaining gas reserves at December 31, 1997. As a percentage
of Net Profits, this expense increased to 63.4% for the six months ended
June 30, 1998 from 40.3% for the six months ended June 30, 1997. This
percentage increase was primarily due to the decreases in the average
prices of oil and gas sold for the six months ended June 30, 1998 as
compared to the six months ended June 30, 1997.
The P-7 Partnership recognized a non-cash charge against earnings of
$1,474,823 during the six months ended June 30, 1997. Of this amount,
$686,260 was related to the decline in oil and gas prices used to
determine future cash flows from the P-7 Partnership's Net Profits
Interests in proved oil and gas reserves at March 31, 1997 and $788,563
was related to the writing-off of Net Profits Interests in unproved
properties. The General Partner determined that it was unlikely that these
unproved properties would be developed due to the low oil and gas prices
received over the prior several years and Partnership Agreement provisions
which limit the P-7 Partnership's level of permissible indirect drilling
activity through its Affiliated Programs. No similar charges were
necessary during the six months ended June 30, 1998.
17
<PAGE>
General and administrative expenses decreased $4,988 (4.1%) for the six
months ended June 30, 1998 as compared to the six months ended June 30,
1997. As a percentage of Net Profits, this expense increased to 22.4% for
the six months ended June 30, 1998 from 10.8% for the six months ended
June 30, 1997. This percentage increase was primarily due to the decrease
in Net Profits discussed above.
Cumulative cash distributions to the Limited Partners through June 30,
1998 were $10,467,916 or 55.47% of the Limited Partners' capital
contributions.
P-8 PARTNERSHIP
THREE MONTHS ENDED JUNE 30, 1998 AS COMPARED TO THE THREE MONTHS ENDED
JUNE 30, 1997.
Three Months Ended June 30,
---------------------------
1998 1997
-------- --------
Net Profits $178,480 $300,445
Barrels produced 14,625 17,004
Mcf produced 86,819 88,232
Average price/Bbl $ 12.62 $ 20.11
Average price/Mcf $ 1.88 $ 1.89
As shown in the table above, Net Profits decreased $121,965 (40.6%) for
the three months ended June 30, 1998 as compared to the three months ended
June 30, 1997. Of this decrease, approximately $48,000 and $110,000,
respectively, were related to decreases in the volumes and average price
of oil sold. These decreases were partially offset by an increase of
approximately $38,000 related to decreases in production expenses incurred
by the owners of the Working Interests. Volumes of oil and gas sold
decreased 2,379 barrels and 1,413 Mcf, respectively, for the three months
ended June 30, 1998 as compared to the three months ended June 30, 1997.
The decrease in volumes of oil sold resulted primarily from a negative
prior period volume adjustment made by the purchaser on one significant
well during the three months ended June 30, 1998. The decrease in
production expenses resulted primarily from (i) workover expenses incurred
on one significant well during the three months ended June 30, 1997 and
(ii) a decrease in production taxes associated with the decrease in Net
Profits discussed above. Average oil prices decreased to $12.62 per barrel
for the three months ended June 30, 1998 from $20.11 per barrel for the
three months ended June 30, 1997, while average gas prices remained
relatively constant at $1.88 per Mcf for the three months ended June 30,
1998 and $1.89 for the three months ended June 30, 1997.
18
<PAGE>
As discussed in Liquidity and Capital Resources above, the P-8 Partnership
sold certain Net Profits Interests during the three months ended June 30,
1998 and recognized a $35,928 gain on such sales. Similar sales during the
three months ended June 30, 1997 resulted in the P-8 Partnership
recognizing similar gains totaling $53,099.
Depletion of Net Profits Interests decreased $59,428 (41.8%) for the three
months ended June 30, 1998 as compared to the three months ended June 30,
1997. This decrease resulted primarily from (i) decreases in volumes of
oil and gas sold during the three months ended June 30, 1998 as compared
to the three months ended June 30, 1997 and (ii) upward revisions in the
estimates of remaining gas reserves at December 31, 1997. As a percentage
of Net Profits, this expense decreased to 46.3% for the three months ended
June 30, 1998 from 47.3% for the three months ended June 30, 1997. This
percentage decrease was primarily due to the upward revisions in the
estimates of remaining gas reserves discussed above.
