-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Rt71QXWQZBhNtSweou8n/SEkgmZrApIRj7uWNr9MqBFxKnej1DDd1d4vgScIy8Dr RP2kMwsLy8gYookrUTOXOA== 0000780200-98-000059.txt : 19980219 0000780200-98-000059.hdr.sgml : 19980219 ACCESSION NUMBER: 0000780200-98-000059 CONFORMED SUBMISSION TYPE: 10-K405 PUBLIC DOCUMENT COUNT: 17 CONFORMED PERIOD OF REPORT: 19971231 FILED AS OF DATE: 19980218 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: GEODYNE ENERGY INCOME LTD PARTNERSHIP II A CENTRAL INDEX KEY: 0000824894 STANDARD INDUSTRIAL CLASSIFICATION: CRUDE PETROLEUM & NATURAL GAS [1311] IRS NUMBER: 731295505 STATE OF INCORPORATION: OK FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-K405 SEC ACT: SEC FILE NUMBER: 000-16388 FILM NUMBER: 98544481 BUSINESS ADDRESS: STREET 1: TWO WEST SECOND STREET CITY: TULSA STATE: OK ZIP: 74103 BUSINESS PHONE: 9185831791 MAIL ADDRESS: STREET 1: SAMSON PLAZA STREET 2: TWO WEST SECOND ST CITY: TULSA STATE: OK ZIP: 74103 FORMER COMPANY: FORMER CONFORMED NAME: PAINEWEBBER GEODYNE ENERGY INCOME LTD PARTNERSHIP II A DATE OF NAME CHANGE: 19920703 FORMER COMPANY: FORMER CONFORMED NAME: PAINEWEBBER GEODYNE ENERGY INCOME LIMITED PARTNERSHIP II A DATE OF NAME CHANGE: 19900620 FILER: COMPANY DATA: COMPANY CONFORMED NAME: GEODYNE ENERGY INCOME LTD PARTNERSHIP II-B CENTRAL INDEX KEY: 0000826345 STANDARD INDUSTRIAL CLASSIFICATION: CRUDE PETROLEUM & NATURAL GAS [1311] IRS NUMBER: 731303341 STATE OF INCORPORATION: OK FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-K405 SEC ACT: SEC FILE NUMBER: 000-16405 FILM NUMBER: 98544482 BUSINESS ADDRESS: STREET 1: TWO WEST SECOND STREET STREET 2: SAMSON PLAZA CITY: TULSA STATE: OK ZIP: 74103 BUSINESS PHONE: 9185831791 MAIL ADDRESS: STREET 1: SAMSON PLAZA STREET 2: TWO WEST SECOND ST CITY: TULSA STATE: OK ZIP: 74103 FORMER COMPANY: FORMER CONFORMED NAME: PAINEWEBBER GEODYNE ENERGY INCOME LTD PARTNERSHIP II-B DATE OF NAME CHANGE: 19920703 FORMER COMPANY: FORMER CONFORMED NAME: PAINEWEBBER GEODYNE ENERGY INCOME LIMITED PARTNERSHIP II-B DATE OF NAME CHANGE: 19900620 FILER: COMPANY DATA: COMPANY CONFORMED NAME: GEODYNE ENERGY INCOME LTD PARTNERSHIP II-C CENTRAL INDEX KEY: 0000833054 STANDARD INDUSTRIAL CLASSIFICATION: CRUDE PETROLEUM & NATURAL GAS [1311] IRS NUMBER: 731308986 STATE OF INCORPORATION: OK FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-K405 SEC ACT: SEC FILE NUMBER: 000-16981 FILM NUMBER: 98544483 BUSINESS ADDRESS: STREET 1: TWO WEST SECOND STREET CITY: TULSA STATE: OK ZIP: 74103 BUSINESS PHONE: 9185831791 MAIL ADDRESS: STREET 1: SAMSON PLAZA STREET 2: TWO WEST SECOND ST CITY: TULSA STATE: OK ZIP: 74103 FORMER COMPANY: FORMER CONFORMED NAME: PAINEWEBBER GEODYNE ENERGY INCOME LTD PARTNERSHIP II-C DATE OF NAME CHANGE: 19920703 FORMER COMPANY: FORMER CONFORMED NAME: PAINEWEBBER GEODYNE ENERGY INCOME LIMITED PARTNERSHIP II-C DATE OF NAME CHANGE: 19900620 FILER: COMPANY DATA: COMPANY CONFORMED NAME: GEODYNE ENERGY INCOME LTD PARTNERSHIP II-D CENTRAL INDEX KEY: 0000833526 STANDARD INDUSTRIAL CLASSIFICATION: CRUDE PETROLEUM & NATURAL GAS [1311] IRS NUMBER: 731329761 STATE OF INCORPORATION: OK FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-K405 SEC ACT: SEC FILE NUMBER: 000-16980 FILM NUMBER: 98544484 BUSINESS ADDRESS: STREET 1: TWO WEST SECOND STREET CITY: TULSA STATE: OK ZIP: 74103 BUSINESS PHONE: 9185831791 MAIL ADDRESS: STREET 1: SAMSON PLAZA STREET 2: TWO WEST SECOND ST CITY: TULSA STATE: OK ZIP: 74103 FORMER COMPANY: FORMER CONFORMED NAME: PAINEWEBBER GEODYNE ENERGY INCOME LTD PARTNERSHIP II-D DATE OF NAME CHANGE: 19920703 FORMER COMPANY: FORMER CONFORMED NAME: PAINEWEBBER GEODYNE ENERGY INCOME LIMITED PARTNERSHIP II-D DATE OF NAME CHANGE: 19900620 FILER: COMPANY DATA: COMPANY CONFORMED NAME: GEODYNE ENERGY INCOME LTD PARTNERSHIP II-E CENTRAL INDEX KEY: 0000842881 STANDARD INDUSTRIAL CLASSIFICATION: ASSET-BACKED SECURITIES [6189] IRS NUMBER: 731324751 STATE OF INCORPORATION: OK FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-K405 SEC ACT: SEC FILE NUMBER: 000-17320 FILM NUMBER: 98544485 BUSINESS ADDRESS: STREET 1: TWO WEST SECOND STREET CITY: TULSA STATE: OK ZIP: 74103 BUSINESS PHONE: 9185831791 MAIL ADDRESS: STREET 1: SAMSON PLAZA STREET 2: TWO WEST SECOND ST CITY: TULSA STATE: OK ZIP: 74103 FORMER COMPANY: FORMER CONFORMED NAME: PAINEWEBBER GEODYNE ENERGY INCOME LTD PARTNERSHIP II-E DATE OF NAME CHANGE: 19920703 FORMER COMPANY: FORMER CONFORMED NAME: PAINEWEBBER GEODYNE ENERGY INCOME LIMITED PARTNERSHIP II-E DATE OF NAME CHANGE: 19900620 FILER: COMPANY DATA: COMPANY CONFORMED NAME: GEODYNE ENERGY INCOME LIMITED PARTNERSHIP II-F CENTRAL INDEX KEY: 0000850506 STANDARD INDUSTRIAL CLASSIFICATION: CRUDE PETROLEUM & NATURAL GAS [1311] IRS NUMBER: 731330632 STATE OF INCORPORATION: OK FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-K405 SEC ACT: SEC FILE NUMBER: 000-17799 FILM NUMBER: 98544486 BUSINESS ADDRESS: STREET 1: TWO W SECOND ST STREET 2: SAMSON PLAZA CITY: TULSA STATE: OK ZIP: 74103 BUSINESS PHONE: 9185831791 MAIL ADDRESS: STREET 1: SAMSON PLZ STREET 2: TWO WEST SECOND STREET CITY: TULSA STATE: OK ZIP: 74103 FORMER COMPANY: FORMER CONFORMED NAME: PAINEWEBBER GEODYNE ENERGY INCOME LIMITED PARTNERSHIP II-F DATE OF NAME CHANGE: 19900620 FILER: COMPANY DATA: COMPANY CONFORMED NAME: GEODYNE ENERGY INCOME LTD PARTNERSHIP II-G CENTRAL INDEX KEY: 0000851724 STANDARD INDUSTRIAL CLASSIFICATION: CRUDE PETROLEUM & NATURAL GAS [1311] IRS NUMBER: 731336572 STATE OF INCORPORATION: OK FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-K405 SEC ACT: SEC FILE NUMBER: 000-17802 FILM NUMBER: 98544487 BUSINESS ADDRESS: STREET 1: TWO WEST SECOND STREET CITY: TULSA STATE: OK ZIP: 74103 BUSINESS PHONE: 9185831791 MAIL ADDRESS: STREET 1: SAMSON PLAZA STREET 2: TWO W SECOND ST CITY: TULSA STATE: OK ZIP: 74103 FORMER COMPANY: FORMER CONFORMED NAME: PAINEWEBBER GEODYNE ENERGY INCOME LTD PARTNERSHIP II-G DATE OF NAME CHANGE: 19920703 FORMER COMPANY: FORMER CONFORMED NAME: PAINEWEBBER GEODYNE ENERGY INCOME LIMITED PARTNERSHIP II-G DATE OF NAME CHANGE: 19900620 FILER: COMPANY DATA: COMPANY CONFORMED NAME: GEODYNE ENERGY INCOME LTD PARTNERSHIP II-H CENTRAL INDEX KEY: 0000854062 STANDARD INDUSTRIAL CLASSIFICATION: CRUDE PETROLEUM & NATURAL GAS [1311] IRS NUMBER: 731342476 STATE OF INCORPORATION: OK FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-K405 SEC ACT: SEC FILE NUMBER: 000-18305 FILM NUMBER: 98544488 BUSINESS ADDRESS: STREET 1: TWO W SECOND ST CITY: TULSA STATE: OK ZIP: 74103 BUSINESS PHONE: 9195831791 MAIL ADDRESS: STREET 1: SAMSON PLAZA STREET 2: TWO W SECOND ST CITY: TULSA STATE: OK ZIP: 74103 FORMER COMPANY: FORMER CONFORMED NAME: PAINEWEBBER GEODYNE ENERGY INCOME LTD PARTNERSHIP II-H DATE OF NAME CHANGE: 19920703 FORMER COMPANY: FORMER CONFORMED NAME: PAINEWEBBER GEODYNE ENERGY INCOME LIMITED PARTNERSHIP II-H DATE OF NAME CHANGE: 19900620 10-K405 1 ANNUAL REPORT ON FORM 10-K405 FORM 10-K405 SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 1997 Commission File Number: II-A: 0-16388 II-C: 0-16981 II-E: 0-17320 II-G: 0-17802 II-B: 0-16405 II-D: 0-16980 II-F: 0-17799 II-H: 0-18305 GEODYNE ENERGY INCOME LIMITED PARTNERSHIP II-A GEODYNE ENERGY INCOME LIMITED PARTNERSHIP II-B GEODYNE ENERGY INCOME LIMITED PARTNERSHIP II-C GEODYNE ENERGY INCOME LIMITED PARTNERSHIP II-D GEODYNE ENERGY INCOME LIMITED PARTNERSHIP II-E GEODYNE ENERGY INCOME LIMITED PARTNERSHIP II-F GEODYNE ENERGY INCOME LIMITED PARTNERSHIP II-G GEODYNE ENERGY INCOME LIMITED PARTNERSHIP II-H ---------------------------------------------- (Exact name of Registrant as specified in its Articles) II-A 73-1295505 II-B 73-1303341 II-C 73-1308986 II-D 73-1329761 II-E 73-1324751 II-F 73-1330632 II-G 73-1336572 Oklahoma II-H 73-1342476 - ------------------------------- -------------------- (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) Two West Second Street, Tulsa, Oklahoma 74103 -------------------------------------------------- (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: (918) 583-1791 Securities registered pursuant to Section 12(b) of the Act: None Securities registered pursuant to Section 12(g) of the Act: Depositary Units of limited partnership interest Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports) and (2) has been subject to the filing requirements for the past 90 days. Yes X No ----- ----- Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K405 or any amendment to this Form 10-K405. X Disclosure is not contained herein ----- Disclosure is contained herein ----- The Depositary Units are not publicly traded, therefore, Registrant cannot compute the aggregate market value of the voting units held by non-affiliates of the Registrant. DOCUMENTS INCORPORATED BY REFERENCE: None FORM 10-K405 TABLE OF CONTENTS PART I.......................................................................1 ITEM 1. BUSINESS...................................................1 ITEM 2. PROPERTIES.................................................7 ITEM 3. LEGAL PROCEEDINGS.........................................22 ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF LIMITED PARTNERS.......26 PART II.....................................................................27 ITEM 5. MARKET FOR UNITS AND RELATED LIMITED PARTNER MATTERS......27 ITEM 6. SELECTED FINANCIAL DATA...................................29 ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.......................38 ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA...............65 ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.......................65 PART III....................................................................65 ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE GENERAL PARTNER...................................................65 ITEM 11. EXECUTIVE COMPENSATION....................................67 ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT................................................77 ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS............78 PART IV.....................................................................80 ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K...............................................80 SIGNATURES............................................................86 PART I. ITEM 1. BUSINESS General The Geodyne Energy Income Limited Partnership II-A (the "II-A Partnership"), Geodyne Energy Income Limited Partnership II-B (the "II-B Partnership"), Geodyne Energy Income Limited Partnership II-C (the "II-C Partnership"), Geodyne Energy Income Limited Partnership II-D (the "II-D Partnership"), Geodyne Energy Income Limited Partnership II-E (the "II-E Partnership"), Geodyne Energy Income Limited Partnership II-F (the "II-F Partnership"), Geodyne Energy Income Limited Partnership II-G (the "II-G Partnership"), and Geodyne Energy Income Limited Partnership II-H (the "II-H Partnership") (collectively, the "Partnerships") are limited partnerships formed under the Oklahoma Revised Uniform Limited Partnership Act. Each Partnership is composed of Geodyne Resources, Inc. ("Geodyne"), a Delaware corporation, as the general partner, and Geodyne Depositary Company, a Delaware corporation, as the sole initial limited partner and public investors as substitute limited partners (the "Limited Partners"). The Partnerships commenced operations on the dates set forth below. Date of Partnership Activation ----------- ----------------- II-A July 22, 1987 II-B October 14, 1987 II-C January 14, 1988 II-D May 10, 1988 II-E September 27, 1988 II-F January 5, 1989 II-G April 10, 1989 II-H May 17, 1989 Immediately following activation, each Partnership invested as a general partner in a separate Oklahoma general partnership which actually conducts the Partnerships' operations. Geodyne serves as managing partner of such general partnerships. Unless the context indicates otherwise, all references to any single Partnership or all of the Partnerships in this Annual Report on Form 10-K405 (the "Annual Report") are references to the Partnership and its related general partnership, collectively. In addition, unless the context indicates otherwise, all references to the "General Partner" in this Annual Report are references to Geodyne as the general partner of the limited partnerships and as the managing partner of the related general partnerships. 1 The General Partner currently serves as general partner of 29 limited partnerships including the Partnerships. The General Partner is a wholly-owned subsidiary of Samson Investment Company. Samson Investment Company and its various corporate subsidiaries, including the General Partner (collectively, the "Samson Companies"), are primarily engaged in the production and development of and exploration for oil and gas reserves and the acquisition and operation of producing properties. At December 31, 1997, the Samson Companies owned interests in approximately 13,000 oil and gas wells located in 19 states of the United States and the countries of Canada, Venezuela, and Russia. At December 31, 1997, the Samson Companies operated approximately 2,500 oil and gas wells located in 15 states of the United States, as well as Canada, Venezuela, and Russia. The Partnerships are currently engaged in the business of owning interests in producing oil and gas properties located in the continental United States. The Partnerships may also engage to a limited extent in development drilling on producing oil and gas properties as required for the prudent management of the Partnerships. As limited partnerships, the Partnerships have no officers, directors, or employees. They rely instead on the personnel of the General Partner and the other Samson Companies. As of February 1, 1998, the Samson Companies employed approximately 820 persons. No employees are covered by collective bargaining agreements, and management believes that the Samson Companies provide a sound employee relations environment. For information regarding the executive officers of the General Partner, see "Item 10. Directors and Executive Officers of the General Partner." The General Partner's and the Partnerships' principal place of business is located at Samson Plaza, Two West Second Street, Tulsa, Oklahoma 74103, and their telephone number is (918) 583-1791 or (800) 283-1791. Pursuant to the terms of the partnership agreements for the Partnerships (the "Partnership Agreements") the Partnerships will terminate on December 31, 2001. However, the Partnership Agreements provide that the General Partner may extend the term of each Partnership for up to five periods of two years each. As of the date of this Annual Report, the General Partner has not determined whether to extend the term of any Partnership. 2 Funding Although the Partnership Agreements permit the Partnerships to incur borrowings, the Partnerships' operations and expenses are currently funded out of each Partnership's revenues from oil and gas sales. The General Partner may, but is not required to, advance funds to a Partnership for the same purposes for which Partnership borrowings are authorized. Principal Products Produced and Services Rendered The Partnerships' sole business is the production of, and related incidental development of, oil and gas. The Partnerships do not refine or otherwise process crude oil and condensate. The Partnerships do not hold any patents, trademarks, licenses, or concessions and are not a party to any government contracts. The Partnerships have no backlog of orders and do not participate in research and development activities. The Partnerships are not presently encountering shortages of oilfield tubular goods, compressors, production material, or other equipment. Competition and Marketing The domestic oil and gas industry is highly competitive, with a large number of companies and individuals engaged in the exploration and development of oil and gas properties. The ability of the Partnerships to produce and market oil and gas profitably depends on a number of factors that are beyond the control of the Partnerships. These factors include worldwide political instability (especially in oil-producing regions), United Nations export embargoes, the supply and price of foreign imports of oil and gas, the level of consumer product demand (which can be heavily influenced by weather patterns), government regulations and taxes, the price and availability of alternative fuels, the overall economic environment, and the availability and capacity of transportation and processing facilities. The effect of these factors on future oil and gas industry trends cannot be accurately predicted or anticipated. The most important variable affecting the Partnerships' revenues is the prices received for the sale of oil and gas. Predicting future prices is very difficult. Concerning past trends, average yearly wellhead gas prices in the United States have been volatile for a number of years. For the past ten years, such average prices have generally been in the $1.40 to $2.40 per Mcf range, significantly below prices received in the early 1980s. Average gas prices in the latter part of 1996 and parts of 1997, however, were somewhat higher than those yearly averages. Gas prices are currently in the higher end of the 10-year average price range described above. 3 Substantially all of the Partnerships' gas reserves are being sold on the "spot market." Prices on the spot market are subject to wide seasonal and regional pricing fluctuations due to the highly competitive nature of the spot market. In addition, such spot market sales are generally short-term in nature and are dependent upon the obtaining of transportation services provided by pipelines. Spot prices for the Partnerships' gas decreased from approximately $3.57 per Mcf at December 31, 1996 to approximately $2.32 per Mcf at December 31, 1997. Such prices were on an MMBTU basis and differ from the prices actually received by the Partnerships due to transportation and marketing costs, BTU adjustments, and regional price and quality differences. For the past ten years, average oil prices have generally been in the $16.00 to $24.00 per barrel range. Due to global consumption and supply trends over the last several months as well as expectations of at least a short-term slowdown in Asian energy demand, oil prices have recently been in the mid to lower portions of this pricing range, and in early 1998 dropped to as low as approximately $13.75 per barrel. It is not known whether this trend will continue. Prices for the Partnerships' oil decreased from approximately $23.75 per barrel at December 31, 1996 to approximately $16.25 per barrel at December 31, 1997. Future prices for both oil and gas will likely be different from (and may be lower than) the prices in effect on December 31, 1997. Primarily due to heating season demand, year-end prices in many past years have tended to be higher, and in some cases significantly higher, than the yearly average price actually received by the Partnerships for at least the following year. Management is unable to predict whether future oil and gas prices will (i) stabilize, (ii) increase, or (iii) decrease. Significant Customers The following customers accounted for ten percent or more of the Partnerships' oil and gas sales during the year ended December 31, 1997: 4 Partnership Purchaser Percentage - ----------- ---------------------------------- ---------- II-A El Paso Energy Marketing Company ("El Paso") 29.7% Amoco Production Company ("Amoco") 14.8% Hallwood Petroleum, Inc. ("Hallwood") 12.1% II-B El Paso 31.8% Hallwood 16.3% II-C El Paso 29.3% II-D El Paso 22.8% II-E El Paso 41.3% II-F El Paso 24.5% Texaco Exploration and Production, Inc. ("Texaco") 11.1% II-G El Paso 24.3% Texaco 11.1% II-H El Paso 23.9% Texaco 11.1% In the event of interruption of purchases by one or more of the Partnerships' significant customers or the cessation or material change in availability of open access transportation by the Partnerships' pipeline transporters, the Partnerships may encounter difficulty in marketing their gas and in maintaining historic sales levels. Management does not expect any of its open access transporters to seek authorization to terminate their transportation services. Even if the services were terminated, management believes that alternatives would be available whereby the Partnerships would be able to continue to market their gas. The Partnerships' principal customers for crude oil production are refiners and other companies which have pipeline facilities near the producing properties of the Partnerships. In the event pipeline facilities are not conveniently available to production areas, crude oil is usually trucked by purchasers to storage facilities. 