0001376912-18-000015.txt : 20180814 0001376912-18-000015.hdr.sgml : 20180814 20180814161857 ACCESSION NUMBER: 0001376912-18-000015 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 39 CONFORMED PERIOD OF REPORT: 20180630 FILED AS OF DATE: 20180814 DATE AS OF CHANGE: 20180814 FILER: COMPANY DATA: COMPANY CONFORMED NAME: Rockies Region 2006 Limited Partnership CENTRAL INDEX KEY: 0001376912 STANDARD INDUSTRIAL CLASSIFICATION: CRUDE PETROLEUM & NATURAL GAS [1311] IRS NUMBER: 205149573 STATE OF INCORPORATION: WV FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-52787 FILM NUMBER: 181017791 BUSINESS ADDRESS: STREET 1: 1775 SHERMAN STREET STREET 2: SUITE 3000 CITY: DENVER STATE: CO ZIP: 80203 BUSINESS PHONE: 303.860.5800 MAIL ADDRESS: STREET 1: 1775 SHERMAN STREET STREET 2: SUITE 3000 CITY: DENVER STATE: CO ZIP: 80203 FORMER COMPANY: FORMER CONFORMED NAME: Rockies Region 2006 Private Limited Partnership DATE OF NAME CHANGE: 20060928 10-Q 1 rr06-20180630x10q.htm ROCKIES REGION 2006 LP 2Q2018 FORM 10-Q Document



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549

FORM 10-Q

S  QUARTERLY REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934

For the quarterly period ended June 30, 2018
or

£  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934 FOR THE TRANSITION PERIOD ____________ TO ____________

Commission File Number 000-52787

Rockies Region 2006 Limited Partnership

(Exact name of registrant as specified in its charter)
 
West Virginia
 
20-5149573
 
 
(State or other jurisdiction of incorporation or organization)
 
(I.R.S. Employer Identification No.)
 

1775 Sherman Street, Suite 3000
Denver, Colorado 80203
(Address of principal executive offices) (Zip code)

Registrant's telephone number, including area code: (303) 860-5800

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 o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).   Yes x No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.
Large accelerated filer  o
Accelerated filer  o
Non-accelerated filer  o
(Do not check if a smaller reporting company)
Smaller reporting company  x
 
Emerging growth company  o
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).  Yes o  No x

As of June 30, 2018, this Partnership had 4,497 units of limited partnership interest and no units of additional general partnership interest outstanding.



Rockies Region 2006 Limited Partnership


TABLE OF CONTENTS

PART I – FINANCIAL INFORMATION
 
 
Page
Item 1.
Financial Statements
 
 
 
 
 
 
Item 2.
Item 3.
Item 4.
 
 
 
PART II – OTHER INFORMATION
 
 
 
Item 1.
Item 1A.
Item 2.
Item 3.
Item 4.
Item 5.
Item 6.
 
 
 
 





SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, Section 21E of the Securities Exchange Act of 1934 and the U.S. Private Securities Litigation Reform Act of 1995 regarding this Partnership's business, financial condition and results of operations. PDC Energy, Inc. (“PDC”) is the Managing General Partner of this Partnership. All statements other than statements of historical fact included in and incorporated by reference into this report are “forward-looking statements”. Words such as expect, anticipate, intend, plan, believe, seek, estimate and similar expressions or variations of such words are intended to identify forward-looking statements herein. Forward-looking statements include, among other things, statements regarding future production, costs and cash flows; commodity prices and differentials; capital expenditures; the impact of elevated gathering system line pressures; availability of additional midstream facilities and services, timing of that availability and related benefits to this Partnership; the effect of environmental or regulatory actions; and the Managing General Partner's future strategies, plans and objectives.

The above statements are not the exclusive means of identifying forward-looking statements herein. Although forward-looking statements contained in this report reflect the Managing General Partner's good faith judgment, such statements can only be based on facts and factors currently known to the Managing General Partner. Forward-looking statements are always subject to risks and uncertainties, including known and unknown risks and uncertainties incidental to the development, production and marketing of crude oil, natural gas and NGLs and actual outcomes may differ materially from the results and outcomes discussed in the forward-looking statements.

Important factors that could cause actual results to differ materially from the forward-looking statements include, but are not limited to:
availability of future cash flows to enable this Partnership to continue as a going concern, for investor distributions, or funding of development activities;
changes in worldwide production volumes and demand, including economic conditions that might impact demand and prices for the products this Partnership produces;
volatility of commodity prices for crude oil, natural gas and natural gas liquids ("NGLs") and the risk of an extended period of depressed prices;
volatility and widening of differentials;
impact of governmental policies and/or regulations, including changes in environmental and other laws, the interpretation and enforcement of those laws and regulations, liabilities arising thereunder and the costs to comply with those laws and regulations;
declines in the value of this Partnership's crude oil, natural gas and NGLs properties resulting in impairments;
changes in estimates of proved reserves;
inaccuracy of reserve estimates and expected production rates;
potential for production decline rates from this Partnership's wells being greater than expected;
the Managing General Partner's ability to secure supplies and services at reasonable prices;
availability of sufficient pipeline, gathering and other transportation facilities and related infrastructure to process and transport this Partnership's production and the impact of these facilities and regional and local capacity on the prices this Partnership receives for its production;
the effect of operating pressures from pipelines, gathering and transportation facilities that influence the ability of a well to produce against such pressures;
timing and receipt of necessary regulatory permits;
risks incidental to the operation of crude oil and natural gas wells;
increases or changes in operating costs, severance and ad valorem taxes;
future cash flows, liquidity and financial condition;
competition within the oil and gas industry;
success of the Managing General Partner in marketing this Partnership's crude oil, natural gas and NGLs;
impact of environmental events, governmental and other third-party responses to such events and the Managing General Partner's ability to insure adequately against such events;
cost of pending or future litigation;
the Managing General Partner's ability to retain or attract senior management and key technical employees; and
success of strategic plans, expectations and objectives for future operations of the Managing General Partner.

Further, this Partnership urges the reader to carefully review and consider the cautionary statements and disclosures made in this Quarterly Report on Form 10-Q, this Partnership's Annual Report on Form 10-K for the year ended December 31, 2017 (the “2017 Form 10-K”) filed with the U.S. Securities and Exchange Commission (“SEC”) on March 29, 2018 and this Partnership's other filings with the SEC for further information on risks and uncertainties that could affect this Partnership's business, financial condition, results of operations and cash flows. Readers are cautioned not to place undue reliance on forward-looking statements, which speak only as of the date of this report. This Partnership undertakes no obligation to update any forward-looking statements in order to reflect any event or circumstance occurring after the date of this report or currently unknown facts or conditions or the occurrence of unanticipated events. All forward looking statements are qualified in their entirety by this cautionary statement.

- 1-


PART I – FINANCIAL INFORMATION

Item 1. Financial Statements

Rockies Region 2006 Limited Partnership
Condensed Balance Sheets
(unaudited)

 
June 30, 2018
 
December 31, 2017
Assets
 
 
 

Current assets:
 
 
 

Cash and cash equivalents
$
6,415

 
$
7,602

Accounts receivable
10,142

 
57,890

Crude oil inventory
29,458

 
21,682

Total current assets
46,015

 
87,174

Crude oil and natural gas properties, successful efforts method, at cost
2,027,049

 
1,978,684

Less: Accumulated depreciation, depletion and amortization
(933,944
)
 
(923,349
)
Crude oil and natural gas properties, net
1,093,105

 
1,055,335

Total Assets
$
1,139,120

 
$
1,142,509

 
 
 
 
Liabilities and Partners' Equity (Deficit)
 
 
 
Current liabilities:
 
 
 
Due to Managing General Partner, net
$
1,397,142

 
$
942,592

Current portion of asset retirement obligations
550,000

 
400,000

Total current liabilities
1,947,142

 
1,342,592

Asset retirement obligations
1,392,294

 
1,621,598

Total Liabilities
3,339,436

 
2,964,190

 
 
 
 
Commitments and contingent liabilities


 


 
 
 
 
Partners' equity (deficit):
 
 
 
   Managing General Partner
(5,750,130
)
 
(5,610,035
)
   Limited Partners - 4,497 units issued and outstanding
3,549,814

 
3,788,354

Total Partners' Equity (Deficit)
(2,200,316
)
 
(1,821,681
)
Total Liabilities and Partners' Equity (Deficit)
$
1,139,120

 
$
1,142,509

    






See accompanying notes to unaudited condensed financial statements.

- 2-


Rockies Region 2006 Limited Partnership
Condensed Statements of Operations
(unaudited)

 
Three Months Ended June,
 
Six Months Ended June 30,
 
2018
 
2017
 
2018
 
2017
Revenues:
 
 
 
 
 
 
 
Crude oil, natural gas and NGLs sales
$
22,218

 
$
214,319

 
$
47,822

 
$
469,474

 
 
 
 
 
 
 
 
Operating costs and expenses:
 
 
 
 
 
 
 
Lease operating expenses
75,413

 
163,653

 
145,800

 
331,044

Production taxes
(57
)
 
13,946

 
586

 
22,645

Direct costs - general and administrative
125,970

 
30,363

 
151,093

 
78,238

Depreciation, depletion and amortization
5,391

 
44,935

 
10,595

 
93,013

Accretion of asset retirement obligations
30,343

 
43,614

 
63,918

 
86,398

(Gain) loss on settlement of asset retirement obligations
19,412

 
13,875

 
54,465

 
(61,730
)
Total operating costs and expenses
256,472

 
310,386

 
426,457

 
549,608

 
 
 
 
 
 
 
 
Net loss
$
(234,254
)
 
$
(96,067
)
 
$
(378,635
)
 
$
(80,134
)
 
 
 
 
 
 
 
 
Net loss allocated to partners
$
(234,254
)
 
$
(96,067
)
 
$
(378,635
)
 
$
(80,134
)
Less: Managing General Partner interest in net loss
(86,674
)
 
(35,546
)
 
(140,095
)
 
(29,650
)
Net loss allocated to Investor Partners
$
(147,580
)
 
$
(60,521
)
 
$
(238,540
)
 
$
(50,484
)
 
 
 
 
 
 
 
 
Net loss per Investor Partner unit
$
(32.82
)
 
$
(13.46
)
 
$
(53.04
)
 
$
(11.23
)
 
 
 
 
 
 
 
 
Investor Partner units outstanding
4,497

 
4,497

 
4,497

 
4,497






See accompanying notes to unaudited condensed financial statements.

- 3-


Rockies Region 2006 Limited Partnership
Condensed Statement of Partners' Equity (Deficit)
(unaudited)
 
 
Six Months Ended June 30, 2018
 
 
 
 
Managing
 
 
 
 
Investor
 
General
 
 
 
 
Partners
 
Partner
 
Total
 
 
 
 
 
 
 
Balance, December 31, 2017
 
$
3,788,354

 
$
(5,610,035
)
 
$
(1,821,681
)
 
 
 
 
 
 
 
Net loss
 
(238,540
)
 
(140,095
)
 
(378,635
)
 
 
 
 
 
 
 
Balance, June 30, 2018
 
$
3,549,814

 
$
(5,750,130
)
 
$
(2,200,316
)




See accompanying notes to unaudited condensed financial statements.


- 4-


Rockies Region 2006 Limited Partnership
Condensed Statements of Cash Flows
(unaudited)
 
Six Months Ended June 30,
 
2018
 
2017
Cash flows from operating activities:
 
 
 
Net loss
$
(378,635
)
 
$
(80,134
)
Adjustments to net loss to reconcile to net cash from operating activities:
 
 
 
Depreciation, depletion and amortization
10,595

 
93,013

Accretion of asset retirement obligations
63,918

 
86,398

(Gain) loss on settlement of asset retirement obligations
54,465

 
(61,730
)
Changes in assets and liabilities:
 
 
 
Accounts receivable
47,748

 
2,988

Crude oil inventory
(7,776
)
 
35,994

Asset retirement obligations
(197,687
)
 
(163,413
)
Due to Managing General Partner, net
436,988

 
84,900

Net cash from operating activities
29,616

 
(1,984
)
 
 
 
 
Cash flows from investing activities:
 
 
 
Capital expenditures for crude oil and natural gas properties
(57,325
)
 

Proceeds from sales of well equipment
26,522

 

Net cash from investing activities
(30,803
)
 

 
 
 
 
Net change in cash and cash equivalents
(1,187
)
 
(1,984
)
Cash and cash equivalents, beginning of period
7,602

 
11,215

Cash and cash equivalents, end of period
$
6,415

 
$
9,231

 
 
 
 
Supplemental cash flow information:
 
 
 
Non-cash investing activities:
 
 
 
Change in due to managing general partner, net
related to purchases of properties and equipment
$
21,028

 
$

Change in due to managing general partner, net
related to sales of well equipment
$
(3,466
)
 
$

 
 
 
 




See accompanying notes to unaudited condensed financial statements.


- 5-




ROCKIES REGION 2006 LIMITED PARTNERSHIP
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
June 30, 2018
(unaudited)


Note 1 - General and Basis of Presentation

Rockies Region 2006 Limited Partnership (this “Partnership” or the “Registrant”) was organized in 2006 as a limited partnership, in accordance with the laws of the State of West Virginia, for the purpose of engaging in the exploration and development of crude oil and natural gas properties. Business operations commenced upon closing of an offering for the private placement of Partnership units. Upon funding, this Partnership entered into a Drilling and Operating Agreement (“D&O Agreement”) with the Managing General Partner which authorizes PDC to conduct and manage this Partnership's business. In accordance with the terms of the Limited Partnership Agreement (the “Agreement”), the Managing General Partner is authorized to manage all activities of this Partnership and initiates and completes substantially all Partnership transactions, subject to the following paragraph.

On May 7, 2018, the Managing General Partner entered into an agreement with Bridgepoint Consulting LLC (“Bridgepoint”). Bridgepoint has designated Karen Nicolaou to serve as the “Responsible Party” for this Partnership. Ms. Nicolaou has more than 20 years of experience in providing restructuring advisory services and has previously served as Responsible Party for other partnerships for which PDC was the Managing General Partner. In her capacity as the Responsible Party, Ms. Nicolaou will make all material decisions regarding this Partnership and has the authority, among other things, to analyze the books and records of this Partnership, analyze potential restructuring and divestiture options, including but not limited to filing bankruptcy, and enter into and execute definitive documents to effect such transactions, or direct the Managing General Partner to do the above.

As of June 30, 2018, there were 1,976 limited partners ("Investor Partners") in this Partnership. PDC is the designated Managing General Partner of this Partnership and owns a 37 percent Managing General Partner ownership in this Partnership. According to the terms of the Agreement, revenues, costs and cash distributions of this Partnership are allocated 63 percent to the Investor Partners, which are shared pro rata based upon the number of units in this Partnership, and 37 percent to the Managing General Partner. The Managing General Partner may repurchase Investor Partner units under certain circumstances provided by the Agreement, upon request of an individual Investor Partner. The formula for the repurchase price is set at a minimum of four times the most recent 12 months of cash distributions. Due to the suspension of cash distributions during the second quarter of 2015, there is no value upon which to base further calculations, and therefore, no repurchase offers are currently being considered. On a cumulative basis, through June 30, 2018, the Managing General Partner has repurchased 204 units of Partnership interest from the Investor Partners at an average price of $1,914 per unit. As of June 30, 2018, the Managing General Partner owned a total of approximately 40 percent of this Partnership, which includes its 37 percent Managing General Partner interest and approximately three percent of Limited Partner Interests it has repurchased from the Investor Partners.