General and administrative expenses decreased $5,148 (13.8%) for the three
months ended June 30, 1998 as compared to the three months ended June 30,
1997. This decrease resulted primarily from a decrease in professional
fees for the three months ended June 30, 1998 as compared to the three
months ended June 30, 1997. As a percentage of Net Profits, these expenses
increased to 18.0% for the three months ended June 30, 1998 from 12.4% for
the three months ended June 30, 1997. This percentage increase was
primarily due to the decrease in Net Profits discussed above.
SIX MONTHS ENDED JUNE 30, 1998 AS COMPARED TO THE SIX MONTHS ENDED JUNE
30, 1997.
Six Months Ended June 30,
-------------------------
1998 1997
-------- --------
Net Profits $370,301 $753,303
Barrels produced 29,326 37,169
Mcf produced 190,405 200,719
Average price/Bbl $ 13.48 $ 20.67
Average price/Mcf $ 1.95 $ 2.33
As shown in the table above, Net Profits decreased $383,002 (50.8%) for
the six months ended June 30, 1998 as compared to the six months ended
June 30, 1997. Of this decrease approximately $162,000 and $24,000,
respectively, were related to decreases in the volumes of oil and gas sold
and approximately $211,000 and $72,000, respectively, were related to
decreases in the average prices of oil and gas sold. These decreases were
partially offset by an increase
19
<PAGE>
of approximately $86,000 related to decreases in production expenses
incurred by the owners of the Working Interests. Volumes of oil and gas
sold decreased 7,843 barrels and 10,314 Mcf, respectively, for the six
months ended June 30, 1998 as compared to the six months ended June 30,
1997. The decrease in volumes of oil sold resulted primarily from (i) a
negative prior period volume adjustment made by a purchaser on one
significant well during the six months ended June 30, 1998 and (ii) a
positive prior period volume adjustment made by a purchaser on another
significant well during the six months ended June 30, 1997. The decrease
in production expenses resulted primarily from (i) workover expenses
incurred on several wells during the six months ended June 30, 1997 and
(ii) a decrease in production taxes associated with the decrease in Net
Profits discussed above. Average oil and gas prices decreased to $13.48
per barrel and $1.95 per Mcf, respectively, for the six months ended June
30, 1998 from $20.67 per barrel and $2.33 per Mcf, respectively, for the
six months ended June 30, 1997.
As discussed in Liquidity and Capital Resources above, the P-8 Partnership
sold certain Net Profits Interests during the six months ended June 30,
1998 and recognized a $96,723 gain on such sales. Similar sales during the
six months ended June 30, 1997 resulted in the P-8 Partnership recognizing
similar gains totaling $53,099.
Depletion of Net Profits Interests decreased $142,977 (45.2%) for the six
months ended June 30, 1998 as compared to the six months ended June 30,
1997. This decrease resulted primarily from (i) decreases in volumes of
oil and gas sold during the six months ended June 30, 1998 as compared to
the six months ended June 30, 1997 and (ii) upward revisions in the
estimates of remaining gas reserves at December 31, 1997. As a percentage
of Net Profits, this expense increased to 46.8% for the six months ended
June 30, 1998 from 42.0% for the six months ended June 30, 1997. This
percentage increase was primarily due to the decreases in the average
prices of oil and gas sold during the six months ended June 30, 1998 as
compared to the six months ended June 30, 1997.
20
<PAGE>
The P-8 Partnership recognized a non-cash charge against earnings of
$1,052,542 during the six months ended June 30, 1997. Of this amount,
$650,465 was related to the decline in oil and gas prices used to
determine future cash flows from the P-8 Partnership's Net Profits
Interests in proved oil and gas reserves at March 31, 1997 and $402,077
was related to the writing-off of Net Profits Interests in unproved
properties. The General Partner determined that it was unlikely that these
unproved properties would be developed due to the low oil and gas prices
received over the prior several years and Partnership Agreement provisions
which limit the P-8 Partnership's level of permissible indirect drilling
activity through its Affiliated Programs. No similar charges were
necessary during the six months ended June 30, 1998.
