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 March 31, 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
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PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
GEODYNE INSTITUTIONAL/PENSION ENERGY INCOME P-7 LIMITED PARTNERSHIP
BALANCE SHEETS
(Unaudited)
ASSETS
March 31, December 31,
1998 1997
----------- ------------
CURRENT ASSETS:
Cash and cash equivalents $ 154,714 $ 517,144
Accounts receivable:
General Partner (Note 2) 141,793 -
---------- ----------
Total current assets $ 296,507 $ 517,144
NET PROFITS INTERESTS, net, utilizing
the successful efforts method 5,065,302 5,190,377
---------- ----------
$5,361,809 $5,707,521
========== ==========
PARTNERS' CAPITAL (DEFICIT)
CURRENT LIABILITIES:
Accounts payable - Net
Profits $ 34,282 $ 6,697
---------- ----------
Total current liabilities $ 34,282 $ 6,697
PARTNERS' CAPITAL (DEFICIT):
General Partner ($ 116,083) ($ 119,241)
Limited Partners, issued and
outstanding, 108,074 units 5,443,610 5,820,065
---------- ----------
Total Partners' capital $5,327,527 $5,700,824
---------- ----------
$5,361,809 $5,707,521
========== ==========
The accompanying condensed notes are an integral part of
these financial statements.
2
<PAGE>
GEODYNE INSTITUTIONAL/PENSION ENERGY INCOME P-7 LIMITED PARTNERSHIP
STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED MARCH 31, 1998 AND 1997
(Unaudited)
1998 1997
-------- ----------
REVENUES:
Net Profits $275,772 $ 661,119
Interest and other income 4,422 5,056
Gain on sale of Net Profits
Interests 109,265 -
-------- ----------
$389,459 $ 666,175
COST AND EXPENSES:
Depletion of Net Profits
Interests $170,489 $ 246,456
Impairment provision - 1,474,823
General and administrative
(Note 2) 65,135 61,609
-------- ----------
$235,624 $1,782,888
-------- ----------
NET INCOME (LOSS) $153,835 ($1,116,713)
======== ==========
GENERAL PARTNER - NET INCOME $ 14,290 $ 12,763
======== ==========
LIMITED PARTNERS - NET INCOME (LOSS) $139,545 ($1,129,476)
======== ==========
NET INCOME (LOSS) per unit $ .74 ($ 5.99)
======== ==========
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 P-7 LIMITED PARTNERSHIP
STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS ENDED MARCH 31, 1998 AND 1997
(Unaudited)
1998 1997
--------- ----------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) $153,835 ($1,116,713)
Adjustments to reconcile net income
(loss) to net cash provided by
operating activities:
Depletion of Net Profits
Interests 170,489 246,456
Impairment provision - 1,474,823
Gain on sale of Net Profits
Interests ( 109,265) -
Decrease in accounts receivable -
Net Profits - 79,577
Increase in accounts receivable -
General Partner ( 141,793) -
Increase in accounts payable 27,585 -
-------- ----------
Net cash provided by operating
activities $100,851 $ 684,143
-------- ----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures ($ 77,942) ($ 83,095)
Proceeds from sale of Net Profits
Interests 141,793 -
-------- ----------
Net cash provided by investing
activities $ 63,851 ($ 83,095)
-------- ----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Cash distributions ($527,132) ($ 643,044)
-------- ----------
Net cash used by financing activities ($527,132) ($ 643,044)
-------- ----------
NET DECREASE IN CASH AND CASH
EQUIVALENTS ($362,430) ($ 41,996)
CASH AND CASH EQUIVALENTS AT
BEGINNING OF PERIOD 517,144 643,415
-------- ----------
CASH AND CASH EQUIVALENTS AT
END OF PERIOD $154,714 $ 601,419
======== ==========
The accompanying condensed notes are an integral part of
these financial statements.
4
<PAGE>
GEODYNE INSTITUTIONAL/PENSION ENERGY INCOME P-8 LIMITED PARTNERSHIP
BALANCE SHEETS
(Unaudited)
ASSETS
March 31, December 31,
1998 1997
----------- ------------
CURRENT ASSETS:
Cash and cash equivalents $ 177,943 $ 382,448
Accounts receivable:
Net Profits 31,306 57,019
General Partner (Note 2) 76,024 -
---------- ----------
Total current assets $ 285,273 $ 439,467
NET PROFITS INTERESTS, net, utilizing
the successful efforts method 2,696,128 2,756,057
---------- ----------
$2,981,401 $3,195,524
========== ==========
PARTNERS' CAPITAL (DEFICIT)
PARTNERS' CAPITAL (DEFICIT):
General Partner ($ 55,466) ($ 56,764)
Limited Partners, issued and
outstanding, 90,094 units 3,036,867 3,252,288
---------- ----------
Total Partners' capital $2,981,401 $3,195,524
---------- ----------
$2,981,401 $3,195,524
========== ==========
The accompanying condensed notes are an integral part of
these financial statements.