In the Managing General Partner's opinion, the accompanying condensed financial statements contain all adjustments consisting of only normal recurring adjustments necessary for a fair statement of this Partnership's results for interim periods in accordance with accounting principles generally accepted in the United States of America ("U.S. GAAP") and with the instructions to Form 10-Q and Article 8 of Regulation S-X of the SEC. Accordingly, pursuant to such rules and regulations, certain notes and other financial information included in the audited financial statements have been condensed or omitted. The December 31, 2017 condensed balance sheet data was derived from this Partnership's audited financial statements, but does not include disclosures required by U.S. GAAP. The information presented in this Quarterly Report on Form 10-Q should be read in conjunction with this Partnership's audited financial statements and notes thereto included in this Partnership's 2017 Form 10-K. This Partnership's accounting policies are described in the Notes to Financial Statements in this Partnership's 2017 Form 10-K and updated, as necessary, in this Quarterly Report on Form 10-Q. The results of operations and cash flows for the six months ended June 30, 2018 are not necessarily indicative of the results to be expected for the full year or any future period.

Certain immaterial reclassifications have been made to the prior period condensed statement of cash flows to conform to the current period presentation. The reclassifications had no impact on previously reported financial results.


- 6-




ROCKIES REGION 2006 LIMITED PARTNERSHIP
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
June 30, 2018
(unaudited)

Note 2 - Going Concern

This Partnership has historically funded its operations with cash flows from operations. This Partnership’s most significant cash outlays have related to its operating expenses, capital expenditures and plugging and abandonment of wells. This Partnership's cash flows provided by operations were $30,000 for the six months ended June 30, 2018 and it had a cash deficit of $2,000 for the six months ended June 30, 2017. This Partnership had working capital deficits of $1,901,000 and $1,255,000 as of June 30, 2018 and December 31, 2017, respectively. The negative impact to its liquidity resulting from elevated gathering system line pressure and current commodity prices raises substantial doubt about this Partnership’s ability to continue as a going concern. As the cash outlays for plugging and abandoning wells over the next several years are expected to be significant, this applies further strain on the overall liquidity of this Partnership. The Managing General Partner believes that cash flows from operations will not be sufficient to meet this Partnership’s obligations largely because of the expenditures required to plug and abandon uneconomic wells, absent a major change in circumstances as described below. Any deficits in available cash flows generated by this Partnership's operations are currently being funded by the Managing General Partner, to the extent necessary. The Managing General Partner will recover amounts funded from future cash flows of this Partnership, to the extent available.

One of this Partnership's most significant obligations is to the Managing General Partner for reimbursement of costs paid on behalf of this Partnership by the Managing General Partner. Such amounts are paid to third parties for general and administrative expenses, well equipment, operating costs and plugging and abandonment costs, as well as monthly operating fees payable to the Managing General Partner. This Partnership's quarterly cash distributions to the Investor Partners and Managing General Partner have been suspended and this suspension is expected to continue until such time, if ever, that cash flows can reasonably be expected to support the necessary costs of expected plugging and abandoning of the wells that are becoming unproductive and any capital investments required for regulatory compliance, and this Partnership becomes current on its obligations.

The ability of this Partnership to continue as a going concern is dependent upon its ability to attain a satisfactory level of cash flows from operations. Greater cash flows would most likely occur from a sustained increase in production and improved commodity pricing. Historically, during times of normalized gathering system line pressures, as a result of the normal production decline in a well's production life cycle, this Partnership has not experienced a sustained increase in production without substantial amounts of capital expenditures.

In accordance with the agreement that the Managing General Partner entered into with Bridgepoint, Ms. Nicolaou will make all material decisions regarding this Partnership and has the authority, among other things, to analyze the books and records of this Partnership, analyze potential restructuring and divestiture options, including but not limited to filing bankruptcy, and enter into and execute definitive documents to effect such transactions, or direct the Managing General Partner to do so. Accordingly, Ms. Nicolaou is considering various options to potentially mitigate risks impacting this Partnership’s ability to continue as a going concern. There can be no assurance that this Partnership will be able to mitigate such conditions. Failure to do so could result in a partial asset sale or some form of bankruptcy, liquidation, or dissolution of this Partnership.

The accompanying financial statements have been prepared on a going concern basis of accounting, which contemplates continuity of operations, realization of assets and satisfaction of liabilities and commitments in the normal course of business. The financial statements do not reflect any adjustments that might result if this Partnership is unable to continue as a going concern.

- 7-




ROCKIES REGION 2006 LIMITED PARTNERSHIP
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
June 30, 2018
(unaudited)

Note 3 - Summary of Significant Accounting Policies

Recently Adopted Accounting Standard

In May 2014, the Financial Accounting Standards Board issued its standard on revenue recognition that provides a comprehensive model that entities will apply to determine the measurement of revenue and timing of when it is recognized. The standard has been updated and now includes technical corrections. The underlying principle is that an entity will recognize revenue to depict the transfer of goods or services to customers at an amount that the entity expects to be entitled to in exchange for those goods or services. The standard outlines a five-step approach to apply the underlying principle: (1) identify the contract with the customer, (2) identify the separate performance obligations in the contract, (3) determine the transaction price, (4) allocate the transaction price to separate performance obligations and (5) recognize revenue when (or as) each performance obligation is satisfied. This Partnership adopted the standard effective January 1, 2018. In order to evaluate the impact that the adoption of the revenue standard had on this Partnership's financial statements, the Managing General Partner performed a comprehensive review of its significant revenue streams. The focus of this review included, among other things, the identification of the significant contracts and other arrangements this Partnership has with its customers to identify performance obligations and principal versus agent considerations and factors affecting the determination of the transaction price. The Managing General Partner also reviewed this Partnership's current accounting policies, procedures and controls with respect to these contracts and arrangements to determine what changes, if any, would be required by the adoption of the revenue standard. This Partnership adopted the standard under the modified retrospective method. Based on the review, adoption of the standard did not impact this Partnership's 2017 results of operations. Upon adoption, no adjustment to the opening balance of this Partnership's retained deficit was deemed necessary.

Note 4 - Fair Value Measurements

This Partnership's fair value measurements were estimated pursuant to a fair value hierarchy that requires this Partnership to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The valuation hierarchy is based upon the transparency of inputs to the valuation of an asset or liability as of the measurement date, giving the highest priority to quoted prices in active markets (Level 1) and the lowest priority to unobservable data (Level 3). In some cases, the inputs used to measure fair value might fall in different levels of the fair value hierarchy. In these cases, the lowest level input that is significant to a fair value measurement in its entirety determines the applicable level in the fair value hierarchy. Assessing the significance of a particular input to the fair value measurement in its entirety requires judgment, considering factors specific to the asset or liability and may affect the valuation of the assets and liabilities and their placement within the fair value hierarchy levels.

The Managing General Partner utilizes fair value, on a non-recurring basis, to perform impairment testing on this Partnership's crude oil and natural gas properties by comparing carrying value to estimated undiscounted future net cash flows. If carrying value exceeds undiscounted future net cash flows, the measurement of impairment is based on estimated fair value and is measured by the amount by which the carrying value exceeds the estimated fair value.


- 8-




ROCKIES REGION 2006 LIMITED PARTNERSHIP
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
June 30, 2018
(unaudited)

Note 5 - Asset Retirement Obligations

The following table presents the changes in carrying amounts of the asset retirement obligations associated with this Partnership's working interest in crude oil and natural gas properties:

 
Amount
 
 
Balance at December 31, 2017
$
2,021,598

Obligations discharged with asset retirements
(143,222
)
Accretion expense
63,918

Balance at June 30, 2018
1,942,294

Less current portion
550,000

Long-term portion
$
1,392,294


This Partnership's estimated asset retirement obligations liability is based on the Managing General Partner's historical experience in plugging and abandoning this Partnership's wells, estimated economic lives and estimated plugging and abandonment costs considering federal and state regulatory requirements in effect. The liability is discounted using the credit-adjusted risk-free rate estimated at the time the liability is incurred or revised. To the extent future revisions to these assumptions impact the present value of the existing asset retirement obligations liability, a corresponding adjustment is made to the properties and equipment balance. Changes in the liability due to the passage of time are recognized as an increase in the carrying amount of the liability and as corresponding accretion expense. The current portion of the asset retirement obligations relates to 11 wells that are expected to be plugged and abandoned during the next 12 months.

During the six months ended June 30, 2018, this Partnership plugged and abandoned three wells and continued reclamation efforts on certain wells that were plugged and abandoned in 2017 for a total estimated cost of approximately $198,000. Upon plugging and abandoning the three wells in 2018, this Partnership relieved the related asset retirement obligations liability of approximately $143,000, resulting in a loss on settlement of asset retirement obligations of approximately $55,000

Note 6 - Commitments and Contingencies

Legal Proceedings

Neither this Partnership nor PDC, in its capacity as the Managing General Partner of this Partnership, is party to any pending legal proceeding, except as provided herein, that PDC believes would have a materially adverse effect on this Partnership's business, financial condition, results of operations or liquidity.

Derivative Action

In December 2017, PDC received an action entitled Dufresne, et al. v. PDC Energy, et al., filed in the United States District Court for the District of Colorado. The original complaint was brought by a number of limited partner investors seeking to assert derivative claims on behalf of this Partnership against PDC and alleging claims for breach of fiduciary duty and breach of contract. The plaintiffs also included claims against two of PDC's senior officers for alleged breach of fiduciary duty. The lawsuit accuses PDC, as the managing general partner of this Partnership, of, among other things, failing to maximize the productivity of this Partnership's crude oil and natural gas wells.

- 9-




ROCKIES REGION 2006 LIMITED PARTNERSHIP
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
June 30, 2018
(unaudited)

PDC filed a motion to dismiss the lawsuit on February 1, 2018, on the grounds that the complaint is deficient, including because the plaintiffs failed to allege that PDC refused a demand to take action on their claims. On March 14, 2018, the motion was denied as moot by the court because the plaintiffs requested leave to amend their complaint. In late April 2018, the plaintiffs filed an amendment to their complaint.  Such amendment alleged additional facts to support the plaintiffs’ claims and purports to add direct class action claims in addition to the original derivative claims. The amendment also added three new individual defendants, all of which are currently independent members of PDC's Board of Directors. PDC filed a motion to dismiss the amended complaint and, in response, the plaintiffs filed a second amended complaint on July 10, 2018. On July 31, 2018, PDC filed a motion to dismiss this second amended complaint and the claims against the individuals named as defendants. This motion has not yet been decided by the court. Potential damages as a result of this lawsuit, if any, would be paid by PDC and should not affect this Partnership.

Environmental

Due to the nature of the natural gas and oil industry, this Partnership is exposed to environmental risks. The Managing General Partner has various policies and procedures to minimize and mitigate the risks from environmental contamination. The Managing General Partner conducts periodic reviews and simulated drills to identify changes in this Partnership's environmental risk profile. Liabilities are recorded when environmental damages resulting from past events are probable and the costs can be reasonably estimated. Except as discussed herein, the Managing General Partner is not aware of any material environmental claims existing as of June 30, 2018 which have not been provided for or would otherwise have a material impact on this Partnership's financial statements; however, there can be no assurance that current regulatory requirements will not change or that unknown potential past non-compliance with environmental laws or other environmental liabilities will not be discovered on this Partnership's properties. The liability ultimately incurred with respect to a matter may exceed the related accrual.

Clean Air Act Tentative Agreement and Related Consent Decree

In August 2015, the Managing General Partner received a Clean Air Act Section 114 Information Request (the "Information Request") from the U.S. Environmental Protection Agency ("EPA"). The Information Request sought, among other things, information related to the design, operation and maintenance of this Partnership's Wattenberg Field production facilities in the Denver-Julesburg Basin of Colorado ("DJ Basin"). The Information Request focused on historical operation and design information at certain of the Managing General Partner's production facilities and asked that the Managing General Partner conduct sampling and analyses at these facilities. The Managing General Partner responded to the Information Request with the requested data in January 2016.
  
In addition, in December 2015, the Managing General Partner received a Compliance Advisory pursuant to C.R.S. 25-7-115(2) from the Colorado Department of Public Health and Environment's Air Quality Control Commission's Air Pollution Control Division alleging that the Managing General Partner failed to design, operate and maintain certain condensate collection, storage, processing and handling operations to minimize leakage of volatile organic compounds at certain production facilities consistent with applicable standards under Colorado law.

In June 2017, the U.S. Department of Justice, on behalf of the EPA and the State of Colorado, filed a complaint against the Managing General Partner in the U.S. District Court for the District of Colorado, claiming that the Managing General Partner failed to operate and maintain certain condensate collection facilities at certain production facilities so as to minimize leakage of volatile organic compounds in compliance with applicable law. In October 2017, the Managing General Partner entered into a consent decree to resolve the lawsuit. Pursuant to the consent decree, the Managing General Partner agreed to implement a variety of operational enhancements and mitigation and similar projects, including vapor control system modifications and verification, increased inspection and monitoring and installation of tank pressure monitors. The three primary elements of the consent decree are: (i) fine/supplemental environmental projects; (ii) injunctive relief; and (iii) mitigation.


- 10-




ROCKIES REGION 2006 LIMITED PARTNERSHIP
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
June 30, 2018
(unaudited)

The Managing General Partner will pay the total amount of the fine and costs associated with the supplemental environmental projects. This Partnership will share proportionally in the injunctive relief and the mitigation costs required by the consent decree. The consent decree includes 33 of this Partnership's wells, of which seven may incur such costs. The profitability of additional older, lower production wells, such as those owned by this Partnership, would likely be affected in a negative manner by the required costs associated with the injunctive relief and mitigation, which could result in the decision to plug and abandon some or all of those wells, rather than make investments in the wells necessary to comply with the consent decree.

Note 7 - Transactions with Managing General Partner

The Managing General Partner transacts business on behalf of this Partnership under the authority of the D&O and Partnership Agreements. Revenues and other cash inflows received by the Managing General Partner on behalf of this Partnership are distributed to this Partnership, net of corresponding operating costs and other cash outflows incurred on behalf of this Partnership.

This Partnership's net amount due to the Managing General Partner was approximately $1,397,000 and $943,000 as of June 30, 2018 and December 31, 2017, respectively. The majority of the amount is past due and represents operating costs, investments in crude oil and natural gas properties, plugging and abandonment costs and general and administrative and other costs that have not been deducted from distributions due to the lack of revenue and available cash flow.

A “Well operations and maintenance” fee is charged by the Managing General Partner for the operation of this Partnership's wells and is included in the “Lease operating expenses” line item on the condensed statements of operations. The fees for well operating and maintenance for the six months ended June 30, 2018 and 2017 were approximately $13,000 and $96,000, respectively.


- 11-


ROCKIES REGION 2006 LIMITED PARTNERSHIP
(A West Virginia Limited Partnership)


Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Partnership Overview

This Partnership engages in the development, production and sale of crude oil, natural gas and NGLs. This Partnership began crude oil and natural gas operations in September 2006 and currently operates 41 gross (40.9 net) wells located in the Wattenberg Field of Colorado, of which 38 were shut-in as of June 30, 2018 due to elevated gathering system line pressures. The Managing General Partner markets this Partnership's crude oil, natural gas and NGL production to midstream marketers. Crude oil, natural gas and NGLs are sold primarily under market-based contracts in which the price varies as a result of market forces. Seasonal factors, such as effects of weather on realized commodity prices, availability of third-party owned pipeline capacity and other factors such as elevated line pressures in the gathering system, whether caused by heat or third-party capacity issues, may impact this Partnership's results.
Partnership Operating Results Overview

This Partnership’s operations for the three and six months ended June 30, 2018 were impacted by a number of noteworthy items. Aggregate crude oil, natural gas and NGLs production decreased 91 percent for both the three and six months ended June 30, 2018, compared to the comparable three and six months ended June 30, 2017. The primary driver for the decrease in production was continued elevated gathering system line pressures. This Partnership’s midstream service provider is currently processing at full capacity and basin-wide development and production continues to increase; therefore, gathering system line pressures continue to remain elevated.