General and administrative expenses decreased $2,965 (3.9%) for the six
months ended June 30, 1998 as compared to the six months ended June 30,
1997. As a percentage of Net Profits, these expenses increased to 19.5%
for the six months ended June 30, 1998 from 10.0% for the six months ended
June 30, 1997. This percentage increase was primarily due to the decrease
in Net Profits discussed above.
Cumulative cash distributions to the Limited Partners through June 30,
1998 were $6,479,583 or 55.78% of the Limited Partners' capital
contributions.
21
<PAGE>
PART II. OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
27.1 Financial Data Schedule containing summary financial
information extracted from the P-7 Partnership's
financial statements as of June 30, 1998 and for the six
months ended June 30, 1998, filed herewith.
27.2 Financial Data Schedule containing summary financial
information extracted from the P-8 Partnership's
financial statements as of June 30, 1998 and for the six
months ended June 30, 1998, filed herewith.
All other exhibits are omitted as inapplicable.
(b) Reports on Form 8-K.
None.
22
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
GEODYNE INSTITUTIONAL/PENSION ENERGY
INCOME LIMITED PARTNERSHIP P-7
GEODYNE INSTITUTIONAL/PENSION ENERGY
INCOME LIMITED PARTNERSHIP P-8
(Registrant)
BY: GEODYNE RESOURCES, INC.
General Partner
Date: August 13, 1998 By: /s/Dennis R. Neill
--------------------------------
(Signature)
Dennis R. Neill
President
Date: August 13, 1998 By: /s/Patrick M. Hall
--------------------------------
(Signature)
Patrick M. Hall
Principal Accounting Officer
23
<PAGE>
INDEX TO EXHIBITS
NUMBER DESCRIPTION
- ------ -----------
27.1 Financial Data Schedule containing summary financial information
extracted from the Geodyne Institutional/Pension Energy Income
Limited Partnership P-7's financial statements as of June 30, 1998
and for the six months ended June 30, 1998, filed herewith.
27.2 Financial Data Schedule containing summary financial information
extracted from the Geodyne Institutional/Pension Energy Income
Limited Partnership P-8's financial statements as of June 30, 1998
and for the six months ended June 30, 1998, filed herewith.
All other exhibits are omitted as inapplicable.
24
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0000888240
<NAME> GEODYNE ENERGY INCOME LIMITED PARTNERSHIP P-7
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> JUN-30-1998
<CASH> 193,799
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 193,799
<PP&E> 14,523,097
<DEPRECIATION> 9,563,927
<TOTAL-ASSETS> 5,152,969
<CURRENT-LIABILITIES> 68,298
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 5,084,671
<TOTAL-LIABILITY-AND-EQUITY> 5,152,969
<SALES> 523,180
<TOTAL-REVENUES> 668,519
<CGS> 0
<TOTAL-COSTS> 449,058
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 219,461
<INCOME-TAX> 0
<INCOME-CONTINUING> 219,461
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 219,461
<EPS-PRIMARY> 1.04
<EPS-DILUTED> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0000888239
<NAME> GEODYNE ENERGY INCOME LIMITED PARTNERSHIP P-8
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> JUN-30-1998
<CASH> 209,878
<SECURITIES> 0
<RECEIVABLES> 19,197
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 229,075
<PP&E> 8,695,416
<DEPRECIATION> 6,054,482
<TOTAL-ASSETS> 2,870,009
<CURRENT-LIABILITIES> 0
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 2,870,009
<TOTAL-LIABILITY-AND-EQUITY> 2,870,009
<SALES> 370,301
<TOTAL-REVENUES> 472,919
<CGS> 0
<TOTAL-COSTS> 245,692
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 227,227
<INCOME-TAX> 0
<INCOME-CONTINUING> 227,227
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 227,227
<EPS-PRIMARY> 1.80
<EPS-DILUTED> 0
</TABLE>