5
<PAGE>
GEODYNE INSTITUTIONAL/PENSION ENERGY INCOME P-8 LIMITED PARTNERSHIP
STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED MARCH 31, 1998 AND 1997
(Unaudited)
1998 1997
---------- ----------
REVENUES:
Net Profits $191,821 $ 452,858
Interest and other income 3,563 3,941
Gain on sale of Net Profits
Interests 60,795 -
-------- ----------
$256,179 $ 456,799
COST AND EXPENSES:
Depletion of Net Profits
Interests $ 90,781 $ 174,330
Impairment provision - 1,052,542
General and administrative
(Note 2) 40,101 37,918
-------- ----------
$130,882 $1,264,790
-------- ----------
NET INCOME (LOSS) $125,297 ($ 807,991)
======== ==========
GENERAL PARTNER - NET INCOME $ 9,718 $ 8,478
======== ==========
LIMITED PARTNERS - NET INCOME (LOSS) $115,579 ($ 816,469)
======== ==========
NET INCOME (LOSS) per unit $ .99 ($ 7.03)
======== ==========
UNITS OUTSTANDING 116,168 116,168
======== ==========
The accompanying condensed notes are an integral part of
these financial statements.
6
<PAGE>
GEODYNE INSTITUTIONAL/PENSION ENERGY INCOME P-8 LIMITED PARTNERSHIP
STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS ENDED MARCH 31, 1998 AND 1997
(Unaudited)
1998 1997
-------- ----------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) $125,297 ($ 807,991)
Adjustments to reconcile net income
(loss) to net cash provided by
operating activities:
Depletion of Net Profits
Interests 90,781 174,330
Impairment provision - 1,052,542
Gain on sale of Net Profits
Interests ( 60,795) -
Decrease in accounts receivable -
Net Profits 25,713 67,809
Increase in accounts receivable -
General Partner ( 76,024) -
-------- ----------
Net cash provided by operating
activities $104,972 $ 486,690
-------- ----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures ($ 46,309) ($ 52,119)
Proceeds from sale of Net Profits
Interests 76,252 -
-------- ----------
Net cash provided (used) by
investing activities $ 29,943 ($ 52,119)
-------- ----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Cash distributions ($339,420) ($ 439,616)
-------- ----------
Net cash used by financing activities ($339,420) ($ 439,616)
-------- ----------
NET DECREASE IN CASH AND CASH
EQUIVALENTS ($204,505) ($ 5,045)
CASH AND CASH EQUIVALENTS AT
BEGINNING OF PERIOD 382,448 488,063
-------- ----------
CASH AND CASH EQUIVALENTS AT
END OF PERIOD $177,943 $ 483,018
======== ==========
The accompanying condensed notes are an integral part of
these financial statements.
7
<PAGE>
GEODYNE INSTITUTIONAL/PENSION ENERGY INCOME PROGRAM II LIMITED PARTNERSHIPS
CONDENSED NOTES TO THE FINANCIAL STATEMENTS
MARCH 31, 1998
(Unaudited)
1. ACCOUNTING POLICIES
-------------------
The balance sheets as of March 31, 1998, statements of operations for the
three months ended March 31, 1998 and 1997, and statements of cash flows
for the three months ended March 31, 1998 and 1997 have been prepared by
Geodyne Resources, Inc., the General Partner (the "General Partner") of
the Geodyne Institutional/Pension Energy 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 March 31, 1998, the results of
operations for the three months ended March 31, 1998 and 1997, and the
cash flows for the three months ended March 31, 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 March 31, 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.
8
<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. During the three months ended March 31, 1998 capital
expenditures incurred by the P-7 and P-8 Partnerships totaled $77,942 and
$46,309, respectively. These expenditures resulted primarily from indirect
participation in the drilling of developmental wells in the large unitized
property of the Goldsmith Adobe Unit located in Ector County, Texas and
the recompletion 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. 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.
