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, 2003
Commission File Number:
II-A: 0-16388 II-D: 0-16980 II-G: 0-17802
II-B: 0-16405 II-E: 0-17320 II-H: 0-18305
II-C: 0-16981 II-F: 0-17799
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP II-A
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP II-B
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP II-C
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP II-D
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP II-E
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP II-F
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP II-G
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP II-H
---------------------------------------------------------------------
(Exact name of Registrant as specified in its Articles)
II-A 73-1295505
II-B 73-1303341 II-C 73-1308986
II-D 73-1329761 II-E 73-1324751
II-F 73-1330632 II-G 73-1336572
Oklahoma II-H 73-1342476
- ----------------------------- ----------------------------------------
(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
------ ------
Indicate by check mark whether the registrant is an accelerated filer (as
defined in Rule 12b-2 of the Exchange Act).
Yes No X
------ ------
-1-
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP II-A
GEODYNE PRODUCTION PARTNERSHIP II-A
COMBINED BALANCE SHEETS
(Unaudited)
ASSETS
June 30, December 31,
2003 2002
------------ ------------
CURRENT ASSETS:
Cash and cash equivalents $1,454,259 $ 794,035
Accounts receivable:
Oil and gas sales 881,030 658,499
---------- ----------
Total current assets $2,335,289 $1,452,534
NET OIL AND GAS PROPERTIES, utilizing
the successful efforts method 2,309,165 2,056,359
DEFERRED CHARGE 656,289 656,289
---------- ----------
$5,300,743 $4,165,182
========== ==========
LIABILITIES AND PARTNERS' CAPITAL (DEFICIT)
CURRENT LIABILITIES:
Accounts payable $ 183,153 $ 256,595
Accrued liability - other (Note 1) 26,672 26,672
Gas imbalance payable 95,268 95,268
---------- ----------
Total current liabilities $ 305,093 $ 378,535
LONG-TERM LIABILITIES:
Accrued liability $ 217,322 $ 217,322
Asset retirement obligation
(Note 1) 291,842 -
---------- ----------
Total long-term liabilities $ 509,164 $ 217,322
PARTNERS' CAPITAL (DEFICIT):
General Partner ($ 207,900) ($ 241,784)
Limited Partners, issued and
outstanding, 484,283 units 4,694,386 3,811,109
---------- ----------
Total Partners' capital $4,486,486 $3,569,325
---------- ----------
$5,300,743 $4,165,182
========== ==========
The accompanying condensed notes are an integral part of these
combined financial statements.
-2-
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP II-A
GEODYNE PRODUCTION PARTNERSHIP II-A
COMBINED STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED JUNE 30, 2003 AND 2002
(Unaudited)
2003 2002
---------- ----------
REVENUES:
Oil and gas sales $1,571,019 $ 979,840
Interest income 1,806 854
Gain on sale of oil and gas
properties - 193,272
---------- ----------
$1,572,825 $1,173,966
COSTS AND EXPENSES:
Lease operating $ 242,221 $ 286,907
Production tax 82,600 52,425
Depreciation, depletion, and
amortization of oil and gas
properties 48,526 80,362
General and administrative
(Note 2) 140,093 134,300
---------- ----------
$ 513,440 $ 553,994
---------- ----------
NET INCOME $1,059,385 $ 619,972
========== ==========
GENERAL PARTNER - NET INCOME $ 110,125 $ 69,144
========== ==========
LIMITED PARTNERS - NET INCOME $ 949,260 $ 550,828
========== ==========
NET INCOME per unit $ 1.96 $ 1.14
========== ==========
UNITS OUTSTANDING 484,283 484,283
========== ==========
The accompanying condensed notes are an integral part of these
combined financial statements.
-3-
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP II-A
GEODYNE PRODUCTION PARTNERSHIP II-A
COMBINED STATEMENTS OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 2003 AND 2002
(Unaudited)
2003 2002
---------- ----------
REVENUES:
Oil and gas sales $3,046,076 $1,767,496
Interest income 3,251 2,350
Gain on sale of oil and gas
properties - 193,272
---------- ----------
$3,049,327 $1,963,118
COSTS AND EXPENSES:
Lease operating $ 518,191 $ 708,631
Production tax 180,135 94,335
Depreciation, depletion, and
amortization of oil and gas
properties 107,030 161,495
General and administrative
(Note 2) 285,311 289,402
---------- ----------
$1,090,667 $1,253,863
---------- ----------
INCOME BEFORE CUMULATIVE EFFECT
OF ACCOUNTING CHANGE $1,958,660 $ 709,255
Cumulative effect of change in
accounting for asset retirement
obligations (Note 1) 5,849 -
---------- ----------
NET INCOME $1,964,509 $ 709,255
========== ==========
GENERAL PARTNER - NET INCOME $ 205,232 $ 85,225
========== ==========
LIMITED PARTNERS - NET INCOME $1,759,277 $ 624,030
========== ==========
NET INCOME per unit $ 3.63 $ 1.29
========== ==========
UNITS OUTSTANDING 484,283 484,283
========== ==========
The accompanying condensed notes are an integral part of these
combined financial statements.
-4-
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP II-A
GEODYNE PRODUCTION PARTNERSHIP II-A
COMBINED STATEMENTS OF CASH FLOWS
FOR THE SIX MONTHS ENDED JUNE 30, 2003 AND 2002
(Unaudited)
2003 2002
------------ ----------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $1,964,509 $709,255
Adjustments to reconcile net
income to net cash provided
by operating activities:
Cumulative effect of change in
accounting for asset retirement
obligations (Note 1) ( 5,849) -
Depreciation, depletion, and
amortization of oil and gas
properties 107,030 161,495
Gain on sale of oil and gas
properties - ( 193,272)
Increase in accounts receivable -
oil and gas sales ( 222,531) ( 191,072)
Decrease in deferred charge - 27,155
Increase (decrease) in accounts
payable ( 73,442) 38,712
Decrease in accrued liability -
other - ( 47,128)
----------- ---------
Net cash provided by operating
activities $1,769,717 $505,145
----------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures ($ 62,145) ($ 16,591)
Proceeds from sale of oil and
gas properties - 134,391
----------- ---------
Net cash provided (used) by investing
activities ($ 62,145) $117,800
----------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES:
Cash distributions ($1,047,348) ($471,520)
----------- ---------
Net cash used by financing activities ($1,047,348) ($471,520)
----------- ---------
NET INCREASE IN CASH AND CASH
EQUIVALENTS $ 660,224 $151,425
CASH AND CASH EQUIVALENTS AT
BEGINNING OF PERIOD 794,035 414,467
---------- --------
CASH AND CASH EQUIVALENTS AT
END OF PERIOD $1,454,259 $565,892
========== ========
The accompanying condensed notes are an integral part of these
combined financial statements.