During the six months ended June 30, 2018, this Partnership’s reclamation efforts continued on certain wells that had been plugged and abandoned during 2017. Three wells were plugged and abandoned during the three months ended March 31, 2018. No wells were plugged and abandoned during the three months ended June 30, 2018. Although this Partnership had no new plugged and abandoned wells during the three months ended June 30, 2018, a loss on settlement of asset retirement obligations of approximately $19,000 was recognized as this Partnership continued reclamation efforts on wells plugged during previous periods and has recorded a loss on settlement of asset retirement obligations of approximately $55,000 for the six months ended June 30, 2018. See Gain/Loss on Settlement of Asset Retirement Obligations included elsewhere in this report.

When considering the current commodity price environment, the significantly elevated gathering system line pressures, operating costs, production taxes, direct costs - general and administrative and the costs incurred and expected to be incurred for future plugging and abandonment of wells, the Managing General Partner does not believe that this Partnership will be able to achieve positive net cash flows in the foreseeable future. Accordingly, this Partnership has suspended cash distributions until such time, if at all, that cash flows can reasonably be expected to support the necessary costs of operations and the expected plugging and abandoning of the wells that are becoming unproductive and/or the required capital investments for regulatory requirements and this Partnership becomes current on its obligations. Because of the projected negative net cash flows, there is substantial doubt about this Partnership’s ability to continue as a going concern. See footnote Going Concern to the financial statements included elsewhere in this report.

In accordance with the agreement that the Managing General Partner entered into with Bridgepoint, Ms. Nicolaou will make all material decisions regarding this Partnership and has the authority, among other things, to analyze the books and records of this Partnership, analyze potential restructuring and divestiture options, including but not limited to filing bankruptcy, and enter into and execute definitive documents to effect such transactions, or direct the Managing General Partner to do so. Accordingly, Ms. Nicolaou is considering various options to potentially mitigate risks impacting this Partnership’s ability to continue as a going concern. There can be no assurance that this Partnership will be able to mitigate such conditions. Failure to do so could result in a partial asset sale or some form of bankruptcy, liquidation, or dissolution of this Partnership.

- 12-


ROCKIES REGION 2006 LIMITED PARTNERSHIP
(A West Virginia Limited Partnership)


Results of Operations

Summary Operating Results

The following table presents selected information regarding this Partnership’s results of operations:
 
Three months ended June 30,
Six months ended June 30,
 
2018
 
2017
 
 Change
2018
 
2017
 
 Change
Number of gross productive wells (end of period) (1)
41

 
55

 
(25
)%
41

 
55

 
(25
)%
Production
 
 
 
 
 
 
 
 
 
 
Crude oil (Bbl)
254

 
3,441

 
(93
)%
601

 
7,213

 
(92
)%
Natural gas (Mcf)
1,303

 
12,019

 
(89
)%
2,387

 
24,921

 
(90
)%
NGLs (Bbl)
211

 
1,968

 
(89
)%
374

 
3,725

 
(90
)%
Crude oil equivalent (Boe)
682

 
7,412

 
(91
)%
1,373

 
15,091

 
(91
)%
 
 
 
 
 
 
 
 
 
 
 
Crude oil, natural gas and NGLs sales
 
 
 
 
 
 
 
 
 
 
Crude oil
$
16,432

 
$
158,250

 
(90
)%
$
37,012

 
$
347,848

 
(89
)%
Natural gas
2,014

 
28,254

 
(93
)%
4,123

 
60,948

 
(93
)%
NGLs
3,772

 
27,815

 
(86
)%
6,687

 
60,678

 
(89
)%
Total crude oil, natural gas and NGLs sales
$
22,218

 
$
214,319

 
(90
)%
$
47,822

 
$
469,474

 
(90
)%
 
 
 
 
 
 
 
 
 
 
 
Average selling price
 
 
 
 
 
 
 
 
 
 
Crude oil (per Bbl)
$
64.69

 
$
45.99

 
41
 %
$
61.58

 
$
48.23

 
28
 %
Natural gas (per Mcf)
1.55

 
2.35

 
(34
)%
$
1.73

 
$
2.45

 
(29
)%
NGLs (per Bbl)
17.88

 
14.13

 
27
 %
$
17.88

 
$
16.29

 
10
 %
Crude oil equivalent (per Boe)
32.58

 
28.92

 
13
 %
$
34.83

 
$
31.11

 
12
 %
 
 
 
 
 
 
 
 
 
 
 
Average cost per Boe
 
 
 
 
 
 
 
 
 
 
Lease operating expenses
$
110.58

 
$
22.08

 
*

$
106.19

 
$
21.94

 
*

Production taxes
(0.08
)
 
1.88

 
(104
)%
0.43

 
1.50

 
(71
)%
Depreciation, depletion and amortization
7.90

 
6.06

 
30
 %
7.72

 
6.16

 
25
 %

*Percentage change is not meaningful.
Amounts may not recalculate due to rounding.

(1) Represents the number of wells capable of producing hydrocarbons at the end of the period, regardless of whether such wells were productive during the periods shown.

Definitions used throughout Management’s Discussion and Analysis of Financial Condition and Results of Operations:

Bbl - One barrel of crude oil or NGLs or 42 gallons of liquid volume.
Boe - Barrels of crude oil equivalent.
Mcf - One thousand cubic feet of natural gas volume.
NGLs - Natural gas liquids.
NYMEX - New York Mercantile Exchange


- 13-


ROCKIES REGION 2006 LIMITED PARTNERSHIP
(A West Virginia Limited Partnership)


Crude Oil, Natural Gas and NGLs Sales    
    
Changes in Crude Oil, Natural Gas and NGLs Production Volumes. For the six months ended June 30, 2018 as compared to the six months ended June 30, 2017, crude oil, natural gas and NGLs production, decreased 91 percent, primarily resulting from elevated gathering system line pressures. This Partnership had production from 12 wells during the six months ended June 30, 2018 and had 38 wells shut-in as of June 30, 2018. Production for the six months ended June 30, 2017 from wells plugged during the six months ended June 30, 2018 was not significant.

This Partnership's wells are particularly susceptible to elevated gathering system line pressures. The associated production equipment for its wells can only operate up to a certain system line pressure, at which point shut-in safety measures must be taken. Gathering system line pressures for this Partnership's wells have significantly increased during the six months ended June 30, 2018 compared to the six months ended June 30, 2017. The current elevated gathering line pressures have led to the shut-in of 38 of this Partnership's wells as of June 30, 2018. Meanwhile, Partnership’s midstream service provider is currently processing at full capacity and field-wide production activity remains high; therefore, line pressures are expected to continue to be at elevated levels.

In order to manage the impact of the increased line pressures, the Managing General Partner, along with other major operators in the Wattenberg Field, continues to work closely with this Partnership's third-party midstream provider in an effort to ensure adequate system capacity going forward, evidenced by a commitment from the midstream provider to build additional gathering and processing capacity in the field. These expansions are expected to increase the midstream provider's system capacity, assist in the control of line pressures and reduce production curtailments in the field. A new plant was placed in service in August 2018. The in-service date of the midstream provider's next plant is currently scheduled to occur in the second quarter of 2019; however, the Managing General Partner expects that line pressures will remain elevated until the new plants are placed in service, causing continued impacts to this Partnership’s production and the potential for lengthy shut-in periods for certain of this Partnership's wells. With current and expected ongoing horizontal development in the field, this increase in capacity may not offset all of the production increases expected in the Wattenberg Field. Although the Managing General Partner believes that some of this Partnership's currently shut-in wells could resume production once the new plant begins operating at full capacity, this may not provide enough long-term relief in line pressure to have a lasting positive effect on this Partnership's vertical wells. There is a risk that after having this plant placed into service that line pressure relief will not attain the levels necessary for this Partnership's wells to increase production, or that this Partnership's wells will not respond to the lower pressures. This could result in a future impairment of this Partnership's crude oil and natural gas properties. The timing and availability of adequate gathering infrastructure is not within the Managing General Partner’s or this Partnership’s control and if the midstream service providers' construction projects are delayed, this Partnership could experience elevated gathering line pressures for extended periods of time.
        
    Crude Oil, Natural Gas and NGLs Pricing. This Partnership's results of operations depend upon many factors, including the price of crude oil, natural gas and NGLs and the Managing General Partner's ability to market this Partnership's production effectively. Crude oil, natural gas and NGLs prices are among the most volatile of all commodity prices. During the six months ended June 30, 2018 compared to the same period in 2017 and primarily due to improvements in the NYMEX index price for crude oil, the price this Partnership received for its crude oil per Bbl and NGLs per Bbl increased 28 percent and 10 percent, respectively. During the same periods, the price this Partnership received for its natural gas per Mcf decreased 29 percent.
    

- 14-


ROCKIES REGION 2006 LIMITED PARTNERSHIP
(A West Virginia Limited Partnership)



Crude Oil, Natural Gas and NGLs Production Costs

Total production costs, which consist of lease operating expenses and production taxes, vary with changes in production volumes and crude oil, natural gas and NGLs sales. General oil field services and all other costs vary and can fluctuate based on services required, but are expected to increase as wells age and require more extensive repair and maintenance. These costs include water hauling and disposal, equipment repairs and maintenance, environmental compliance and remediation and service rig workovers. Fixed monthly well operating costs on a per unit basis increase as production decreases. Production taxes vary directly with crude oil, natural gas and NGLs sales and effective tax rates. Production taxes are estimated by the Managing General Partner based on tax rates determined using published information and are subject to revision based on actual amounts determined during future filings by the Managing General Partner with taxing authorities.

Three months ended June 30, 2018 as compared to three months ended June 30, 2017

Total lease operating expenses for the three months ended June 30, 2018 decreased approximately $88,000 compared to the same period in 2017, primarily due to the decrease in the number of wells producing in 2018 resulting from elevated gathering system line pressures and plugging and abandonment activities. Fewer producing wells also resulted in lower well operating and maintenance fees being charged by the Managing General Partner. The decrease in production taxes resulted from a positive true-up of a prior year's estimated production taxes along with a 90 percent decrease in crude oil, natural gas and NGLs sales during the three months ended June 30, 2018 as compared to the same period in 2017.

Six months ended June 30, 2018 as compared to six months ended June 30, 2017

Total lease operating expenses for the six months ended June 30, 2018 decreased approximately $185,000 compared to the same period in 2017, primarily due to the decrease in the number of wells producing in 2018 resulting from elevated gathering system line pressures and plugging and abandonment activities. Fewer producing wells also resulted in lower well operating and maintenance fees being charged by the Managing General Partner. The decrease in production taxes resulted from a positive true-up of a prior year's estimated production taxes along with a 90 percent decrease in crude oil, natural gas and NGLs sales during the six months ended June 30, 2018 as compared to the same period in 2017.
    
Direct costs - general and administrative

Three months ended June 30, 2018 as compared to three months ended June 30, 2017

Direct costs - general and administrative for the three months ended June 30, 2018 increased approximately $96,000 compared to the same period in 2017. This Partnership paid retainer fees of $35,000 to this Partnership's Responsible Party and $70,000 to the Responsible Party's law firm, pursuant to the agreement with Bridgepoint. These legal fees were partially offset by lower audit-related fees.

Six months ended June 30, 2018 as compared to six months ended June 30, 2017

Direct costs - general and administrative for the six months ended June 30, 2018 increased approximately $73,000 compared to the same period in 2017. This Partnership paid retainer fees of $35,000 to this Partnership's Responsible Party and $70,000 to the Responsible Party's law firm, pursuant to the agreement with Bridgepoint. These legal fees were partially offset by lower audit-related fees and tax preparation fees.

Depreciation, Depletion and Amortization

Three months ended June 30, 2018 as compared to three months ended June 30, 2017

Depreciation, depletion and amortization ("DD&A") expense decreased for the three months ended June 30, 2018 compared to the three months ended June 30, 2017 due to the 91 percent decrease in production. The DD&A expense rate per Boe increased to $7.90 for the three months ended June 30, 2018 as compared to $6.06 during the same period in 2017.


- 15-


ROCKIES REGION 2006 LIMITED PARTNERSHIP
(A West Virginia Limited Partnership)


Six months ended June 30, 2018 as compared to six months ended June 30, 2017

Depreciation, depletion and amortization expense decreased for the six months ended June 30, 2018 compared to the six months ended June 30, 2017 due to the 91 percent decrease in production. The DD&A expense rate per Boe increased to $7.72 for the six months ended June 30, 2018 as compared to $6.16 during the same period in 2017.

Asset Retirement Obligations
    
The current portion of the asset retirement obligations of $550,000 relates to 11 of this Partnership's wells that the Managing General Partner expects to be plugged and abandoned during the next 12 months. These wells are expected to be uneconomic to operate given current commodity prices and the negative impact of elevated gathering system line pressures on productivity. The costs to plug and abandon wells over the next 12 months are expected to result in a significant cash outflow for this Partnership. Since the costs of plugging and abandonment activities exceed current cash balances and cash flows from operations, the Managing General Partner expects to fund such activities. The Managing General Partner would then recover amounts funded from future cash flows of this Partnership, if available.

Gain/Loss on Settlement of Asset Retirement Obligations

Three months ended June 30, 2018 as compared to three months ended June 30, 2017

During the three months ended June 30, 2018, this Partnership did not plug and abandon any wells. This Partnership continued to incur costs for reclamation efforts on three wells plugged and abandoned during the three months ended March 31, 2018 and for certain wells plugged and abandoned in 2017. The additional costs resulted in a loss on settlement of asset retirement obligations of approximately $19,000 during the three months ended June 30, 2018 compared to $14,000 loss during the three months ended June 30, 2017. 

Six months ended June 30, 2018 as compared to six months ended June 30, 2017

During the six months ended June 30, 2018, this Partnership plugged and abandoned three wells and continued the reclamation efforts for certain wells plugged and abandoned in 2017, incurring an estimated cost of approximately $198,000. Upon plugging and abandoning the three wells in 2018, this Partnership relieved the related asset retirement obligations liability of approximately $143,000, resulting in a loss on settlement of asset retirement obligations of approximately $55,000. During the six months ended June 30, 2017, this Partnership plugged and abandoned four wells for a total estimated cost of approximately $163,000, which were offset by the relief of the asset retirement obligations liability of approximately $225,000, resulting in a gain on settlement of asset retirement obligations of approximately $62,000.

Accretion Expense
    
Three months ended June 30, 2018 as compared to three months ended June 30, 2017

Asset retirement obligation accretion expense decreased approximately $13,000, or 30 percent, to approximately $30,000 during the three months ended June 30, 2018 compared to approximately $44,000 in 2017, primarily due to a reduction in the number of this Partnership's wells.

Six months ended June 30, 2018 as compared to six months ended June 30, 2017

Asset retirement obligation accretion expense decreased approximately $22,000, or 26 percent, to approximately $64,000 during the six months ended June 30, 2018 compared to approximately $86,000 in 2017, primarily due to a reduction in the number of this Partnership's wells.




- 16-


ROCKIES REGION 2006 LIMITED PARTNERSHIP
(A West Virginia Limited Partnership)


Financial Condition, Liquidity and Capital Resources

Historically, this Partnership's primary source of liquidity has been cash flows from operating activities. Fluctuations in this Partnership's operating cash flows are substantially driven by changes in commodity prices and sales volumes. This source of cash has been primarily used to fund this Partnership's operating costs, direct costs-general and administrative and capital expenditures.

Due to the trend of decreased liquidity that this Partnership has been experiencing in recent periods, and anticipated future expenditures required to remain compliant with certain regulatory requirements and costs of necessary plugging and abandonment activities, the Managing General Partner believes that projected cash flows from operations will be insufficient to meet this Partnership’s obligations. Crude oil and NGLs prices during the six months ended June 30, 2018 showed improvement relative to pricing experienced during 2017, with the effect of this increase offset partially by lower natural gas prices. This level of price improvement is not likely to be sufficient to alleviate concerns regarding this Partnership’s ability to meet its obligations.