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 form such properties, the cost
of the properties is written down to fair value, which is
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determined by using the discounted future cash flows from the properties.
The Partnerships recorded a non-cash charge against earnings (impairment
provision) during the three months ended March 31, 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 three months ended March 31, 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 March 31, 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 $15,476 $49,659
P-8 9,531 30,570
Affiliates of the Partnerships operate certain of the Partnerships'
properties and their policy is to bill the Partnerships for all customary
charges and cost reimbursements associated with their activities.
The receivables from the General Partner at March 31, 1998 for the
Partnerships represent proceeds due to such Partnerships from the sale of
oil and gas properties to third parties during the first quarter of 1998.
Subsequent to March 31, 1998, such receivables were collected by the
Partnerships.
10
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
USE OF FORWARD-LOOKING STATEMENTS AND ESTIMATES
- -----------------------------------------------
This Quarterly Report contains certain forward-looking statements. The
words "anticipate", "believe", "expect", "plan", "intend", "estimate",
"project", "could", "may" and similar expressions are intended to identify
forward-looking statements. Such statements reflect management's current
views with respect to future events and financial performance. This
Quarterly Report also includes certain information, which is, or is based
upon, estimates and assumptions. Such estimates and assumptions are
management's efforts to accurately reflect the condition and operation of
the Program.
Use of forward-looking statements and estimates and assumptions involve
risks and uncertainties which include, but are not limited to, the
volatility of oil and gas prices, the uncertainty of reserve information,
the operating risk associated with oil and gas properties (including the
risk of personal injury, death, property damage, damage to the well or
producing reservoir, environmental contamination, and other operating
risks), the prospect of changing tax and regulatory laws, the availability
and capacity of processing and transportation facilities, the general
economic climate, the supply and price of foreign imports of oil and gas,
the level of consumer product demand, and the price and availability of
alternative fuels. Should one or more of these risks or uncertainties
occur or should estimates or underlying assumptions prove incorrect,
actual conditions or results may vary materially and adversely from those
stated, anticipated, believed, estimated, and otherwise indicated.
GENERAL
- -------
The Partnerships 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
11
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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 March 31, 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 first quarter of 1998
include proceeds from the sale of oil and gas properties during the three
months ended March 31, 1998. These proceeds will be reflected, as
applicable, in the Partnerships' cash distributions, if any, to be paid in
May 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.
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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. In addition, such spot market sales are generally short-term
in nature and are dependent upon the obtaining of transportation services
provided by pipelines. Management is unable to predict whether future oil
and gas prices will (i) stabilize, (ii) increase, or (iii) decrease.
P-7 PARTNERSHIP
THREE MONTHS ENDED MARCH 31, 1998 AS COMPARED TO THE THREE MONTHS ENDED
MARCH 31, 1997.
Three Months Ended March 31,
----------------------------
1998 1997
-------- --------
Net Profits $275,772 $661,119
Barrels produced 24,263 34,647
Mcf produced 139,361 145,037
Average price/Bbl $ 14.44 $ 21.15
Average price/Mcf $ 2.06 $ 2.60
As shown in the table above, Net Profits decreased $385,347 (58.3%) for
the three months ended March 31, 1998 as compared to the three months
ended March 31, 1997. Of this decrease, approximately $163,000 and
$75,000, respectively, were related to decreases in the average prices of
oil and gas sold and approximately $220,000 and $15,000, respectively,
were related to decreases in volumes of oil and gas sold. The decrease in
Net Profits was partially offset by an increase of approximately $88,000
related to decreases in production expenses incurred by the owners of the
Working Interests. Volumes of oil and gas sold decreased 10,384 barrels
and 5,676 Mcf, respectively, for the three months ended March 31, 1998 as
compared to the three months ended March 31, 1997. The decrease in volumes
of oil sold resulted primarily from declines in production on two
significant wells during the three months ended March 31, 1998. The
decrease in production expenses resulted primarily from decreases in (i)
production taxes incurred by the owners of the Working Interests and (ii)
volumes of oil
13
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and gas sold during the three months ended March 31, 1998 as compared to
the three months ended March 31, 1997. Average oil and gas prices
decreased to $14.44 per barrel and $2.06 per Mcf, respectively, for the
three months ended March 31, 1998 from $21.15 per barrel and $2.60 per
Mcf, respectively, for the three months ended March 31, 1997.