-5-
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP II-B
GEODYNE PRODUCTION PARTNERSHIP II-B
COMBINED BALANCE SHEETS
(Unaudited)
ASSETS
June 30, December 31,
2003 2002
------------ ------------
CURRENT ASSETS:
Cash and cash equivalents $ 910,897 $ 478,067
Accounts receivable:
Oil and gas sales 591,075 481,002
---------- ----------
Total current assets $1,501,972 $ 959,069
NET OIL AND GAS PROPERTIES, utilizing
the successful efforts method 1,742,881 1,605,587
DEFERRED CHARGE 245,511 245,511
---------- ----------
$3,490,364 $2,810,167
========== ==========
LIABILITIES AND PARTNERS' CAPITAL (DEFICIT)
CURRENT LIABILITIES:
Accounts payable $ 134,137 $ 147,990
Gas imbalance payable 47,652 47,652
---------- ----------
Total current liabilities $ 181,789 $ 195,642
LONG-TERM LIABILITIES:
Accrued liability $ 52,682 $ 52,682
Asset retirement obligation
(Note 1) 212,371 -
---------- ----------
Total long-term liabilities $ 265,053 $ 52,682
PARTNERS' CAPITAL (DEFICIT):
General Partner ($ 243,874) ($ 264,786)
Limited Partners, issued and
outstanding, 361,719 units 3,287,396 2,826,629
---------- ----------
Total Partners' capital $3,043,522 $2,561,843
---------- ----------
$3,490,364 $2,810,167
========== ==========
The accompanying condensed notes are an integral part of these
combined financial statements.
-6-
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP II-B
GEODYNE PRODUCTION PARTNERSHIP II-B
COMBINED STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED JUNE 30, 2003 AND 2002
(Unaudited)
2003 2002
---------- --------
REVENUES:
Oil and gas sales $1,014,577 $672,842
Interest income 1,130 256
Gain on sale of oil and gas
properties - 20,525
---------- --------
$1,015,707 $693,623
COSTS AND EXPENSES:
Lease operating $ 186,785 $202,113
Production tax 60,222 39,825
Depreciation, depletion, and
amortization of oil and gas
properties 49,047 62,456
General and administrative
(Note 2) 106,851 101,499
---------- --------
$ 402,905 $405,893
---------- --------
NET INCOME $ 612,802 $287,730
========== ========
GENERAL PARTNER - NET INCOME $ 65,582 $ 34,369
========== ========
LIMITED PARTNERS - NET INCOME $ 547,220 $253,361
========== ========
NET INCOME per unit $ 1.51 $ .70
========== ========
UNITS OUTSTANDING 361,719 361,719
========== ========
The accompanying condensed notes are an integral part of these
combined financial statements.
-7-
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP II-B
GEODYNE PRODUCTION PARTNERSHIP II-B
COMBINED STATEMENTS OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 2003 AND 2002
(Unaudited)
2003 2002
---------- ----------
REVENUES:
Oil and gas sales $2,038,060 $1,253,187
Interest income 2,056 992
Gain on sale of oil and gas
properties - 20,525
---------- ----------
$2,040,116 $1,274,704
COSTS AND EXPENSES:
Lease operating $ 355,546 $ 518,793
Production tax 135,287 71,435
Depreciation, depletion, and
amortization of oil and gas
properties 88,759 124,817
General and administrative
(Note 2) 218,028 220,435
---------- ----------
$ 797,620 $ 935,480
---------- ----------
INCOME BEFORE CUMULATIVE EFFECT
OF ACCOUNTING CHANGE $1,242,496 $ 339,224
Cumulative effect of change in
accounting for asset retirement
obligations (Note 1) 4,347 -
---------- ----------
NET INCOME $1,246,843 $ 339,224
========== ==========
GENERAL PARTNER - NET INCOME $ 132,076 $ 45,057
========== ==========
LIMITED PARTNERS - NET INCOME $1,114,767 $ 294,167
========== ==========
NET INCOME per unit $ 3.08 $ .81
========== ==========
UNITS OUTSTANDING 361,719 361,719
========== ==========
The accompanying condensed notes are an integral part of these
combined financial statements.
-8-
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP II-B
GEODYNE PRODUCTION PARTNERSHIP II-B
COMBINED STATEMENTS OF CASH FLOWS
FOR THE SIX MONTHS ENDED JUNE 30, 2003 AND 2002
(Unaudited)
2003 2002
------------ ----------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $1,246,843 $339,224
Adjustments to reconcile net
income to net cash provided
by operating activities:
Cumulative effect of change in
accounting for asset retirement
obligations (Note 1) ( 4,347) -
Depreciation, depletion, and
amortization of oil and gas
properties 88,759 124,817
Gain on sale of oil and gas
properties - ( 20,525)
Increase in accounts receivable -
oil and gas sales ( 110,073) ( 115,850)
Increase (decrease) in accounts
payable ( 13,853) 21,713
---------- --------
Net cash provided by operating
activities $1,207,329 $349,379
---------- --------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures ($ 9,335) ($ 14,102)
Proceeds from sale of oil and gas
properties - 4,858
---------- --------
Net cash used by investing activities ($ 9,335) ($ 9,244)
---------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Cash distributions ($ 765,164) ($284,079)
---------- --------
Net cash used by financing activities ($ 765,164) ($284,079)
---------- --------
NET INCREASE IN CASH AND CASH
EQUIVALENTS $ 432,830 $ 56,056
CASH AND CASH EQUIVALENTS AT
BEGINNING OF PERIOD 478,067 262,153
---------- --------
CASH AND CASH EQUIVALENTS AT
END OF PERIOD $ 910,897 $318,209
========== ========
The accompanying condensed notes are an integral part of these
combined financial statements.
-9-
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP II-C
GEODYNE PRODUCTION PARTNERSHIP II-C
COMBINED BALANCE SHEETS
(Unaudited)
ASSETS
June 30, December 31,
2003 2002
------------ ------------
CURRENT ASSETS:
Cash and cash equivalents $ 466,819 $ 250,767
Accounts receivable:
Oil and gas sales 308,881 236,341
---------- ----------
Total current assets $ 775,700 $ 487,108
NET OIL AND GAS PROPERTIES, utilizing
the successful efforts method 802,934 774,648
DEFERRED CHARGE 130,077 130,077
---------- ----------
$1,708,711 $1,391,833
========== ==========
LIABILITIES AND PARTNERS' CAPITAL (DEFICIT)
CURRENT LIABILITIES:
Accounts payable $ 59,200 $ 63,712
Gas imbalance payable 26,684 26,684
---------- ----------
Total current liabilities $ 85,884 $ 90,396
LONG-TERM LIABILITIES:
Accrued Liability $ 37,248 $ 29,815
Asset retirement obligation
(Note 1) 69,593 -
---------- ----------
Total long-term liabilities $ 106,841 $ 29,815
PARTNERS' CAPITAL (DEFICIT):
General Partner ($ 99,070) ($ 98,831)
Limited Partners, issued and
outstanding, 154,621 units 1,615,056 1,370,453
---------- ----------
Total Partners' capital $1,515,986 $1,271,622
---------- ----------
$1,708,711 $1,391,833
========== ==========
The accompanying condensed notes are an integral part of these
combined financial statements.
-10-
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP II-C
GEODYNE PRODUCTION PARTNERSHIP II-C
COMBINED STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED JUNE 30, 2003 AND 2002
(Unaudited)
2003 2002
-------- --------
REVENUES:
Oil and gas sales $512,079 $336,986
Interest income 589 202
Gain on sale of oil and gas
properties - 1,014
Gain on abandonment 91 -
-------- --------
$512,759 $338,202
COSTS AND EXPENSES:
Lease operating $ 92,842 $ 72,453
Production tax 32,569 21,016
Depreciation, depletion, and
amortization of oil and gas
properties 21,957 32,478
General and administrative
(Note 2) 50,687 46,076
-------- --------
$198,055 $172,023
-------- --------
NET INCOME $314,704 $166,179
======== ========
GENERAL PARTNER - NET INCOME $ 33,379 $ 19,521
======== ========
LIMITED PARTNERS - NET INCOME $281,325 $146,658
======== ========
NET INCOME per unit $ 1.82 $ .95
======== ========
UNITS OUTSTANDING 154,621 154,621
======== ========
The accompanying condensed notes are an integral part of these
combined financial statements.