Historically, this Partnership's operations were expected to be conducted with available funds and revenues generated from crude oil, natural gas and NGLs production activities. Crude oil, natural gas and NGLs production from existing properties are generally expected to continue a decline in the rate of production over the remaining life of the wells. These declines in production will be particularly significant during times of elevated gathering system line pressures, such as the present. Given the current operating environment, this Partnership anticipates a lower annual level of crude oil, natural gas and NGLs production due to the shut-in of wells and workovers being uneconomic to perform. Under these circumstances, a continuation of current production levels would have a material adverse impact on this Partnership's operations and, when combined with the requirements to plug and abandon wells, the decision has been made to continue the suspension of distributions from this Partnership, until such time, if ever, that cash flows can reasonably be expected to support the necessary costs of expected plugging and abandoning of the wells that are becoming unproductive and/or the required capital investments for regulatory requirements, and this Partnership becomes current on its obligations.
Working Capital

As of June 30, 2018, this Partnership had a working capital deficit of $1,901,000, compared to a working capital deficit of $1,255,000 as of December 31, 2017. The $646,000 increase in the working capital deficit from December 31, 2017, to June 30, 2018 was primarily due to:

a $455,000 increase in the amount due to Managing General Partner;
a $150,000 increase in the current portion of asset retirement obligations; and
a $48,000 decrease in accounts receivable.

Partially offset by:

an $8,000 increase in oil inventory.

Although the D&O Agreement permits this Partnership to borrow funds on its behalf for Partnership activities, the Managing General Partner does not anticipate funding a portion of this Partnership's activities through borrowings, nor is it likely that borrowings would be supportable based on the remaining asset composition of this Partnership.


- 17-


ROCKIES REGION 2006 LIMITED PARTNERSHIP
(A West Virginia Limited Partnership)


Cash Flows

Operating Activities

The net cash provided by operating activities was $30,000 for the six months ended June 30, 2018 compared to a net cash deficit of $2,000 from operating activities for the comparable period in 2017.

This Partnership's cash flows from operating activities for the six months ended June 30, 2018 were largely the result of an increase in the amount due to the Managing Partner related to capital expenditures for crude oil and natural gas properties.

Investing Activities

Cash flows from investing activities consist of investments in well equipment and proceeds received from the sale of equipment from wells that have been plugged and abandoned. This Partnership invests in equipment which supports treatment, delivery and measurement of crude oil, natural gas and NGLs or environmental protection. During the six months ended June 30, 2018, this Partnership's investment in well equipment was approximately $57,000 and its proceeds from the sale of equipment salvaged from wells that were recently plugged and abandoned were approximately $27,000. This Partnership had no cash flows from investing activities during the six months ended June 30, 2017.

Off-Balance Sheet Arrangements

As of June 30, 2018, this Partnership had no existing off-balance sheet arrangements, as defined under SEC rules, which have or are reasonably likely to have a material current or future effect on this Partnership's financial condition, results of operations, liquidity, capital expenditures, or capital resources.

Commitments and Contingencies

See the footnote titled Commitments and Contingencies to the financial statements included elsewhere in this report.

Recent Accounting Standards

See the footnote titled Summary of Significant Accounting Policies to the financial statements included elsewhere in this report.

Critical Accounting Policies and Estimates

The preparation of the accompanying condensed financial statements in conformity with U.S. GAAP requires management to use judgment in making estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities and the reported amounts of revenue and expenses.

There have been no significant changes to this Partnership's critical accounting policies and estimates or in the underlying accounting assumptions and estimates used in these critical accounting policies from those disclosed in the financial statements and accompanying notes contained in this Partnership's 2017 Form 10-K.


- 18-


ROCKIES REGION 2006 LIMITED PARTNERSHIP
(A West Virginia Limited Partnership)


Item 3. Quantitative and Qualitative Disclosures About Market Risk

Not applicable.

Item 4. Controls and Procedures

This Partnership has no direct management or officers. The management, officers and other employees that provide services on behalf of this Partnership are employed by the Managing General Partner.

(a)    Evaluation of Disclosure Controls and Procedures

As of June 30, 2018, PDC, as Managing General Partner on behalf of this Partnership, carried out an evaluation, under the supervision and with the participation of the Managing General Partner's management, including the Chief Executive Officer and the Chief Financial Officer, of the effectiveness of the design and operation of this Partnership's disclosure controls and procedures pursuant to Exchange Act Rules 13a-15(e) and 15d-15(e).

Based on the results of this evaluation, the Managing General Partner's Chief Executive Officer and Chief Financial Officer concluded that this Partnership's disclosure controls and procedures were effective as of June 30, 2018.

Management of the Managing General Partner is responsible for internal control over financial reporting of this Partnership as this Partnership shares the Managing General Partner's disclosure controls and procedures. As of December 31, 2017, the Managing General Partner carried out an evaluation under the supervision and with the participation of its management, including its Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of the Managing General Partner’s disclosure controls and procedures pursuant to Exchange Act Rules 13a-15(e) and 15d-15(e). Based on the results of this evaluation, its Chief Executive Officer and Chief Financial Officer concluded that the Managing General Partner’s disclosure controls and procedures were not effective as of December 31, 2017 because of material weaknesses in its internal control over financial reporting. The material weaknesses identified by management of the Managing General Partner did not impact this Partnership’s disclosure controls and procedures during any periods covered by this report.

(b)    Changes in Internal Control over Financial Reporting
 
During the three months ended June 30, 2018, PDC, the Managing General Partner, made no changes in this Partnership's internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act) that have materially affected or are reasonably likely to materially affect this Partnership's internal control over financial reporting.

- 19-


ROCKIES REGION 2006 LIMITED PARTNERSHIP
(A West Virginia Limited Partnership)



PART II – OTHER INFORMATION

Item 1.    Legal Proceedings

From time to time, this Partnership is a party to various legal proceedings in the ordinary course of business. See the footnote titled Commitments and Contingencies to the financial statements included elsewhere in this report.


Item 1A. Risk Factors

Not applicable.

Item 2.    Unregistered Sales of Equity Securities and Use of Proceeds

Unit Repurchase Provisions. Investor Partners may request that the Managing General Partner repurchase limited partnership units at any time beginning with the third anniversary of the first cash distribution of this Partnership. The repurchase price is set at a minimum of four times the most recent 12 months of cash distributions from production. In accordance with the Partnership Agreement, the Managing General Partner has elected to suspend cash distributions in order to fund the plugging and abandonment costs of Partnership wells. Since the formula for the repurchase price is set at a minimum of four times the most recent 12 months of cash distributions, due to the suspension of cash distributions, the Managing General Partner is currently unable to repurchase units as there is expected to be no value upon which to base the calculations, and therefore no repurchase offers are currently being considered. The Managing General Partner acquired 40 investor partner units from an Investor Partner during the three months ended June 30, 2018 for $125 per unit. This acquisition was not made through this Partnership's repurchase provision, but was part of a settlement agreement with this Investor Partner. Previously, in any calendar year the Managing General Partner was conditionally obligated to purchase Investor Partner units aggregating up to 10 percent of the initial subscriptions, if requested by an individual investor partner, subject to PDC's financial ability to do so and upon receipt of opinions of counsel that the repurchase will not cause this Partnership to be treated as a “publicly traded partnership” or result in the termination of this Partnership for federal income tax purposes. If accepted, repurchase requests are fulfilled by the Managing General Partner on a first-come, first-served basis.

Item 3.    Defaults Upon Senior Securities

Not applicable.

Item 4.    Mine Safety Disclosures

Not applicable.

Item 5.    Other Information

None.


- 20-


ROCKIES REGION 2006 LIMITED PARTNERSHIP
(A West Virginia Limited Partnership)


Item 6.    Exhibits Index
 
 
 
 
Incorporated by Reference
 
 
Exhibit
Number
 
Exhibit Description
 
Form
 
SEC File
Number
 
Exhibit
 
Filing Date
 
Filed
Herewith
 
 
 
 
 
 
 
 
 
 
 
 
 
10.1
 
 
 
 
 
 
 
 
 
 
X
 
 
 
 
 
 
 
 
 
 
 
 
 
31.1
 
 
 
 
 
 
 
 
 
 
X
 
 
 
 
 
 
 
 
 
 
 
 
 
31.2
 
 
 
 
 
 
 
 
 
 
X
 
 
 
 
 
 
 
 
 
 
 
 
 
32.1*
 
 
 
 
 
 
 
 
 
 

 
 
 
 
 
 
 
 
 
 
 
 
 
101.INS
 
XBRL Instance Document
 
 
 
 
 
 
 
 
 
X
 
 
 
 
 
 
 
 
 
 
 
 
 
101.SCH
 
XBRL Taxonomy Extension Schema Document
 
 
 
 
 
 
 
 
 
X
 
 
 
 
 
 
 
 
 
 
 
 
 
101.CAL
 
XBRL Taxonomy Extension Calculation Linkbase Document
 
 
 
 
 
 
 
 
 
X
 
 
 
 
 
 
 
 
 
 
 
 
 
101.DEF
 
XBRL Taxonomy Extension Definition Linkbase Document
 
 
 
 
 
 
 
 
 
X
 
 
 
 
 
 
 
 
 
 
 
 
 
101.LAB
 
XBRL Taxonomy Extension Label Linkbase Document
 
 
 
 
 
 
 
 
 
X
 
 
 
 
 
 
 
 
 
 
 
 
 
101.PRE
 
XBRL Taxonomy Extension Presentation Linkbase Document
 
 
 
 
 
 
 
 
 
X
*Furnished herewith.


- 21-


ROCKIES REGION 2006 LIMITED PARTNERSHIP
(A West Virginia Limited Partnership)




SIGNATURES
 
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Rockies Region 2006 Limited Partnership
By its Managing General Partner
PDC Energy, Inc.

 
By: /s/ Barton Brookman
 
 
Barton Brookman
President and Chief Executive Officer
of PDC Energy, Inc.
 
 
August 14, 2018
 
 
 
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated:


Signature
 
Title
Date
 
 
 
 
/s/ Barton Brookman
 
President, Chief Executive Officer and Director
August 14, 2018
Barton Brookman
 
PDC Energy, Inc.
Managing General Partner of the Registrant
 
 
 
(principal executive officer)
 
 
 
 
 
/s/ R. Scott Meyers
 
Senior Vice President and Chief Financial Officer
August 14, 2018
R. Scott Meyers
 
PDC Energy, Inc.
Managing General Partner of the Registrant
 
 
 
(principal financial officer)
 
 

- 22-
EX-10.1 2 bridgepoint.htm BRIDGEPOINT CONSULTING LLC AGREEMENT Exhibit



bridgepointimage1.jpg

Daniel W. Amidon, Esq. PDC Energy
1775 Sherman Street, Suite 3000 Denver, CO 80203

RE: Resolution and wind-down of Rockies Region 2006 Limited Partnership and the Rockies Region 2007 Limited Partnership (collectively, the "Partnerships")

Dear Mr. Amidon:

You have requested that Bridgepoint Consulting LLC ("BPC") provide certain financial advisory and managerial services for the Partnerships in relation to analyzing options for wind-down and/or divestiture of the Partnerships' operations and assets.

We appreciate your confidence in BPC, and want to ensure we exceed your expectations with regard to the services we will provide.

SCOPE OF SERVICES
As requested by you and agreed by BPC, BPC will provide Karen Nicolaou ("Nicolaou") to serve as the Responsible Party ("Responsible Party") for each of the Partnerships and will analyze all options available to wind-down the Partnerships, including analyzing all potential restructuring and divestiture options (which include, but are not limited to bankruptcy). As Responsible Party and independent fiduciary for the Partnerships, Nicolaou will serve as the authorized representative for each of the Partnerships with authority to oversee the Partnerships in determining the best course of action to wind-down the Partnerships, including overseeing all actions in connection with a potential bankruptcy filing or an auction sale of the Partnerships' assets. In the role of Responsible Party, Nicolaou will have the authority to perform all services necessary and consistent with her position, including but not limited to:

Exploring options for divesting of assets of the Partnerships and entering into and executing definitive documents to effect such sale; and
Analyzing the books and records of the Partnerships and resolving issues related to claims against and interests in the Partnerships.

The services provided will encompass all services normally and reasonably associated with this type of engagement consistent with our ethical obligations. PDC Energy, Inc. ("PDC") shall retain all other responsibilities as Managing General Partner of the Partnerships set forth in each
Partnership's Partnership Agreement, including but not limited to, oversight of the Partnerships' oil and gas operations.



In connection with this engagement, Nicolaou may retain counsel and such other experts, advisors and consultants as reasonably necessary and appropriate to assist her in providing the services described here. The choice of such professionals will be in Nicolaou's sole discretion, and the Partnerships agree to pay for any fees or expenses of such professionals, including any fees and expenses approved in a future bankruptcy proceeding.

PDC REPRESENTATIONS
PDC, as Managing General Partner of the Partnerships, hereby represents that it is authorized to retain Nicolaou as Responsible Party pursuant to the following sections of each Partnership's Partnership Agreement:

Section 5.01: PDC has broad authority to manage the affairs of the Partnership in a prudent and businesslike fashion;
Section 6.02: PDC is authorized to do any action or execute any document or enter into any contract or any agreement of any nature necessary or desirable ... in pursuance of the purposes of the Partnership;
Section 6.02(c): PDC is authorized to employ and retain such personnel as it deems desirable for the conduct of the Partnerships' activities, including employees, consultants and attorneys; and
Section 6.02(j): PDC is authorized to enter into agreements to hire services of any kind or nature.

The Partnerships and PDC shall provide BPC and the Responsible Party with access to all Partnership books and records, data, and other information in their possession necessary to perform the services contemplated by this agreement, as and when requested by the Responsible Party.

FEES
In consideration for any financial advisory and consulting services, including any services rendered as Responsible Party, and subject to the approval of the United States Bankruptcy Court, if a bankruptcy is filed, the Partnerships will compensate BPC as follows:

1)
Hourly Fees: BPC will invoice the Partnerships monthly for services rendered on an hourly fee basis at standard hourly rates.

Position:
Principal
Hour Rate:
$425

Director

$350

Manager

$250

Consultants

$150

Administrative Support
$
80


Services provided by Nicolaou will be invoiced at above listed "Director" rate. Hourly rates for BPC personnel will not increase during the course of this representation.

2)
Transaction Fee: Upon completion of any sale of the Partnerships' assets and any other transaction that results in cash being distributed to the limited partners of the partnership



(each such occurrence, a "Transaction"), BPC shall be entitled to additional compensation from the proceeds received by such Partnerships from any such Transaction as follows: (i) 3% of the first $1,000,000 in net proceeds received by the Partnerships from any Transaction; and (ii) 2% of any additional net proceeds greater than $1,000,000 received by the Partnerships from any such Transaction.

Expenses: In addition to the above compensation, BPC will be entitled to reimbursement for expenses at the actual amount incurred for items such as travel (including mileage, parking, airfare, lodging, meals, and ground transportation), messenger and delivery services, photocopying, long distance telephone, tele-copying, computer charges and similar items. Out of town travel time will be invoiced at ½ of the normal hourly rate. To the extent an outside is used, BPC will be entitled to reimbursement of its actual costs paid to such outside vendors.

We respectfully request a retainer of $70,000 at the commencement of this engagement. BPC may request that such retainer be replenished as necessary, including but not limited to in the event of a bankruptcy filing.

In the event we are requested or authorized by government regulation, subpoena, or other legal process to produce our documents or our personnel as witnesses with respect to this engagement, you will reimburse us for our professional time and expenses, as well as the fees and expenses of our counsel incurred in responding to such requests.