5 Oil, Gas, and Environmental Control Regulations Regulation of Production Operations -- The production of oil and gas is subject to extensive federal and state laws and regulations governing a wide variety of matters, including the drilling and spacing of wells, allowable rates of production, prevention of waste and pollution, and protection of the environment. In addition to the direct costs borne in complying with such regulations, operations and revenues may be impacted to the extent that certain regulations limit oil and gas production to below economic levels. Regulation of Sales and Transportation of Oil and Gas -- Sales of crude oil and condensate are made by the Partnerships at market prices and are not subject to price controls. The sale of gas may be subject to both federal and state laws and regulations. The provisions of these laws and regulations are complex and affect all who produce, resell, transport, or purchase gas, including the Partnerships. Although virtually all of the Partnerships' gas production is not subject to price regulation, other regulations affect the availability of gas transportation services and the ability of gas consumers to continue to purchase or use gas at current levels. Accordingly, such regulations may have a material effect on the Partnerships' operations and projections of future oil and gas production and revenues. Future Legislation -- Legislation affecting the oil and gas industry is under constant review for amendment or expansion. Because such laws and regulations are frequently amended or reinterpreted, management is unable to predict what additional energy legislation may be proposed or enacted or the future cost and impact of complying with existing or future regulations. Regulation of the Environment -- The Partnerships' operations are subject to numerous laws and regulations governing the discharge of materials into the environment or otherwise relating to environmental protection. Compliance with such laws and regulations, together with any penalties resulting from noncompliance, may increase the cost of the Partnerships' operations or may affect the Partnerships' ability to timely complete existing or future activities. Management anticipates that various local, state, and federal environmental control agencies will have an increasing impact on oil and gas operations. 6 Insurance Coverage The Partnerships are subject to all of the risks inherent in the exploration for and production of oil and gas including blowouts, pollution, fires, and other casualties. The Partnerships maintain insurance coverage as is customary for entities of a similar size engaged in operations similar to that of the Partnerships, but losses can occur from uninsurable risks or in amounts in excess of existing insurance coverage. The occurrence of an event which is not fully covered by insurance could have a material adverse effect on the Partnerships' financial position and results of operations. ITEM 2. PROPERTIES Well Statistics The following table sets forth the number of productive wells of the Partnerships as of December 31, 1997. Well Statistics(1) As of December 31, 1997 Number of Gross Wells(2) Number of Net Wells(3) ------------------------ ---------------------------- P/ship Total Oil Gas N/A(4) Total Oil Gas N/A(4) - ------ ----- --- --- ------- ----- ----- ----- ------ II-A 1,102 383 715 4 47.08 29.99 16.98 .11 II-B 209 120 87 2 25.10 16.20 8.85 .05 II-C 299 115 180 4 10.21 3.20 6.97 .04 II-D 235 90 142 3 28.42 7.03 20.70 .69 II-E 987 721 236 30 12.82 5.09 7.66 .07 II-F 1,009 757 223 29 12.77 6.85 5.89 .03 II-G 1,009 757 223 29 27.63 14.74 12.83 .06 II-H 1,009 757 223 29 6.75 3.57 3.17 .01 - --------------- (1) The designation of a well as an oil well or gas well is made by the General Partner based on the relative amount of oil and gas reserves for the well. Regardless of a well's oil or gas designation, it may produce oil, gas, or both oil and gas. (2) As used in this Annual Report, "gross well" refers to a well in which a working interest is owned; accordingly, the number of gross wells is the total number of wells in which a working interest is owned. (3) As used in this Annual Report, "net well" refers to the sum of the fractional working interests owned in gross wells. For example, a 15% working interest in a well represents one gross well, but 0.15 net well. (4) Wells which have not been designated as oil or gas. 7 Drilling Activities During 1997 the II-A Partnership participated in drilling the following development wells, all of which are currently producing: Working Name County State Type Interest - -------------- -------- -------- ---- -------- Willamar Willacy Texas Oil 11.5% Community E No. 9 White Farms Canadian Oklahoma Gas 12.0% A No. 4 Arthur Clifton Limestone Texas Gas 0.7% Unit No. 2 No other Partnership participated in any drilling activities during 1997. Oil and Gas Production, Revenue, and Price History The following tables set forth certain historical information concerning the oil (including condensates) and gas production, net of all royalties, overriding royalties, and other third party interests, of the Partnerships, revenues attributable to such production, and certain price and cost information. As used in the tables, direct operating expenses include lease operating expenses and production taxes. In addition, gas production is converted to oil equivalents at the rate of six Mcf per barrel, representing the estimated relative energy content of gas and oil, which rate is not necessarily indicative of the relationship of oil and gas prices. The respective prices of oil and gas are affected by market and other factors in addition to relative energy content. 8 Net Production Data II-A Partnership ---------------- Year Ended December 31, ---------------------------------------- 1997 1996 1995 ---------- ---------- ---------- Production: Oil (Bbls) 105,866 103,230 120,420 Gas (Mcf) 1,505,818 1,737,090 1,768,316 Oil and gas sales: Oil $1,995,185 $2,105,377 $2,030,710 Gas 3,436,560 3,727,497 2,640,845 --------- --------- --------- Total $5,431,745 $5,832,874 $4,671,555 ========= ========= ========= Total direct operating expenses $1,888,421 $1,941,040 $1,846,264 ========= ========= ========= Direct operating expenses as a percentage of oil and gas sales 34.8% 33.3% 39.5% Average sales price: Per barrel of oil $18.85 $20.40 $16.86 Per Mcf of gas 2.28 2.15 1.49 Direct operating expenses per equivalent Bbl of oil $ 5.29 $ 4.94 $ 4.45 9 Net Production Data II-B Partnership ---------------- Year Ended December 31, ---------------------------------------- 1997 1996 1995 ---------- ---------- ---------- Production: Oil (Bbls) 67,591 74,434 81,304 Gas (Mcf) 1,047,458 1,219,775 1,205,296 Oil and gas sales: Oil $1,292,911 $1,557,104 $1,351,079 Gas 2,523,358 2,622,423 1,853,715 --------- --------- --------- Total $3,816,269 $4,179,527 $3,204,794 ========= ========= ========= Total direct operating expenses $1,314,450 $1,164,713 $1,524,778 ========= ========= ========= Direct operating expenses as a percentage of oil and gas sales 34.4% 27.9% 47.6% Average sales price: Per barrel of oil $19.13 $20.92 $16.62 Per Mcf of gas 2.41 2.15 1.54 Direct operating expenses per equivalent Bbl of oil $ 5.43 $ 4.19 $ 5.40 10 Net Production Data II-C Partnership ---------------- Year Ended December 31, ---------------------------------------- 1997 1996 1995 ---------- ---------- ---------- Production: Oil (Bbls) 22,753 25,093 26,383 Gas (Mcf) 582,748 685,344 737,277 Oil and gas sales: Oil $ 433,286 $ 530,533 $ 446,522 Gas 1,363,371 1,395,407 1,073,415 --------- --------- --------- Total $1,796,657 $1,925,940 $1,519,937 ========= ========= ========= Total direct operating expenses $ 527,821 $ 602,924 $ 698,645 ========= ========= ========= Direct operating expenses as a percentage of oil and gas sales 29.4% 31.3% 46.0% Average sales price: Per barrel of oil $19.04 $21.14 $16.92 Per Mcf of gas 2.34 2.04 1.46 Direct operating expenses per equivalent Bbl of oil $ 4.40 $ 4.33 $ 4.68 11 Net Production Data II-D Partnership ---------------- Year Ended December 31, ---------------------------------------- 1997 1996 1995 ---------- ---------- ---------- Production: Oil (Bbls) 50,413 66,517 88,913 Gas (Mcf) 1,501,911 1,637,645 1,906,303 Oil and gas sales: Oil $ 941,767 $1,332,558 $1,457,580 Gas 3,372,387 2,996,544 2,443,936 --------- --------- --------- Total $4,314,154 $4,329,102 $3,901,516 ========= ========= ========= Total direct operating expenses $1,657,087 $1,800,899 $2,136,244 ========= ========= ========= Direct operating expenses as a percentage of oil and gas sales 38.4% 41.6% 54.8% Average sales price: Per barrel of oil $18.68 $20.03 $16.39 Per Mcf of gas 2.25 1.83 1.28 Direct operating expenses per equivalent Bbl of oil $ 5.51 $ 5.31 $ 5.25 12 Net Production Data II-E Partnership ---------------- Year Ended December 31, ---------------------------------------- 1997 1996 1995 ---------- ---------- ---------- Production: Oil (Bbls) 42,668 53,804 63,680 Gas (Mcf) 783,379 861,464 937,469 Oil and gas sales: Oil $ 814,761 $1,096,064 $1,070,217 Gas 1,801,242 1,597,253 1,227,192 --------- --------- --------- Total $2,616,003 $2,693,317 $2,297,409 ========= ========= ========= Total direct operating expenses $ 909,321 $ 913,077 $1,148,507 ========= ========= ========= Direct operating expenses as a percentage of oil and gas sales 34.8% 33.9% 50.0% Average sales price: Per barrel of oil $19.10 $20.37 $16.81 Per Mcf of gas 2.30 1.85 1.31 Direct operating expenses per equivalent Bbl of oil $ 5.25 $ 4.63 $ 5.22 13 Net Production Data II-F Partnership ---------------- Year Ended December 31, ---------------------------------------- 1997 1996 1995 ---------- ---------- ---------- Production: Oil (Bbls) 45,014 47,395 54,773 Gas (Mcf) 586,444 761,702 845,804 Oil and gas sales: Oil $ 839,925 $ 939,731 $ 882,021 Gas 1,351,464 1,493,582 1,146,571 --------- --------- --------- Total $2,191,389 $2,433,313 $2,028,592 ========= ========= ========= Total direct operating expenses $ 546,465 $ 643,984 $ 661,659 ========= ========= ========= Direct operating expenses as a percentage of oil and gas sales 24.9% 26.5% 32.6% Average sales price: Per barrel of oil $18.66 $19.83 $16.10 Per Mcf of gas 2.30 1.96 1.36 Direct operating expenses per equivalent Bbl of oil $ 3.83 $ 3.69 $ 3.38 14 Net Production Data II-G Partnership ---------------- Year Ended December 31, ---------------------------------------- 1997 1996 1995 ---------- ---------- ---------- Production: Oil (Bbls) 94,553 99,593 115,206 Gas (Mcf) 1,256,464 1,626,530 1,832,915 Oil and gas sales: Oil $1,764,599 $1,975,112 $1,855,886 Gas 2,905,646 3,183,687 2,492,201 --------- --------- --------- Total $4,670,245 $5,158,799 $4,348,087 ========= ========= ========= Total direct operating expenses $1,185,722 $1,386,254 $1,455,357 ========= ========= ========= Direct operating expenses as a percentage of oil and gas sales 25.4% 26.9% 33.5% Average sales price: Per barrel of oil $18.66 $19.83 $16.11 Per Mcf of gas 2.31 1.96 1.36 Direct operating expenses per equivalent Bbl of oil $ 3.90 $ 3.74 $ 3.46 15 Net Production Data II-H Partnership ---------------- Year Ended December 31, ---------------------------------------- 1997 1996 1995 ---------- ---------- ---------- Production: Oil (Bbls) 21,998 23,172 26,870 Gas (Mcf) 304,593 397,146 449,854 Oil and gas sales: Oil $ 410,718 $ 459,899 $ 433,226 Gas 709,016 770,323 609,509 --------- --------- --------- Total $1,119,734 $1,230,222 $1,042,735 ========= ========= ========= Total direct operating expenses $ 290,042 $ 339,390 $ 358,984 ========= ========= ========= Direct operating expenses as a percentage of oil and gas sales 25.9% 27.6% 34.4% Average sales price: Per barrel of oil $18.67 $19.85 $16.12 Per Mcf of gas 2.33 1.94 1.35 Direct operating expenses per equivalent Bbl of oil $ 3.99 $ 3.80 $ 3.52 Proved Reserves and Net Present Value The following table sets forth each Partnership's estimated proved oil and gas reserves and net present value therefrom as of December 31, 1997. The schedule of quantities of proved oil and gas reserves was prepared by the General Partner in accordance with the rules prescribed by the Securities and Exchange Commission (the "SEC"). Certain reserve information was reviewed by Ryder Scott Company Petroleum Engineers ("Ryder Scott"), an independent petroleum engineering firm. As used throughout this Annual Report, "proved reserves" refers to those estimated quantities of crude oil, gas, and gas liquids which geological and engineering data demonstrate with reasonable certainty to be recoverable in future years from known oil and gas reservoirs under existing economic and operating conditions. 16 Net present value represents estimated future gross cash flow from the production and sale of proved reserves, net of estimated oil and gas production costs (including production taxes, ad valorem taxes, and operating expenses) and estimated future development costs, discounted at 10% per annum. Net present value attributable to the Partnerships' proved reserves was calculated on the basis of current costs and prices at December 31, 1997. Such prices were not escalated except in certain circumstances where escalations were fixed and readily determinable in accordance with applicable contract provisions. The prices used in calculating the net present value attributable to the Partnerships' proved reserves do not necessarily reflect market prices for oil and gas production subsequent to December 31, 1997. Year-end prices have generally been higher than prices during the rest of the year. There can be no assurance that the prices used in calculating the net present value of the Partnerships' proved reserves at December 31, 1997 will actually be realized for such production. The process of estimating oil and gas reserves is complex, requiring significant subjective decisions in the evaluation of available geological, engineering, and economic data for each reservoir. The data for a given reservoir may change substantially over time as a result of, among other things, additional development activity, production history, and viability of production under varying economic conditions; consequently, it is reasonably possible that material revisions to existing reserve estimates may occur in the near future. Although every reasonable effort has been made to ensure that these reserve estimates represent the most accurate assessment possible, the significance of the subjective decisions required and variances in available data for various reservoirs make these estimates generally less precise than other estimates presented in connection with financial statement disclosures. 17 Proved Reserves and Net Present Values From Proved Reserves As of December 31, 1997(1) II-A Partnership: - ---------------- Estimated proved reserves: Gas (Mcf) 8,356,437 Oil and liquids (Bbls) 539,343 Net present value (discounted at 10% per annum) $12,407,355 II-B Partnership: - ---------------- Estimated proved reserves: Gas (Mcf) 5,229,097 Oil and liquids (Bbls) 387,865 Net present value (discounted at 10% per annum) $ 8,071,131 II-C Partnership: - ---------------- Estimated proved reserves: Gas (Mcf) 3,889,883 Oil and liquids (Bbls) 162,147 Net present value (discounted at 10% per annum) $ 5,267,515 II-D Partnership: - ---------------- Estimated proved reserves: Gas (Mcf) 9,255,929 Oil and liquids (Bbls) 383,039 Net present value (discounted at 10% per annum) $11,085,069 II-E Partnership: - ---------------- Estimated proved reserves: Gas (Mcf) 5,074,002 Oil and liquids (Bbls) 237,194 Net present value (discounted at 10% per annum) $ 6,823,354 II-F Partnership: - ---------------- Estimated proved reserves: Gas (Mcf) 3,944,059 Oil and liquids (Bbls) 315,819 Net present value (discounted at 10% per annum) $ 6,688,489 18 II-G Partnership: - ---------------- Estimated proved reserves: Gas (Mcf) 8,448,788 Oil and liquids (Bbls) 664,340 Net present value (discounted at 10% per annum) $14,197,304 II-H Partnership: - ---------------- Estimated proved reserves: Gas (Mcf) 2,044,982 Oil and liquids (Bbls) 155,440 Net present value (discounted at 10% per annum) $ 3,380,100 - ---------- (1) Includes certain gas balancing adjustments which cause the gas volumes and net present values to differ from the reserve reports prepared by the General Partner and reviewed by Ryder Scott. No estimates of the proved reserves of the Partnerships comparable to those included herein have been included in reports to any federal agency other than the SEC. Additional information relating to the Partnerships' proved reserves is contained in Note 4 to the Partnerships' financial statements, included in Item 8 of this Annual Report. Significant Properties The following tables set forth certain well and reserves information for the basins in which the Partnerships own a significant amount of properties. The tables contain the following information for each significant basin: (i) the number of gross wells and net wells, (ii) the number of wells in which only a non-working interest is owned, (iii) the Partnership's total number of wells, (iv) the number and percentage of wells operated by the Partnership's affiliates, (v) estimated proved oil reserves, (vi) estimated proved gas reserves, and (vii) the present value (discounted at 10% per annum) of estimated future net cash flow. The Anadarko Basin is located in western Oklahoma and the Texas panhandle, while the Southern Oklahoma Folded Belt Basin is located in southern Oklahoma. The Gulf Coast Basin is located in southern Louisiana and southeast Texas, while the Permian Basin straddles west Texas and southeast New Mexico. Northeast Utah contains the Uinta Basin, while the Sacramento Basin is located in central California. The Williston Basin is located in North Dakota, South Dakota, and Eastern Montana. 19
Significant Properties ---------------------- Wells Operated by Affiliates Oil Gas Gross Net Other Total ------------ Reserves Reserves Present Basin Wells Wells Wells(1) Wells Number % (Bbl) (Mcf) Value - ------------------ ------ ------- -------- ------ ------ ---- -------- ---------- ---------- II-A Partnership: Anadarko 169 9.88 58 227 35 15% 51,131 4,377,441 $5,344,894 Gulf Coast 270 12.02 2 272 1 -% 169,557 1,613,746 2,693,269 Permian 484 4.18 11 495 10 2% 63,838 997,003 1,362,308 Southern Okla. Folded Belt 17 2.22 23 40 12 30% 62,956 648,662 1,214,239 II-B Partnership: Anadarko 42 5.12 4 46 14 30% 21,287 2,505,100 $2,849,997 Gulf Coast 29 .79 2 31 1 3% 35,805 784,913 1,183,795 Permian 11 1.43 3 14 10 71% 38,467 796,796 890,676 Southern Okla. Folded Belt 13 3.50 1 14 12 86% 101,012 843,100 1,652,372 Uinta 10 1.01 1 11 - -% 107,810 187,584 1,136,984 II-C Partnership: Anadarko 104 5.30 16 120 22 18% 20,753 2,182,901 $2,576,147 Southern Okla. Folded Belt 17 1.64 1 18 15 83% 43,728 587,814 930,768 II-D Partnership: Anadarko 72 9.91 13 85 10 12% 37,984 3,470,933 $4,205,358 Sacramento 34 5.63 1 35 - -% - 2,153,514 1,952,005 Williston 74 2.49 1 75 - -% 185,370 191,116 1,096,499 Gulf Coast 20 2.97 - 20 10 50% 62,717 942,820 1,136,417 - -------------------------- (1) Wells in which only a non-working (e.g. royalty) interest is owned.