-11-
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP II-C
GEODYNE PRODUCTION PARTNERSHIP II-C
COMBINED STATEMENTS OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 2003 AND 2002
(Unaudited)
2003 2002
---------- --------
REVENUES:
Oil and gas sales $1,035,313 $604,759
Interest income 1,066 506
Gain on sale of oil and gas
properties - 1,014
Gain on abandonment 91 -
---------- --------
$1,036,470 $606,279
COSTS AND EXPENSES:
Lease operating $ 169,385 $199,907
Production tax 72,909 37,538
Depreciation, depletion, and
amortization of oil and gas
properties 45,884 62,331
General and administrative
(Note 2) 104,354 103,926
---------- --------
$ 392,532 $403,702
---------- --------
INCOME BEFORE CUMULATIVE EFFECT
OF ACCOUNTING CHANGE $ 643,938 $202,577
Cumulative effect of change in
accounting for asset retirement
obligations (Note 1) 74 -
---------- --------
NET INCOME $ 644,012 $202,577
========== ========
GENERAL PARTNER - NET INCOME $ 68,409 $ 25,817
========== ========
LIMITED PARTNERS - NET INCOME $ 575,603 $176,760
========== ========
NET INCOME per unit $ 3.72 $ 1.14
========== ========
UNITS OUTSTANDING 154,621 154,621
========== ========
The accompanying condensed notes are an integral part of these
combined financial statements.
-12-
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP II-C
GEODYNE PRODUCTION PARTNERSHIP II-C
COMBINED STATEMENTS OF CASH FLOWS
FOR THE SIX MONTHS ENDED JUNE 30, 2003 AND 2002
(Unaudited)
2003 2002
---------- ----------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $644,012 $202,577
Adjustments to reconcile net
income to net cash provided
by operating activities:
Cumulative effect of change in
accounting for asset retirement
obligations (Note 1) ( 74) -
Depreciation, depletion, and
amortization of oil and gas
properties 45,884 62,331
Gain on sale of oil and gas
properties - ( 1,014)
Gain on abandonment ( 91) -
Increase in accounts receivable -
oil and gas sales ( 72,540) ( 64,334)
Increase (decrease) in accounts
payable ( 4,512) 6,904
Increase in accrued liability 7,433 -
-------- --------
Net cash provided by operating
activities $620,112 $206,464
-------- --------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures ($ 4,412) ($ 2,944)
Proceeds from sale of oil and
gas properties - 1,602
-------- --------
Net cash used by investing activities ($ 4,412) ($ 1,342)
-------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Cash distributions ($399,648) ($131,448)
-------- --------
Net cash used by financing
activities ($399,648) ($131,448)
-------- --------
NET INCREASE IN CASH AND CASH
EQUIVALENTS $216,052 $ 73,674
CASH AND CASH EQUIVALENTS AT
BEGINNING OF PERIOD 250,767 115,201
-------- --------
CASH AND CASH EQUIVALENTS AT
END OF PERIOD $466,819 $188,875
======== ========
The accompanying condensed notes are an integral part of these
combined financial statements.
-13-
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP II-D
GEODYNE PRODUCTION PARTNERSHIP II-D
COMBINED BALANCE SHEETS
(Unaudited)
ASSETS
June 30, December 31,
2003 2002
---------- ------------
CURRENT ASSETS:
Cash and cash equivalents $ 892,440 $ 561,177
Accounts receivable:
Oil and gas sales 659,023 512,579
---------- ----------
Total current assets $1,551,463 $1,073,756
NET OIL AND GAS PROPERTIES, utilizing
the successful efforts method 1,518,803 1,482,828
DEFERRED CHARGE 358,699 358,699
---------- ----------
$3,428,965 $2,915,283
========== ==========
LIABILITIES AND PARTNERS' CAPITAL (DEFICIT)
CURRENT LIABILITIES:
Accounts payable $ 112,348 $ 156,725
Gas imbalance payable 42,368 42,368
---------- ----------
Total current liabilities $ 154,716 $ 199,093
LONG-TERM LIABILITIES:
Accrued liability $ 96,494 $ 96,494
Asset retirement obligation
(Note 1) 184,096 -
---------- ----------
Total long-term liabilities $ 280,590 $ 96,494
PARTNERS' CAPITAL (DEFICIT):
General Partner ($ 176,318) ($ 76,044)
Limited Partners, issued and
outstanding, 314,878 units 3,169,977 2,695,740
---------- ----------
Total Partners' capital $2,993,659 $2,619,696
---------- ----------
$3,428,965 $2,915,283
========== ==========
The accompanying condensed notes are an integral part of these
combined financial statements.
-14-
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP II-D
GEODYNE PRODUCTION PARTNERSHIP II-D
COMBINED STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED JUNE 30, 2003 AND 2002
(Unaudited)
2003 2002
------------ --------
REVENUES:
Oil and gas sales $1,001,063 $798,184
Interest income 1,058 479
Gain on sale of oil and gas
properties - 11,014
Gain on abandonment 1,044 -
---------- --------
$1,003,165 $809,677
COSTS AND EXPENSES:
Lease operating $ 216,106 $158,759
Production tax 58,148 45,894
Depreciation, depletion, and
amortization of oil and gas
properties 70,253 73,842
General and administrative
(Note 2) 94,130 88,945
---------- --------
$ 438,637 $367,440
---------- --------
NET INCOME $ 564,528 $442,237
========== ========
GENERAL PARTNER - NET INCOME $ 62,575 $ 50,822
========== ========
LIMITED PARTNERS - NET INCOME $ 501,953 $391,415
========== ========
NET INCOME per unit $ 1.59 $ 1.24
========== ========
UNITS OUTSTANDING 314,878 314,878
========== ========
The accompanying condensed notes are an integral part of these
combined financial statements.
-15-
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP II-D
GEODYNE PRODUCTION PARTNERSHIP II-D
COMBINED STATEMENTS OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 2003 AND 2002
(Unaudited)
2003 2002
------------ ----------
REVENUES:
Oil and gas sales $2,043,771 $1,335,760
Interest income 1,910 1,103
Gain on sale of oil and gas
properties - 11,014
Gain on abandonment 1,044 -
---------- ----------
$2,046,725 $1,347,877
COSTS AND EXPENSES:
Lease operating $ 377,801 $ 418,082
Production tax 128,409 76,772
Depreciation, depletion, and
amortization of oil and gas
properties 151,635 133,712
General and administrative
(Note 2) 192,303 194,071
---------- ----------
$ 850,148 $ 822,637
---------- ----------
INCOME BEFORE CUMULATIVE EFFECT
OF ACCOUNTING CHANGE $1,196,577 $ 525,240
Cumulative effect of change in
accounting for asset retirement
obligations (Note 1) ( 2,344) -
---------- ----------
NET INCOME $1,194,233 $ 525,240
========== ==========
GENERAL PARTNER - NET INCOME $ 132,996 $ 64,448
========== ==========
LIMITED PARTNERS - NET INCOME $1,061,237 $ 460,792
========== ==========
NET INCOME per unit $ 3.37 $ 1.46
========== ==========
UNITS OUTSTANDING 314,878 314,878
========== ==========
The accompanying condensed notes are an integral part of these
combined financial statements.