TERMS
Invoices are payable upon presentment or, if a bankruptcy is pursued, within the terms of any professional procedures order as approved by the bankruptcy court in effect at the time the services are rendered or expenses incurred, to the extent such order applies to the Responsible Party.
The scope of this engagement does not constitute the provision by BPC, its owners, or staff of any legal
advice. Moreover, because our engagement is limited in nature and scope, it cannot be relied upon to discover all documents and other information or provide all analyses which may have importance to this matter. Bridgepoint Consulting LLC is not a CPA firm, and this engagement does not include the compilation, review, or audit of financial records or financial statements other than specifically set forth hereinabove

If a court determines that Nicolaou or BPC is not qualified to serve in this matter, such determination will not be deemed a breach of this agreement; and the Client will remain liable for payment of fees and expenses as set forth.

We agree to abide by any court orders provided to us in writing and signed by us regarding confidentiality. We will, at your request, transmit information to you by facsimile, e-mail, or over the Internet. If any confidentiality breaches occur because of data transmission over the Internet, you agree that this will not constitute a breach of any obligation of confidentiality. If you wish to limit such transmission to information that is not highly confidential, or seek more secure means of communication for highly confidential information, you will need to inform us.

We have undertaken an inquiry of our records to determine conflicts with this engagement. We have determined that our prior relationships do not preclude our retention. However, the very nature, diversity, and magnitude of BPC clients and engagements, and its past and present clients and professional relationships, does not allow us to be certain that each and every possible relationship or potential conflict has come to our attention. In the event that additional relationships or potential conflicts come to our attention, we will promptly notify you.



If any portion of this letter is held to be void, or otherwise unenforceable, in whole or part, the remaining portions of this letter shall remain in effect.

APPROVAL
If this letter is agreeable to you, please sign it in the space provided below and return it to us by scanning and emailing to knicolaou@bridgepointconsulting.com.

Again, thank you for giving Bridgepoint Consulting LLC the opportunity to be of service to you. We look forward to working with you.

bridgepointimage2.jpg




9.Governing Law: Venue: Arbitration: Attorney's Fees: This agreement shall be construed in accordance with the laws of the State of Texas (except its conflicts of laws principles). The exclusive venue to resolve any dispute related in any way to this agreement or the services provided or to be provided by BPC to Client shall lie in Travis County, Texas. Any dispute related in any way to this agreement shall be resolved by binding arbitration under the Commercial Rules of the American Arbitration Association (except to the extent they conflict with this agreement). The prevailing party in any dispute related in any way to this agreement shall be entitled to recover his, her or its reasonable attorney's fees and reasonable out-of-pocket expenses incurred in the prosecution or defense of claims in such dispute.
10.Miscellaneous: There are no intended third-party beneficiaries of this agreement, the Services, or the engagement. Amounts past due under this agreement shall accrue interest at the rate of 10% per year, or the maximum rate allowed by law, whichever is less. Client shall pay (or if BPC pays, reimburse BPC for) any applicable sales, use or similar tax imposed in connection with any sale of goods or services by BPC to Client. This agreement supersedes any prior agreement, understanding, or representation between BPC and Client, and can only be modified by a written document signed by BPC and Client.

11.Confidentiality: In the course of providing the Services, BPC may obtain trade secrets or confidential information of Client, or information held by Client under an obligation to a third party to keep that information confidential (together, Confidential Information). BPC agrees not to use or disclose Confidential Information except (a) to provide the Services to Client or otherwise to perform this Agreement , in which case BPC will require any third party recipient to commit in writing to be bound by similar terms protecting the confidentiality of such information, or (b) to comply with a subpoena, court order or obligation imposed by law, in which case BPC will use reasonable efforts to give Client notice so that Client can try to protect or limit such use or disclosure. Client will mark all Confidential Information as "CONFIDENTIAL" so that BPC can honor these commitments.



EXHIBIT A
STANDARD TERMS AND CONDITIONS

1.Services: Bridgepoint Consulting LLC ("BPC") will use reasonable efforts to perform the agreed-upon services (the "Services") described in the engagement letter to which these Standard Terms and Conditions are attached as Exhibit A. The Client will provide BPC with all resources (physical and human) reasonably requested by BPC to enable BPC to perform the Services.
2.Fees and Expenses: Unless otherwise specified in the engagement letter, fees will be billed semi-monthly, on the fifteenth and last day of each month. Expenses incurred by BPC on behalf of the Client will be invoiced at the actual amount incurred and will be included with the fee billings. All invoices are due in 15 days except as set forth in the engagement letter.
3.Termination: Unless otherwise specified in the engagement letter, this engagement can be terminated upon two weeks written notice by either party. Either party shall have the right to terminate this engagement immediately if the other party materially breaches this agreement. The terms of this Exhibit A shall survive any termination or expiration of this agreement or the engagement.
4.Independent Contractor: BPC is an independent contractor, and will indemnify the Client and hold it harmless to the extent of any obligation imposed by law on the Client to pay any withholding taxes, social security, unemployment or disability insurance, or similar items in connection with any payments made by the Client for the Services.
5.Limitation of Liability: Even if the remedies provided for in this agreement fail of their essential purpose and even if BPC has been advised of the possibility of the following damages, in no event shall BPC (or its principals, affiliates, employees, contractors , or agents) be liable to Client or to any other person or entity, under any equitable, common law, contractual, statutory, or other theory, for (i) any incidental, special, consequential, indirect, or punitive damages, (ii) any damages measured by lost profits, opportunities or goodwill, or (iii) any damages in excess of the fees paid by Client to BPC during the 6 month period immediately preceding BPC's actual receipt of Client's first express, written assertion of such claim.
6.Indemnification: Each party will indemnify the other party and hold it harmless from all claims made against such other party in connection with BPC's performance of the Services to the fullest extent permitted under applicable law, except to the extent such claims arise as a result of the other party's gross negligence or willful misconduct.
7.Non-Solicitation: Unless otherwise set forth in the engagement letter, during the term of this engagement and for 12 months thereafter , Client and any of its affiliated companies ("Group") agrees not to solicit BPC's Affiliates or employees without BPC's prior written consent, and BPC agrees not to solicit Client's employees without Client's prior written consent. If an employee (or in the case of BPC, an Affiliate) of one party (the "First Employer") becomes employed or contracted by the other party (the "Second Employer"), and 365 days have not elapsed since such employee (or Affiliate) was last employed by or provided services as a contractor to the First Employer, then the Second Employer shall be conclusively deemed to have breached its obligations under this section. As liquidated damages for such a breach, the Second Employer shall pay the First Employer an amount equal to forty percent (40 %) of the total cash compensation reasonably anticipated to be paid by the Second Employer to such employee or contractor during the first year of such employment or contract relationship with the Second Employer. For purposes of this calculation, the parties agree that such payment shall be due within 30 days after such employment or contract relationship commences, and to conclusively assume that all base salary, discretionary bonuses (in the targeted amount), contract payments (based on reasonable estimates of hours worked or jobs performed), commissions (based on reasonable performance), and other amounts are earned and paid for one entire year, without regard to whether any component of such compensation is discretionary or whether such employment or contract relationship is at will or for a definite term less than one year.
8.Trademark License: BPC shall have the right , during the term of this agreement and thereafter, to disclose Client's relationship as a Client or former Client of BPC and to use Client's trade names, trademarks, service marks and logos (collectively , "Client's Marks") for that purpose in any medium. BPC shall use Client's Marks in accordance with any commercially reasonable written trademark usage policies provided by Client to BPC from time to time. Nothing herein shall affect Client's ownership of Client's Marks.

EX-31.1 3 rr06-ex311_20180630.htm 302 CERTIFICATION OF CHIEF EXECUTIVE OFFICER Exhibit


Exhibit 31.1

CERTIFICATIONS
I, Barton Brookman, certify that:
 
1.
I have reviewed this Quarterly Report on Form 10-Q of Rockies Region 2006 Limited Partnership;

2.
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.
The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a.
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b.
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c.
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d.
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5.
The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

a.
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

b.
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
 
Date:
August 14, 2018
 
/s/ Barton Brookman
 
Barton Brookman

 
President and Chief Executive Officer
 
PDC Energy, Inc.
 
Managing General Partner


EX-31.2 4 rr06-ex312_20180630.htm 302 CERTIFICATION OF CHIEF FINANCIAL OFFICER Exhibit


Exhibit 31.2

CERTIFICATIONS
 
I, R. Scott Meyers, certify that:
 
1.
I have reviewed this Quarterly Report on Form 10-Q of Rockies Region 2006 Limited Partnership;

2.
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.
The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a.
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b.
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c.
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d.
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5.
The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

a.
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

b.
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
 
Date:
August 14, 2018
 
/s/ R. Scott Meyers
 
R. Scott Meyers
 
Senior Vice President and Chief Financial Officer
 
PDC Energy, Inc.
 
Managing General Partner


EX-32.1 5 rr06-ex321_20180630.htm 906 CERTIFICATION OF CHIEF EXECUTIVE OFFICER AND CHIEF FINANCIAL OFFICER Exhibit


Exhibit 32.1

CERTIFICATION
FURNISHED PURSUANT TO 18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES OXLEY ACT OF 2002
 
In connection with the Quarterly Report of Rockies Region 2006 Limited Partnership (the “Registrant”) on Form 10-Q for the period ended June 30, 2018, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), the undersigned certify pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:
(1)
The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2)
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Registrant.

/s/ Barton Brookman
 
August 14, 2018
Barton Brookman
 
 
President and Chief Executive Officer
 
 
PDC Energy, Inc.
 
 
Managing General Partner
 
 
 
 
 
/s/ R. Scott Meyers
 
August 14, 2018
R. Scott Meyers
 
 
Senior Vice President and Chief Financial Officer
 
 
PDC Energy, Inc.
 
 
Managing General Partner
 
 