20
Significant Properties ---------------------- Wells Operated by Affiliates Oil Gas Gross Net Other Total ------------ Reserves Reserves Present Basin Wells Wells Wells(1) Wells Number % (Bbl) (Mcf) Value - ------------------ ------ ------- -------- ------ ------ ---- -------- ---------- ---------- II-E Partnership: Anadarko 37 2.25 23 60 15 25% 5,810 2,222,572 $2,371,567 Gulf Coast 46 3.19 6 52 10 19% 74,860 369,287 755,167 Permian 831 4.54 2,533 3,364 8 -% 116,648 1,598,410 2,413,276 Southern Okla. Folded Belt 10 .50 - 10 1 10% 17,717 823,681 1,057,730 II-F Partnership: Anadarko 65 2.39 25 90 17 19% 4,987 1,630,842 $1,841,287 Permian 824 7.39 2,530 3,354 4 -% 274,943 1,515,389 3,948,477 Southern Okla. Folded Belt 29 2.11 - 29 23 79% 18,528 609,628 695,450 II-G Partnership: Anadarko 65 5.08 25 90 17 19% 10,759 3,446,615 $3,893,134 Permian 824 15.51 2,530 3,354 4 -% 574,459 3,165,274 8,252,982 Southern Okla. Folded Belt 29 4.78 - 29 23 79% 41,979 1,380,923 1,575,495 II-H Partnership: Anadarko 65 1.21 20 85 17 20% 2,524 814,347 $ 919,184 Permian 824 3.58 2,530 3,354 4 -% 132,860 733,034 1,911,408 Southern Okla. Folded Belt 29 1.26 - 29 23 79% 11,094 365,066 416,959 - ---------------------- (1) Wells in which only a non-working (e.g. royalty) interest is owned.
21 Title to Oil and Gas Properties Management believes that the Partnerships have satisfactory title to their oil and gas properties. Record title to all of the Partnerships' properties is held by either the Partnerships or Geodyne Nominee Corporation, an affiliate of the General Partner. Title to the Partnerships' properties is subject to customary royalty, overriding royalty, carried, working, and other similar interests and contractual arrangements customary in the oil and gas industry, to liens for current taxes not yet due, and to other encumbrances. Management believes that such burdens do not materially detract from the value of such properties or from the Partnerships' interest therein or materially interfere with their use in the operation of the Partnerships' business. ITEM 3. LEGAL PROCEEDINGS Upon acquiring an interest in certain natural gas producing wells in 1988, the II-A, II-B, II-C, II-D, and II-E Partnerships became plaintiffs (together with certain other owners of interests in the same wells) in a lawsuit seeking damages from Texaco, Inc. ("Texaco") for (i) take-or-pay deficiencies and (ii) gas pricing claims arising out of a gas purchase contract pursuant to which Texaco purchased gas from the Partnerships and the other owners. That lawsuit is styled Wolverine Exploration Company, et al. v. Natural Gas Pipeline Company of America, et al., Case No. CJ-88-5522, District Court of Tulsa County, Oklahoma, filed September 12, 1988. In June 1995, as a result of an order from the Oklahoma Court of Appeals and agreement among the parties, an arbitration was conducted before a three person panel. On September 6, 1995 the panel issued its determination and awarded damages to the plaintiffs in the matter. 22 Geodyne filed a petition with the Tulsa County District Court seeking confirmation of the arbitration award. Texaco has contested the confirmation based upon stated legal and factual arguments, all of which Geodyne believes to be without merit. A hearing on the confirmation petition was held on May 1 and 2, 1996. As of the date of this Annual Report, no ruling has been issued in the matter. Texaco has stated that it will contest Geodyne's entitlement to interest on the arbitration award from September 6, 1995 through the date of actual payment. Additionally, Texaco sought to reopen its Chapter 11 bankruptcy proceedings in an effort to avoid enforcement of the arbitration award through the bankruptcy court. Texaco's motion to reopen the bankruptcy proceedings was granted. Geodyne and other parties moved to dismiss the Texaco proceeding. In addition, all parties moved for summary judgment in the bankruptcy proceedings. On January 16, 1998 the bankruptcy court ruled in favor of Geodyne on its motion for summary judgment, rejecting all of Texaco's efforts to void the arbitration award. Texaco, however, has the right to appeal the bankruptcy court's ruling. In addition, Geodyne and the other plaintiffs have filed a new district court action in Tulsa County, Oklahoma styled Geodyne Production Co. et al. v. Texaco, Inc. Case No. CJ-96-00955, District Court of Tulsa County, Oklahoma. This lawsuit seeks, reimbursement from Texaco for expenses incurred by Geodyne and the other plaintiffs in connection with Texaco's reopened bankruptcy court action. No further proceedings on this lawsuit have occurred to date. Following the ruling of the bankruptcy court, the parties have agreed to meet to discuss settlement of the entire dispute. However, there is no assurance of a settlement. The total amounts of (i) the arbitration award and (ii) post-award interest from September 6, 1995 accrued through December 31, 1997, applicable to the Partnerships after deducting applicable taxes and royalties due to other parties is summarized as follows: Arbitration Award with Post Award Arbitration Award Interest ----------------------- ------------------------ Partnership Total Per Unit Total Per Unit ----------- ---------- -------- ---------- --------- II-A $1,392,000 $ 2.88 $1,703,000 $ 3.52 II-B 2,274,000 6.29 2,781,000 7.69 II-C 975,000 6.30 1,192,000 7.71 II-D 2,470,000 7.84 3,020,000 9.59 II-E 5,014,000 21.91 6,132,000 26.80 The above estimates may change for a number of reasons, including, but not limited to, an appeal of the award by Texaco, and any final award of expenses and post-award interest. 23 In the event the Partnerships ultimately receive any or all of the damages awarded, the funds will be included in the Partnerships' revenues for the quarter in which they are received. Limited Partners who hold Units at the time any related cash distribution is made, then, will benefit from any recovery associated with the litigation. On October 26, 1994 Geodyne and the Partnerships, among other parties, were named as defendants in a lawsuit alleging causes of action based on fraud, negligent misrepresentation, breach of fiduciary duty, breach of implied covenant, and breach of contract in connection with the offer and sale of limited partnership interests ("Units") in the Partnerships (Sidney Neidick et al. v. Geodyne Resources, Inc., et al., Case No. 94-052860, District Court of Harris County, Texas). The plaintiffs' petition alleged that the lawsuit was being brought as a class action on behalf of investors who purchased Units in the Partnerships. On June 7, 1995, Geodyne and the Partnerships were dismissed without prejudice as defendants in the matter. In addition, on June 7, 1995, the matter was certified as a class action. On November 23 and 25, 1994, Geodyne, PaineWebber Incorporated ("PaineWebber"), and certain other parties were named as defendants in two related lawsuits alleging misrepresentations made to induce investments in the Partnerships and asserting causes of action for common law fraud and deceit and unjust enrichment (Romine v. PaineWebber, Inc., et al, Case No. 94-CIV-8558, U. S. District Court, Southern District of New York and Romine v. PaineWebber, Inc., et al, Case No. 94-132844, Supreme Court of the State of New York, County of New York). The federal court case was later consolidated with other similar actions (to which Geodyne is not a party) under the title In Re: PaineWebber Limited Partnerships' Litigation and was certified as a class action on May 30, 1995 (the "Federal Partnership Class Action"). The Federal Partnership Class Action also alleges violations of 18 U.S.C. Section 1962(c) and the Securities Exchange Act of 1934. Compensatory and punitive damages, interest, and costs have been requested in both matters. The amended complaint in the Federal Partnership Class Action no longer asserts any claim directly against Geodyne. On January 18, 1996, PaineWebber issued a press release indicating that it had reached an agreement to settle the pending Federal Partnership Class Action along with the Neidick matter referred to above (collectively, the "PaineWebber Partnership Class Actions"), along with a settlement with the SEC and an agreement to settle with various state securities regulators. On that date, PaineWebber paid $125 million into an interest bearing account as part of a memorandum of understanding in connection with the proposed settlement (the "Settlement Fund"). The Settlement Fund applies to claims related to both the Partnerships and certain other investment programs sold by PaineWebber. In 24 addition, PaineWebber agreed to a SEC administrative order creating a capped $40 million fund (the "SEC Claims Fund"), which is to be distributed to eligible Limited Partners by an independent administrator (the "Claims Administrator"); a civil penalty of $5 million leveled by the SEC; and payments aggregating $5 million to state securities administrators. Such settlement is not an obligation of either the Partnerships or Geodyne and, accordingly, would not affect the financial statements of the Partnerships. In connection with the PaineWebber Partnership Class Actions, on July 17, 1996 the federal court entered a preliminary order regarding the settlement proceedings referred to above. Pursuant to that order, plaintiffs' counsel mailed to class members the Class Settlement Notice (the "Notice") and Proof of Claim. Eligible class members are generally those who purchased their Units through PaineWebber on or before December 31, 1992 and who have not (i) previously opted out of the Class, (ii) previously released PaineWebber, or (iii) finally adjudicated their claims against PaineWebber. Plaintiffs' counsel will be responsible for allocating payments from the $125 million Settlement Fund previously funded by PaineWebber among eligible Limited Partners and investors in other unrelated PaineWebber partnerships in accordance with the settlement. The amount and date of any payment will vary depending upon many factors set forth in the Notice. It is currently expected that payments from the Settlement Fund will be made some time in 1998. In addition, eligible Limited Partners in the Partnerships who held their Units on June 3, 1996 may be entitled to certain additional payments from an escrow fund to which PaineWebber will make payments through May 30, 2001 if spot market oil and natural gas prices as reported by the New York Mercantile Exchange fall below certain thresholds set forth in the Notice (the "Pricing Guarantee"). The threshold prices used in the Pricing Guarantee are $18.00 per barrel of oil and $1.80 per Mcf of gas. Under the Notice, PaineWebber payments, if any, made pursuant to the Pricing Guarantee will be paid to Limited Partners of record on June 30, 1996 irrespective of whether they subsequently sell/dispose of their Units to third parties. The Pricing Guarantee does NOT attach to the Units as an attribute of ownership in the Partnerships and is not an obligation of either Geodyne or the Partnerships. A look back provision is also included in the settlement which may provide additional funds as of January 1, 2001 for eligible Limited Partners. Class members who sold their Units prior to June 30, 1996 will not be eligible for payments, if any, under the Pricing Guarantee or the look back provision. 25 Eligible Limited Partners were required to timely execute and return a proof of claim by January 17, 1997 in order to participate in the settlement. In connection with the SEC Claims Fund, on April 17, 1996, PaineWebber mailed a Notice and Claim Form to each Limited Partner who purchased Units in the Partnerships through PaineWebber from January 1, 1986 to December 31, 1992. Limited Partners are not eligible to participate in the claims process if they (i) previously reached a settlement with PaineWebber or (ii) had their direct investment claim resolved by a court or in arbitration. Participation in the claims process is optional, and does not prevent a Limited Partner from pursuing any other remedy against PaineWebber that may be available. Limited Partners had until October 22, 1996 to complete the claim form and return it to the Claims Administrator. The determination of whether a Limited Partner is entitled to a recovery under the SEC Claims Fund will be based on whether or not the Claims Administrator determines that the Limited Partner's investment in the Partnerships was suitable for him at the time of purchase. In addition, if the Limited Partner has opted out of the PaineWebber Partnership Class Action and has not already settled with PaineWebber or has had a claim resolved by a court or in arbitration, the Claims Administrator will also consider allegations that misrepresentations were made in connection with the sale of the Units. On March 20, 1997 the settlement described above was confirmed by the federal district court. Certain limited partners in partnerships that were not sponsored by the General Partner appealed the confirmation; however, all such appeals were denied by the United States Second Circuit Court of Appeals and the settlement order is now final. The parties are currently awaiting a ruling by the federal district judge as to the amount of attorneys' fees to be awarded to the plaintiffs' attorneys from the Settlement Fund. The General Partner expects that the Settlement Fund will be distributed to eligible class members within a few months following the entry of a final order on the attorneys' fees. Except as set forth above, to the knowledge of the General Partner, neither the General Partner nor the Partnerships or their properties are subject to any litigation, the results of which would have a material effect on the Partnerships' or the General Partner's financial condition or operations. ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF LIMITED PARTNERS There were no matters submitted to a vote of the Limited Partners of any Partnership during 1997. 26 PART II. ITEM 5. MARKET FOR UNITS AND RELATED LIMITED PARTNER MATTERS As of January 31, 1998, the number of Units outstanding and the approximate number of Limited Partners of record in the Partnerships were as follows: Number of Numbers of Partnership Units Limited Partners ----------- ---------- ---------------- II-A 484,283 4,251 II-B 361,719 2,708 II-C 154,621 1,408 II-D 314,878 2,954 II-E 228,821 2,245 II-F 171,400 1,699 II-G 372,189 2,590 II-H 91,711 1,235 Units were initially sold for a price of $100. The Units are not traded on any exchange and there is no public trading market for them. The General Partner is aware of certain transfers of Units between unrelated parties, some of which are facilitated by secondary trading firms and matching services. In addition, as further described below, the General Partner is aware of certain "4.9% tender offers" which have been made for the Units. The General Partner believes that the transfers between unrelated parties have been limited and sporadic in number and volume. Other than trades facilitated by certain secondary trading firms and matching services, no organized trading market for Units exists and none is expected to develop. Due to the nature of these transactions, the General Partner has no verifiable information regarding prices at which Units have been transferred. Further, a transferee may not become a substitute Limited Partner without the consent of the General Partner. Pursuant to the terms of the Partnership Agreements, the General Partner is obligated to annually issue a repurchase offer which is based on the estimated future net revenues from the Partnerships' reserves and is calculated pursuant to the terms of the Partnership Agreements. Such repurchase offer is recalculated monthly in order to reflect cash distributions to the Limited Partners and extraordinary events. The following table sets forth the General Partner's repurchase offer per Unit as of the periods indicated. For purposes of this Annual Report, a Unit represents an initial subscription of $100 to the Partnership. 27 Repurchase Offer Prices ----------------------- 1996 1997 1998 ------------------------ ------------------------ ---- 1st 2nd 3rd 4th 1st 2nd 3rd 4th 1st P/ship Qtr. Qtr. Qtr. Qtr. Qtr. Qtr. Qtr. Qtr. Qtr. - ------ ---- ---- ---- ---- ---- ---- ---- ---- ---- II-A $12 $11 $15 $13 $12 $16 $14 $13 $12 II-B 12 12 14 11 10 15 14 12 11 II-C 16 15 18 16 13 20 18 16 14 II-D 19 18 23 22 19 22 20 18 15 II-E 17 15 21 20 18 20 18 16 14 II-F 19 18 25 22 20 26 22 20 16 II-G 19 18 24 22 19 26 22 20 16 II-H 19 17 24 21 19 25 21 19 16 In addition to this repurchase offer, the Partnerships have been subject to "4.9% tender offers" from several third parties during 1997. The General Partner does not know the terms of these offers or the prices received by the Limited Partners who accepted these offers. Cash Distributions Cash distributions are primarily dependent upon a Partnership's cash receipts from the sale of oil and gas production and cash requirements of the Partnership. Distributable cash is determined by the General Partner at the end of each calendar quarter and distributed to the Limited Partners within 45 days after the end of the quarter. Distributions are restricted to cash on hand less amounts required to be retained out of such cash as determined in the sole judgment of the General Partner to pay costs, expenses, or other Partnership obligations whether accrued or anticipated to accrue. In certain instances, the General Partner may not distribute the full amount of cash receipts which might otherwise be available for distribution in an effort to equalize or stabilize the amounts of quarterly distributions. Any available amounts not distributed are invested and the interest or income thereon is for the accounts of the Limited Partners. The following is a summary of cash distributions paid to the Limited Partners during 1996 and 1997 and the first quarter of 1998. 28 Cash Distributions ------------------ 1996 -------------------------------------------------- 1st 2nd 3rd 4th P/ship Qtr. Qtr. Qtr. Qtr.(1) - ------ ------- ------- ------- ---------- II-A $ .97 $ .97 $1.27 $2.16 II-B .46 .85 1.27 2.21 II-C .60 1.40 1.39 2.05 II-D 1.08 1.15 1.06 1.56 II-E .80 1.24 1.02 1.39 II-F 1.72 1.76 2.33 2.85 II-G 1.64 1.68 2.20 2.78 II-H 1.60 1.59 2.07 2.66 1997 1998 -------------------------------------------------- ------- 1st 2nd 3rd 4th 1st P/ship Qtr. Qtr.(1) Qtr.(1) Qtr.(1) Qtr.(1) - ------ -------- ---------- ---------- ---------- ------- II-A $1.58 $2.24 $1.47 $1.25 $1.43 II-B 1.47 1.96 1.29 1.31 1.71 II-C 2.38(1) 2.35 2.13 1.57 2.17 II-D 2.52(1) 2.60 2.34 1.58 3.33 II-E 1.53(1) 1.93 2.22 1.64 2.21 II-F 2.39 2.77 3.86 1.90 4.18 II-G 2.31 2.69 3.96 1.84 4.05 II-H 2.24 2.58 4.07 1.76 3.83 - ---------------------- (1) Amount of cash distribution includes proceeds from the sale of certain oil and gas properties. ITEM 6. SELECTED FINANCIAL DATA The following tables present selected financial data for the Partnerships. This data should be read in conjunction with the financial statements of the Partnerships, and the respective notes thereto, included elsewhere in this Annual Report. See "Item 8. Financial Statements and Supplementary Data." 29
Selected Financial Data II-A Partnership ---------------- 1997 1996 1995 1994 1993 ------------- ------------- ------------- ------------- ------------- Oil and Gas Sales $5,431,745 $5,832,874 $ 4,671,555 $ 6,371,949 $ 5,445,632 Net Income (Loss): Limited Partners 1,577,370 2,043,339 ( 715,678) 265,761 ( 723,059) General Partner 141,030 156,483 81,747 145,993 84,771 Total 1,718,400 2,199,822 ( 633,931) 411,754 ( 638,288) Limited Partners' Net Income (Loss) per Unit 3.26 4.22 ( 1.48) .55 ( 1.49) Limited Partners' Cash Distributions per Unit 6.54 5.37 3.83 5.49 5.72 Total Assets 7,495,013 9,068,387 9,833,188 12,673,498 15,773,152 Partners' Capital (Deficit): Limited Partners 7,350,261 8,937,891 9,494,552 12,065,230 14,459,469 General Partner ( 387,587) ( 342,481) ( 311,994) ( 297,741) ( 303,734) Number of Units Outstanding 484,283 484,283 484,283 484,283 484,283
30
Selected Financial Data II-B Partnership ---------------- 1997 1996 1995 1994 1993 ------------- ------------- ------------- ------------- ------------- Oil and Gas Sales $3,816,269 $4,179,527 $3,204,794 $4,703,629 $ 4,615,384 Net Income (Loss): Limited Partners 1,095,312 1,329,755 ( 798,537) ( 574,825) ( 330,130) General Partner 99,884 113,834 37,441 87,118 90,840 Total 1,195,196 1,443,589 ( 761,096) ( 487,707) ( 239,290) Limited Partners' Net Income (Loss) per Unit 3.03 3.68 ( 2.21) ( 1.59) ( .91) Limited Partners' Cash Distributions per Unit 6.03 4.79 3.21 5.98 6.64 Total Assets 4,414,695 5,579,977 6,237,427 8,302,058 11,063,368 Partners' Capital (Deficit): Limited Partners 4,464,974 5,552,662 5,955,907 7,914,444 10,654,269 General Partner ( 305,223) ( 265,183) ( 246,438) ( 222,879) ( 196,997) Number of Units Outstanding 361,719 361,719 361,719 361,719 361,719
31
Selected Financial Data II-C Partnership ---------------- 1997 1996 1995 1994 1993 ------------- ------------- ------------- ------------- ------------- Oil and Gas Sales $1,796,657 $1,925,940 $1,519,937 $2,289,166 $1,896,565 Net Income (Loss): Limited Partners 853,383 707,991 ( 337,547) ( 37,871) ( 36,537) General Partner 57,028 53,569 20,538 52,546 39,050 Total 910,411 761,560 ( 317,009) 14,675 2,513 Limited Partners' Net Income (Loss) per Unit 5.52 4.58 ( 2.18) ( .24) ( .24) Limited Partners' Cash Distributions per Unit 8.43 5.43 4.63 7.06 7.44 Total Assets 2,440,315 2,941,348 3,205,943 4,291,920 5,486,394 Partners' Capital (Deficit): Limited Partners 2,458,089 2,907,706 3,039,715 4,092,262 5,220,133 General Partner ( 123,277) ( 115,619) ( 99,615) ( 84,153) ( 80,199) Number of Units Outstanding 154,621 154,621 154,621 154,621 154,621