-16-
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP II-D
GEODYNE PRODUCTION PARTNERSHIP II-D
COMBINED STATEMENTS OF CASH FLOWS
FOR THE SIX MONTHS ENDED JUNE 30, 2003 AND 2002
(Unaudited)
2003 2002
------------ ----------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $1,194,233 $525,240
Adjustments to reconcile net
income to net cash provided
by operating activities:
Cumulative effect of change in
accounting for asset retirement
obligations (Note 1) 2,344 -
Depreciation, depletion, and
amortization of oil and gas
properties 151,635 133,712
Gain on sale of oil and gas
properties - ( 11,014)
Gain on abandonment ( 1,044) -
Increase in accounts receivable -
oil and gas sales ( 146,444) ( 125,514)
Increase (decrease) in accounts
payable ( 44,377) 35,096
Decrease in payable to General
Partner - ( 65,905)
---------- --------
Net cash provided by operating
activities $1,156,347 $491,615
---------- --------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures ($ 4,814) ($ 37,663)
Proceeds from sale of oil and gas
properties - 16,816
---------- --------
Net cash used by investing activities ($ 4,814) ($ 20,847)
---------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Cash distributions ($ 820,270) ($187,783)
---------- --------
Net cash used by financing activities ($ 820,270) ($187,783)
---------- --------
NET INCREASE IN CASH AND CASH
EQUIVALENTS $ 331,263 $282,985
CASH AND CASH EQUIVALENTS AT
BEGINNING OF PERIOD 561,177 170,516
---------- --------
CASH AND CASH EQUIVALENTS AT
END OF PERIOD $ 892,440 $453,501
========== ========
The accompanying condensed notes are an integral part of these
combined financial statements.
-17-
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP II-E
GEODYNE PRODUCTION PARTNERSHIP II-E
COMBINED BALANCE SHEETS
(Unaudited)
ASSETS
June 30, December 31,
2003 2002
------------ ------------
CURRENT ASSETS:
Cash and cash equivalents $ 716,411 $ 388,042
Accounts receivable:
Oil and gas sales 477,226 362,987
---------- ----------
Total current assets $1,193,637 $ 751,029
NET OIL AND GAS PROPERTIES, utilizing
the successful efforts method 1,469,843 1,425,028
DEFERRED CHARGE 209,297 209,297
---------- ----------
$2,872,777 $2,385,354
========== ==========
LIABILITIES AND PARTNERS' CAPITAL (DEFICIT)
CURRENT LIABILITIES:
Accounts payable $ 70,372 $ 85,744
Gas imbalance payable 43,443 43,443
---------- ----------
Total current liabilities $ 113,815 $ 129,187
LONG-TERM LIABILITIES:
Accrued liability $ 4,116 $ 7,264
Asset retirement obligation
(Note 1) 97,122 -
---------- ----------
Total long-term liabilities $ 101,238 $ 7,264
PARTNERS' CAPITAL (DEFICIT):
General Partner ($ 111,292) ($ 131,864)
Limited Partners, issued and
outstanding, 228,821 units 2,769,016 2,380,767
---------- ----------
Total Partners' capital $2,657,724 $2,248,903
---------- ----------
$2,872,777 $2,385,354
========== ==========
The accompanying condensed notes are an integral part of these
combined financial statements.
-18-
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP II-E
GEODYNE PRODUCTION PARTNERSHIP II-E
COMBINED STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED JUNE 30, 2003 AND 2002
(Unaudited)
2003 2002
-------- --------
REVENUES:
Oil and gas sales $774,082 $473,556
Interest income 829 27
Gain on sale of oil and gas
properties - 20,604
-------- --------
$774,911 $494,187
COSTS AND EXPENSES:
Lease operating $ 89,137 $ 94,630
Production tax 52,940 36,153
Depreciation, depletion, and
amortization of oil and gas
properties 25,106 57,585
General and administrative
(Note 2) 72,603 67,074
-------- --------
$239,786 $255,442
-------- --------
NET INCOME $535,125 $238,745
======== ========
GENERAL PARTNER - NET INCOME $ 55,689 $ 29,054
======== ========
LIMITED PARTNERS - NET INCOME $479,436 $209,691
======== ========
NET INCOME per unit $ 2.10 $ .92
======== ========
UNITS OUTSTANDING 228,821 228,821
======== ========
The accompanying condensed notes are an integral part of these
combined financial statements.
-19-
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP II-E
GEODYNE PRODUCTION PARTNERSHIP II-E
COMBINED STATEMENTS OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 2003 AND 2002
(Unaudited)
2003 2002
---------- --------
REVENUES:
Oil and gas sales $1,526,763 $872,051
Interest income 1,541 775
Gain on sale of oil and gas
properties - 20,604
---------- --------
$1,528,304 $893,430
COSTS AND EXPENSES:
Lease operating $ 229,178 $221,437
Production tax 101,142 66,512
Depreciation, depletion, and
amortization of oil and gas
properties 60,567 118,352
General and administrative
(Note 2) 146,876 148,066
---------- --------
$ 537,763 $554,367
---------- --------
INCOME BEFORE CUMULATIVE EFFECT
OF ACCOUNTING CHANGE $ 990,541 $339,063
Cumulative effect of change in
accounting for asset retirement
obligations (Note 1) 3,090 -
---------- --------
NET INCOME $ 993,631 $339,063
========== ========
GENERAL PARTNER - NET INCOME $ 104,382 $ 44,480
========== ========
LIMITED PARTNERS - NET INCOME $ 889,249 $294,583
========== ========
NET INCOME per unit $ 3.89 $ 1.29
========== ========
UNITS OUTSTANDING 228,821 228,821
========== ========
The accompanying condensed notes are an integral part of these
combined financial statements.
-20-
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP II-E
GEODYNE PRODUCTION PARTNERSHIP II-E
COMBINED STATEMENTS OF CASH FLOWS
FOR THE SIX MONTHS ENDED JUNE 30, 2003 AND 2002
(Unaudited)
2003 2002
---------- ----------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $993,631 $339,063
Adjustments to reconcile net income
to net cash provided by operating
activities:
Cumulative effect of change in
accounting for asset retirement
obligations (Note 1) ( 3,090) -
Depreciation, depletion, and
amortization of oil and gas
properties 60,567 118,352
Gain on sale of oil and gas
properties - ( 20,604)
Increase in accounts receivable -
oil and gas sales ( 114,239) ( 60,798)
Increase (decrease) in accounts
payable ( 15,372) 18,285
Decrease in payable to General
Partner - ( 115,045)
Decrease in accrued liability ( 3,148) -
-------- --------
Net cash provided by operating
activities $918,349 $279,253
-------- --------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures ($ 7,428) ($183,609)
Proceeds from the sale of oil and
gas properties 2,258 -
-------- --------
Net cash used by investing activities ($ 5,170) ($183,609)
-------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Cash distributions ($584,810) ($171,983)
-------- --------
Net cash used by financing activities ($584,810) ($171,983)
-------- --------
NET INCREASE (DECREASE) IN CASH AND
CASH EQUIVALENTS $328,369 ($ 76,339)
CASH AND CASH EQUIVALENTS AT
BEGINNING OF PERIOD 388,042 242,032
-------- --------
CASH AND CASH EQUIVALENTS AT
END OF PERIOD $716,411 $165,693
======== ========
The accompanying condensed notes are an integral part of these
combined financial statements.