EX-101.INS 6 pdce-20180630.xml XBRL INSTANCE DOCUMENT 0001376912 2018-01-01 2018-06-30 0001376912 2017-01-01 2017-06-30 0001376912 2018-06-30 0001376912 2017-12-31 0001376912 2017-04-01 2017-06-30 0001376912 2018-04-01 2018-06-30 0001376912 2017-06-30 0001376912 us-gaap:LimitedPartnerMember 2018-06-30 0001376912 us-gaap:GeneralPartnerMember 2018-06-30 0001376912 2016-12-31 0001376912 us-gaap:MinimumMember 2018-06-30 0001376912 pdce:ManagingGeneralPartnerMember 2017-01-01 2017-06-30 0001376912 pdce:ManagingGeneralPartnerMember 2018-01-01 2018-06-30 xbrli:shares pdce:Wells pdce:Number_of_Limited_Partners xbrli:pure iso4217:USD xbrli:shares iso4217:USD false --12-31 Q2 2018 2018-06-30 10-Q 0001376912 0.00 Smaller Reporting Company Rockies Region 2006 Limited Partnership 0 1914 204 55000 0.37 -2000 30000 1976 11 3 0.03 198000 96000 13000 -1255000 -1901000 57890 10142 2021598 1942294 43614 86398 30343 63918 -163413 -197687 400000 550000 -143222 1621598 1392294 1142509 1139120 87174 46015 0 21028 11215 9231 7602 6415 -1984 -1187 310386 549608 256472 426457 44935 93013 5391 10595 942592 1397142 0 -3466 30363 78238 125970 151093 -5610035 -5750130 -5750130 -378635 -2988 -47748 84900 436988 -35994 7776 21682 29458 2964190 3339436 1142509 1139120 1342592 1947142 0.40 0.63 3788354 3549814 3549814 4497 4497 4497 4497 4497 0 -30803 -1984 29616 -35546 -29650 -86674 -140095 -60521 -50484 -147580 -238540 -13.46 -11.23 -32.82 -53.04 163653 331044 75413 145800 923349 933944 1978684 2027049 1055335 1093105 214319 469474 22218 47822 -1821681 -2200316 0 57325 0 26522 13946 22645 -57 586 -96067 -80134 -234254 -378635 13875 -61730 19412 54465 <div style="font-family:Times New Roman;font-size:10pt;"><div style="line-height:120%;text-align:justify;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;font-weight:bold;">Asset Retirement Obligations</font></div><div style="line-height:120%;text-align:left;padding-left:24px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br clear="none"/></font></div><div style="line-height:120%;text-align:left;text-indent:48px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">The following table presents the changes in carrying amounts of the asset retirement obligations associated with this Partnership's working interest in crude oil and natural gas properties: </font></div><div style="line-height:120%;text-align:justify;text-indent:48px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br clear="none"/></font></div><div style="line-height:120%;text-align:center;text-indent:48px;font-size:10pt;"><div style="padding-left:0px;text-indent:0px;line-height:normal;padding-top:10px;"><table cellpadding="0" cellspacing="0" style="font-family:Times New Roman;font-size:10pt;margin-left:auto;margin-right:auto;width:77.19298245614034%;border-collapse:collapse;text-align:left;"><tr><td colspan="4" rowspan="1"></td></tr><tr><td style="width:78%;" rowspan="1" colspan="1"></td><td style="width:1%;" rowspan="1" colspan="1"></td><td style="width:20%;" rowspan="1" colspan="1"></td><td style="width:1%;" rowspan="1" colspan="1"></td></tr><tr><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;" rowspan="1" colspan="1"><div style="overflow:hidden;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">&#160;</font></div></td><td colspan="3" style="vertical-align:bottom;border-bottom:1px solid #000000;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;" rowspan="1"><div style="text-align:center;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">Amount</font></div></td></tr><tr><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;" rowspan="1" colspan="1"><div style="overflow:hidden;height:20px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">&#160;</font></div></td><td colspan="3" style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;" rowspan="1"><div style="overflow:hidden;height:20px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">&#160;</font></div></td></tr><tr><td style="vertical-align:bottom;background-color:#cceeff;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;" rowspan="1" colspan="1"><div style="text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">Balance at December 31, 2017</font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;background-color:#cceeff;" rowspan="1" colspan="1"><div style="text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">$</font></div></td><td style="vertical-align:bottom;background-color:#cceeff;padding-top:2px;padding-bottom:2px;" rowspan="1" colspan="1"><div style="text-align:right;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">2,021,598</font></div></td><td style="vertical-align:bottom;background-color:#cceeff;" rowspan="1" colspan="1"><div style="text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br clear="none"/></font></div></td></tr><tr><td style="vertical-align:bottom;padding-left:12px;padding-top:2px;padding-bottom:2px;padding-right:2px;" rowspan="1" colspan="1"><div style="text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">Obligations discharged with asset retirements</font></div></td><td colspan="2" style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;" rowspan="1"><div style="text-align:right;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">(143,222</font></div></td><td style="vertical-align:bottom;padding-right:2px;padding-top:2px;padding-bottom:2px;" rowspan="1" colspan="1"><div style="text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">)</font></div></td></tr><tr><td style="vertical-align:bottom;background-color:#cceeff;padding-left:12px;padding-top:2px;padding-bottom:2px;padding-right:2px;" rowspan="1" colspan="1"><div style="text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">Accretion expense</font></div></td><td colspan="2" style="vertical-align:bottom;background-color:#cceeff;padding-left:2px;padding-top:2px;padding-bottom:2px;" rowspan="1"><div style="text-align:right;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">63,918</font></div></td><td style="vertical-align:bottom;background-color:#cceeff;" rowspan="1" colspan="1"><div style="text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br clear="none"/></font></div></td></tr><tr><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;" rowspan="1" colspan="1"><div style="text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">Balance at June 30, 2018</font></div></td><td colspan="2" style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;border-top:1px solid #000000;" rowspan="1"><div style="text-align:right;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">1,942,294</font></div></td><td style="vertical-align:bottom;border-top:1px solid #000000;" rowspan="1" colspan="1"><div style="text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br clear="none"/></font></div></td></tr><tr><td style="vertical-align:bottom;background-color:#cceeff;padding-left:12px;padding-top:2px;padding-bottom:2px;padding-right:2px;" rowspan="1" colspan="1"><div style="text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">Less current portion</font></div></td><td colspan="2" style="vertical-align:bottom;background-color:#cceeff;padding-left:2px;padding-top:2px;padding-bottom:2px;" rowspan="1"><div style="text-align:right;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">550,000</font></div></td><td style="vertical-align:bottom;background-color:#cceeff;" rowspan="1" colspan="1"><div style="text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br clear="none"/></font></div></td></tr><tr><td style="vertical-align:bottom;padding-left:12px;padding-top:2px;padding-bottom:2px;padding-right:2px;" rowspan="1" colspan="1"><div style="text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">Long-term portion</font></div></td><td style="vertical-align:bottom;border-bottom:3px double #000000;padding-left:2px;padding-top:2px;padding-bottom:2px;border-top:1px solid #000000;" rowspan="1" colspan="1"><div style="text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">$</font></div></td><td style="vertical-align:bottom;border-bottom:3px double #000000;padding-top:2px;padding-bottom:2px;border-top:1px solid #000000;" rowspan="1" colspan="1"><div style="text-align:right;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">1,392,294</font></div></td><td style="vertical-align:bottom;border-bottom:3px double #000000;border-top:1px solid #000000;" rowspan="1" colspan="1"><div style="text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br clear="none"/></font></div></td></tr></table></div></div><div style="line-height:120%;text-align:center;text-indent:48px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br clear="none"/></font></div><div style="line-height:120%;text-indent:48px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;color:#ee2724;"></font><font style="font-family:inherit;font-size:10pt;">This Partnership's estimated asset retirement obligations liability is based on the Managing General Partner's historical experience in plugging and abandoning this Partnership's wells, estimated economic lives and estimated plugging and abandonment costs considering federal and state regulatory requirements in effect. The liability is discounted using the credit-adjusted risk-free rate estimated at the time the liability is incurred or revised. To the extent future revisions to these assumptions impact the present value of the existing asset retirement obligations liability, a corresponding adjustment is made to the properties and equipment balance. Changes in the liability due to the passage of time are recognized as an increase in the carrying amount of the liability and as corresponding accretion expense. The current portion of the asset retirement obligations relates to </font><font style="font-family:inherit;font-size:10pt;">11</font><font style="font-family:inherit;font-size:10pt;"> wells that are expected to be plugged and abandoned during the next 12 months.</font></div><div style="line-height:120%;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br clear="none"/></font></div><div style="line-height:120%;text-indent:48px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">During the </font><font style="font-family:inherit;font-size:10pt;">six months ended June 30, 2018</font><font style="font-family:inherit;font-size:10pt;">, this Partnership plugged and abandoned </font><font style="font-family:inherit;font-size:10pt;">three</font><font style="font-family:inherit;font-size:10pt;"> wells and continued reclamation efforts on certain wells that were plugged and abandoned in 2017 for a total estimated cost of approximately </font><font style="font-family:inherit;font-size:10pt;">$198,000</font><font style="font-family:inherit;font-size:10pt;">. Upon plugging and abandoning the </font><font style="font-family:inherit;font-size:10pt;">three</font><font style="font-family:inherit;font-size:10pt;"> wells in 2018, this Partnership relieved the related asset retirement obligations liability of approximately </font><font style="font-family:inherit;font-size:10pt;">$143,000</font><font style="font-family:inherit;font-size:10pt;">, resulting in a loss on settlement of asset retirement obligations of approximately </font><font style="font-family:inherit;font-size:10pt;">$55,000</font><font style="font-family:inherit;font-size:10pt;">.</font></div></div> <div style="font-family:Times New Roman;font-size:10pt;"><div style="line-height:120%;text-align:justify;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;font-weight:bold;">Going Concern </font></div><div style="line-height:120%;text-align:justify;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br clear="none"/></font></div><div style="line-height:120%;text-indent:48px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;color:#ff0000;"></font><font style="font-family:inherit;font-size:10pt;">This Partnership has historically funded its operations with cash flows from operations. This Partnership&#8217;s most significant cash outlays have related to its operating expenses, capital expenditures and plugging and abandonment of wells. This Partnership's cash flows provided by operations were </font><font style="font-family:inherit;font-size:10pt;">$30,000</font><font style="font-family:inherit;font-size:10pt;"> for the </font><font style="font-family:inherit;font-size:10pt;">six months ended June 30, 2018</font><font style="font-family:inherit;font-size:10pt;"> and it had a cash deficit of </font><font style="font-family:inherit;font-size:10pt;">$2,000</font><font style="font-family:inherit;font-size:10pt;"> for the six months ended </font><font style="font-family:inherit;font-size:10pt;">June&#160;30, 2017</font><font style="font-family:inherit;font-size:10pt;">. This Partnership had working capital deficits of </font><font style="font-family:inherit;font-size:10pt;">$1,901,000</font><font style="font-family:inherit;font-size:10pt;"> and </font><font style="font-family:inherit;font-size:10pt;">$1,255,000</font><font style="font-family:inherit;font-size:10pt;"> as of </font><font style="font-family:inherit;font-size:10pt;">June&#160;30, 2018</font><font style="font-family:inherit;font-size:10pt;"> and </font><font style="font-family:inherit;font-size:10pt;">December&#160;31, 2017</font><font style="font-family:inherit;font-size:10pt;">, respectively. The negative impact to its liquidity resulting from elevated gathering system line pressure and current commodity prices raises substantial doubt about this Partnership&#8217;s ability to continue as a going concern. As the cash outlays for plugging and abandoning wells over the next several years are expected to be significant, this applies further strain on the overall liquidity of this Partnership. The Managing General Partner believes that cash flows from operations will not be sufficient to meet this Partnership&#8217;s obligations largely because of the expenditures required to plug and abandon uneconomic wells, absent a major change in circumstances as described below. Any deficits in available cash flows generated by this Partnership's operations are currently being funded by the Managing General Partner, to the extent necessary. The Managing General Partner will recover amounts funded from future cash flows of this Partnership, to the extent available. </font></div><div style="line-height:120%;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br clear="none"/></font></div><div style="line-height:120%;text-indent:48px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">One of this Partnership's most significant obligations is to the Managing General Partner for reimbursement of costs paid on behalf of this Partnership by the Managing General Partner. Such amounts are paid to third parties for general and administrative expenses, well equipment, operating costs and plugging and abandonment costs, as well as monthly operating fees payable to the Managing General Partner. This Partnership's quarterly cash distributions to the Investor Partners and Managing General Partner have been suspended and this suspension is expected to continue until such time, if ever, that cash flows can reasonably be expected to support the necessary costs of expected plugging and abandoning of the wells that are becoming unproductive and any capital investments required for regulatory compliance, and this Partnership becomes current on its obligations. </font></div><div style="line-height:120%;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br clear="none"/></font></div><div style="line-height:120%;text-indent:48px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">The ability of this Partnership to continue as a going concern is dependent upon its ability to attain a satisfactory level of cash flows from operations. Greater cash flows would most likely occur from a sustained increase in production and improved commodity pricing. Historically, during times of normalized gathering system line pressures, as a result of the normal production decline in a well's production life cycle, this Partnership has not experienced a sustained increase in production without substantial amounts of capital expenditures.</font></div><div style="line-height:120%;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br clear="none"/></font></div><div style="line-height:120%;text-indent:48px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">In accordance with the agreement that the Managing General Partner entered into with Bridgepoint, Ms. Nicolaou will make all material decisions regarding this Partnership and has the authority, among other things, to analyze the books and records of this Partnership, analyze potential restructuring and divestiture options, including but not limited to filing bankruptcy, and enter into and execute definitive documents to effect such transactions, or direct the Managing General Partner to do so. Accordingly, Ms. Nicolaou is considering various options to potentially mitigate risks impacting this Partnership&#8217;s ability to continue as a going concern. There can be no assurance that this Partnership will be able to mitigate such conditions. Failure to do so could result in a partial asset sale or some form of bankruptcy, liquidation, or dissolution of this Partnership.</font></div><div style="line-height:120%;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br clear="none"/></font></div><div style="line-height:120%;text-indent:48px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">The accompanying financial statements have been prepared on a going concern basis of accounting, which contemplates continuity of operations, realization of assets and satisfaction of liabilities and commitments in the normal course of business. The financial statements do not reflect any adjustments that might result if this Partnership is unable to continue as a going concern.</font></div></div> <div style="font-family:Times New Roman;font-size:10pt;"><div style="line-height:120%;text-align:left;text-indent:48px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">In the Managing General Partner's opinion, the accompanying condensed financial statements contain all adjustments consisting of only normal recurring adjustments necessary for a fair statement of this Partnership's results for interim periods in accordance with accounting principles generally accepted in the United States of America ("U.S. GAAP") and with the instructions to Form 10-Q and Article 8 of Regulation S-X of the SEC. Accordingly, pursuant to such rules and regulations, certain notes and other financial information included in the audited financial statements have been condensed or omitted. The December 31, 2017 condensed balance sheet data was derived from this Partnership's audited financial statements, but does not include disclosures required by U.S. GAAP. The information presented in this Quarterly Report on Form 10-Q should be read in conjunction with this Partnership's audited financial statements and notes thereto included in this Partnership's 2017 Form 10-K. This Partnership's accounting policies are described in the Notes to Financial Statements in this Partnership's 2017 Form 10-K and updated, as necessary, in this Quarterly Report on Form 10-Q. The results of operations and cash flows for the </font><font style="font-family:inherit;font-size:10pt;">six months ended June 30, 2018</font><font style="font-family:inherit;font-size:10pt;"> are not necessarily indicative of the results to be expected for the full year or any future period.</font></div><div style="line-height:120%;text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br clear="none"/></font></div><div style="line-height:120%;padding-bottom:10px;text-align:left;text-indent:48px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">Certain immaterial reclassifications have been made to the prior period condensed statement of cash flows to conform to the current period presentation. The reclassifications had no impact on previously reported financial results.</font></div></div> <div style="font-family:Times New Roman;font-size:10pt;"><div style="line-height:120%;text-align:justify;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;font-weight:bold;">Commitments and Contingencies</font></div><div style="line-height:120%;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br clear="none"/></font></div><div style="line-height:120%;text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;text-decoration:underline;">Legal Proceedings</font></div><div style="line-height:120%;text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br clear="none"/></font></div><div style="line-height:120%;text-align:left;text-indent:48px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">Neither this Partnership nor PDC, in its capacity as the Managing General Partner of this Partnership, is party to any pending legal proceeding, except as provided herein, that PDC believes would have a materially adverse effect on this Partnership's business, financial condition, results of operations or liquidity. </font></div><div style="line-height:120%;text-align:left;text-indent:48px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br clear="none"/></font></div><div style="line-height:120%;text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;text-decoration:underline;">Derivative Action</font><font style="font-family:inherit;font-size:10pt;"> </font></div><div style="line-height:120%;text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br clear="none"/></font></div><div style="line-height:120%;padding-bottom:10px;text-align:left;text-indent:48px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">In December 2017, PDC received an action entitled </font><font style="font-family:inherit;font-size:10pt;font-style:italic;">Dufresne, et al. v. PDC Energy, et al.,</font><font style="font-family:inherit;font-size:10pt;"> filed in the United States District Court for the District of Colorado. The original complaint was brought by a number of limited partner investors seeking to assert derivative claims on behalf of this Partnership against PDC and alleging claims for breach of fiduciary duty and breach of contract. The plaintiffs also included claims against two of PDC's senior officers for alleged breach of fiduciary duty. The lawsuit accuses PDC, as the managing general partner of this Partnership, of, among other things, failing to maximize the productivity of this Partnership's crude oil and natural gas wells. </font></div><div style="line-height:120%;text-align:left;text-indent:48px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">PDC filed a motion to dismiss the lawsuit on February 1, 2018, on the grounds that the complaint is deficient, including because the plaintiffs failed to allege that PDC refused a demand to take action on their claims. On March 14, 2018, the motion was denied as moot by the court because the plaintiffs requested leave to amend their complaint. In late April 2018, the plaintiffs filed an amendment to their complaint.