32
Selected Financial Data II-D Partnership ---------------- 1997 1996 1995 1994 1993 ------------- ------------- ------------- ------------- ------------- Oil and Gas Sales $4,314,154 $4,329,102 $3,901,516 $4,849,160 $ 4,353,624 Net Income (Loss): Limited Partners 1,796,378 1,270,858 ( 697,631) ( 193,308) ( 138,556) General Partner 127,204 99,743 44,055 108,234 85,418 Total 1,923,582 1,370,601 ( 653,576) ( 85,074) ( 53,138) Limited Partners' Net Income (Loss) per Unit 5.70 4.04 ( 2.22) ( .61) ( .44) Limited Partners' Cash Distributions per Unit 9.04 4.85 4.69 6.25 9.29 Total Assets 5,780,264 6,953,850 7,291,164 9,571,883 11,687,932 Partners' Capital (Deficit): Limited Partners 5,572,122 6,627,744 6,884,886 9,057,517 11,215,825 General Partner ( 224,003) ( 218,956) ( 143,473) ( 111,528) ( 135,262) Number of Units Outstanding 314,878 314,878 314,878 314,878 314,878
33
Selected Financial Data II-E Partnership ---------------- 1997 1996 1995 1994 1993 ------------- ------------- ------------- ------------- ------------- Oil and Gas Sales $2,616,003 $2,693,317 $2,297,409 $2,480,706 $ 2,572,564 Net Income (Loss): Limited Partners ( 569) 695,738 ( 1,279,244) ( 842,191) ( 523,678) General Partner 66,976 66,720 9,448 43,060 49,510 Total 66,407 762,458 ( 1,269,796) ( 799,131) ( 474,168) Limited Partners' Net Income (Loss) per Unit .00 3.04 ( 5.59) ( 3.68) ( 2.29) Limited Partners' Cash Distributions per Unit 7.32 4.45 2.32 4.78 7.81 Total Assets 4,257,875 5,976,145 6,279,396 8,117,206 10,020,423 Partners' Capital (Deficit): Limited Partners 4,094,575 5,770,144 6,093,406 7,902,650 9,839,841 General Partner ( 172,017) ( 147,595) ( 122,950) ( 104,398) ( 94,958) Number of Units Outstanding 228,821 228,821 228,821 228,821 228,821
34
Selected Financial Data II-F Partnership ---------------- 1997 1996 1995 1994 1993 ------------- ------------- ------------- ------------- ------------- Oil and Gas Sales $2,191,389 $2,433,313 $2,028,592 $2,316,564 $2,636,304 Net Income (Loss): Limited Partners 147,631 1,108,389 ( 191,631) 19,524 122,048 General Partner 81,927 79,948 46,686 54,498 73,431 Total 229,558 1,188,337 ( 144,945) 74,022 195,479 Limited Partners' Net Income (Loss) per Unit .86 6.47 ( 1.12) .11 .71 Limited Partners' Cash Distributions Per Unit 10.92 8.66 5.93 9.21 8.87 Total Assets 3,564,889 5,312,077 5,733,459 6,967,432 8,544,148 Partners' Capital (Deficit): Limited Partners 3,590,805 5,315,174 5,691,785 6,898,416 8,458,892 General Partner ( 143,355) ( 105,914) ( 84,377) ( 80,063) ( 52,561) Number of Units Outstanding 171,400 171,400 171,400 171,400 171,400
35
Selected Financial Data II-G Partnership ---------------- 1997 1996 1995 1994 1993 ------------- ------------- ------------- ------------- ------------- Oil and Gas Sales $4,670,245 $ 5,158,799 $ 4,348,087 $ 5,116,776 $ 5,581,221 Net Income (Loss): Limited Partners 114,502 2,250,119 ( 714,189) ( 87,682) 130,828 General Partner 172,947 165,845 94,880 113,680 153,901 Total 287,449 2,415,964 ( 619,309) 25,998 284,729 Limited Partners' Net Income (Loss) per Unit .31 6.05 ( 1.92) ( .24) .35 Limit Partners' Cash Distributions per Unit 10.80 8.30 5.80 8.72 8.74 Total Assets 7,635,720 11,576,732 12,519,149 15,456,785 18,825,582 Partners' Capital (Deficit): Limited Partners 7,690,992 11,598,490 12,439,371 15,313,560 18,646,242 General Partner ( 312,392) ( 244,312) ( 197,620) ( 181,500) ( 122,180) Number of Units Outstanding 372,189 372,189 372,189 372,189 372,189
36
Selected Financial Data II-H Partnership ---------------- 1997 1996 1995 1994 1993 ------------- ------------- ------------- ------------- ------------- Oil and Gas Sales $1,119,734 $1,230,222 $1,042,735 $1,208,886 $1,367,514 Net Income (Loss): Limited Partners ( 11,817) 519,143 ( 239,052) ( 47,630) 20,790 General Partner 40,425 38,792 21,532 26,955 36,610 Total 28,608 557,935 ( 217,520) ( 20,675) 57,400 Limited Partners' Net Income (Loss) per Unit ( .13) 5.66 ( 2.61) ( .52) .23 Limited Partners' Cash Distributions per Unit 10.65 7.93 5.61 8.39 8.67 Total Assets 1,788,149 2,790,245 3,024,656 3,790,149 4,618,128 Partners' Capital (Deficit): Limited Partners 1,807,223 2,795,040 3,002,897 3,756,949 4,574,579 General Partner ( 78,796) ( 58,835) ( 47,635) ( 42,167) ( 29,122) Number of Units Outstanding 91,711 91,711 91,711 91,711 91,711
37 ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Use of Forward-Looking Statements and Estimates This Annual Report contains certain forward-looking statements. The words "anticipate," "believe," "expect," "plan," "intend," "estimate," "project," "could," "may," and similar expressions are intended to identify forward-looking statements. Such statements reflect management's current views with respect to future events and financial performance. This Annual Report also includes certain information which is, or is based upon, estimates and assumptions. Such estimates and assumptions are management's efforts to accurately reflect the condition and operation of the Partnerships. Use of forward-looking statements and estimates and assumptions involve risks and uncertainties which include, but are not limited to, the volatility of oil and gas prices, the uncertainty of reserve information, the operating risk associated with oil and gas properties (including the risk of personal injury, death, property damage, damage to the well or producing reservoir, environmental contamination, and other operating risks), the prospect of changing tax and regulatory laws, the availability and capacity of processing and transportation facilities, the general economic climate, the supply and price of foreign imports of oil and gas, the level of consumer product demand, and the price and availability of alternative fuels. Should one or more of these risks or uncertainties occur or should estimates or underlying assumptions prove incorrect, actual conditions or results may vary materially and adversely from those stated, anticipated, believed, estimated, or otherwise indicated. General Discussion The following general discussion should be read in conjunction with the analysis of results of operations provided below. The most important variable affecting the Partnerships' revenues is the prices received for the sale of oil and gas. Predicting future prices is very difficult. Concerning past trends, average yearly wellhead gas prices in the United States have been volatile for a number of years. For the past ten years, such average prices have generally been in the $1.40 to $2.40 per Mcf range, significantly below prices received in the early 1980s. Average gas prices in the latter part of 1996 and parts of 1997, however, were somewhat higher than those yearly averages. Gas prices are currently in the higher end of the 10-year average price range described above. 38 Substantially all of the Partnerships' gas reserves are being sold on the "spot market." Prices on the spot market are subject to wide seasonal and regional pricing fluctuations due to the highly competitive nature of the spot market. In addition, such spot market sales are generally short-term in nature and are dependent upon the obtaining of transportation services provided by pipelines. Spot prices for the Partnerships' gas decreased from approximately $3.57 per Mcf at December 31, 1996 to approximately $2.32 per Mcf at December 31, 1997. Such prices were on an MMBTU basis and differ from the prices actually received by the Partnerships due to transportation and marketing costs, BTU adjustments, and regional price and quality differences. For the past ten years, average oil prices have generally been in the $16.00 to $24.00 per barrel range. Due to global consumption and supply trends over the last several months as well as expectations of at least a short-term slowdown in Asian energy demand, oil prices have recently been in the mid to lower portions of this pricing range and in early 1998 dropped to as low as approximately $13.75 per barrel. It is not known whether this trend will continue. Prices for the Partnerships' oil decreased from approximately $23.75 per barrel at December 31, 1996 to approximately $16.25 per barrel at December 31, 1997. Future prices for both oil and gas will likely be different from (and may be lower than) the prices in effect on December 31, 1997. Primarily due to heating season demand, year-end prices in many past years have tended to be higher, and in some cases significantly higher, than the yearly average price actually received by the Partnerships for at least the following year. Management is unable to predict whether future oil and gas prices will (i) stabilize, (ii) increase, or (iii) decrease. As discussed in the "Results of Operations" section below, volumes of oil and gas sold also significantly affect the Partnerships' revenues. Oil and gas wells generally produce the most oil or gas in the earlier years of their lives and, as production continues, the rate of production naturally declines. At some point, production physically ceases or becomes no longer economic. The Partnerships are not acquiring additional oil and gas properties, and the existing properties are not experiencing significant additional production through drilling or other capital projects. Therefore, volumes of oil and gas produced naturally decline from year to year. While it is difficult for management to predict future production from these properties, it is likely that this general trend of declining production will continue. 39 Despite this general trend of declining production, several factors can cause the volumes of oil and gas sold to increase or decrease at an even greater rate over a given period. These factors include, but are not limited to, (i) geophysical conditions which cause an acceleration of the decline in production, (ii) the shutting in of wells (or the opening of previously shut-in wells) due to low oil and gas prices, mechanical difficulties, loss of a market or transportation, or performance of workovers, recompletions, or other operations in the well, (iii) prior period volume adjustments (either positive or negative) made by purchasers of the production, (iv) ownership adjustments in accordance with agreements governing the operation or ownership of the well (such as adjustments that occur at payout), and (v) completion of enhanced recovery projects which increase production for the well. Many of these factors are very significant as related to a single well or as related to many wells over a short period of time. However, due to the large number of wells owned by the Partnerships, these factors are generally not material as compared to the normal decline in production experienced on all remaining wells. Results of Operations An analysis of the change in net oil and gas operations (oil and gas sales, less lease operating expenses and production taxes), is presented in the tables following "Results of Operations" under the heading "Average Sales Prices, Production Volumes, and Average Production Costs." Following is a discussion of each Partnership's results of operations for the year ended December 31, 1997 as compared to the year ended December 31, 1996 and for the year ended December 31, 1996 as compared to the year ended December 31, 1995. II-A Partnership ---------------- Year Ended December 31, 1997 Compared to Year Ended December 31, 1996 -------------------------------------- Total oil and gas sales decreased $401,129 (6.9%) in 1997 as compared to 1996. Of this decrease, approximately $497,000 was related to a decrease in volumes of gas sold and approximately $164,000 was related to a decrease in the average price of oil sold, which decreases were partially offset by increases of approximately $196,000 related to an increase in the average price of gas sold and approximately $54,000 related to an increase in volumes of oil sold. Volumes of oil sold increased 2,636 barrels, while volumes of gas sold decreased 231,272 Mcf in 1997 as compared to 1996. The decrease in volumes of gas sold resulted primarily from (i) positive prior period volume adjustments made by purchasers 40 on several wells in 1996, (ii) negative prior volume adjustments made by a purchaser on one significant well in 1997, and (iii) normal declines in production. Average oil prices decreased to $18.85 per barrel in 1997 from $20.40 per barrel in 1996. Average gas prices increased to $2.28 per Mcf in 1997 from $2.15 per Mcf in 1996. Oil and gas production expenses (including lease operating expenses and production taxes) decreased $52,619 (2.7%) in 1997 as compared to 1996. This decrease resulted primarily from the decrease in volumes of gas sold in 1997, which decrease was partially offset by an increase in workover expenses incurred on several wells in 1997. As a percentage of oil and gas sales, these expenses remained relatively constant at 34.8% in 1997 and 33.3% in 1996. Depreciation, depletion, and amortization of oil and gas properties decreased $416,359 (34.8%) in 1997 as compared to 1996. This decrease resulted primarily from (i) an upward revision in the estimate of remaining gas reserves at December 31, 1997, (ii) the decrease in volumes of gas sold in 1997, and (iii) a reduction in the depletable base of oil and gas properties due to the impairment provision recorded against proved oil and gas properties in the first quarter of 1997 as discussed below. As a percentage of oil and gas sales, this expense decreased to 14.4% in 1997 from 20.5% in 1996. This percentage decrease was primarily due to the dollar decrease in depreciation, depletion, and amortization and the increase in the average price of gas sold in 1997. The II-A Partnership recognized a non-cash charge against earnings of $684,276 in the first quarter of 1997. Of this amount, $223,943 was related to the decline in oil and gas prices used to determine the recoverability of proved oil and gas reserves at March 31, 1997 and $460,333 was related to the writing-off of unproved properties. These unproved properties were written off based on the General Partner's determination that it is unlikely that such properties would be developed due to the low oil and gas prices received over the last several years and provisions in the II-A Partnership's Partnership Agreement which limit the level of permissible drilling activity. No similar charges were necessary in 1996. General and administrative expenses decreased $29,306 (4.7%) in 1997 as compared to 1996. This decrease resulted primarily from a decrease in professional fees in 1997 as compared to 1996. As a percentage of oil and gas sales, these expenses remained relatively constant at 10.9% in 1997 and 10.6% in 1996. The Limited Partners have received cash distributions through December 31, 1997 totaling $41,991,357 or 86.71% of the Limited Partners' capital contributions. 41 Year Ended December 31, 1996 Compared to Year Ended December 31, 1995 ------------------------------------- Total oil and gas sales increased $1,161,319 (24.9%) in 1996 as compared to 1995. Of this increase, approximately $365,000 and $1,146,000, respectively, were related to increases in the average prices of oil and gas sold, partially offset by a decrease of approximately $290,000 related to a decrease in volumes of oil sold. Volumes of oil and gas sold decreased 17,190 barrels and 31,226 Mcf, respectively, in 1996 as compared to 1995. Average oil and gas prices increased to $20.40 per barrel and $2.15 per Mcf, respectively, in 1996 from $16.86 per barrel and $1.49 per Mcf, respectively, in 1995. Oil and gas production expenses (including lease operating expenses and production taxes) increased $94,776 (5.1%) in 1996 as compared to 1995. This increase resulted primarily from an increase in production taxes associated with the increase in oil and gas sales discussed above. As a percentage of oil and gas sales, these expenses decreased to 33.3% in 1996 from 39.5% in 1995. This percentage decrease was primarily due to the increase in the average prices of oil and gas sold, partially offset by the dollar increase in production expenses in 1996. Depreciation, depletion, and amortization of oil and gas properties decreased $644,559 (35.0%) in 1996 as compared to 1995. This decrease resulted primarily from (i) an upward revision in the estimate of remaining gas reserves at December 31, 1996, (ii) the decrease in volumes of oil and gas sold in 1996, and (iii) a reduction in the depletable base of oil and gas properties due to the impairment provision recorded in 1995 as discussed below. As a percentage of oil and gas sales, this expense decreased to 20.5% in 1996 from 39.4% in 1995. This percentage decrease was primarily due to the dollar decrease in depreciation, depletion, and amortization and the increases in the average prices of oil and gas sold in 1996. The II-A Partnership recognized a non-cash charge against earnings of $994,919 in 1995. This impairment provision was necessary due to the unamortized costs of proved oil and gas properties exceeding the undiscounted future net revenues from such oil and gas properties. No similar charge was necessary in 1996. General and administrative expenses decreased $34,887 (5.3%) in 1996 as compared to 1995. This decrease resulted primarily from a decrease in professional fees in 1996 as compared to 1995. As a percentage of oil and gas sales, these expenses decreased to 10.6% in 1996 from 14.0% in 1995. This percentage decrease was primarily due to the increase in oil and gas sales in 1996. 42 II-B Partnership ---------------- Year Ended December 31, 1997 as Compared to Year Ended December 31, 1996 ---------------------------------------- Total oil and gas sales decreased $363,258 (8.7%) in 1997 as compared to 1996. Of this decrease, approximately $143,000 and $370,000, respectively, were related to decreases in volumes of oil and gas sold and approximately $121,000 was related to a decrease in the average price of oil sold, which decreases were partially offset by an increase of approximately $272,000 related to an increase in the average price of gas sold. Volumes of oil and gas sold decreased 6,843 barrels and 172,317 Mcf, respectively, in 1997 as compared to 1996. The decrease in volumes of gas sold resulted primarily from (i) positive prior period volume adjustments made by purchasers on several wells in 1996, (ii) normal declines in production, (iii) negative prior period volume adjustments made by a purchaser on one significant well in 1997, and (iv) the sale of one significant gas producing well in 1997. Average oil prices decreased to $19.13 per barrel in 1997 from $20.92 per barrel in 1996. Average gas prices increased to $2.41 per Mcf in 1997 from $2.15 per Mcf in 1996. Oil and gas production expenses (including lease operating expenses and production taxes) increased $149,737 (12.9%) in 1997 as compared to 1996. This increase resulted primarily from workover expenses incurred on several wells in 1997, which increase was partially offset by decreases in volumes of oil and gas sold in 1997. As a percentage of oil and gas sales, these expenses increased to 34.4% in 1997 from 27.9% in 1996. This percentage increase was primarily due to the dollar increase in oil and gas production expenses and the decrease in the average price of oil sold in 1997. Depreciation, depletion, and amortization of oil and gas properties decreased $515,276 (48.5%) in 1997 as compared to 1996. This decrease resulted primarily from (i) an upward revision in the estimate of remaining gas reserves at December 31, 1997, (ii) decreases in volumes of oil and gas sold in 1997 and (iii) a reduction in the depletable base of oil and gas properties due to the impairment provision recorded against proved oil and gas properties in the first quarter of 1997 as discussed below. As a percentage of oil and gas sales, this expense decreased to 14.3% in 1997 from 25.4% in 1996. This percentage decrease was primarily due to the dollar decrease in depreciation, depletion, and amortization and the increase in the average price of gas sold in 1997. 43 The II-B Partnership recognized a non-cash charge against earnings of $530,988 in the first quarter of 1997. Of this amount, $134,003 was related to the decline in oil and gas prices used to determine the recoverability of proved oil and gas reserves at March 31, 1997 and $396,985 was related to the writing-off of unproved properties. These unproved properties were written off based on the General Partner's determination that it is unlikely that such properties would be developed due to the low oil and gas prices received over the last several years and provisions in the II-B Partnership's Partnership Agreement which limit the level of permissible drilling activity. No similar charges were necessary in 1996. General and administrative expenses decreased $45,222 (9.1%) in 1997 as compared to 1996. This decrease resulted primarily from a decrease in professional fees in 1997 as compared to 1996. As a percentage of oil and gas sales, these expenses remained relatively constant at 11.8% in 1997 and 11.9% in 1996. The Limited Partners have received cash distributions through December 31, 1997 totaling $29,816,916 or 82.43% of the Limited Partners' capital contributions. Year Ended December 31, 1996 Compared to Year Ended December 31, 1995 ------------------------------------- Total oil and gas sales increased $974,733 (30.4%) in 1996 as compared to 1995. Of this increase, approximately $320,000 and $744,000, respectively, were related to increases in the average prices of oil and gas sold, partially offset by a decrease of approximately $114,000 related to a decrease in volumes of oil sold. Volumes of oil sold decreased 6,870 barrels, while volumes of gas sold increased 14,479 Mcf in 1996 as compared to 1995. Average oil and gas prices increased to $20.92 per barrel and $2.15 per Mcf, respectively, in 1996 from $16.62 per barrel and $1.54 per Mcf, respectively, in 1995. Oil and gas production expenses (including lease operating expenses and production taxes) decreased $360,065 (23.6%) in 1996 as compared to 1995. This decrease resulted primarily from (i) workover expenses incurred on two wells during 1995 in order to improve the recovery of reserves, (ii) the sale of one well during 1995, and (iii) a decrease in general repair and maintenance expenses incurred on several wells in 1996 as compared to 1995, partially offset by an increase in production taxes due to higher oil and gas sales in 1996. As a percentage of oil and gas sales, these expenses decreased to 27.9% in 1996 from 47.6% in 1995. This percentage decrease was primarily due to the dollar decrease in production expenses and the increases in the average prices of oil and gas sold in 1996. 