-21-
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP II-F
GEODYNE PRODUCTION PARTNERSHIP II-F
COMBINED BALANCE SHEETS
(Unaudited)
ASSETS
June 30, December 31,
2003 2002
------------ ------------
CURRENT ASSETS:
Cash and cash equivalents $ 694,780 $ 453,233
Accounts receivable:
Oil and gas sales 453,250 352,341
---------- ----------
Total current assets $1,148,030 $ 805,574
NET OIL AND GAS PROPERTIES, utilizing
the successful efforts method 1,367,845 1,311,537
DEFERRED CHARGE 36,774 36,774
---------- ----------
$2,552,649 $2,153,885
========== ==========
LIABILITIES AND PARTNERS' CAPITAL (DEFICIT)
CURRENT LIABILITIES:
Accounts payable $ 67,246 $ 71,740
Gas imbalance payable 6,701 6,701
---------- ----------
Total current liabilities $ 73,947 $ 78,441
LONG-TERM LIABILITIES:
Accrued liability $ 15,443 $ 15,443
Asset retirement obligation
(Note 1) 98,412 -
---------- ----------
Total long-term liabilities $ 113,855 $ 15,443
PARTNERS' CAPITAL (DEFICIT):
General Partner ($ 78,181) ($ 95,526)
Limited Partners, issued and
outstanding, 171,400 units 2,443,028 2,155,527
---------- ----------
Total Partners' capital $2,364,847 $2,060,001
---------- ----------
$2,552,649 $2,153,885
========== ==========
The accompanying condensed notes are an integral part of these
combined financial statements.
-22-
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP II-F
GEODYNE PRODUCTION PARTNERSHIP II-F
COMBINED STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED JUNE 30, 2003 AND 2002
(Unaudited)
2003 2002
-------- --------
REVENUES:
Oil and gas sales $729,504 $426,001
Interest income 812 372
Gain on sale of oil and gas
properties - 50,440
-------- --------
$730,316 $476,813
COSTS AND EXPENSES:
Lease operating $ 94,748 $ 67,941
Production tax 47,886 25,653
Depreciation, depletion, and
amortization of oil and gas
properties 28,195 45,298
General and administrative
(Note 2) 55,953 50,854
-------- --------
$226,782 $189,746
-------- --------
NET INCOME $503,534 $287,067
======== ========
GENERAL PARTNER - NET INCOME $ 52,810 $ 32,747
======== ========
LIMITED PARTNERS - NET INCOME $450,724 $254,320
======== ========
NET INCOME per unit $ 2.63 $ 1.49
======== ========
UNITS OUTSTANDING 171,400 171,400
======== ========
The accompanying condensed notes are an integral part of these
combined financial statements.
-23-
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP II-F
GEODYNE PRODUCTION PARTNERSHIP II-F
COMBINED STATEMENTS OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 2003 AND 2002
(Unaudited)
2003 2002
----------- --------
REVENUES:
Oil and gas sales $1,470,221 $842,559
Interest income 1,581 1,107
Gain on sale of oil and gas
properties - 50,440
---------- --------
$1,471,802 $894,106
COSTS AND EXPENSES:
Lease operating $ 218,095 $182,047
Production tax 94,500 53,096
Depreciation, depletion, and
amortization of oil and gas
properties 70,483 98,801
General and administrative
(Note 2) 114,504 114,908
---------- --------
$ 497,582 $448,852
---------- --------
INCOME BEFORE CUMULATIVE EFFECT
OF ACCOUNTING CHANGE $ 974,220 $445,254
Cumulative effect of change in
accounting for asset retirement
obligations (Note 1) 4,938 -
---------- --------
NET INCOME $ 979,158 $445,254
========== ========
GENERAL PARTNER - NET INCOME $ 103,657 $ 53,307
========== ========
LIMITED PARTNERS - NET INCOME $ 875,501 $391,947
========== ========
NET INCOME per unit $ 5.11 $ 2.29
========== ========
UNITS OUTSTANDING 171,400 171,400
========== ========
The accompanying condensed notes are an integral part of these
combined financial statements.
-24-
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP II-F
GEODYNE PRODUCTION PARTNERSHIP II-F
COMBINED STATEMENTS OF CASH FLOWS
FOR THE SIX MONTHS ENDED JUNE 30, 2003 AND 2002
(Unaudited)
2003 2002
---------- ----------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $979,158 $445,254
Adjustments to reconcile net income
to net cash provided by operating
activities:
Cumulative effect of change in
accounting for asset retirement
obligations (Note 1) ( 4,938) -
Depreciation, depletion, and
amortization of oil and gas
properties 70,483 98,801
Gain on sale of oil and gas
properties - ( 50,440)
Increase in accounts receivable -
oil and gas sales ( 100,909) ( 64,128)
Increase (decrease) in accounts
payable ( 4,494) 1,394
-------- --------
Net cash provided by operating
activities $939,300 $430,881
-------- --------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures ($ 23,441) ($ 40,130)
Proceeds from sale of oil and
gas properties - 491
-------- --------
Net cash used by investing
activities ($ 23,441) ($ 39,639)
-------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Cash distributions ($674,312) ($417,599)
-------- --------
Net cash used by financing
activities ($674,312) ($417,599)
-------- --------
NET INCREASE (DECREASE) IN CASH AND
CASH EQUIVALENTS $241,547 ($ 26,357)
CASH AND CASH EQUIVALENTS AT
BEGINNING OF PERIOD 453,233 278,738
-------- --------
CASH AND CASH EQUIVALENTS AT
END OF PERIOD $694,780 $252,381
======== ========
The accompanying condensed notes are an integral part of these
combined financial statements.
-25-
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP II-G
GEODYNE PRODUCTION PARTNERSHIP II-G
COMBINED BALANCE SHEETS
(Unaudited)
ASSETS
June 30, December 31,
2003 2002
------------ ------------
CURRENT ASSETS:
Cash and cash equivalents $1,485,533 $ 959,481
Accounts receivable:
Oil and gas sales 963,540 745,529
---------- ----------
Total current assets $2,449,073 $1,705,010
NET OIL AND GAS PROPERTIES, utilizing
the successful efforts method 2,942,938 2,821,960
DEFERRED CHARGE 79,136 79,136
---------- ----------
$5,471,147 $4,606,106
========== ==========
LIABILITIES AND PARTNERS' CAPITAL (DEFICIT)
CURRENT LIABILITIES:
Accounts payable $ 142,372 $ 153,893
Gas imbalance payable 16,907 16,907
---------- ----------
Total current liabilities $ 159,279 $ 170,800
LONG-TERM LIABILITIES:
Accrued liability $ 31,075 $ 31,075
Asset retirement obligation
(Note 1) 212,179 -
---------- ----------
Total long-term liabilities $ 243,254 $ 31,075
PARTNERS' CAPITAL (DEFICIT):
General Partner ($ 59,653) ($ 97,205)
Limited Partners, issued and
outstanding, 372,189 units 5,128,267 4,501,436
---------- ----------
Total Partners' capital $5,068,614 $4,404,231
---------- ----------
$5,471,147 $4,606,106
========== ==========
The accompanying condensed notes are an integral part of these
combined financial statements.
-26-
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP II-G
GEODYNE PRODUCTION PARTNERSHIP II-G
COMBINED STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED JUNE 30, 2003 AND 2002
(Unaudited)
2003 2002
----------- ----------
REVENUES:
Oil and gas sales $1,556,629 $ 905,139
Interest income 1,766 868
Gain on sale of oil and gas
properties - 105,409
---------- ----------
$1,558,395 $1,011,416
COSTS AND EXPENSES:
Lease operating $ 201,891 $ 144,832
Production tax 102,799 54,832
Depreciation, depletion, and
amortization of oil and gas
properties 60,242 97,606
General and administrative
(Note 2) 110,404 104,586
---------- ----------
$ 475,336 $ 401,856
---------- ----------
NET INCOME $1,083,059 $ 609,560
========== ==========
GENERAL PARTNER - NET INCOME $ 113,551 $ 69,654
========== ==========
LIMITED PARTNERS - NET INCOME $ 969,508 $ 539,906
========== ==========
NET INCOME per unit $ 2.60 $ 1.45
========== ==========
UNITS OUTSTANDING 372,189 372,189
========== ==========
The accompanying condensed notes are an integral part of these
combined financial statements.