&#160; Such amendment alleged additional facts to support the plaintiffs&#8217; claims and purports to add direct class action claims in addition to the original derivative claims.&#160;The amendment also added three new individual defendants, all of which are currently independent members of PDC's Board of Directors. PDC filed a motion to dismiss the amended complaint and, in response, the plaintiffs filed a second amended complaint on July 10, 2018. On July 31, 2018, PDC filed a motion to dismiss this second amended complaint and the claims against the individuals named as defendants. This motion has not yet been decided by the court. Potential damages as a result of this lawsuit, if any, would be paid by PDC and should not affect this Partnership. </font></div><div style="line-height:120%;text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br clear="none"/></font></div><div style="line-height:120%;text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;text-decoration:underline;">Environmental</font></div><div style="line-height:120%;text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br clear="none"/></font></div><div style="line-height:120%;text-indent:48px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;color:#ee2724;"></font><font style="font-family:inherit;font-size:10pt;">Due to the nature of the natural gas and oil industry, this Partnership is exposed to environmental risks. The Managing General Partner has various policies and procedures to minimize and mitigate the risks from environmental contamination. The Managing General Partner conducts periodic reviews and simulated drills to identify changes in this Partnership's environmental risk profile. Liabilities are recorded when environmental damages resulting from past events are probable and the costs can be reasonably estimated. Except as discussed herein, the Managing General Partner is not aware of any material environmental claims existing as of </font><font style="font-family:inherit;font-size:10pt;">June&#160;30, 2018</font><font style="font-family:inherit;font-size:10pt;"> which have not been provided for or would otherwise have a material impact on this Partnership's financial statements; however, there can be no assurance that current regulatory requirements will not change or that unknown potential past non-compliance with environmental laws or other environmental liabilities will not be discovered on this Partnership's properties. The liability ultimately incurred with respect to a matter may exceed the related accrual.</font></div><div style="line-height:120%;text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br clear="none"/></font></div><div style="line-height:120%;text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;text-decoration:underline;">Clean Air Act Tentative Agreement and Related Consent Decree</font></div><div style="line-height:120%;text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br clear="none"/></font></div><div style="line-height:120%;text-align:left;text-indent:48px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"></font><font style="font-family:inherit;font-size:10pt;">In August 2015, the Managing General Partner received a Clean Air Act Section 114 Information Request (the "Information Request") from the U.S. Environmental Protection Agency ("EPA"). The Information Request sought, among other things, information related to the design, operation and maintenance of this Partnership's Wattenberg Field production facilities in the Denver-Julesburg Basin of Colorado ("DJ Basin"). The Information Request focused on historical operation and design information at certain of the Managing General Partner's production facilities and asked that the Managing General Partner conduct sampling and analyses at these facilities. The Managing General Partner responded to the Information Request with the requested data in January 2016</font><font style="font-family:inherit;font-size:10pt;">. </font></div><div style="line-height:120%;text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">&#160;&#160;</font></div><div style="line-height:120%;text-align:left;text-indent:48px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"></font><font style="font-family:inherit;font-size:10pt;">In addition, in December 2015, the Managing General Partner received a Compliance Advisory pursuant to C.R.S. 25-7-115(2) from the Colorado Department of Public Health and Environment's Air Quality Control Commission's Air Pollution Control Division alleging that the Managing General Partner failed to design, operate and maintain certain condensate collection, storage, processing and handling operations to minimize leakage of volatile organic compounds at certain production facilities consistent with applicable standards under Colorado law</font><font style="font-family:inherit;font-size:10pt;">. </font></div><div style="line-height:120%;text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br clear="none"/></font></div><div style="line-height:120%;text-align:left;text-indent:48px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"></font><font style="font-family:inherit;font-size:10pt;">In June 2017, the U.S. Department of Justice, on behalf of the EPA and the State of Colorado, filed a complaint against the Managing General Partner in the U.S. District Court for the District of Colorado, claiming that the Managing General Partner</font><font style="font-family:inherit;font-size:10pt;color:#ee2724;"> </font><font style="font-family:inherit;font-size:10pt;">failed to operate and maintain certain condensate collection facilities at certain production facilities so as to minimize leakage of volatile organic compounds in compliance with applicable law. In October 2017, the Managing General Partner entered into a consent decree to resolve the lawsuit. Pursuant to the consent decree, the Managing General Partner agreed to implement a variety of operational enhancements and mitigation and similar projects, including vapor control system modifications and verification, increased inspection and monitoring and installation of tank pressure monitors. The three primary elements of the consent decree are: (i) fine/supplemental environmental projects; (ii) injunctive relief; and (iii) mitigation. </font></div><div style="line-height:120%;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br clear="none"/></font></div><div style="line-height:120%;text-indent:48px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">The Managing General Partner will pay the total amount of the fine and costs associated with the supplemental environmental projects. This Partnership will share proportionally in the injunctive relief and the mitigation costs required by the consent decree. The consent decree includes 33 of this Partnership's wells, of which seven may incur such costs. The profitability of additional older, lower production wells, such as those owned by this Partnership, would likely be affected in a negative manner by the required costs associated with the injunctive relief and mitigation, which could result in the decision to plug and abandon some or all of those wells, rather than make investments in the wells necessary to comply with the consent decree.</font></div></div> <div style="font-family:Times New Roman;font-size:10pt;"><div style="line-height:120%;text-align:left;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;font-weight:bold;">Fair Value Measurements</font></div><div style="line-height:120%;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br clear="none"/></font></div><div style="line-height:120%;text-align:left;text-indent:48px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">This Partnership's fair value measurements were estimated pursuant to a fair value hierarchy that requires this Partnership to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The valuation hierarchy is based upon the transparency of inputs to the valuation of an asset or liability as of the measurement date, giving the highest priority to quoted prices in active markets (Level 1) and the lowest priority to unobservable data (Level 3). In some cases, the inputs used to measure fair value might fall in different levels of the fair value hierarchy. In these cases, the lowest level input that is significant to a fair value measurement in its entirety determines the applicable level in the fair value hierarchy. Assessing the significance of a particular input to the fair value measurement in its entirety requires judgment, considering factors specific to the asset or liability and may affect the valuation of the assets and liabilities and their placement within the fair value hierarchy levels. </font></div><div style="line-height:120%;text-align:left;text-indent:48px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br clear="none"/></font></div><div style="line-height:120%;text-align:left;text-indent:48px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">The Managing General Partner utilizes fair value, on a non-recurring basis, to perform impairment testing on this Partnership's crude oil and natural gas properties by comparing carrying value to estimated undiscounted future net cash flows. If carrying value exceeds undiscounted future net cash flows, the measurement of impairment is based on estimated fair value and is measured by the amount by which the carrying value exceeds the estimated fair value.</font></div></div> <div style="font-family:Times New Roman;font-size:10pt;"><div style="line-height:120%;text-align:left;text-indent:48px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;font-weight:bold;">Recently Adopted Accounting Standard</font></div><div style="line-height:120%;text-align:justify;text-indent:48px;font-size:9pt;"><font style="font-family:inherit;font-size:9pt;"><br clear="none"/></font></div><div style="line-height:120%;text-align:left;text-indent:48px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">In May 2014, the Financial Accounting Standards Board issued its standard on revenue recognition that provides a comprehensive model that entities will apply to determine the measurement of revenue and timing of when it is recognized. The standard has been updated and now includes technical corrections. The underlying principle is that an entity will recognize revenue to depict the transfer of goods or services to customers at an amount that the entity expects to be entitled to in exchange for those goods or services. The standard outlines a five-step approach to apply the underlying principle: (1) identify the contract with the customer, (2) identify the separate performance obligations in the contract, (3) determine the transaction price, (4) allocate the transaction price to separate performance obligations and (5) recognize revenue when (or as) each performance obligation is satisfied. This Partnership adopted the standard effective January 1, 2018. In order to evaluate the impact that the adoption of the revenue standard had on this Partnership's financial statements, the Managing General Partner performed a comprehensive review of its significant revenue streams. The focus of this review included, among other things, the identification of the significant contracts and other arrangements this Partnership has with its customers to identify performance obligations and principal versus agent considerations and factors affecting the determination of the transaction price. The Managing General Partner also reviewed this Partnership's current accounting policies, procedures and controls with respect to these contracts and arrangements to determine what changes, if any, would be required by the adoption of the revenue standard. This Partnership adopted the standard under the modified retrospective method. Based on the review, adoption of the standard did not impact this Partnership's 2017 results of operations. Upon adoption, no adjustment to the opening balance of this Partnership's retained deficit was deemed necessary.</font></div></div> <div style="font-family:Times New Roman;font-size:10pt;"><div style="line-height:120%;text-align:left;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;font-weight:bold;">General and Basis of Presentation</font></div><div style="line-height:120%;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br clear="none"/></font></div><div style="line-height:120%;text-align:left;text-indent:48px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">Rockies Region 2006 Limited Partnership</font><font style="font-family:inherit;font-size:10pt;"> (this &#8220;Partnership&#8221; or the &#8220;Registrant&#8221;) was organized in 2006 as a limited partnership, in accordance with the laws of the State of West Virginia, for the purpose of engaging in the exploration and development of crude oil and natural gas properties. Business operations commenced upon closing of an offering for the private placement of Partnership units. Upon funding, this Partnership entered into a Drilling and Operating Agreement (&#8220;D&amp;O Agreement&#8221;) with the Managing General Partner which authorizes PDC to conduct and manage this Partnership's business. In accordance with the terms of the Limited Partnership Agreement (the &#8220;Agreement&#8221;), the Managing General Partner is authorized to manage all activities of this Partnership and initiates and completes substantially all Partnership transactions, subject to the following paragraph. </font></div><div style="line-height:120%;text-align:left;text-indent:48px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br clear="none"/></font></div><div style="line-height:120%;text-align:left;text-indent:48px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">On May 7, 2018, the Managing General Partner entered into an agreement with Bridgepoint Consulting LLC (&#8220;Bridgepoint&#8221;). Bridgepoint has designated Karen Nicolaou to serve as the &#8220;Responsible Party&#8221; for this Partnership. Ms. Nicolaou has more than 20 years of experience in providing restructuring advisory services and has previously served as Responsible Party for other partnerships for which PDC was the Managing General Partner. In her capacity as the Responsible Party, Ms. Nicolaou will make all material decisions regarding this Partnership and has the authority, among other things, to analyze the books and records of this Partnership, analyze potential restructuring and divestiture options, including but not limited to filing bankruptcy, and enter into and execute definitive documents to effect such transactions, or direct the Managing General Partner to do the above.</font></div><div style="line-height:120%;text-align:left;text-indent:48px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br clear="none"/></font></div><div style="line-height:120%;text-align:left;text-indent:48px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">As of </font><font style="font-family:inherit;font-size:10pt;">June&#160;30, 2018</font><font style="font-family:inherit;font-size:10pt;">, there were </font><font style="font-family:inherit;font-size:10pt;">1,976</font><font style="font-family:inherit;font-size:10pt;"> limited partners ("Investor Partners") in this Partnership. PDC is the designated Managing General Partner of this Partnership and owns a </font><font style="font-family:inherit;font-size:10pt;">37 percent</font><font style="font-family:inherit;font-size:10pt;"> Managing General Partner ownership in this Partnership. According to the terms of the Agreement, revenues, costs and cash distributions of this Partnership are allocated </font><font style="font-family:inherit;font-size:10pt;">63 percent</font><font style="font-family:inherit;font-size:10pt;"> to the Investor Partners, which are shared pro rata based upon the number of units in this Partnership, and </font><font style="font-family:inherit;font-size:10pt;">37 percent</font><font style="font-family:inherit;font-size:10pt;"> to the Managing General Partner. The Managing General Partner may repurchase Investor Partner units under certain circumstances provided by the Agreement, upon request of an individual Investor Partner. The formula for the repurchase price is set at a minimum of four times the most recent 12 months of cash distributions. Due to the suspension of cash distributions during the second quarter of 2015, there is no value upon which to base further calculations, and therefore, no repurchase offers are currently being considered. On a cumulative basis, through </font><font style="font-family:inherit;font-size:10pt;">June&#160;30, 2018</font><font style="font-family:inherit;font-size:10pt;">, the Managing General Partner has repurchased </font><font style="font-family:inherit;font-size:10pt;">204</font><font style="font-family:inherit;font-size:10pt;"> units of Partnership interest from the Investor Partners at an average price of </font><font style="font-family:inherit;font-size:10pt;">$1,914</font><font style="font-family:inherit;font-size:10pt;"> per unit. As of </font><font style="font-family:inherit;font-size:10pt;">June&#160;30, 2018</font><font style="font-family:inherit;font-size:10pt;">, the Managing General Partner owned a total of approximately </font><font style="font-family:inherit;font-size:10pt;">40 percent</font><font style="font-family:inherit;font-size:10pt;"> of this Partnership, which includes its </font><font style="font-family:inherit;font-size:10pt;">37</font><font style="font-family:inherit;font-size:10pt;"> percent Managing General Partner interest and approximately </font><font style="font-family:inherit;font-size:10pt;">three percent</font><font style="font-family:inherit;font-size:10pt;"> of Limited Partner Interests it has repurchased from the Investor Partners. </font></div><div style="line-height:120%;text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br clear="none"/></font></div><div style="line-height:120%;text-align:left;text-indent:48px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">In the Managing General Partner's opinion, the accompanying condensed financial statements contain all adjustments consisting of only normal recurring adjustments necessary for a fair statement of this Partnership's results for interim periods in accordance with accounting principles generally accepted in the United States of America ("U.S. GAAP") and with the instructions to Form 10-Q and Article 8 of Regulation S-X of the SEC. Accordingly, pursuant to such rules and regulations, certain notes and other financial information included in the audited financial statements have been condensed or omitted. The December 31, 2017 condensed balance sheet data was derived from this Partnership's audited financial statements, but does not include disclosures required by U.S. GAAP. The information presented in this Quarterly Report on Form 10-Q should be read in conjunction with this Partnership's audited financial statements and notes thereto included in this Partnership's 2017 Form 10-K. This Partnership's accounting policies are described in the Notes to Financial Statements in this Partnership's 2017 Form 10-K and updated, as necessary, in this Quarterly Report on Form 10-Q. The results of operations and cash flows for the </font><font style="font-family:inherit;font-size:10pt;">six months ended June 30, 2018</font><font style="font-family:inherit;font-size:10pt;"> are not necessarily indicative of the results to be expected for the full year or any future period.</font></div><div style="line-height:120%;text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br clear="none"/></font></div><div style="line-height:120%;padding-bottom:10px;text-align:left;text-indent:48px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">Certain immaterial reclassifications have been made to the prior period condensed statement of cash flows to conform to the current period presentation. The reclassifications had no impact on previously reported financial results.</font></div></div> <div style="font-family:Times New Roman;font-size:10pt;"><div style="line-height:120%;text-align:left;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;font-weight:bold;">Transactions with Managing General Partner</font></div><div style="line-height:120%;text-align:justify;text-indent:48px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br clear="none"/></font></div><div style="line-height:120%;text-align:left;text-indent:48px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">The Managing General Partner transacts business on behalf of this Partnership under the authority of the D&amp;O and Partnership Agreements. Revenues and other cash inflows received by the Managing General Partner on behalf of this Partnership are distributed to this Partnership, net of corresponding operating costs and other cash outflows incurred on behalf of this Partnership.</font></div><div style="line-height:120%;text-align:left;text-indent:48px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br clear="none"/></font></div><div style="line-height:120%;text-align:left;text-indent:48px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">This Partnership's net amount due to the Managing General Partner was approximately </font><font style="font-family:inherit;font-size:10pt;">$1,397,000</font><font style="font-family:inherit;font-size:10pt;"> and </font><font style="font-family:inherit;font-size:10pt;">$943,000</font><font style="font-family:inherit;font-size:10pt;"> as of </font><font style="font-family:inherit;font-size:10pt;">June&#160;30, 2018</font><font style="font-family:inherit;font-size:10pt;"> and </font><font style="font-family:inherit;font-size:10pt;">December&#160;31, 2017</font><font style="font-family:inherit;font-size:10pt;">, respectively. The majority of the amount is past due and represents operating costs, investments in crude oil and natural gas properties, plugging and abandonment costs and general and administrative and other costs that have not been deducted from distributions due to the lack of revenue and available cash flow.