44 Depreciation, depletion, and amortization of oil and gas properties decreased $374,555 (26.1%) in 1996 as compared to 1995. This decrease resulted primarily from (i) an upward revision in the estimate of remaining gas reserves at December 31, 1996 and (ii) a reduction in the depletable base of oil and gas properties due to the impairment provision recorded in 1995 as discussed below. As a percentage of oil and gas sales, this expense decreased to 25.4% in 1996 from 44.8% in 1995. This percentage decrease was primarily due to the dollar decrease in depreciation, depletion, and amortization and the increases in the average prices of oil and gas sold in 1996. The II-B Partnership recognized a non-cash charge against earnings of $450,601 in 1995. This impairment provision was necessary due to unamortized costs of proved oil and gas properties exceeding the undiscounted future net revenues from such oil and gas properties. No similar charge was necessary in 1996. General and administrative expenses decreased $77,761 (13.5%) in 1996 as compared to 1995. This decrease resulted primarily from a decrease in professional fees in 1996 as compared to 1995. As a percentage of oil and gas sales, these expenses decreased to 11.9% in 1996 from 17.9% in 1995. This percentage decrease was primarily due to the increase in oil and gas sales in 1996. II-C Partnership ---------------- Year Ended December 31, 1997 as Compared to Year Ended December 31, 1996 ---------------------------------------- Total oil and gas sales decreased $129,283 (6.7%) in 1997 as compared to 1996. Of this decrease, approximately $49,000 and $209,000, respectively, were related to decreases in volumes of oil and gas sold and approximately $48,000 was related to a decrease in the average price of oil sold, which decreases were partially offset by an increase of approximately $175,000 related to an increase in the average price of gas sold. Volumes of oil and gas sold decreased 2,340 barrels and 102,596 Mcf, respectively, in 1997 as compared to 1996. The decrease in volumes of gas sold resulted primarily from (i) the sale of several gas producing wells during 1996, (ii) positive prior period volume adjustments made by purchasers on several wells during 1996, and (iii) normal declines in production. Average oil prices decreased to $19.04 per barrel in 1997 from $21.14 per barrel in 1996. Average gas prices increased to $2.34 per Mcf in 1997 from $2.04 per Mcf in 1996. 45 Oil and gas production expenses (including lease operating expenses and production taxes) decreased $75,103 (12.5%) in 1997 as compared to 1996. This decrease resulted primarily from (i) decreases in volumes of oil and gas sold in 1997 and (ii) a decrease in production taxes associated with the decrease in oil and gas sales in 1997. As a percentage of oil and gas sales, these expenses decreased to 29.4% in 1997 from 31.3% in 1996. This percentage decrease was primarily due to the dollar decrease in oil and gas production expenses and the increase in the average price of gas sold in 1997. Depreciation, depletion, and amortization of oil and gas properties decreased $129,630 (32.6%) in 1997 as compared to 1996. This decrease resulted primarily from (i) an upward revision in the estimate of remaining gas reserves at December 31, 1997, (ii) the decreases in volumes of oil and gas sold in 1997, and (iii) a reduction in the depletable base of oil and gas properties due to the impairment provision recorded against proved oil and gas properties in the first quarter of 1997 as discussed below. As a percentage of oil and gas sales, this expense decreased to 14.9% in 1997 from 20.7% in 1996. This percentage decrease was primarily due to the dollar decrease in depreciation, depletion, and amortization and the increase in the average price of gas sold in 1997. The II-C Partnership recognized a non-cash charge against earnings of $66,617 in the first quarter of 1997. Of this amount, $36,163 was related to the decline in oil and gas prices used to determine the recoverability of proved oil and gas reserves at March 31, 1997 and $30,454 was related to the writing-off of unproved properties. These unproved properties were written off based on the General Partner's determination that it is unlikely that such properties would be developed due to the low oil and gas prices received over the last several years and provisions in the II-C Partnership's Partnership Agreement which limit the level of permissible drilling activity. No similar charges were necessary in 1996. General and administrative expenses decreased $20,622 (9.6%) in 1997 as compared to 1996. This decrease resulted primarily from a decrease in professional fees in 1997 as compared to 1996. As a percentage of oil and gas sales, these expenses remained relatively constant at 10.8% in 1997 and 11.1% in 1996. The Limited Partners have received cash distributions through December 31, 1997 totaling $13,225,686 or 85.54% of the Limited Partners' capital contributions. 46 Year Ended December 31, 1996 as Compared to Year Ended December 31, 1995 ---------------------------------------- Total oil and gas sales increased $406,003 (26.7%) in 1996 as compared to 1995. Of this increase, approximately $106,000 and $398,000, respectively, were related to increases in the average prices of oil and gas sold, partially offset by a decrease of approximately $76,000 related to a decrease in volumes of gas sold. Volumes of oil and gas sold decreased 1,290 barrels and 51,933 Mcf, respectively, in 1996 as compared to 1995. Average oil and gas prices increased to $21.14 per barrel and $2.04 per Mcf, respectively, in 1996 from $16.92 per barrel and $1.46 per Mcf, respectively, in 1995. Oil and gas production expenses (including lease operating expenses and production taxes) decreased $95,721 (13.7%) in 1996 as compared to 1995. This decrease resulted primarily from (i) workover expenses incurred on two wells during 1995 in order to improve the recovery of reserves and (ii) a decrease in general repair and maintenance expenses incurred on several wells in 1996 as compared to 1995, partially offset by an increase in production taxes associated with higher oil and gas sales in 1996. As a percentage of oil and gas sales, these expenses decreased to 31.3% in 1996 from 46.0% in 1995. This percentage decrease was primarily due to the dollar decrease in production expenses and the increases in the average prices of oil and gas sold in 1996. Depreciation, depletion, and amortization of oil and gas properties decreased $266,527 (40.1%) in 1996 as compared to 1995. This decrease resulted primarily from (i) an upward revision in the estimate of remaining gas reserves at December 31, 1996, (ii) the decrease in volumes of oil and gas sold in 1996, and (iii) a reduction in the depletable base of oil and gas properties due to the impairment provision recorded in 1995 as discussed below. As a percentage of oil and gas sales, this expense decreased to 20.7% in 1996 from 43.7% in 1995. This percentage decrease was primarily due to the dollar decrease in depreciation, depletion, and amortization and the increases in the average prices of oil and gas sold in 1996. The II-C Partnership recognized a non-cash charge against earnings of $245,324 in 1995. This impairment provision was necessary due to the unamortized costs of proved oil and gas properties exceeding the undiscounted future net revenues from such oil and gas properties. No similar charge was necessary in 1996. 47 General and administrative expenses decreased $34,462 (13.8%) in 1996 as compared to 1995. This decrease resulted primarily from a decrease in professional fees in 1996 as compared to 1995. As a percentage of oil and gas sales, these expenses decreased to 11.1% in 1996 from 16.4% in 1995. This percentage decrease was primarily due to the increase in oil and gas sales in 1996. II-D Partnership ---------------- Year Ended December 31, 1997 as Compared to Year Ended December 31, 1996 ---------------------------------------- Total oil and gas sales remained relatively constant in 1997 as compared to 1996. Any decrease in oil and gas sales caused by decreases of approximately $323,000 and $248,000, respectively, relating to decreases in volumes of oil and gas sold and a decrease of approximately $68,000 related to a decrease in the average price of oil sold was substantially offset by an increase of approximately $631,000 related to an increase in the average price of gas sold. Volumes of oil and gas sold decreased 16,104 barrels and 135,734 Mcf, respectively, in 1997 as compared to 1996. The decrease in volumes of oil sold resulted primarily from (i) the sale of one well in late 1996 and (ii) a negative prior period volume adjustment made the by purchaser on one well in 1997. Average oil prices decreased to $18.68 per barrel in 1997 from $20.03 per barrel in 1996. Average gas prices increased to $2.25 per Mcf in 1997 from $1.83 per Mcf in 1996. Oil and gas production expenses (including lease operating expenses and production taxes) decreased $143,812 (8.0%) in 1997 as compared to 1996. This decrease resulted primarily from decreases in volumes of oil and gas sold in 1997. As a percentage of oil and gas sales, these expenses decreased to 38.4% in 1997 from 41.6% in 1996. This percentage decrease was primarily due to the dollar decrease in oil and gas production expenses and the increase in the average price of gas sold in 1997. Depreciation, depletion, and amortization of oil and gas properties decreased $111,321 (13.9%) in 1997 as compared to 1996. This decrease resulted primarily from the decreases in volumes of oil and gas sold in 1997 and a reduction in the depletable base of oil and gas properties due to the impairment provision recorded against proved oil and gas properties in the first quarter of 1997 as discussed below. As a percentage of oil and gas sales, this expense decreased to 16.0% in 1997 from 18.5% in 1996. This percentage decrease was primarily due to the increase in the average price of gas sold in 1997. 48 The II-D Partnership recognized a non-cash charge against earnings of $143,957 in the first quarter of 1997. This impairment provision was necessary due to the decline in oil and gas prices used to determine the recoverability of proved oil and gas reserves at March 31, 1997. No similar charge was necessary in 1996. General and administrative expenses decreased $56,299 (12.4%) in 1997 as compared to 1996. This decrease resulted primarily from a decrease in professional fees in 1997 as compared to 1996. As a percentage of oil and gas sales, these expenses decreased to 9.2% in 1997 from 10.5% in 1996. This percentage decrease was primarily due to the dollar decrease in general and administrative expenses discussed above. The Limited Partners have received cash distributions through December 31, 1997 totaling $25,589,903 or 81.27% of the Limited Partners' capital contributions. Year Ended December 31, 1996 as Compared to Year Ended December 31, 1995 ---------------------------------------- Total oil and gas sales increased $427,586 (11.0%) in 1996 as compared to 1995. Of this increase, approximately $242,000 and $901,000, respectively, were related to increases in the average prices of oil and gas sold, partially offset by decreases of approximately $367,000 and $344,000, respectively, related to decreases in volumes of oil and gas sold and a $35,000 adjustment due to a net profits interest settlement. Volumes of oil and gas sold decreased 22,396 barrels and 268,658 Mcf, respectively, in 1996 as compared to 1995. The decrease in volumes of oil sold resulted primarily from (i) the sale of four significant oil producing wells during 1996, (ii) the shutting-in of one well during 1996 in order to perform a workover to improve the recovery of reserves, and (iii) normal declines in production due to diminished oil reserves on two wells in 1996 as compared to 1995. Average oil and gas prices increased to $20.03 per barrel and $1.83 per Mcf, respectively, in 1996 from $16.39 per barrel and $1.28 per Mcf, respectively, in 1995. Oil and gas production expenses (including lease operating expenses and production taxes) decreased $335,345 (15.7%) in 1996 as compared to 1995. This decrease resulted primarily from the decreases in volumes of oil and gas sold in 1996. As a percentage of oil and gas sales, these expenses decreased to 41.6% in 1996 from 54.8% in 1995. This percentage decrease was primarily due to the increases in the average prices of oil and gas sold in 1996. 49 Depreciation, depletion, and amortization of oil and gas properties decreased $747,734 (48.3%) in 1996 as compared to 1995. This decrease resulted primarily from (i) an upward revision in the estimate of remaining gas reserves at December 31, 1996, (ii) the decrease in volumes of oil and gas sold in 1996, and (iii) a reduction in the depletable base of oil and gas properties due to the impairment provision recorded in 1995 as discussed below. As a percentage of oil and gas sales, this expense decreased to 18.5% in 1996 from 39.7% in 1995. This percentage decrease was primarily due to the dollar decrease in depreciation, depletion, and amortization and the increases in the average prices of oil and gas sold in 1996. The II-D Partnership recognized a non-cash charge against earnings of $370,172 in 1995. This impairment provision was necessary due to the unamortized costs of proved oil and gas properties exceeding the undiscounted future net revenues from such oil and gas properties. No similar charge was necessary in 1996. General and administrative expenses decreased $89,014 (16.4%) in 1996 as compared to 1995. This decrease resulted primarily from a decrease in professional fees in 1996 as compared to 1995. As a percentage of oil and gas sales, these expenses decreased to 10.5% in 1996 from 13.9% in 1995. This percentage decrease was primarily due to the increase in oil and gas sales in 1996. II-E Partnership ---------------- Year Ended December 31, 1997 as Compared to Year Ended December 31, 1996 ---------------------------------------- Total oil and gas sales decreased $77,314 (2.9%) in 1997 as compared to 1996. Of this decrease, approximately $227,000 and $144,000, respectively, were related to decreases in volumes of oil and gas sold and approximately $54,000 was related to a decrease in the average price of oil sold, which decreases were partially offset by an increase of approximately $353,000 related to an increase in the average price of gas sold. Volumes of oil and gas sold decreased 11,136 barrels and 78,085 Mcf, respectively, in 1997 as compared to 1996. The decrease in volumes of oil sold resulted primarily from the sale of one well in late 1996 and a normal decline in production. Average oil prices decreased to $19.10 per barrel in 1997 from $20.37 per barrel in 1996. Average gas prices increased to $2.30 per Mcf in 1997 from $1.85 per Mcf in 1996. 50 Oil and gas production expenses (including lease operating expenses and production taxes) remained relatively constant in 1997 as compared to 1996. As a percentage of oil and gas sales, these expenses remained relatively constant at 34.8% in 1997 and 33.9% in 1996. Depreciation, depletion, and amortization of oil and gas properties decreased $101,553 (13.9%) in 1997 as compared to 1996. This decrease resulted primarily from (i) the decreases in volumes of oil and gas sold in 1997, (ii) a reduction in the depletable base of oil and gas properties due to the impairment provision recorded against proved oil and gas properties in the first quarter of 1997 as discussed below, and (iii) an upward revision in the estimate of remaining gas reserves at December 31, 1997. As a percentage of oil and gas sales, this expense decreased to 24.0% in 1997 from 27.0% in 1996. This percentage decrease was primarily due to the increase in the average price of gas sold in 1997. The II-E Partnership recognized a non-cash charge against earnings of $992,851 in the first quarter of 1997. Of this amount, $317,979 was related to the decline in oil and as prices used to determine the recoverability of proved oil and gas reserves at March 31, 1997 and $674,872 was related to the writing-off of unproved properties. These unproved properties were written off based on the General Partner's determination that it is unlikely that such properties would be developed due to the low oil and gas prices received over the last several years and provisions in the II-E Partnership's Partnership Agreement which limit the level of permissible drilling activity. No similar charges were necessary in 1996. General and administrative expenses decreased $102,370 (24.5%) in 1997 as compared to 1996. This decrease resulted primarily from a decrease in professional fees in 1997 as compared to 1996. As a percentage of oil and gas sales, these expenses decreased to 12.0% in 1997 from 15.5% in 1996. This percentage decrease was primarily due to the dollar decrease in general and administrative expenses. The Limited Partners have received cash distributions through December 31, 1997 totaling $15,100,574 or 65.99% of the Limited Partners' capital contributions. 51 Year Ended December 31, 1996 as Compared to Year Ended December 31, 1995 ---------------------------------------- Total oil and gas sales increased $395,908 (17.2%) in 1996 as compared to 1995. Of this increase, approximately $192,000 and $465,000, respectively, were related to increases in the average prices of oil and gas sold, partially offset by decreases of approximately $166,000 and $100,000, respectively, related to decreases in volumes of oil and gas sold. Volumes of oil and gas sold decreased 9,876 barrels and 76,005 Mcf, respectively, in 1996 as compared to 1995. The decrease in volumes of oil sold resulted primarily from (i) the sale of one significant oil producing well in 1996 and (ii) normal declines in production due to diminished oil reserves on several wells in 1996 as compared to 1995. Average oil and gas prices increased to $20.37 per barrel and $1.85 per Mcf, respectively, in 1996 from $16.81 per barrel and $1.31 per Mcf, respectively, in 1995. Oil and gas production expenses (including lease operating expenses and production taxes) decreased $235,430 (20.5%) in 1996 as compared to 1995. This decrease resulted primarily from (i) a decrease in production expenses due to the sale of one well in 1996, (ii) abandonment expenses incurred on another well during 1995, (iii) workover expenses incurred on two wells during 1995 in order to improve the recovery of reserves, and (iv) a decrease in general repair and maintenance expenses incurred on several wells in 1996 as compared to 1995. As a percentage of oil and gas sales, these expenses decreased to 33.9% in 1996 from 50.0% in 1995. This percentage decrease was primarily due to the dollar decrease in production expenses and the increases in the average prices of oil and gas sold in 1996. Depreciation, depletion, and amortization of oil and gas properties decreased $629,892 (46.4%) in 1996 as compared to 1995. This decrease resulted primarily from (i) an upward revision in the estimate of remaining gas reserves at December 31, 1996, (ii) the decrease in volumes of oil and gas sold in 1996, and (iii) a reduction in the depletable base of oil and gas properties due to the impairment provision recorded in 1995 as discussed below. As a percentage of oil and gas sales, this expense decreased to 29.3% in 1996 from 59.1% in 1995. This percentage decrease was primarily due to the dollar decrease in depreciation, depletion, and amortization and the increases in the average prices of oil and gas sold in 1996. The II-E Partnership recognized a non-cash charge against earnings of $465,045 in 1995. This impairment provision was necessary due to the unamortized costs of proved oil and gas properties exceeding the undiscounted future net revenues from such oil and gas properties. No similar charge was necessary in 1996. 