-27-
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP II-G
GEODYNE PRODUCTION PARTNERSHIP II-G
COMBINED STATEMENTS OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 2003 AND 2002
(Unaudited)
2003 2002
------------ ----------
REVENUES:
Oil and gas sales $3,125,482 $1,786,842
Interest income 3,415 2,639
Gain on sale of oil and gas
properties - 105,409
---------- ----------
$3,128,897 $1,894,890
COSTS AND EXPENSES:
Lease operating $ 464,340 $ 387,951
Production tax 201,840 113,061
Depreciation, depletion, and
amortization of oil and gas
properties 150,359 212,791
General and administrative
(Note 2) 224,717 227,874
---------- ----------
$1,041,256 $ 941,677
---------- ----------
INCOME BEFORE CUMULATIVE EFFECT
OF ACCOUNTING CHANGE $2,087,641 $ 953,213
Cumulative effect of change in
accounting for asset retirement
obligations (Note 1) 10,247 -
---------- ----------
NET INCOME $2,097,888 $ 953,213
========== ==========
GENERAL PARTNER - NET INCOME $ 222,057 $ 114,209
========== ==========
LIMITED PARTNERS - NET INCOME $1,875,831 $ 839,004
========== ==========
NET INCOME per unit $ 5.04 $ 2.25
========== ==========
UNITS OUTSTANDING 372,189 372,189
========== ==========
The accompanying condensed notes are an integral part of these
combined financial statements.
-28-
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP II-G
GEODYNE PRODUCTION PARTNERSHIP II-G
COMBINED STATEMENTS OF CASH FLOWS
FOR THE SIX MONTHS ENDED JUNE 30, 2003 AND 2002
(Unaudited)
2003 2002
------------ ----------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $2,097,888 $953,213
Adjustments to reconcile net income
to net cash provided by operating
activities:
Cumulative effect of changes in
accounting for asset retirement
obligations (Note 1) ( 10,247) -
Depreciation, depletion, and
amortization of oil and gas
properties 150,359 212,791
Gain on sale of oil and gas
Properties - ( 105,409)
Increase in accounts receivable -
oil and gas sales ( 218,011) ( 137,174)
Increase (decrease) in accounts
payable ( 11,521) 3,133
---------- --------
Net cash provided by operating
activities $2,008,468 $926,554
---------- --------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures ($ 48,911) ($ 83,919)
Proceeds from sale of oil and
gas properties - 1,059
---------- --------
Net cash used by investing activities ($ 48,911) ($ 82,860)
---------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Cash distributions ($1,433,505) ($930,443)
---------- --------
Net cash used by financing activities ($1,433,505) ($930,443)
---------- --------
NET INCREASE (DECREASE) IN CASH AND
CASH EQUIVALENTS $ 526,052 ($ 86,749)
CASH AND CASH EQUIVALENTS AT
BEGINNING OF PERIOD 959,481 625,720
---------- --------
CASH AND CASH EQUIVALENTS AT
END OF PERIOD $1,485,533 $538,971
========== ========
The accompanying condensed notes are an integral part of these
combined financial statements.
-29-
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP II-H
GEODYNE PRODUCTION PARTNERSHIP II-H
COMBINED BALANCE SHEETS
(Unaudited)
ASSETS
June 30, December 31,
2003 2002
------------ ------------
CURRENT ASSETS:
Cash and cash equivalents $ 340,705 $ 224,669
Accounts receivable:
Oil and gas sales 229,992 176,539
---------- ----------
Total current assets $ 570,697 $ 401,208
NET OIL AND GAS PROPERTIES, utilizing
the successful efforts method 694,863 664,355
DEFERRED CHARGE 20,637 20,637
---------- ----------
$1,286,197 $1,086,200
========== ==========
LIABILITIES AND PARTNERS' CAPITAL (DEFICIT)
CURRENT LIABILITIES:
Accounts payable $ 34,677 $ 37,271
Gas imbalance payable 3,596 3,596
---------- ----------
Total current liabilities $ 38,273 $ 40,867
LONG-TERM LIABILITIES:
Accrued liability $ 8,079 $ 8,079
Asset retirement obligation
(Note 1) 51,950 -
---------- ----------
Total long-term liabilities $ 60,029 $ 8,079
PARTNERS' CAPITAL (DEFICIT):
General Partner ($ 44,489) ($ 53,547)
Limited Partners, issued and
outstanding, 91,711 units 1,232,384 1,090,801
---------- ----------
Total Partners' capital $1,187,895 $1,037,254
---------- ----------
$1,286,197 $1,086,200
========== ==========
The accompanying condensed notes are an integral part of these
combined financial statements.
-30-
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP II-H
GEODYNE PRODUCTION PARTNERSHIP II-H
COMBINED STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED JUNE 30, 2003 AND 2002
(Unaudited)
2003 2002
-------- --------
REVENUES:
Oil and gas sales $373,776 $214,575
Interest income 381 155
Gain on sale of oil and gas
properties - 24,403
-------- --------
$374,157 $239,133
COSTS AND EXPENSES:
Lease operating $ 48,303 $ 34,731
Production tax 24,850 13,104
Depreciation, depletion, and
amortization of oil and gas
properties 14,193 22,738
General and administrative
(Note 2) 34,340 29,528
-------- --------
$121,686 $100,101
-------- --------
NET INCOME $252,471 $139,032
======== ========
GENERAL PARTNER - NET INCOME $ 26,486 $ 15,934
======== ========
LIMITED PARTNERS - NET INCOME $225,985 $123,098
======== ========
NET INCOME per unit $ 2.47 $ 1.35
======== ========
UNITS OUTSTANDING 91,711 91,711
======== ========
The accompanying condensed notes are an integral part of these
combined financial statements.
-31-
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP II-H
GEODYNE PRODUCTION PARTNERSHIP II-H
COMBINED STATEMENTS OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 2003 AND 2002
(Unaudited)
2003 2002
-------- --------
REVENUES:
Oil and gas sales $744,784 $423,019
Interest income 748 484
Gain on sale of oil and gas
properties - 24,403
-------- --------
$745,532 $447,906
COSTS AND EXPENSES:
Lease operating $110,952 $ 93,077
Production tax 48,392 26,926
Depreciation, depletion, and
amortization of oil and gas
properties 35,244 49,484
General and administrative
(Note 2) 70,756 70,061
-------- --------
$265,344 $239,548
-------- --------
INCOME BEFORE CUMULATIVE EFFECT
OF ACCOUNTING CHANGE $480,188 $208,358
Cumulative effect of change in
accounting for asset retirement
obligations (Note 1) 2,536 -
-------- --------
NET INCOME $482,724 $208,358
======== ========
GENERAL PARTNER - NET INCOME $ 51,141 $ 25,241
======== ========
LIMITED PARTNERS - NET INCOME $431,583 $183,117
======== ========
NET INCOME per unit $ 4.71 $ 2.00
======== ========
UNITS OUTSTANDING 91,711 91,711
======== ========
The accompanying condensed notes are an integral part of these
combined financial statements.