</font></div><div style="line-height:120%;text-align:justify;padding-left:96px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br clear="none"/></font></div><div style="line-height:120%;text-align:left;text-indent:48px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">A &#8220;Well operations and maintenance&#8221; fee is charged by the Managing General Partner for the operation of this Partnership's wells and is included in the &#8220;Lease operating expenses&#8221; line item on the condensed statements of operations. The fees for well operating and maintenance for the </font><font style="font-family:inherit;font-size:10pt;">six months ended June 30, 2018</font><font style="font-family:inherit;font-size:10pt;"> and 2017 were approximately </font><font style="font-family:inherit;font-size:10pt;">$13,000</font><font style="font-family:inherit;font-size:10pt;"> and </font><font style="font-family:inherit;font-size:10pt;">$96,000</font><font style="font-family:inherit;font-size:10pt;">, respectively.</font></div></div> <div style="font-family:Times New Roman;font-size:10pt;"><div style="line-height:120%;text-align:left;text-indent:48px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">The following table presents the changes in carrying amounts of the asset retirement obligations associated with this Partnership's working interest in crude oil and natural gas properties: </font></div><div style="line-height:120%;text-align:justify;text-indent:48px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br clear="none"/></font></div><div style="line-height:120%;text-align:center;text-indent:48px;font-size:10pt;"><div style="padding-left:0px;text-indent:0px;line-height:normal;padding-top:10px;"><table cellpadding="0" cellspacing="0" style="font-family:Times New Roman;font-size:10pt;margin-left:auto;margin-right:auto;width:77.19298245614034%;border-collapse:collapse;text-align:left;"><tr><td colspan="4" rowspan="1"></td></tr><tr><td style="width:78%;" rowspan="1" colspan="1"></td><td style="width:1%;" rowspan="1" colspan="1"></td><td style="width:20%;" rowspan="1" colspan="1"></td><td style="width:1%;" rowspan="1" colspan="1"></td></tr><tr><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;" rowspan="1" colspan="1"><div style="overflow:hidden;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">&#160;</font></div></td><td colspan="3" style="vertical-align:bottom;border-bottom:1px solid #000000;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;" rowspan="1"><div style="text-align:center;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">Amount</font></div></td></tr><tr><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;" rowspan="1" colspan="1"><div style="overflow:hidden;height:20px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">&#160;</font></div></td><td colspan="3" style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;" rowspan="1"><div style="overflow:hidden;height:20px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">&#160;</font></div></td></tr><tr><td style="vertical-align:bottom;background-color:#cceeff;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;" rowspan="1" colspan="1"><div style="text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">Balance at December 31, 2017</font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;background-color:#cceeff;" rowspan="1" colspan="1"><div style="text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">$</font></div></td><td style="vertical-align:bottom;background-color:#cceeff;padding-top:2px;padding-bottom:2px;" rowspan="1" colspan="1"><div style="text-align:right;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">2,021,598</font></div></td><td style="vertical-align:bottom;background-color:#cceeff;" rowspan="1" colspan="1"><div style="text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br clear="none"/></font></div></td></tr><tr><td style="vertical-align:bottom;padding-left:12px;padding-top:2px;padding-bottom:2px;padding-right:2px;" rowspan="1" colspan="1"><div style="text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">Obligations discharged with asset retirements</font></div></td><td colspan="2" style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;" rowspan="1"><div style="text-align:right;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">(143,222</font></div></td><td style="vertical-align:bottom;padding-right:2px;padding-top:2px;padding-bottom:2px;" rowspan="1" colspan="1"><div style="text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">)</font></div></td></tr><tr><td style="vertical-align:bottom;background-color:#cceeff;padding-left:12px;padding-top:2px;padding-bottom:2px;padding-right:2px;" rowspan="1" colspan="1"><div style="text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">Accretion expense</font></div></td><td colspan="2" style="vertical-align:bottom;background-color:#cceeff;padding-left:2px;padding-top:2px;padding-bottom:2px;" rowspan="1"><div style="text-align:right;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">63,918</font></div></td><td style="vertical-align:bottom;background-color:#cceeff;" rowspan="1" colspan="1"><div style="text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br clear="none"/></font></div></td></tr><tr><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;" rowspan="1" colspan="1"><div style="text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">Balance at June 30, 2018</font></div></td><td colspan="2" style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;border-top:1px solid #000000;" rowspan="1"><div style="text-align:right;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">1,942,294</font></div></td><td style="vertical-align:bottom;border-top:1px solid #000000;" rowspan="1" colspan="1"><div style="text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br clear="none"/></font></div></td></tr><tr><td style="vertical-align:bottom;background-color:#cceeff;padding-left:12px;padding-top:2px;padding-bottom:2px;padding-right:2px;" rowspan="1" colspan="1"><div style="text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">Less current portion</font></div></td><td colspan="2" style="vertical-align:bottom;background-color:#cceeff;padding-left:2px;padding-top:2px;padding-bottom:2px;" rowspan="1"><div style="text-align:right;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">550,000</font></div></td><td style="vertical-align:bottom;background-color:#cceeff;" rowspan="1" colspan="1"><div style="text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br clear="none"/></font></div></td></tr><tr><td style="vertical-align:bottom;padding-left:12px;padding-top:2px;padding-bottom:2px;padding-right:2px;" rowspan="1" colspan="1"><div style="text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">Long-term portion</font></div></td><td style="vertical-align:bottom;border-bottom:3px double #000000;padding-left:2px;padding-top:2px;padding-bottom:2px;border-top:1px solid #000000;" rowspan="1" colspan="1"><div style="text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">$</font></div></td><td style="vertical-align:bottom;border-bottom:3px double #000000;padding-top:2px;padding-bottom:2px;border-top:1px solid #000000;" rowspan="1" colspan="1"><div style="text-align:right;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">1,392,294</font></div></td><td style="vertical-align:bottom;border-bottom:3px double #000000;border-top:1px solid #000000;" rowspan="1" colspan="1"><div style="text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br clear="none"/></font></div></td></tr></table></div></div><div style="line-height:120%;text-align:center;text-indent:48px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br clear="none"/></font></div><div style="line-height:120%;text-indent:48px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;color:#ee2724;"></font><font style="font-family:inherit;font-size:10pt;"></font></div></div> <div style="font-family:Times New Roman;font-size:10pt;"><div style="line-height:120%;text-align:left;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;font-weight:bold;">Summary of Significant Accounting Policies </font></div><div style="line-height:120%;text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br clear="none"/></font></div><div style="line-height:120%;text-align:left;text-indent:48px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;font-weight:bold;">Recently Adopted Accounting Standard</font></div><div style="line-height:120%;text-align:justify;text-indent:48px;font-size:9pt;"><font style="font-family:inherit;font-size:9pt;"><br clear="none"/></font></div><div style="line-height:120%;text-align:left;text-indent:48px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">In May 2014, the Financial Accounting Standards Board issued its standard on revenue recognition that provides a comprehensive model that entities will apply to determine the measurement of revenue and timing of when it is recognized. The standard has been updated and now includes technical corrections. The underlying principle is that an entity will recognize revenue to depict the transfer of goods or services to customers at an amount that the entity expects to be entitled to in exchange for those goods or services. The standard outlines a five-step approach to apply the underlying principle: (1) identify the contract with the customer, (2) identify the separate performance obligations in the contract, (3) determine the transaction price, (4) allocate the transaction price to separate performance obligations and (5) recognize revenue when (or as) each performance obligation is satisfied. This Partnership adopted the standard effective January 1, 2018. In order to evaluate the impact that the adoption of the revenue standard had on this Partnership's financial statements, the Managing General Partner performed a comprehensive review of its significant revenue streams. The focus of this review included, among other things, the identification of the significant contracts and other arrangements this Partnership has with its customers to identify performance obligations and principal versus agent considerations and factors affecting the determination of the transaction price. The Managing General Partner also reviewed this Partnership's current accounting policies, procedures and controls with respect to these contracts and arrangements to determine what changes, if any, would be required by the adoption of the revenue standard. This Partnership adopted the standard under the modified retrospective method. Based on the review, adoption of the standard did not impact this Partnership's 2017 results of operations. Upon adoption, no adjustment to the opening balance of this Partnership's retained deficit was deemed necessary.</font></div></div> EX-101.SCH 7 pdce-20180630.xsd XBRL TAXONOMY EXTENSION SCHEMA DOCUMENT 2417402 - Disclosure - Asset Retirement Obligations Asset Retirement Obligations (Details) link:presentationLink link:calculationLink link:definitionLink 2117100 - Disclosure - Asset Retirement Obligations Asset Retirement Obligations (Notes) link:presentationLink link:calculationLink link:definitionLink 2317301 - Disclosure - Asset Retirement Obligations Asset Retirement Obligations (Tables) link:presentationLink link:calculationLink link:definitionLink 1002500 - Statement - Balance Sheet Parentheticals (Parentheticals) link:presentationLink link:calculationLink link:definitionLink 2119100 - Disclosure - Commitments and Contingencies link:presentationLink link:calculationLink link:definitionLink 2419401 - Disclosure - Commitments and Contingencies Commitments and Contingencies (Details) link:presentationLink link:calculationLink link:definitionLink 1001000 - 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Commitments and Contingencies Disclosure [Abstract] Commitments and Contingencies Disclosure [Text Block] Commitments and Contingencies Disclosure [Text Block] Accounting Policies [Abstract] Recently Issued Accounting Standards [Policy Text Block] New Accounting Pronouncements, Policy [Policy Text Block] Going Concern [Abstract] Going Concern [Abstract] Going Concern [Text Block] Basis of Accounting [Text Block] Reconciliation of Changes in Asset Retirement Obligations [Table] Reconciliation of Changes in Asset Retirement Obligations [Table] Reconciliation of Changes in Asset Retirement Obligations [Table] Range [Axis] Range [Axis] Range [Domain] Range [Domain] Minimum [Member] Minimum [Member] Plugged wells [Axis] Plugged wells [Axis] Plugged wells [Axis] Plugged wells [Domain] Plugged wells [Domain] [Domain] for Plugged wells [Axis] Range of wells plugged [Axis] Range of wells plugged [Axis] Range of wells plugged [Axis] Range of wells plugged [Domain] Range of wells plugged [Domain] Range of wells plugged [Domain] Legal Entity [Axis] Legal Entity [Axis] Entity [Domain] Entity [Domain] Changes in carrying amounts of Asset Retirement Obligation [Line Items] Changes in carrying amounts of Asset Retirement Obligation [Line Items] Changes in carrying amounts of Asset Retirement Obligation [Line Items] Oil and Gas Wells Plugged Oil and Gas Wells Plugged Oil and Gas Wells Plugged Plugging and abandonment costs Plugging and abandonment costs Plugging and abandonment costs Changes in asset retirement obligations Asset Retirement Obligation, Roll Forward Analysis [Roll Forward] Balance at beginning of period Asset Retirement Obligation Accretion expense Asset Retirement Obligation, Accretion Expense (Gain) loss on settlement of asset retirement obligations Settlement of Asset Retirement Obligations Through Noncash Payments, Amount Balance at end of period Less current portion Asset Retirement Obligation, Current Long-term portion Asset Retirement Obligations, Noncurrent Asset Retirement Obligation, Liabilities Settled Asset Retirement Obligation, Liabilities Settled OIl and Gas Wells Expected to be Plugged OIl and Gas Wells Expected to be Plugged OIl and Gas Wells Expected to be Plugged in next 12 months. Loss on settlement of asset retirement obligations Loss on settlement of asset retirement obligations Loss on settlement of asset retirement obligations Income Statement [Abstract] Statement [Table] Statement [Table] Partner Capital Components [Axis] Partner Capital Components [Axis] Partner Capital Components [Domain] Partner Capital Components [Domain] Limited Partner [Member] Limited Partner [Member] Scenario [Axis] Scenario, Unspecified [Domain] Statement [Line Items] Statement [Line Items] Revenues: Revenues [Abstract] Crude oil, natural gas and NGLs sales Oil and Gas Sales Revenue Operating costs and expenses: Operating Costs and Expenses [Abstract] Lease operating expenses Oil and Gas Production Expense Production taxes Production Tax Expense Direct costs - general and administrative General and Administrative Expense Depreciation, depletion and amortization Depreciation, Depletion and Amortization Accretion of asset retirement obligations (Gain) loss on settlement of asset retirement obligations Total operating costs and expenses Costs and Expenses Operating loss: Operating Income (Loss) [Abstract] Net loss Net Income (Loss), Including Portion Attributable to Noncontrolling Interest Less: Managing General Partner interest in net loss Net Income (Loss) Allocated to General Partners Net loss allocated to Investor Partners Net Income (Loss) Allocated to Limited Partners Net income (loss) per Investor Partner Unit: Earnings Per Share [Abstract] Net loss per Investor Partner unit Net Income (Loss), Per Outstanding Limited Partnership Unit, Basic, Net of Tax Investor Partner units outstanding Limited Partners' Capital Account, Units Outstanding Organization, Consolidation and Presentation of Financial Statements [Abstract] Basis of Accounting, Policy [Policy Text Block] Basis of Accounting, Policy [Policy Text Block] Number of Investor Partners Number of Limited Partners Number of Limited Partners Managing General Partner, Ownership Interest Before Unit Repurchases Managing Member or General Partner, Ownership Interest Before Unit Repurchases Managing Member or General Partner, Ownership Interest Before Unit Repurchases Investor Partner Ownership Interest Limited Liability Company or Limited Partnership, Members or Limited Partners, Ownership Interest Limited Partner Units Repurchased by Managing General Partner Limited Partner Units Repurchased by Managing General Partner Number of Limited Partner Units Repurchased by Managing General Partner Average Price Paid for Units Repurchased by Managing General Partner Average Price Paid for Units Repurchased by Managing General Partner Average Price Paid for Units Repurchased by Managing General Partner Limited Liability Company (LLC) or Limited Partnership (LP), Managing Member or General Partner, Ownership Interest Limited Liability Company (LLC) or Limited Partnership (LP), Managing Member or General Partner, Ownership Interest Percentage of Limited Partner Units Repurchased by Managing General Partner Percentage of Limited Partner Units Repurchased by Managing General Partner Percentage of Limited Partner Units Repurchased by Managing General Partner Statement of Partners' Capital [Abstract] Scenario [Axis] Scenario, Unspecified [Domain] Partner Type [Axis] Partner Type [Axis] Partner Type of Partners' Capital Account, Name [Domain] Partner Type of Partners' Capital Account, Name [Domain] Investor Partners Managing General Partner General Partner [Member] Partners' Capital Partners' Capital Income (Loss) from Continuing Operations, Net of Tax, Including Portion Attributable to Noncontrolling Interest Income (Loss) from Continuing Operations, Net of Tax, Including Portion Attributable to Noncontrolling Interest Limited Partners' Capital Account Limited Partners' Capital Account General Partners' Capital Account General Partners' Capital Account Fair Value Disclosures [Abstract] Fair Value Disclosures [Text Block] Fair Value Disclosures [Text Block] Balance Sheet Parentheticals [Abstract] Balance Sheet Parentheticals Limited Partners' Capital Account, Units Issued Limited Partners' Capital Account, Units Issued Limited Partners' Capital Account, Units Outstanding Subsequent Events [Abstract] Organization, Consolidation and Presentation of Financial Statements Disclosure [Text Block] Organization, Consolidation and Presentation of Financial Statements Disclosure [Text Block] Statement of Cash Flows [Abstract] Cash flows from operating activities: Net Cash Provided by (Used in) Operating Activities [Abstract] Net loss Adjustments to net income (loss) to reconcile to net cash from operating activities: Adjustments to Reconcile Net Income (Loss) to Cash Provided by (Used in) Operating Activities [Abstract] Changes in assets and liabilities: Increase (Decrease) in Operating Capital [Abstract] Accounts receivable Increase (Decrease) in Accounts Receivable Crude oil inventory Increase (Decrease) in Inventories Asset retirement obligations Asset Retirement Obligation, Cash Paid to Settle Due to Managing General Partner, net Increase (Decrease) in Due to Affiliates, Current Net cash from operating activities Net Cash Provided by (Used in) Operating Activities Cash flows from Investing Activities: Net Cash Provided by (Used in) Investing Activities [Abstract] Capital expenditures for crude oil and natural gas properties Payments to Explore and Develop Oil and Gas Properties Proceeds from sales of well equipment Proceeds from Sale of Oil and Gas Property and Equipment Net cash from investing activities Net Cash Provided by (Used in) Investing Activities Net change in cash and cash equivalents Cash and Cash Equivalents, Period Increase (Decrease) Cash and cash equivalents, beginning of period Cash and Cash Equivalents, at Carrying Value Cash and cash equivalents, end of period Change in due to managing general partner, net related to purchases of properties and equipment Capital Expenditures Incurred but Not yet Paid Change in due to managing general partner, net related to sales of well equipment Gain (Loss) on Sale of Properties New Accounting Pronouncements and Changes in Accounting Principles [Abstract] Summary of Significant Accounting Policies [Text Block] Significant Accounting Policies [Text Block] Statement of Financial Position [Abstract] Assets Assets [Abstract] Current assets: Assets, Current [Abstract] Cash and cash equivalents Accounts receivable Accounts Receivable, Net, Current Crude oil inventory Inventory, Net Total current assets Assets, Current Crude oil and natural gas properties, successful efforts method, at cost Oil and Gas Property, Successful Effort Method, Gross Less: Accumulated depreciation, depletion and amortization Oil and Gas Property, Successful Effort Method, Accumulated Depreciation, Depletion and Amortization Crude oil and natural gas properties, net Oil and Gas Property, Successful Effort Method, Net Total Assets Assets Liabilities and Partners' Equity Liabilities and Equity [Abstract] Current liabilities: Liabilities, Current [Abstract] Due to Managing General Partner, net Current portion of asset retirement obligations Total current liabilities Liabilities, Current Asset retirement obligations Total Liabilities Liabilities Commitments and contingent liabilities Commitments and Contingencies Partners' equity (deficit): Partners' Capital [Abstract] Managing General Partner Limited Partners - 4,497 units issued and outstanding Total Partners' Equity (Deficit) Total Liabilities and Partners' Equity (Deficit) Liabilities and Equity Schedule of Change in Asset Retirement Obligation [Table Text Block] Schedule of Change in Asset Retirement Obligation [Table Text Block] Related Party Transactions Disclosure [Text Block] Related Party Transactions Disclosure [Text Block] Document Entity Information [Abstract] Document Entity Information [Abstract] Entities [Table] Entities [Table] Entity Information Entity Information [Line Items] Additional General Partnership Units Outstanding Additional General Partnership Units Outstanding Additional General Partnership Units Outstanding Entity Registrant Name Entity Registrant Name