Depletion of Net Profits Interests decreased $75,967 (30.8%) for the three
months ended March 31, 1998 as compared to the three months ended March
31, 1997. This decrease resulted primarily from (i) the decreases in
volumes of oil and gas sold during the three months ended March 31, 1998
as compared to the three months ended March 31, 1997 and (ii) upward
revisions in the estimate of remaining gas reserves at December 31, 1997.
As a percentage of Net Profits, this expense increased to 61.8% for the
three months ended March 31, 1998 from 37.3% for the three months ended
March 31, 1997. This percentage increase was primarily due to the
decreases in the average prices of oil and gas sold during the three
months ended March 31, 1998 as compared to the three months ended March
31, 1997.
The P-7 Partnership recognized a non-cash charge against earnings of
$1,474,823 during the three months ended March 31, 1997. Of this amount,
$686,260 was related to a 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 affiliated programs which own the Working Interests. No
similar charges were necessary during the three months ended March 31,
1998.
General and administrative expenses increased $3,526 (5.7%) for the three
months ended March 31, 1998 as compared to the three months ended March
31, 1997. As a percentage of Net Profits, these expenses increased to
23.6% for the three months ended March 31, 1998 from 9.3% for the three
months ended March 31, 1997. This percentage increase was primarily due to
the decrease in Net Profits discussed above.
Cumulative cash distributions to the Limited Partners through March 31,
1998 were $10,178,916 or 53.94% of the Limited Partners' capital
contributions.
14
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P-8 PARTNERSHIP
THREE MONTHS ENDED MARCH 31, 1998 AS COMPARED TO THE THREE MONTHS ENDED
MARCH 31, 1997.
Three Months Ended March 31,
----------------------------
1998 1997
-------- --------
Net Profits $191,821 $452,858
Barrels produced 14,701 20,165
Mcf produced 103,586 112,487
Average price/Bbl $ 14.33 $ 21.15
Average price/Mcf $ 2.01 $ 2.67
As shown in the table above, Net Profits decreased $261,037 (57.6%) for
the three months ended March 31, 1998 as compared to the three months
ended March 31, 1997. Of this decrease, approximately $100,000 and
$68,000, respectively, were related to decreases in the average prices of
oil and gas sold and approximately $116,000 and $24,000, respectively,
were related to decreases in volumes of oil and gas sold. The decrease in
Net Profits was partially offset by an increase of approximately $47,000
related to decreases in production expenses incurred by the owners of the
Working Interests. Volumes of oil and gas sold decreased 5,464 barrels and
8,901 Mcf, respectively, for the three months ended March 31, 1998 as
compared to the three months ended March 31, 1997. The decrease in volumes
of oil sold resulted primarily from declines in production on two
significant wells during the three months ended March 31, 1998. The
decrease in production expenses resulted primarily from decreases in (i)
production taxes incurred by the owners of the Working Interests and (ii)
volumes of oil and gas sold during the three months ended March 31, 1998
as compared to the three months ended March 31, 1997. Average oil and gas
prices decreased to $14.33 per barrel and $2.01 per Mcf, respectively, for
the three months ended March 31, 1998 from $21.15 per barrel and $2.67 per
Mcf, respectively, for the three months ended March 31, 1997.
Depletion of Net Profits Interests decreased $83,549 (47.9%) for the three
months ended March 31, 1998 as compared to the three months ended March
31, 1997. This decrease resulted primarily from (i) the decreases in
volumes of oil and gas sold during the three months ended March 31, 1998
as compared to the three months ended March 31, 1997 and (ii) upward
revisions in the estimate of remaining gas reserves at December 31, 1997.
As a percentage of Net Profits, this expense increased to 47.3% for the
three months ended March 31, 1998 from 38.5% for the three months ended
March 31, 1997. This percentage increase was primarily due to the
decreases in the average prices of oil and gas sold during
15
<PAGE>
the three months ended March 31, 1998 as compared to the three months
ended March 31, 1997.
The P-8 Partnership recognized a non-cash charge against earnings of
$1,052,542 during the three months ended March 31, 1997. Of this amount,
$650,465 was related to a 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 affiliated programs which own the Working Interests. No
similar charges were necessary during the three months ended March 31,
1998.
General and administrative expenses increased $2,183 (5.8%) for the three
months ended March 31, 1998 as compared to the three months ended March
31, 1997. As a percentage of Net Profits, these expenses increased to
20.9% for the three months ended March 31, 1998 from 8.4% for the three
months ended March 31, 1997. This percentage increase was primarily due to
the decrease in Net Profits discussed above.