-32-
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP II-H
GEODYNE PRODUCTION PARTNERSHIP II-H
COMBINED STATEMENTS OF CASH FLOWS
FOR THE SIX MONTHS ENDED JUNE 30, 2003 AND 2002
(Unaudited)
2003 2002
---------- ----------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $482,724 $208,358
Adjustments to reconcile net income
to net cash provided by operating
activities:
Cumulative effect of change in
accounting for asset retirement
obligations (Note 1) ( 2,536) -
Depreciation, depletion, and
amortization of oil and gas
properties 35,244 49,484
Gain on sale of oil and gas
Properties - ( 24,403)
Increase in accounts receivable -
oil and gas sales ( 53,453) ( 32,116)
Increase (decrease) in accounts
payable ( 2,594) 765
-------- --------
Net cash provided by operating
activities $459,385 $202,088
-------- --------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures ($ 11,266) ($ 19,409)
Proceeds from sale of oil and
Gas properties - 258
-------- --------
Net cash used by investing activities ($ 11,266) ($ 19,151)
-------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Cash distributions ($332,083) ($195,974)
-------- --------
Net cash used by financing activities ($332,083) ($195,974)
-------- --------
NET INCREASE (DECREASE) IN CASH AND
CASH EQUIVALENTS $116,036 ($ 13,037)
CASH AND CASH EQUIVALENTS AT
BEGINNING OF PERIOD 224,669 136,988
-------- --------
CASH AND CASH EQUIVALENTS AT
END OF PERIOD $340,705 $123,951
======== ========
The accompanying condensed notes are an integral part of these
combined financial statements.
-33-
GEODYNE ENERGY INCOME PROGRAM II LIMITED PARTNERSHIPS
CONDENSED NOTES TO THE COMBINED FINANCIAL STATEMENTS
JUNE 30, 2003
(Unaudited)
1. ACCOUNTING POLICIES
-------------------
The combined balance sheets as of June 30, 2003, combined statements of
operations for the three and six months ended June 30, 2003 and 2002, and
combined statements of cash flows for the six months ended June 30, 2003
and 2002 have been prepared by Geodyne Resources, Inc., the General
Partner of the limited partnerships, without audit. Each limited
partnership is a general partner in the related Geodyne Production
Partnership in which Geodyne Resources, Inc. serves as the managing
partner. Unless the context indicates otherwise, all references to a
"Partnership" or the "Partnerships" are references to the limited
partnership and its related production partnership, collectively, and all
references to the "General Partner" are references to the general partner
of the limited partnerships and the managing partner of the production
partnerships, collectively. In the opinion of management the financial
statements referred to above include all necessary adjustments, consisting
of normal recurring adjustments, to present fairly the combined financial
position at June 30, 2003, the combined results of operations for the
three and six months ended June 30, 2003 and 2002, and the combined cash
flows for the six months ended June 30, 2003 and 2002.
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, 2002. The
results of operations for the period ended June 30, 2003 are not
necessarily indicative of the results to be expected for the full year.
The Limited Partners' net income or loss per unit is based upon each $100
initial capital contribution.
-34-
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.
Depletion of the costs of producing oil and gas properties, amortization
of related intangible drilling and development costs, and depreciation of
tangible lease and well equipment are computed on the unit-of-production
method. The Partnerships' depletion, depreciation, and amortization
includes estimated dismantlement and abandonment costs and estimated
salvage value of the equipment.
When complete units of depreciable property are retired or sold, the asset
cost and related accumulated depreciation are eliminated with any gain or
loss (including the elimination of the asset retirement obligation)
reflected in income. When less than complete units of depreciable property
are retired or sold, the proceeds are credited to oil and gas properties.
ACCRUED LIABILITY - OTHER
-------------------------
The Accrued Liability - Other at June 30, 2003 and December 31, 2002 for
the II-A Partnership represents a charge accrued for the payment of a
judgment related to plugging liabilities, which judgment is currently
under appeal.
-35-
NEW ACCOUNTING PRONOUNCEMENTS
- -----------------------------
In July 2001, the FASB issued FAS No. 143, "Accounting for Asset
Retirement Obligations", which is effective for fiscal years beginning
after June 15, 2002 (January 1, 2003 for the Partnerships). On January 1,
2003, the Partnerships adopted FAS No. 143 and recorded an increase in
capitalized cost of oil and gas properties, an increase (decrease) in net
income for the cumulative effect of the change in accounting principle,
and an asset retirement obligation in the following approximate amounts
for each Partnership:
Increase
(Decrease)
Increase in
in Net Income
Capitalized for the
Cost of Oil Change in Asset
and Gas Accounting Retirement
Partnerships Properties Principle Obligation
------------ ----------- ---------- ----------
II-A $292,000 $ 6,000 $286,000
II-B 212,000 4,000 208,000
II-C 68,000 100 68,000
II-D 181,000 ( 2,000) 183,000
II-E 98,000 3,000 95,000
II-F 101,000 5,000 96,000
II-G 218,000 10,000 208,000
II-H 54,000 3,000 51,000
These amounts differ significantly from the estimates disclosed in the
Annual Report on Form 10-K for the year ended December 31, 2002 due to a
revision of the methodology used in calculating the change in capitalized
cost of oil and gas properties.
The asset retirement obligation will be adjusted upwards each quarter in
order to recognize accretion of the time-related discount factor. For the
six months ended June 30, 2003, the II-A, II-B, II-C, II-D, II-E, II-F,
II-G, and II-H Partnerships recognized approximately $6,000, $4,000,
$2,000, $5,000, $2,000, $2,000, $5,000 and $1,000, respectively, of an
increase in depreciation, depletion, and amortization expense, which was
comprised of accretion of the asset retirement obligation and depletion of
the increase in capitalized cost of oil and gas properties.
-36-
If this accounting policy had been in effect on January 1, 2002, the
proforma impact for the II-A, II-B, II-C, II-D, II-E, II-F, II-G, and II-H
Partnerships during the six months ended June 30, 2002 would have been an
increase in depreciation, depletion, and amortization expense of
approximately $6,000, $4,000, $2,000, $5,000, $3,000, $3,000, $7,000, and
$2,000, respectively.
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, 2003, the following payments were made to the General
Partner or its affiliates by the Partnerships:
Direct General Administrative
Partnership and Administrative Overhead
----------- ------------------ --------------
II-A $12,650 $127,443
II-B 11,661 95,190
II-C 9,998 40,689
II-D 11,267 82,863
II-E 12,387 60,216
II-F 10,848 45,105
II-G 12,460 97,944
II-H 10,205 24,135
During the six months ended June 30, 2003, the following payments were
made to the General Partner or its affiliates by the Partnerships:
Direct General Administrative
Partnership and Administrative Overhead
----------- ------------------ --------------
II-A $30,425 $254,886
II-B 27,648 190,380
II-C 22,976 81,378
II-D 26,577 165,726
II-E 26,444 120,432
II-F 24,295 90,210
II-G 28,829 195,888
II-H 22,486 48,270
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.
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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
USE OF FORWARD-LOOKING STATEMENTS AND ESTIMATES
- -----------------------------------------------
This Quarterly Report contains certain forward-looking statements. The
words "anticipate", "believe", "expect", "plan", "intend", "estimate",
"project", "could", "may" and similar expressions are intended to identify
forward-looking statements. Such statements reflect management's current
views with respect to future events and financial performance. This
Quarterly Report also includes certain information, which is, or is based
upon, estimates and assumptions. Such estimates and assumptions are
management's efforts to accurately reflect the condition and operation of
the Partnerships.