52 General and administrative expenses decreased $199,100 (32.3%) in 1996 as compared to 1995. This decrease resulted primarily from a decrease in professional fees in 1996 as compared to 1995. As a percentage of oil and gas sales, these expenses decreased to 15.5% in 1996 from 26.8% in 1995. This percentage decrease was primarily due to the dollar decrease in general and administrative expenses and the increase in oil and gas sales in 1996 as compared to 1995. II-F Partnership ---------------- Year Ended December 31, 1997 as Compared to Year Ended December 31, 1996 ---------------------------------------- Total oil and gas sales decreased $241,924 (9.9%) in 1997 as compared to 1996. Of this decrease, approximately $47,000 and $344,000, respectively, were related to decreases in volumes of oil and gas sold and approximately $53,000 was related to a decrease in the average price of oil sold, which decreases were partially offset by an increase of approximately $199,000 related to an increase in the average price of gas sold. Volumes of oil and gas sold decreased 2,381 barrels and 175,258 Mcf, respectively, in 1997 as compared to 1996. The decrease in volumes of gas sold resulted primarily from (i) negative prior period volume adjustments made by the purchasers on three wells in 1997, (ii) positive prior period volume adjustments made by the purchasers on several wells in 1996, (iii) normal declines in production, and (iv) the sale of one well in early 1997. Average oil prices decreased to $18.66 per barrel in 1997 from $19.83 per barrel in 1996. Average gas prices increased to $2.30 per Mcf in 1997 from $1.96 per Mcf in 1996. Oil and gas production expenses (including lease operating expenses and production taxes) decreased $97,519 (15.1%) in 1997 as compared to 1996. This decrease resulted primarily from decreases in volumes of oil and gas sold in 1997 and a decrease in production taxes associated with the decrease in oil and gas sales discussed above. As a percentage of oil and gas sales, these expenses decreased to 24.9% in 1997 from 26.5% in 1996. This percentage decrease was primarily due to the dollar decrease in oil and gas production expenses discussed above and the increase in the average price of gas sold in 1997. Depreciation, depletion, and amortization of oil and gas properties decreased $122,039 (23.0%) in 1997 as compared to 1996. This decrease resulted primarily from decreases in volumes of oil and gas sold in 1997 and a reduction in the depletable base of oil and gas properties due to the impairment provision recorded against proved oil and gas properties in the first quarter of 1997 as discussed below. As a percentage of oil and gas sales, this expense decreased to 53 18.7% in 1997 from 21.8% in 1996. This percentage decrease was primarily due to the increase in the average price of gas sold in 1997. The II-F Partnership recognized a non-cash charge against earnings of $1,377,160 in the first quarter of 1997. Of this amount, $208,255 was related to the decline in oil and gas prices used to determine the recoverability of proved oil and gas reserves at March 31, 1997 and $1,168,905 was related to the writing-off of unproved properties. These unproved properties were written off based on the General Partner's determination that it is unlikely that such properties would be developed due to the low oil and gas prices received over the last several years and provisions in the II-F Partnership's Partnership Agreement which limit the level of permissible drilling activity. No similar charges were necessary in 1996. General and administrative expenses decreased $2,351 (1.1%) in 1997 as compared to 1996. As a percentage of oil and gas sales, these expenses remained relatively constant at 9.3% in 1997 and 8.5% in 1996. The Limited Partners have received cash distributions through December 31, 1997 totaling $14,914,051 or 87.01% of the Limited Partners' capital contributions. Year Ended December 31, 1996 as Compared to Year Ended December 31, 1995 ---------------------------------------- Total oil and gas sales increased $404,721 (20.0%) in 1996 as compared to 1995. Of this increase, approximately $177,000 and $457,000, respectively, were related to increases in the average prices of oil and gas sold, partially offset by decreases of approximately $119,000 and $114,000, respectively, related to decreases in volumes of oil and gas sold. Volumes of oil and gas sold decreased 7,378 barrels and 84,102 Mcf, respectively, in 1996 as compared to 1995. Average oil and gas prices increased to $19.83 per barrel and $1.96 per Mcf, respectively, in 1996 from $16.10 per barrel and $1.36 per Mcf, respectively, in 1995. Oil and gas production expenses (including lease operating expenses and production taxes) decreased $17,675 (2.7%) in 1996 as compared to 1995. This decrease resulted primarily from the decreases in volumes of oil and gas sold in 1996, partially offset by an increase in production taxes associated with the increase in oil and gas sales discussed above. As a percentage of oil and gas sales, these expenses decreased to 26.5% in 1996 from 32.6% in 1995. This percentage decrease was primarily due to the increases in the average prices of oil and gas sold in 1996. 54 Depreciation, depletion, and amortization of oil and gas properties decreased $505,018 (48.7%) in 1996 as compared to 1995. This decrease resulted primarily from (i) an upward revision in the estimate of remaining gas reserves at December 31, 1996, (ii) the decrease in volumes of oil and gas sold in 1996, and (iii) a reduction in the depletable base of oil and gas properties due to the impairment provision recorded in 1995 as discussed below. As a percentage of oil and gas sales, this expense decreased to 21.8% in 1996 from 51.1% in 1995. This percentage decrease was primarily due to the dollar decrease in depreciation, depletion, and amortization and the increases in the average prices of oil and gas sold in 1996. The II-F Partnership recognized a non-cash charge against earnings of $312,270 in 1995. This impairment provision was necessary due to the unamortized costs of proved oil and gas properties exceeding the undiscounted future net revenues from such oil and gas properties. No similar charge was necessary in 1996. General and administrative expenses remained relatively constant during 1995 and 1996. As a percentage of oil and gas sales, these expenses decreased to 8.5% in 1996 from 9.9% in 1995. This percentage decrease was primarily due to the increases in the average prices of oil and gas sold in 1996. II-G Partnership ---------------- Year Ended December 31, 1997 as Compared to Year Ended December 31, 1996 ---------------------------------------- Total oil and gas sales decreased $488,554 (9.5%) in 1997 as compared to 1996. Of this decrease, approximately $100,000 and $725,000, respectively, were related to decreases in volumes of oil and gas sold and approximately $111,000 was related to a decrease in the average price of oil sold, which decreases were partially offset by an increase of approximately $440,000 related to an increase in the average price of gas sold. Volumes of oil and gas sold decreased 5,040 barrels and 370,066 Mcf, respectively, in 1997 as compared to 1996. The decrease in volumes of gas sold resulted primarily from (i) negative prior period volume adjustments made by the purchasers on three wells in 1997, (ii) positive prior period volume adjustments made by the purchasers on several wells in 1996, and (iii) normal declines in production. Average oil prices decreased to $18.66 per barrel in 1997 from $19.83 per barrel in 1996. Average gas prices increased to $2.31 per Mcf in 1997 from $1.96 per Mcf in 1996. 55 Oil and gas production expenses (including lease operating expenses and production taxes) decreased $200,532 (14.5%) in 1997 as compared to 1996. This decrease resulted primarily from a decrease in production taxes associated with the decrease in oil and gas sales discussed above and decreases in volumes of oil and gas sold in 1997. As a percentage of oil and gas sales, these expenses decreased to 25.4% in 1997 from 26.9% in 1996. This percentage decrease was primarily due to the dollar decrease in oil and gas production expenses and the increase in the average prices of gas sold in 1997. Depreciation, depletion, and amortization of oil and gas properties decreased $246,840 (21.2%) in 1997 as compared to 1996. This decrease resulted primarily from the decreases in volumes of oil and gas sold in 1997 and a reduction in the depletable base of oil and gas properties due to the impairment provision recorded against proved oil and gas properties in the first quarter of 1997 as discussed below. As a percentage of oil and gas sales, this expense decreased to 19.6% in 1997 from 22.5% in 1996. This percentage decrease was primarily due to the dollar decrease in depreciation, depletion, and amortization and the increase in the average price of gas sold in 1997. The II-G Partnership recognized a non-cash charge against earnings of $3,101,656 in the first quarter of 1997. Of this amount, $489,672 was related to the decline in oil and gas prices used to determine the recoverability of proved oil and gas reserves at March 31, 1997 and $2,611,984 was related to the writing-off of unproved properties. These unproved properties were written off based on the General Partner's determination that it is unlikely that such properties would be developed due to the low oil and gas prices received over the last several years and provisions in the II-G Partnership's Partnership Agreement which limit the level of permissible drilling activity. No similar charges were necessary in 1996. General and administrative expenses decreased $4,755 (1.1%) in 1997 as compared to 1996. As a percentage of oil and gas sales, these expenses remained relatively constant at 9.5% in 1997 and 8.7% in 1996. The Limited Partners have received cash distributions through December 31, 1997 totaling $30,660,371 or 82.38% of the Limited Partners' capital contributions. 56 Year Ended December 31, 1996 as Compared to Year Ended December 31, 1995 ---------------------------------------- Total oil and gas sales increased $810,712 (18.6%) in 1996 as compared to 1995. Of this increase, approximately $370,000 and $976,000, respectively, were related to increases in the average prices of oil and gas sold, partially offset by decreases of approximately $252,000 and $281,000, respectively, related to decreases in volumes of oil and gas sold. Volumes of oil and gas sold decreased 15,613 barrels and 206,385 Mcf, respectively, in 1996 as compared to 1995. Average oil and gas prices increased to $19.83 per barrel and $1.96 per Mcf, respectively, in 1996 from $16.11 per barrel and $1.36 per Mcf, respectively, in 1995. Oil and gas production expenses (including lease operating expenses and production taxes) decreased $69,103 (4.7%) in 1996 as compared to 1995. This decrease resulted primarily from decreases in volumes of oil and gas sold in 1996, partially offset by an increase in production taxes associated with the increase in oil and gas sales discussed above. As a percentage of oil and gas sales, these expenses decreased to 26.9% in 1996 from 33.5% in 1995. This percentage decrease was primarily due to the increases in the average prices of oil and gas sold in 1996. Depreciation, depletion, and amortization of oil and gas properties decreased $1,143,679 (49.6%) in 1996 as compared to 1995. This decrease resulted primarily from (i) an upward revision in the estimate of remaining gas reserves at December 31, 1996, (ii) the decrease in volumes of oil and gas sold in 1996, and (iii) a reduction in the depletable base of oil and gas properties due to the impairment provision recorded in 1995 as discussed below. As a percentage of oil and gas sales, this expense decreased to 22.5% in 1996 from 53.1% in 1995. This percentage decrease was primarily due to the dollar decrease in depreciation, depletion, and amortization discussed above and the increases in the average prices of oil and gas sold in 1996. The II-G Partnership recognized a non-cash charge against earnings of $839,228 in 1995. This impairment provision was necessary due to the unamortized costs of proved oil and gas properties exceeding the undiscounted future net revenues from such oil and gas properties. No similar charge was necessary in 1996. General and administrative expenses remained relatively constant during 1995 and 1996. As a percentage of oil and gas sales, these expenses remained relatively constant at 8.7% during 1996 as compared to 10.1% for 1995. 57 II-H Partnership ---------------- Year Ended December 31, 1997 as Compared to Year Ended December 31, 1996 ---------------------------------------- Total oil and gas sales decreased $110,488 (9.0%) in 1997 as compared to 1996. Of this decrease, approximately $23,000 and $180,000, respectively, were related to decreases in volumes of oil and gas sold and approximately $26,000 was related to a decrease in the average price of oil sold, which decreases were partially offset by an increase of approximately $119,000 related to an increase in the average price of gas sold. Volumes of oil and gas sold decreased 1,174 barrels and 92,553 Mcf in 1997 as compared to 1996. The decrease in volumes of gas sold resulted primarily from (i) negative prior period volume adjustments made by the purchasers on three wells in 1997, (ii) positive prior period volume adjustments made by the purchasers on several wells in 1996, and (iii) normal declines in production. Average oil prices decreased to $18.67 per barrel in 1997 from $19.85 per barrel in 1996. Average gas prices increased to $2.33 per Mcf in 1997 from $1.94 per Mcf in 1996. Oil and gas production expenses (including lease operating expenses and production taxes) decreased $49,348 (14.5%) in 1997 as compared to 1996. This decrease resulted primarily from a decrease in production taxes associated with the decrease in oil and gas sales discussed above and the decreases in volumes of oil and gas sold in 1997. As a percentage of oil and gas sales, these expenses decreased to 25.9% in 1997 from 27.6% in 1996. This percentage decrease was primarily due to the dollar decrease in oil and gas production expenses and the increase in the average price of gas sold in 1997. Depreciation, depletion, and amortization of oil and gas properties decreased $78,681 (28.0%) in 1997 as compared to 1996. This decrease resulted primarily from the decreases in volumes of oil and gas sold in 1997 and a reduction in the depletable base of oil and gas properties due to the impairment provision recorded against proved oil and gas properties in the first quarter of 1997 as discussed below. As a percentage of oil and gas sales, this expense decreased to 18.1% in 1997 from 22.8% in 1996. This percentage decrease was primarily due to the dollar decrease in depreciation, depletion, and amortization. The II-H Partnership recognized a non-cash charge against earnings of $785,220 in the first quarter of 1997. Of this amount, $125,223 was related to the decline in oil and gas prices used to determine the recoverability of proved oil and gas reserves at March 31, 1997 and $659,997 was related to the writing-off of unproved properties. These unproved properties 58 were written off based on the General Partner's determination that it is unlikely that such properties would be developed due to the low oil and gas prices received over the last several years and provisions in the II-H Partnership's Partnership Agreement which limit the level of permissible drilling activity. No similar charges were necessary in 1996. General and administrative expenses decreased $1,437 (1.3%) in 1997 as compared to 1996. As a percentage of oil and gas sales, these expenses remained relatively constant at 9.8% in 1997 and 9.0% in 1996. The Limited Partners have received cash distributions through December 31, 1997 totaling $7,139,364 or 77.85% of the Limited Partners' capital contributions. Year Ended December 31, 1996 as Compared to Year Ended December 31, 1995 ---------------------------------------- Total oil and gas sales increased $187,487 (18.0%) in 1996 as compared to 1995. Of this increase, approximately $86,000 and $234,000, respectively, were related to increases in the average prices of oil and gas sold, partially offset by decreases of approximately $60,000 and $71,000, respectively, related to decreases in volumes of oil and gas sold. Volumes of oil and gas sold decreased 3,698 barrels and 52,708 Mcf, respectively, in 1996 as compared to 1995. Average oil and gas prices increased to $19.85 per barrel and $1.94 per Mcf, respectively, in 1996 from $16.12 per barrel and $1.35 per Mcf, respectively, in 1995. Oil and gas production expenses (including lease operating expenses and production taxes) decreased $19,594 (5.5%) in 1996 as compared to 1995. This decrease resulted primarily from the decreases in volumes of oil and gas sold in 1996, partially offset by an increase in production taxes associated with the increase in oil and gas sales discussed above. As a percentage of oil and gas sales, these expenses decreased to 27.6% in 1996 from 34.4% in 1995. This percentage decrease was primarily due to the increases in the average prices of oil and gas sold in 1996. Depreciation, depletion, and amortization of oil and gas properties decreased $269,588 (49.0%) in 1996 as compared to 1995. This decrease resulted primarily from (i) an upward revision in the estimate of remaining gas reserves at December 31, 1996, (ii) the decrease in volumes of oil and gas sold in 1996, and (iii) a reduction in the depletable base of oil and gas properties due to the impairment provision recorded in 1995 as discussed below. As a percentage of oil and gas sales, this expense decreased to 22.8% in 1996 from 52.8% in 1995. This percentage decrease was primarily due to the dollar decrease in depreciation, depletion, and amortization and the increases in the average prices of oil and gas sold in 1996. 59 The II-H Partnership recognized a non-cash charge against earnings of $259,808 in 1995. This impairment provision was necessary due to the unamortized costs of proved oil and gas properties exceeding the undiscounted future net revenues from such oil and gas properties. No similar charge was necessary in 1996. General and administrative expenses remained relatively constant during 1995 and 1996. As a percentage of oil and gas sales, these expenses decreased to 9.0% in 1996 from 10.3% in 1995. This percentage decrease was primarily due to the increases in the average prices of oil and gas sold in 1996. Average Sales Prices, Production Volumes, and Average Production Costs The following tables are comparisons of the annual average oil and gas sales prices, production volumes, and average production costs (lease operating expenses and production taxes) per equivalent unit (one barrel of oil or six Mcf of gas) for 1997, 1996, and 1995. These factors comprise the change in net oil and gas operations discussed in the "Results of Operations" section above. 