Cumulative cash distributions to the Limited Partners through March 31,
1998 were $6,279,583 or 54.06% of the Limited Partners' capital
contributions.
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PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
As further described in the Partnerships' Annual Report on Form 10-K for
the year ended December 31, 1997 (the "Form 10-K"), the Partnerships are
included in the subject matter of a class action lawsuit entitled "In Re:
PaineWebber Limited Partnerships' Litigation," Case No. 94-CIV-8558, U.S.
District Court, Southern District of New York.
In early 1996 PaineWebber Incorporated ("PaineWebber") reached settlements
with the class action plaintiffs and the Securities and Exchange
Commission (the "SEC") that resolved the above referenced litigation. As
part of the class settlement, PaineWebber paid $125 million (the "Class
Action Fund"), plus certain additional consideration to the class.
PaineWebber also paid $40 million to a capped claims fund to be
independently administered on behalf of the SEC (the "SEC Fund"). Both
settlement funds (in the case of the Class Action Fund, net of court
approved class counsel attorney's fees and disbursements) were to be
allocated among eligible limited partners whose claims were approved by
the respective Claims Administrators.
In late March 1998, the Court awarded attorney's fees and disbursements to
class counsel. On or about May 8, 1998, the Claims Administrator for the
Class Action Fund mailed to eligible class members the cash component of
their settlement benefits from the Class Action Fund. The General Partner
has been advised that in late May 1998 the SEC Claims Administrator
expects to mail to each eligible class member his or her claim
determination with the preliminary settlement amount, if any, from the SEC
Fund.
A further description of the settlement is included within the Form 10-K
referred to above.
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 March 31, 1998 and for the
three months ended March 31, 1998, filed herewith.
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<PAGE>
27.2 Financial Data Schedule containing summary financial
information extracted from the P-8 Partnership's
financial statements as of March 31, 1998 and for the
three months ended March 31, 1998, filed herewith.
All other exhibits are omitted as inapplicable.
(b) Reports on Form 8-K.
Current report on Form 8-K filed during the first quarter of 1998:
Date of event: January 29, 1998
Date filed with SEC: January 30, 1998
Items included
Item 5 - Other Events
Item 7 - Exhibits
18
<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: May 13, 1998 By: /s/Dennis R. Neill
--------------------------------
(Signature)
Dennis R. Neill
President
Date: May 13, 1998 By: /s/Patrick M. Hall
--------------------------------
(Signature)
Patrick M. Hall
Principal Accounting Officer
19
<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 March 31, 1998
and for the three months ended March 31, 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 March 31, 1998
and for the three months ended March 31, 1998, filed herewith.
All other exhibits are omitted as inapplicable.
20
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0000888240
<NAME> GEODYNE INST/PENSION ENERGY INCOME LTD PSHP P-7
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> MAR-31-1998
<CASH> 154,714
<SECURITIES> 0
<RECEIVABLES> 141,793
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 296,507
<PP&E> 14,481,995
<DEPRECIATION> 9,416,693
<TOTAL-ASSETS> 5,361,809
<CURRENT-LIABILITIES> 34,282
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 5,327,527
<TOTAL-LIABILITY-AND-EQUITY> 5,361,809
<SALES> 275,772
<TOTAL-REVENUES> 389,459
<CGS> 0
<TOTAL-COSTS> 235,624
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 153,835
<INCOME-TAX> 0
<INCOME-CONTINUING> 153,835
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 153,835
<EPS-PRIMARY> 0.74
<EPS-DILUTED> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0000888239
<NAME> GEODYNE INST/PENSION ENERGY INCOME LTD PSHP P-8
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> MAR-31-1998
<CASH> 177,943
<SECURITIES> 0
<RECEIVABLES> 107,330
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 285,273
<PP&E> 8,679,364
<DEPRECIATION> 5,983,236
<TOTAL-ASSETS> 2,981,401
<CURRENT-LIABILITIES> 0
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 2,981,401
<TOTAL-LIABILITY-AND-EQUITY> 2,981,401
<SALES> 191,821
<TOTAL-REVENUES> 256,179
<CGS> 0
<TOTAL-COSTS> 130,882
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 125,297
<INCOME-TAX> 0
<INCOME-CONTINUING> 125,297
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 125,297
<EPS-PRIMARY> 0.99
<EPS-DILUTED> 0
</TABLE>