Use of forward-looking statements and estimates and assumptions involve
risks and uncertainties which include, but are not limited to, the
volatility of oil and gas prices, the uncertainty of reserve information,
the operating risk associated with oil and gas properties (including the
risk of personal injury, death, property damage, damage to the well or
producing reservoir, environmental contamination, and other operating
risks), the prospect of changing tax and regulatory laws, the availability
and capacity of processing and transportation facilities, the general
economic climate, the supply and price of foreign imports of oil and gas,
the level of consumer product demand, and the price and availability of
alternative fuels. Should one or more of these risks or uncertainties
occur or should estimates or underlying assumptions prove incorrect,
actual conditions or results may vary materially and adversely from those
stated, anticipated, believed, estimated, and otherwise indicated.
GENERAL
- -------
The Partnerships are engaged in the business of acquiring and operating
producing oil and gas properties located in the continental United States.
In general, a Partnership acquired producing properties and did not engage
in development drilling or enhanced recovery projects, except as an
incidental part of the management of the producing properties acquired.
Therefore, the economic life of each Partnership, and its related
Production Partnership, is limited to the period of time required to fully
produce its acquired oil and gas reserves. The net proceeds from the oil
and gas operations are distributed to the Limited Partners and the General
Partner in accordance with the terms of the Partnerships' partnership
agreements.
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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
----------- ------------------ ---------------
II-A July 22, 1987 $48,428,300
II-B October 14, 1987 36,171,900
II-C January 14, 1988 15,462,100
II-D May 10, 1988 31,487,800
II-E September 27, 1988 22,882,100
II-F January 5, 1989 17,140,000
II-G April 10, 1989 37,218,900
II-H May 17, 1989 9,171,100
In general, the amount of funds available for acquisition of producing
properties was equal to the capital contributions of the Limited Partners,
less 15% for sales commissions and organization and management fees. All
of the Partnerships have fully invested their capital contributions.
Net proceeds from the operations less necessary operating capital are
distributed to the Limited Partners on a quarterly basis. Revenues and net
proceeds of a Partnership are largely dependent upon the volumes of oil
and gas sold and the prices received for such oil and gas. While the
General Partner cannot predict future pricing trends, it believes the
working capital available as of June 30, 2003 and the net revenue
generated from future operations will provide sufficient working capital
to meet current and future obligations.
Occasional expenditures for new wells or well recompletions or workovers,
however, may reduce or eliminate cash available for a particular quarterly
distribution. During the six months ended June 30, 2002, capital
expenditures for the II-D Partnership totaled $37,663. These expenditures
were primarily due to the drilling of the Crusch A 1-3 well located in
Roosevelt County, Montana, in which the II-D Partnership owns a working
interest of approximately 11.5%. During the six months ended June 30,
2002, capital expenditures for the II-E Partnership totaled $183,609.
These expenditures were primarily due to the drilling of the Ernest Frey
#1 and Mordello Vincent #7 wells located in Acadia Parish, Louisiana, in
each of which the II-E Partnership owns a working interest of
approximately 5.8%. During the six months ended June 30, 2002, capital
-39-
expenditures for the II-F, II-G, and II-H Partnerships totaled $40,130,
$83,919, and $19,409, respectively. These expenditures were primarily due
to a recompletion on the CH Weir B well located in Lea County, New Mexico.
The II-F, II-G, and II-H Partnerships own working interests of
approximately 4.0%, 8.3%, and 1.9%, respectively, in this well.
The II-A Partnership's Statement of Cash Flows for the six months ended
June 30, 2002 includes proceeds from the sale of certain oil and gas
properties during December 2001. These proceeds were included in the
Partnership's cash distributions paid in February 2002.
The Partnerships would have terminated on December 31, 2001 in accordance
with the partnership agreements for the Partnerships. However, such
partnership agreements provide that the General Partner may extend the
term of each Partnership for up to five periods of two years each. The
General Partner has extended the terms of the Partnerships for their first
two-year extension thereby extending their termination date to December
31, 2003. The General Partner currently intends to extend the terms of
each Partnership for their third extension period. Accordingly, the
financial statements have not been presented on a liquidation basis
because it is not probable that the Partnerships will be terminated within
the next year.
CRITICAL ACCOUNTING POLICIES
- ----------------------------
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 the
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.
-40-
Depletion of the cost 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 and
estimated salvage value of the equipment. When complete units of
depreciable property are retired or sold, the asset cost and related
accumulated depreciation are eliminated with any gain or loss (including
the elimination of the asset retirement obligation) 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 for each oil and gas field (rather
than separately for each well). If the unamortized costs of oil and gas
properties within a field exceeds the expected undiscounted future cash
flows from such properties, the cost of the properties is written down to
fair value, which is determined by using the discounted future cash flows
from the properties. The risk that the Partnerships will be required to
record impairment provisions in the future increases as oil and gas prices
decrease.
The Deferred Charge on the Balance Sheets represents costs deferred for
lease operating expenses incurred in connection with the Partnerships'
underproduced gas imbalance positions. Conversely, the 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 Deferred Charge and Accrued Liability is
the annual average production costs per Mcf.
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 revenues 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
-41-
occurred. This also approximates the price for which the Partnerships are
currently settling this liability. 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 party in excess of current estimates of total gas reserves
for the well or by negotiated or contractual payment to the underproduced
party.
NEW ACCOUNTING PRONOUNCEMENTS
- -----------------------------
Below is a brief description of Financial Accounting Standards ("FAS")
recently issued by the Financial Accounting Standards Board ("FASB") which
may have an impact on the Partnerships' future results of operations and
financial position.
In July 2001, the FASB issued FAS No. 143, "Accounting for Asset
Retirement Obligations", which is effective for fiscal years beginning
after June 15, 2002 (January 1, 2003 for the Partnerships). On January 1,
2003, the Partnerships adopted FAS No. 143 and recorded an increase in
capitalized cost of oil and gas properties, an increase (decrease) in net
income for the cumulative effect of the change in accounting principle,
and an asset retirement obligation in the following approximate amounts
for each Partnership:
Increase
(Decrease)
Increase in
in Net Income
Capitalized for the
Cost of Oil Change in Asset
and Gas Accounting Retirement
Partnerships Properties Principle Obligation
------------ ----------- ---------- ----------
II-A $292,000 $ 6,000 $286,000
II-B 212,000 4,000 208,000
II-C 68,000 100 68,000
II-D 181,000 ( 2,000) 183,000
II-E 98,000 3,000 95,000
II-F 101,000 5,000 96,000
II-G 218,000 10,000 208,000
II-H 54,000 3,000 51,000
These amounts differ significantly from the estimates disclosed in the
Annual Report on Form 10-K for the year ended December 31, 2002 due to a
revision of the methodology used in calculating the change in capitalized
cost of oil and gas properties.
-42-
The asset retirement obligation will be adjusted upwards each quarter in
order to recognize accretion of the time-related discount factor. For the
six months ended June 30, 2003, the II-A, II-B, II-C, II-D, II-E, II-F,
II-G, and II-H Partnerships recognized approximately $6,000, $4,000,
$2,000, $5,000, $2,000, $2,000, $5,000 and $1,000, respectively, of an
increase in depreciation, depletion, and amortization expense, which was
comprised of accretion of the asset retirement obligation and depletion of
the increase in capitalized cost of oil and gas properties.
PROVED RESERVES AND NET PRESENT VALUE
- -------------------------------------
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 future. Although