60 1997 Compared to 1996 --------------------- Average Sales Prices ------------------------------------------------------------- P/ship 1997 1996 % Change - ------ ---------------- ---------------- ---------- Oil Gas Oil Gas ($/Bbl) ($/Mcf) ($/Bbl) ($/Mcf) Oil Gas ------- ------- ------- ------- ----- --- II-A $18.85 $2.28 $20.40 $2.15 ( 8%) 6% II-B 19.13 2.41 20.92 2.15 ( 9%) 12% II-C 19.04 2.34 21.14 2.04 (10%) 15% II-D 18.68 2.25 20.03 1.83 ( 7%) 23% II-E 19.10 2.30 20.37 1.85 ( 6%) 24% II-F 18.66 2.30 19.83 1.96 ( 6%) 17% II-G 18.66 2.31 19.83 1.96 ( 6%) 18% II-H 18.67 2.33 19.85 1.94 ( 6%) 20% Production Volumes ---------------------------------------------------------------- P/ship 1997 1996 % Change - ------ ------------------ ------------------ ------------ Oil Gas Oil Gas Oil Gas (Bbls) (Mcf) (Bbls) (Mcf) (Bbls) (Mcf) ------- --------- ------ --------- ------ ----- II-A 105,866 1,505,818 103,230 1,737,090 3% (13%) II-B 67,591 1,047,458 74,434 1,219,775 ( 9%) (14%) II-C 22,753 582,748 25,093 685,344 ( 9%) (15%) II-D 50,413 1,501,911 66,517 1,637,645 (24%) ( 8%) II-E 42,668 783,379 53,804 861,464 (21%) ( 9%) II-F 45,014 586,444 47,395 761,702 ( 5%) (23%) II-G 94,553 1,256,464 99,593 1,626,530 ( 5%) (23%) II-H 21,998 304,593 23,172 397,146 ( 5%) (23%) Average Production Costs per Equivalent Barrel of Oil -------------------------------- P/ship 1997 1996 % Change ------ ----- ----- -------- II-A $5.29 $4.94 7% II-B 5.43 4.19 30% II-C 4.40 4.33 2% II-D 5.51 5.31 4% II-E 5.25 4.63 13% II-F 3.83 3.69 4% II-G 3.90 3.74 4% II-H 3.99 3.80 5% 61 1996 Compared to 1995 --------------------- Average Sales Prices -------------------------------------------------------------- P/ship 1996 1995 % Change - ------ ---------------- ---------------- ---------- Oil Gas Oil Gas ($/Bbl) ($/Mcf) ($/Bbl) ($/Mcf) Oil Gas ------- ------- ------- ------- --- ---- II-A $20.40 $2.15 $16.86 $1.49 21% 44% II-B 20.92 2.15 16.62 1.54 26% 40% II-C 21.14 2.04 16.92 1.46 25% 40% II-D 20.03 1.83 16.39 1.28 22% 43% II-E 20.37 1.85 16.81 1.31 21% 41% II-F 19.83 1.96 16.10 1.36 23% 44% II-G 19.83 1.96 16.11 1.36 23% 44% II-H 19.85 1.94 16.12 1.35 23% 44% Production Volumes ----------------------------------------------------------------- P/ship 1996 1995 % Change - ------ ------------------ ------------------ ------------ Oil Gas Oil Gas Oil Gas (Bbls) (Mcf) (Bbls) (Mcf) (Bbls) (Mcf) ------- --------- ------ --------- ------ ----- II-A 103,230 1,737,090 120,420 1,768,316 (14%) ( 2%) II-B 74,434 1,219,775 81,304 1,205,296 ( 8%) 1% II-C 25,093 685,344 26,383 737,277 ( 5%) ( 7%) II-D 66,517 1,637,645 88,913 1,906,303 (25%) (14%) II-E 53,804 861,464 63,680 937,469 (16%) ( 8%) II-F 47,395 761,702 54,773 845,804 (13%) (10%) II-G 99,593 1,626,530 115,206 1,832,915 (14%) (11%) II-H 23,172 397,146 26,870 449,854 (14%) (12%) Average Production Costs per Equivalent Barrel of Oil -------------------------------- P/ship 1996 1995 % Change ------ ----- ----- -------- II-A $4.94 $4.45 11% II-B 4.19 5.40 (22%) II-C 4.33 4.68 ( 7%) II-D 5.31 5.25 1% II-E 4.63 5.22 (11%) II-F 3.69 3.38 9% II-G 3.74 3.46 8% II-H 3.80 3.52 8% 62 Liquidity and Capital Resources Net proceeds from operations less necessary operating capital are distributed to the Limited Partners on a quarterly basis. See "Item 5. Market for Units and Related Limited Partner Matters." The net proceeds from production are not reinvested in productive assets, except to the extent that producing wells are improved, or where methods are employed to permit more efficient recovery of reserves, thereby resulting in a positive economic impact. Assuming production levels for 1997, the Partnerships proved reserve quantities at December 31, 1997 would have the following remaining lives: Partnership Gas-Years Oil-Years ----------- --------- --------- II-A 5.5 5.1 II-B 5.0 5.7 II-C 6.7 7.1 II-D 6.2 7.6 II-E 6.5 5.6 II-F 6.7 7.0 II-G 6.7 7.0 II-H 6.7 7.1 The Partnerships' available capital from the Limited Partners' subscriptions has been spent on oil and gas properties and there should be no further material capital resource commitments in the future. Occasional expenditures for new wells or well recompletions or workovers, however, may reduce or eliminate cash available for a particular quarterly cash distribution. The Partnerships have no debt commitments. Cash for operational purposes will be provided by current oil and gas production. The Partnerships sold certain oil and gas properties during 1997. The sale of a property owned by one or more Partnerships was made by the General Partner after giving due consideration to the offer price and the General Partner's estimate of both the property's remaining proved reserves and future operating costs. Net proceeds from the sale of any such properties were distributed to the Partnerships and included in the calculation of the Partnerships' cash distributions for the quarter immediately following the Partnerships' receipt of the proceeds. The amount of such proceeds from the sale of oil and gas properties during 1997 were as follows: 63 Partnership Amount ----------- ---------- II-A $ 225,375 II-B 251,335 II-C 208,805 II-D 629,832 II-E 431,541 II-F 758,534 II-G 1,658,135 II-H 414,950 The sale of these properties reduced the quantity of the Partnerships' proved reserves. It is also possible that the Partnerships' repurchase values and future cash distributions could decline as a result of a reduction of the Partnerships' reserve base. The General Partner believes that the sale of these properties will be beneficial to the Partnerships since the properties sold generally had a higher ratio of future operating expenses as compared to reserves than the properties not sold. There can be no assurance as to the amount of the Partnerships' future cash distributions. The Partnerships' ability to make cash distributions depends primarily upon the level of available cash flow generated by the Partnerships' operating activities, which will be affected (either positively or negatively) by many factors beyond the control of the Partnerships, including the price of and demand for oil and gas and other market and economic conditions. Even if prices and costs remain stable, the amount of cash available for distributions will decline over time (as the volume of production from producing properties declines) since the Partnerships are not replacing production through acquisitions of producing properties and drilling. The Partnerships' quantity of proved reserves has been reduced by the sale of oil and gas properties as described above; therefore, it is possible that the Partnerships' future cash distributions could decline as a result of a reduction of the Partnerships' reserve base. The Partnerships will terminate on December 31, 2001 in accordance with the Partnership Agreements. However, the Partnership Agreements provide that the General Partner may extend the term of each Partnership for up to five periods of two years each. As of the date of this Annual Report, the General Partner has not determined whether to extend the term of any Partnership. 64 Inflation and Changing Prices Prices obtained for oil and gas production depend upon numerous factors, including the extent of domestic and foreign production, foreign imports of oil, market demand, domestic and foreign economic conditions in general, and governmental regulations and tax laws. The general level of inflation in the economy did not have a material effect on the operations of the Partnerships in 1997. Oil and gas prices have fluctuated during recent years and generally have not followed the same pattern as inflation. See "Item 2. Properties - Oil and Gas Production, Revenue, and Price History." Year 2000 Computer Issues The General Partner has reviewed its computer systems and hardware to locate potential operational problems associated with the year 2000. Such review will continue until all potential problems are located and resolved. The General Partner believes that all year-2000 problems in its computer system have been or will be resolved in a timely manner and have not caused and will not cause disruption of the Partnerships' operations or a material affect on the Partnerships' financial condition or results of operations. However, it is possible that the Partnerships' cash flows could be disrupted by year-2000 problems experienced by operators of the Partnerships' wells, buyers of the Partnerships' oil and gas, financial institutions, or other persons. The General Partner is unable to quantify the effect, if any, on the Partnerships of year-2000 computer problems experienced by these third parties. ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA The financial statements and supplementary data are indexed in Item 14 hereof. ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE None. PART III. ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE GENERAL PARTNER The Partnerships have no directors or executive officers. The following individuals are directors and executive officers of the General Partner. The business address of such director and executive officers is Two West Second Street, Tulsa, Oklahoma 74103. 65 Name Age Position with General Partner ---------------- --- -------------------------------- Dennis R. Neill 45 President and Director Judy K. Fox 46 Secretary The director will hold office until the next annual meeting of shareholders of Geodyne and until his successor has been duly elected and qualified. All executive officers serve at the discretion of the Board of Directors. Dennis R. Neill joined the Samson Companies in 1981, was named Senior Vice President and Director of Geodyne on March 3, 1993, and was named President of Geodyne and its subsidiaries on June 30, 1996. Prior to joining the Samson Companies, he was associated with a Tulsa law firm, Conner and Winters, where his principal practice was in the securities area. He received a Bachelor of Arts degree in political science from Oklahoma State University and a Juris Doctorate degree from the University of Texas. Mr. Neill also serves as Senior Vice President of Samson Investment Company and as President and Director of Samson Properties Incorporated, Samson Hydrocarbons Company, Dyco Petroleum Corporation, Berry Gas Company, Circle L Drilling Company, and Compression, Inc. Judy K. Fox joined the Samson Companies in 1990 and was named Secretary of Geodyne and its subsidiaries on June 30, 1996. Prior to joining the Samson Companies, she served as Gas Contract Manager for Ely Energy Company. Ms. Fox is also Secretary of Berry Gas Company, Circle L Drilling Company, Compression, Inc., Dyco Petroleum Corporation, Samson Hydrocarbons Company, and Samson Properties Incorporated. Section 16(a) Beneficial Ownership Reporting Compliance To the best knowledge of the Partnerships and the General Partner, there were no officers, directors, or ten percent owners who were delinquent filers of reports required under Section 16 of the Securities Exchange Act of 1934 during 1997. 66 ITEM 11. EXECUTIVE COMPENSATION The General Partner and its affiliates are reimbursed for actual general and administrative costs and operating costs incurred and attributable to the conduct of the business affairs and operations of the Partnerships, computed on a cost basis, determined in accordance with generally accepted accounting principles. Such reimbursed costs and expenses allocated to the Partnerships include office rent, secretarial, employee compensation and benefits, travel and communication costs, fees for professional services, and other items generally classified as general or administrative expense. The amount of general and administrative expense allocated to the General Partner and its affiliates which was charged to each Partnership during 1997, 1996, and 1995 is set forth in the table below. Although the actual costs incurred by the General Partner and its affiliates have fluctuated during the three years presented, the amounts charged to the Partnerships have not fluctuated due to expense limitations imposed by the Partnership Agreements. Partnership 1997 1996 1995 ----------- -------- -------- -------- II-A $509,772 $509,772 $509,772 II-B 380,760 380,760 380,760 II-C 162,756 162,756 162,756 II-D 331,452 331,452 331,452 II-E 240,864 240,864 240,864 II-F 180,420 180,420 180,420 II-G 391,776 391,776 391,776 II-H 96,540 96,540 96,540 None of the officers or directors of the General Partner receive compensation directly from the Partnerships. The Partnerships reimburse the General Partner or its affiliates for that portion of such officers' and directors' salaries and expenses attributable to time devoted by such individuals to the Partnerships' activities. The following tables indicate the approximate amount of general and administrative expense reimbursement attributable to the salaries of the directors, officers, and employees of the General Partner and its affiliates during 1997, 1996, and 1995: 67
Salary Reimbursements II-A Partnership ---------------- Three Years Ended December 31, 1997 Long Term Compensation ---------------------------------- Annual Compensation Awards Payouts ----------------------------- ----------------------- ------- Securi- Other ties All Name Annual Restricted Under- Other and Compen- Stock lying LTIP Compen- Principal Salary Bonus sation Award(s) Options/ Payouts sation Position Year ($) ($) ($) ($) SARs(#) ($) ($) - --------------- ---- ------- ------- ------- ---------- -------- ------- ------- C. Philip Tholen, President, Chief Executive Officer(1)(2) 1995 - - - - - - - 1996 - - - - - - - Dennis R. Neill, President(2)(3) 1996 - - - - - - - 1997 - - - - - - - All Executive Officers, Directors, and Employees as a group(4) 1995 $278,336 - - - - - - 1996 $298,217 - - - - - - 1997 $304,538 - - - - - - - ---------- (1) Mr. Tholen served as President and Chief Executive Officer of Geodyne until July 1, 1996. (2) The general and administrative expenses paid by the II-A Partnership and attributable to salary reimbursements do not include any salary or other compensation attributable to Mr. Tholen or Mr. Neill. (3) Mr. Neill became President of Geodyne on July 1, 1996. (4) No officer or director of Geodyne or its affiliates provides full-time services to the II-A Partnership and no individual's salary or other compensation reimbursement from the II-A Partnership equals or exceeds $100,000 per annum.
68
Salary Reimbursements II-B Partnership ---------------- Three Years Ended December 31, 1997 Long Term Compensation ---------------------------------- Annual Compensation Awards Payouts ----------------------------- ----------------------- ------- Securi- Other ties All Name Annual Restricted Under- Other and Compen- Stock lying LTIP Compen- Principal Salary Bonus sation Award(s) Options/ Payouts sation Position Year ($) ($) ($) ($) SARs(#) ($) ($) - --------------- ---- ------- ------- ------- ---------- -------- ------- ------- C. Philip Tholen, President, Chief Executive Officer(1)(2) 1995 - - - - - - - 1996 - - - - - - - Dennis R. Neill, President(2)(3) 1996 - - - - - - - 1997 - - - - - - - All Executive Officers, Directors, and Employees as a group(4) 1995 $207,895 - - - - - - 1996 $222,745 - - - - - - 1997 $227,466 - - - - - - - ---------- (1) Mr. Tholen served as President and Chief Executive Officer of Geodyne until July 1, 1996. (2) The general and administrative expenses paid by the II-B Partnership and attributable to salary reimbursements do not include any salary or other compensation attributable to Mr. Tholen or Mr. Neill. (3) Mr. Neill became President of Geodyne on July 1, 1996. (4) No officer or director of Geodyne or its affiliates provides full-time services to the II-B Partnership and no individual's salary or other compensation reimbursement from the II-B Partnership equals or exceeds $100,000 per annum.
69
Salary Reimbursements II-C Partnership ---------------- Three Years Ended December 31, 1997 Long Term Compensation ---------------------------------- Annual Compensation Awards Payouts ----------------------------- ----------------------- ------- Securi- Other ties All Name Annual Restricted Under- Other and Compen- Stock lying LTIP Compen- Principal Salary Bonus sation Award(s) Options/ Payouts sation Position Year ($) ($) ($) ($) SARs(#) ($) ($) - --------------- ---- ------- ------- ------- ---------- -------- ------- ------- C. Philip Tholen, President, Chief Executive Officer(1)(2) 1995 - - - - - - - 1996 - - - - - - - Dennis R. Neill, President(2)(3) 1996 - - - - - - - 1997 - - - - - - - All Executive Officers, Directors, and Employees as a group(4) 1995 $88,865 - - - - - - 1996 $95,212 - - - - - - 1997 $97,230 - - - - - - - ---------- (1) Mr. Tholen served as President and Chief Executive Officer of Geodyne until July 1, 1996. (2) The general and administrative expenses paid by the II-C Partnership and attributable to salary reimbursements do not include any salary or other compensation attributable to Mr. Tholen or Mr. Neill. (3) Mr. Neill became President of Geodyne on July 1, 1996. (4) No officer or director of Geodyne or its affiliates provides full-time services to the II-C Partnership and no individual's salary or other compensation reimbursement from the II-C Partnership equals or exceeds $100,000 per annum.
70
Salary Reimbursements II-D Partnership ---------------- Three Years Ended December 31, 1997 Long Term Compensation ---------------------------------- Annual Compensation Awards Payouts ----------------------------- ----------------------- ------- Securi- Other ties All Name Annual Restricted Under- Other and Compen- Stock lying LTIP Compen- Principal Salary Bonus sation Award(s) Options/ Payouts sation Position Year ($) ($) ($) ($) SARs(#) ($) ($) - --------------- ---- ------- ------- ------- ---------- -------- ------- ------- C. Philip Tholen, President, Chief Executive Officer(1)(2) 1995 - - - - - - - 1996 - - - - - - - Dennis R. Neill, President(2)(3) 1996 - - - - - - - 1997 - - - - - - - All Executive Officers, Directors, and Employees as a group(4) 1995 $180,973 - - - - - - 1996 $193,899 - - - - - - 1997 $198,009 - - - - - - - ---------- (1) Mr. Tholen served as President and Chief Executive Officer of Geodyne until July 1, 1996. (2) The general and administrative expenses paid by the II-D Partnership and attributable to salary reimbursements do not include any salary or other compensation attributable to Mr. Tholen or Mr. Neill. (3) Mr. Neill became President of Geodyne on July 1, 1996. (4) No officer or director of Geodyne or its affiliates provides full-time services to the II-D Partnership and no individual's salary or other compensation reimbursement from the II-D Partnership equals or exceeds $100,000 per annum.
71
Salary Reimbursements II-E Partnership ---------------- Three Years Ended December 31, 1997 Long Term Compensation ---------------------------------- Annual Compensation Awards Payouts ----------------------------- ----------------------- ------- Securi- Other ties All Name Annual Restricted Under- Other and Compen- Stock lying LTIP Compen- Principal Salary Bonus sation Award(s) Options/ Payouts sation Position Year ($) ($) ($) ($) SARs(#) ($) ($) - --------------- ---- ------- ------- ------- ---------- -------- ------- ------- C. Philip Tholen, President, Chief Executive Officer(1)(2) 1995 - - - - - - - 1996 - - - - - - - Dennis R. Neill, President(2)(3) 1996 - - - - - - - 1997 - - - - - - - All Executive Officers, Directors, and Employees as a group(4) 1995 $131,512 - - - - - - 1996 $140,905 - - - - - - 1997 $143,892 - - - - - - - ---------- (1) Mr. Tholen served as President and Chief Executive Officer of Geodyne until July 1, 1996. (2) The general and administrative expenses paid by the II-E Partnership and attributable to salary reimbursements do not include any salary or other compensation attributable to Mr. Tholen or Mr. Neill. (3) Mr. Neill became President of Geodyne on July 1, 1996. (4) No officer or director of Geodyne or its affiliates provides full-time services to the II-E Partnership and no individual's salary or other compensation reimbursement from the II-E Partnership equals or exceeds $100,000 per annum.
72
Salary Reimbursements II-F Partnership ---------------- Three Years Ended December 31, 1997 Long Term Compensation ---------------------------------- Annual Compensation Awards Payouts ----------------------------- ----------------------- ------- Securi- Other ties All Name Annual Restricted Under- Other and Compen- Stock lying LTIP Compen- Principal Salary Bonus sation Award(s) Options/ Payouts sation Position Year ($) ($) ($) ($) SARs(#) ($) ($) - --------------- ---- ------- ------- ------- ---------- -------- ------- ------- C. Philip Tholen, President, Chief Executive Officer(1)(2) 1995 - - - - - - - 1996 - - - - - - - Dennis R. Neill, President(2)(3) 1996 - - - - - - - 1997 - - - - - - - All Executive Officers, Directors, and Employees as a group(4) 1995 $ 98,509 - - - - - - 1996 $105,546 - - - - - - 1997 $107,783 - - - - - - - ---------- (1) Mr. Tholen served as President and Chief Executive Officer of Geodyne until July 1, 1996. (2) The general and administrative expenses paid by the II-F Partnership and attributable to salary reimbursements do not include any salary or other compensation attributable to Mr. Tholen or Mr. Neill. (3) Mr. Neill became President of Geodyne on July 1, 1996. (4) No officer or director of Geodyne or its affiliates provides full-time services to the II-F Partnership and no individual's salary or other compensation reimbursement from the II-F Partnership equals or exceeds $100,000 per annum.
73
Salary Reimbursements II-G Partnership ---------------- Three Years Ended December 31, 1997 Long Term Compensation ---------------------------------- Annual Compensation Awards Payouts ----------------------------- ----------------------- ------- Securi- Other ties All Name Annual Restricted Under- Other and Compen- Stock lying LTIP Compen- Principal Salary Bonus sation Award(s) Options/ Payouts sation Position Year ($) ($) ($) ($) SARs(#) ($) ($) - --------------- ---- ------- ------- ------- ---------- -------- ------- ------- C. Philip Tholen, President, Chief Executive Officer(1)(2) 1995 - - - - - - - 1996 - - - - - - - Dennis R. Neill, President(2)(3) 1996 - - - - - - - 1997 - - - - - - - All Executive Officers, Directors, and Employees as a group(4) 1995 $213,910 - - - - - - 1996 $229,189 - - - - - - 1997 $234,047 - - - - - - - ---------- (1) Mr. Tholen served as President and Chief Executive Officer of Geodyne until July 1, 1996. (2) The general and administrative expenses paid by the II-G Partnership and attributable to salary reimbursements do not include any salary or other compensation attributable to Mr. Tholen or Mr. Neill. (3) Mr. Neill became President of Geodyne on July 1, 1996. (4) No officer or director of Geodyne or its affiliates provides full-time services to the II-G Partnership and no individual's salary or other compensation reimbursement from the II-G Partnership equals or exceeds $100,000 per annum.
74
Salary Reimbursements II-H Partnership ---------------- Three Years Ended December 31, 1997 Long Term Compensation ---------------------------------- Annual Compensation Awards Payouts ----------------------------- ----------------------- ------- Securi- Other ties All Name Annual Restricted Under- Other and Compen- Stock lying LTIP Compen- Principal Salary Bonus sation Award(s) Options/ Payouts sation Position Year ($) ($) ($) ($) SARs(#) ($) ($) - --------------- ---- ------- ------- ------- ---------- -------- ------- ------- C. Philip Tholen, President, Chief Executive Officer(1)(2) 1995 - - - - - - - 1996 - - - - - - - Dennis R. Neill, President(2)(3) 1996 - - - - - - - 1997 - - - - - - - All Executive Officers, Directors, and Employees as a group(4) 1995 $52,711 - - - - - - 1996 $56,476 - - - - - - 1997 $57,673 - - - - - - - ---------- (1) Mr. Tholen served as President and Chief Executive Officer of Geodyne until July 1, 1996. (2) The general and administrative expenses paid by the II-H Partnership and attributable to salary reimbursements do not include any salary or other compensation attributable to Mr. Tholen or Mr. Neill. (3) Mr. Neill became President of Geodyne on July 1, 1996. (4) No officer or director of Geodyne or its affiliates provides full-time services to the II-H Partnership and no individual's salary or other compensation reimbursement from the II-H Partnership equals or exceeds $100,000 per annum.
75 During 1995 El Paso Energy Marketing Company, formerly known as Premier Gas Company ("El Paso"), an affiliate of the Partnerships until December 6, 1995, purchased a portion of the Partnerships' gas at market prices and resold such gas at market prices directly to end users and local distribution companies. The table below summarizes the dollar amount of gas sold by the Partnerships to El Paso during 1995. Partnership 1995 ----------- -------- II-A $825,515 II-B 374,717 II-C 225,948 II-D 682,346 II-E 593,218 II-F 367,527 II-G 776,211 II-H 182,878 After December 6, 1995 the Partnerships' gas was marketed by the General Partner and its affiliates, who were reimbursed for such activities as general and administrative expenses. See "Item 13. Certain Relationships and Related Transactions." Affiliates of the Partnerships serve as operator of some of the Partnerships' wells. The General Partner contracts with such affiliates for services as operator of the wells. As operator, such affiliates are compensated at rates provided in the operating agreements in effect and charged to all parties to such agreement. Such compensation may occur both prior and subsequent to the commencement of commercial marketing of production of oil or gas. The dollar amount of such compensation paid by the Partnerships to the affiliates is impossible to quantify as of the date of this Annual Report. In addition to the compensation/reimbursements noted above, during the three years ended December 31, 1997, the Samson Companies were in the business of supplying field and drilling equipment and services to affiliated and unaffiliated parties in the industry. These companies may have provided equipment and services for wells in which the Partnerships have an interest. These equipment and services were provided at prices or rates equal to or less than those normally charged in the same or comparable geographic area by unaffiliated persons or companies dealing at arm's length. The operators of these wells billed the Partnerships for a portion of such costs based upon the Partnerships' interest in the well. 76 ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT The following table provides information as to the beneficial ownership of the Units as of January 31, 1998 by (i) each beneficial owner of more than five percent of the issued and outstanding Units, (ii) the directors and officers of the General Partner, and (iii) the General Partner and its affiliates. The address of each of such persons is Samson Plaza, Two West Second Street, Tulsa, Oklahoma 74103. Number of Units Beneficially Owned (Percent Beneficial Owner of Outstanding) - ------------------------------------ ------------------ II-A Partnership: - ---------------- Samson Resources Company 61,201 (12.6%) All affiliates, directors, and officers of the General Partner as a group and the General Partner (4 persons) 61,201 (12.6%) II-B Partnership: - ---------------- Samson Resources Company 52,156 (14.4%) All affiliates, directors, and officers of the General Partner as a group and the General Partner (4 persons) 52,156 (14.4%) II-C Partnership: - ---------------- Samson Resources Company 28,773 (18.6%) All affiliates, directors, and officers of the General Partner as a group and the General Partner (4 persons) 28,773 (18.6%) II-D Partnership: - ---------------- Samson Resources Company 37,396 (11.9%) All affiliates, directors, and officers of the General Partner as a group and the General Partner (4 persons) 37,396 (11.9%) 77 II-E Partnership: - ---------------- Samson Resources Company 31,344 (13.7%) All affiliates, directors, and officers of the General Partner as a group and the General Partner (4 persons) 31,344 (13.7%) II-F Partnership: - ---------------- Samson Resources Company 22,820 (13.3%) All affiliates, directors, and officers of the General Partner as a group and the General Partner (4 persons) 22,820 (13.3%) II-G Partnership: - ---------------- Samson Resources Company 37,751 (10.1%) All affiliates, directors, and officers of the General Partner as a group and the General Partner (4 persons) 37,751 (10.1%) II-H Partnership: - ---------------- Samson Resources Company 12,428 (13.6%) All affiliates, directors, and officers of the General Partner as a group and the General Partner (4 persons) 12,428 (13.6%) ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS The General Partner and certain of its affiliates engage in oil and gas activities independently of the Partnerships which result in conflicts of interest that cannot be totally eliminated. The allocation of acquisition and drilling opportunities and the nature of the compensation arrangements between the Partnerships and the General Partner also create potential conflicts of interest. An affiliate of the Partnerships owns some of the Partnerships' Units and therefore has an identity of interest with other Limited Partners with respect to the operations of the Partnerships. 78 In order to attempt to assure limited liability for Limited Partners as well as an orderly conduct of business, management of the Partnerships is exercised solely by the General Partner. The Partnership Agreements grant the General Partner broad discretionary authority with respect to the Partnerships' participation in drilling prospects and expenditure and control of funds, including borrowings. These provisions are similar to those contained in prospectuses and partnership agreements for other public oil and gas partnerships. Broad discretion as to general management of the Partnerships involves circumstances where the General Partner has conflicts of interest and where it must allocate costs and expenses, or opportunities, among the Partnerships and other competing interests. The General Partner does not devote all of its time, efforts, and personnel exclusively to the Partnerships. Furthermore, the Partnerships do not have any employees, but instead rely on the personnel of the Samson Companies. The Partnerships thus compete with the Samson Companies (including other currently sponsored oil and gas partnerships) for the time and resources of such personnel. The Samson Companies devote such time and personnel to the management of the Partnerships as are indicated by the circumstances and as are consistent with the General Partner's fiduciary duties. As a result of Samson Investment Company's ("Samson") acquisition of the General Partner and its affiliates, Samson, PaineWebber (the dealer manager of the original offering of Units), and the General Partner entered into an advisory agreement which relates primarily to the Partnerships. The Advisory Agreement became effective on March 3, 1993 and will expire on March 3, 1998. The Advisory Agreement provides, among other things, that: (i) Samson will review periodically with PaineWebber the general operations and performance of the Partnerships and the terms of any material transaction involving a Partnership; (ii) Samson will allow PaineWebber to advise Samson and to comment on any General Partner-initiated amendment to a Partnership Agreement which requires a vote of the Limited Partners and any proposal initiated by the General Partner that would involve a reorganization, merger, or consolidation of a Partnership, a sale of all or substantially all of the assets of a Partnership, the liquidation or dissolution of a Partnership, or the exchange of cash, securities, or other assets for all or any outstanding Units; (iii) the General Partner will maintain an "800" investor services telephone number; and (iv) if Samson proposes a consolidation, merger, or exchange offer involving any limited partnership managed by Samson, it will propose to include all of the Partnerships in such transaction or provide a statement to PaineWebber as to the reasons why some or all of the Partnerships are not included in such transaction. 79 Affiliates of the Partnerships are solely responsible for the negotiation, administration, and enforcement of oil and gas sales agreements covering the Partnerships' leasehold interests. Because affiliates of the Partnership who provide services to the Partnership have fiduciary or other duties to other members of the Samson Companies, contract amendments and negotiating positions taken by them in their effort to enforce contracts with purchasers may not necessarily represent the positions that the Partnerships would take if they were to administer their own contracts without involvement with other members of the Samson Companies. On the other hand, management believes that the Partnerships' negotiating strength and contractual positions have been enhanced by virtue of their affiliation with the Samson Companies. For a description of certain of the relationships and related transactions see "Item 11. Executive Compensation." PART IV. ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K (a) Financial Statements, Financial Statement Schedules, and Exhibits. (1) Financial Statements: The following financial statements for the Geodyne Energy Income Limited Partnership II-A Geodyne Energy Income Limited Partnership II-B Geodyne Energy Income Limited Partnership II-C Geodyne Energy Income Limited Partnership II-D Geodyne Energy Income Limited Partnership II-E Geodyne Energy Income Limited Partnership II-F Geodyne Energy Income Limited Partnership II-G Geodyne Energy Income Limited Partnership II-H as of December 31, 1997 and 1996 and for each of the three years in the period ended December 31, 1997 are filed as part of this report: Report of Independent Accountants Combined Balance Sheets Combined Statements of Operations Combined Statements of Changes in Partners' Capital (Deficit) Combined Statements of Cash Flows Notes to Combined Financial Statements (2) Financial Statement Schedules: None. 80 (3) Exhibits: 4.1 The Certificate and Agreements of Limited Partnership for the following Partnerships have been previously filed with the Securities and Exchange Commission as Exhibit 2.1 to Form 8-A filed by each Partnership on the dates shown below and are hereby incorporated by reference. Partnership Filing Date File No. ----------- ------------ -------- II-A November 18, 1987 0-16388 II-B November 19, 1987 0-16405 II-C August 5, 1988 0-16981 II-D August 5, 1988 0-16980 II-E November 17, 1988 0-17320 II-F June 5, 1989 0-17799 II-G June 5, 1989 0-17802 II-H February 20, 1990 0-18305 4.2 The Agreements of Partnership for the following Production Partnerships have been previously filed with the Securities and Exchange Commission as Exhibit 2.2 to Form 8-A filed by the related Partnerships on the dates shown below and are hereby incorporated by reference. Partnership Filing Date ----------- ----------- II-A November 18, 1987 II-B November 19, 1987 II-C August 5, 1988 II-D August 5, 1988 II-E November 17, 1988 II-F June 5, 1989 II-G June 5, 1989 II-H February 20, 1990 4.3 Advisory Agreement dated as of November 24, 1992 between Samson, PaineWebber, Geodyne Resources, Geodyne Properties, Inc., Geodyne Production Company, and Geodyne Energy Company filed as Exhibit 28.3 to Registrant's Current Report on Form 8-K on December 24, 1992 and is hereby incorporated by reference. 81 4.4 Second Amendment to Amended and Restated Agreement and Certificate of Limited Partnership of Geodyne Energy Income Limited Partnership II-A, filed as Exhibit 4.1 to Registrant's Current Report on Form 8-K dated August 2, 1993 filed with the SEC on August 10, 1993 and is hereby incorporated by reference. 4.5 Second Amendment to Amended and Restated Agreement and Certificate of Limited Partnership of Geodyne Energy Income Limited Partnership II-B, filed as Exhibit 4.2 to Registrant's Current Report on Form 8-K dated August 2, 1993 filed with the SEC on August 10, 1993 and is hereby incorporated by reference. 4.6 Second Amendment to Amended and Restated Agreement and Certificate of Limited Partnership of Geodyne Energy Income Limited Partnership II-C, filed as Exhibit 4.3 to Registrant's Current Report on Form 8-K dated August 2, 1993 filed with the SEC on August 10, 1993 and is hereby incorporated by reference. 4.7 Second Amendment to Amended and Restated Agreement and Certificate of Limited Partnership of Geodyne Energy Income Limited Partnership II-D, filed as Exhibit 4.4 to Registrant's Current Report on Form 8-K dated August 2, 1993 filed with the SEC on August 10, 1993 and is hereby incorporated by reference. 4.8 Second Amendment to Amended and Restated Agreement and Certificate of Limited Partnership of Geodyne Energy Income Limited Partnership II-E, filed as Exhibit 4.5 to Registrant's Current Report on Form 8-K dated August 2, 1993 filed with the SEC on August 10, 1993 and is hereby incorporated by reference. 4.9 Second Amendment to Amended and Restated Agreement and Certificate of Limited Partnership of Geodyne Energy Income Limited Partnership II-F, filed as Exhibit 4.6 to Registrant's Current Report on Form 8-K dated August 2, 1993 filed with the SEC on August 10, 1993 and is hereby incorporated by reference. 82 4.10 Second Amendment to Amended and Restated Agreement and Certificate of Limited Partnership of Geodyne Energy Income Limited Partnership II-G, filed as Exhibit 4.7 to Registrant's Current Report on Form 8-K dated August 2, 1993 filed with the SEC on August 10, 1993 and is hereby incorporated by reference. 4.11 Second Amendment to Amended and Restated Agreement and Certificate of Limited Partnership of Geodyne Energy Income Limited Partnership II-H, filed as Exhibit 4.8 to Registrant's Current Report on Form 8-K dated August 2, 1993 filed with the SEC on August 10, 1993 and is hereby incorporated by reference. 4.12 Third Amendment to Agreement and Certificate of Limited Partnership of Geodyne Energy Income Limited Partnership II-E, filed as Exhibit 4.12 to the Registrant's Annual Report on Form 10-K for the year ended December 31, 1995 filed with the SEC on April 4, 1996 and is hereby incorporated by reference. 4.13 Third Amendment to Agreement and Certificate of Limited Partnership of Geodyne Energy Income Limited Partnership II-F, filed as Exhibit 4.13 to the Registrant's Annual Report on Form 10-K for the year ended December 31, 1995 filed with the SEC on April 4, 1996 and is hereby incorporated by reference. 4.14 Third Amendment to Agreement and Certificate of Limited Partnership of Geodyne Energy Income Limited Partnership II-G, filed as Exhibit 4.14 to the Registrant's Annual Report on Form 10-K for the year ended December 31, 1995 filed with the SEC on April 4, 1996 and is hereby incorporated by reference. 4.15 Third Amendment to Agreement and Certificate of Limited Partnership of Geodyne Energy Income Limited Partnership II-H, filed as Exhibit 4.15 to the Registrant's Annual Report on Form 10-K for the year ended December 31, 1995 filed with the SEC on April 4, 1996 and is hereby incorporated by reference. 83 * 23.1 Consent of Ryder Scott Company Petroleum Engineers for Geodyne Energy Income Limited Partnership II-A. * 23.2 Consent of Ryder Scott Company Petroleum Engineers for Geodyne Energy Income Limited Partnership II-B. * 23.3 Consent of Ryder Scott Company Petroleum Engineers for Geodyne Energy Income Limited Partnership II-C. * 23.4 Consent of Ryder Scott Company Petroleum Engineers for Geodyne Energy Income Limited Partnership II-D. * 23.5 Consent of Ryder Scott Company Petroleum Engineers for Geodyne Energy Income Limited Partnership II-E. * 23.6 Consent of Ryder Scott Company Petroleum Engineers for Geodyne Energy Income Limited Partnership II-F. * 23.7 Consent of Ryder Scott Company Petroleum Engineers for Geodyne Energy Income Limited Partnership II-G. * 23.8 Consent of Ryder Scott Company Petroleum Engineers for Geodyne Energy Income Limited Partnership II-H. * 27.1 Financial Data Schedule containing summary financial information extracted from the Geodyne Energy Income Limited Partnership II-A's financial statements as of December 31, 1997 and for the year ended December 31, 1997. * 27.2 Financial Data Schedule containing summary financial information extracted from the Geodyne Energy Income Limited Partnership II-B's financial statements as of December 31, 1997 and for the year ended December 31, 1997. * 27.3 Financial Data Schedule containing summary financial information extracted from the Geodyne Energy Income Limited Partnership II-C's financial statements as of December 31, 1997 and for the year ended December 31, 1997. 84 * 27.4 Financial Data Schedule containing summary financial information extracted from the Geodyne Energy Income Limited Partnership II-D's financial statements as of December 31, 1997 and for the year ended December 31, 1997. * 27.5 Financial Data Schedule containing summary financial information extracted from the Geodyne Energy Income Limited Partnership II-E's financial statements as of December 31, 1997 and for the year ended December 31, 1997. * 27.6 Financial Data Schedule containing summary financial information extracted from the Geodyne Energy Income Limited Partnership II-F's financial statements as of December 31, 1997 and for the year ended December 31, 1997. * 27.7 Financial Data Schedule containing summary financial information extracted from the Geodyne Energy Income Limited Partnership II-G's financial statements as of December 31, 1997 and for the year ended December 31, 1997. * 27.8 Financial Data Schedule containing summary financial information extracted from the Geodyne Energy Income Limited Partnership II-H's financial statements as of December 31, 1997 and for the year ended December 31, 1997. All other Exhibits are omitted as inapplicable. ---------- *Filed herewith. (b) Reports on Form 8-K filed during the fourth quarter of 1997: None. 85 SIGNATURES Pursuant to the requirements of Sections 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly organized. GEODYNE ENERGY INCOME LIMITED PARTNERSHIP II-A By: GEODYNE RESOURCES, INC. General Partner February 18, 1998 By: /s/Dennis R. Neill ------------------------------ Dennis R. Neill President Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities on the dates indicated. By: /s/Dennis R. Neill President and February 18, 1998 ------------------- Director (Principal Dennis R. Neill Executive Officer) /s/Patrick M. Hall (Principal February 18, 1998 ------------------- Financial and Patrick M. Hall Accounting Officer) /s/Judy K. Fox Secretary February 18, 1998 ------------------- Judy K. Fox 86 SIGNATURES Pursuant to the requirements of Sections 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly organized. GEODYNE ENERGY INCOME LIMITED PARTNERSHIP II-B By: GEODYNE RESOURCES, INC. General Partner February 18, 1998 By: /s/Dennis R. Neill ------------------------------ Dennis R. Neill President Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities on the dates indicated. By: /s/Dennis R. Neill President and February 18, 1998 ------------------- Director (Principal Dennis R. Neill Executive Officer) /s/Patrick M. Hall (Principal February 18, 1998 ------------------- Financial and Patrick M. Hall Accounting Officer) /s/Judy K. Fox Secretary February 18, 1998 ------------------- Judy K. Fox 87 SIGNATURES Pursuant to the requirements of Sections 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly organized. GEODYNE ENERGY INCOME LIMITED PARTNERSHIP II-C By: GEODYNE RESOURCES, INC. General Partner February 18, 1998 By: /s/Dennis R. Neill ------------------------------ Dennis R. Neill President Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities on the dates indicated. By: /s/Dennis R. Neill President and February 18, 1998 ------------------- Director (Principal Dennis R. Neill Executive Officer) /s/Patrick M. Hall (Principal February 18, 1998 ------------------- Financial and Patrick M. Hall Accounting Officer) /s/Judy K. Fox Secretary February 18, 1998 ------------------- Judy K. Fox 88 SIGNATURES Pursuant to the requirements of Sections 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly organized. GEODYNE ENERGY INCOME LIMITED PARTNERSHIP II-D By: GEODYNE RESOURCES, INC. General Partner February 18, 1998 By: /s/Dennis R. Neill ------------------------------ Dennis R. Neill President Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities on the dates indicated. By: /s/Dennis R. Neill President and February 18, 1998 ------------------- Director (Principal Dennis R. Neill Executive Officer) /s/Patrick M. Hall (Principal February 18, 1998 ------------------- Financial and Patrick M. Hall Accounting Officer) /s/Judy K. Fox Secretary February 18, 1998 ------------------- Judy K. Fox 89 SIGNATURES Pursuant to the requirements of Sections 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly organized. GEODYNE ENERGY INCOME LIMITED PARTNERSHIP II-E By: GEODYNE RESOURCES, INC. General Partner February 18, 1998 By: /s/Dennis R. Neill ------------------------------ Dennis R. Neill President Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities on the dates indicated. By: /s/Dennis R. Neill President and February 18, 1998 ------------------- Director (Principal Dennis R. Neill Executive Officer) /s/Patrick M. Hall (Principal February 18, 1998 ------------------- Financial and Patrick M. Hall Accounting Officer) /s/Judy K. Fox Secretary February 18, 1998 ------------------- Judy K. Fox 90 SIGNATURES Pursuant to the requirements of Sections 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly organized. GEODYNE ENERGY INCOME LIMITED PARTNERSHIP II-F By: GEODYNE RESOURCES, INC. General Partner February 18, 1998 By: /s/Dennis R. Neill ------------------------------ Dennis R. Neill President Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities on the dates indicated. By: /s/Dennis R. Neill President and February 18, 1998 ------------------- Director (Principal Dennis R. Neill Executive Officer) /s/Patrick M. Hall (Principal February 18, 1998 ------------------- Financial and Patrick M. Hall Accounting Officer) /s/Judy K. Fox Secretary February 18, 1998 ------------------- Judy K. Fox 91 SIGNATURES Pursuant to the requirements of Sections 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly organized. GEODYNE ENERGY INCOME LIMITED PARTNERSHIP II-G By: GEODYNE RESOURCES, INC. General Partner February 18, 1998 By: /s/Dennis R. Neill ------------------------------ Dennis R. Neill President Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities on the dates indicated. By: /s/Dennis R. Neill President and February 18, 1998 ------------------- Director (Principal Dennis R. Neill Executive Officer) /s/Patrick M. Hall (Principal February 18, 1998 ------------------- Financial and Patrick M. Hall Accounting Officer) /s/Judy K. Fox Secretary February 18, 1998 ------------------- Judy K. Fox 92 SIGNATURES Pursuant to the requirements of Sections 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly organized. GEODYNE ENERGY INCOME LIMITED PARTNERSHIP II-H By: GEODYNE RESOURCES, INC. General Partner February 18, 1998 By: /s/Dennis R. Neill ------------------------------ Dennis R. Neill President Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities on the dates indicated. By: /s/Dennis R. Neill President and February 18, 1998 ------------------- Director (Principal Dennis R. Neill Executive Officer) /s/Patrick M. Hall (Principal February 18, 1998 ------------------- Financial and Patrick M. Hall Accounting Officer) /s/Judy K. Fox Secretary February 18, 1998 ------------------- Judy K. Fox 93 ITEM 8: FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA REPORT OF INDEPENDENT ACCOUNTANTS TO THE PARTNERS GEODYNE ENERGY INCOME LIMITED PARTNERSHIP II-A GEODYNE PRODUCTION PARTNERSHIP II-A We have audited the combined balance sheets of the Geodyne Energy Income Limited Partnership II-A, an Oklahoma limited partnership, and Geodyne Production Partnership II-A, an Oklahoma general partnership, as of December 31, 1997 and 1996 and the related combined statements of operations, changes in partners' capital (deficit), and cash flows for the years ended December 31, 1997, 1996, and 1995. These financial statements are the responsibility of the Partnerships' management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the combined financial statements referred to above present fairly, in all material respects, the combined financial position of the Geodyne Energy Income Limited Partnership II-A and Geodyne Production Partnership II-A at December 31, 1997 and 1996 and the combined results of their operations and cash flows for the years ended December 31, 1997, 1996, and 1995, in conformity with generally accepted accounting principles. //s// Coopers & Lybrand L.L.P. COOPERS & LYBRAND L.L.P. Tulsa, Oklahoma January 30, 1998 F-1 GEODYNE ENERGY INCOME LIMITED PARTNERSHIP II-A GEODYNE ENERGY INCOME PRODUCTION PARTNERSHIP II-A Combined Balance Sheets December 31, 1997 and 1996 ASSETS ------ 1997 1996 ----------- ---------- CURRENT ASSETS: Cash and cash equivalents $ 830,584 $ 875,918 Accounts receivable: Oil and gas sales 837,560 1,073,459 Other 20,975 - --------- --------- Total current assets $1,689,119 $1,949,377 NET OIL AND GAS PROPERTIES, utilizing the successful efforts method 4,894,853 6,170,793 DEFERRED CHARGE 911,041 948,217 --------- --------- $7,495,013 $9,068,387 ========= ========= LIABILITIES AND PARTNERS' CAPITAL (DEFICIT) ------------------------------------------- CURRENT LIABILITIES: Accounts payable $ 233,246 $ 212,801 Gas imbalance payable 142,043 101,493 --------- --------- Total current liabilities $ 375,289 $ 314,294 ACCRUED LIABILITY $ 157,050 $ 158,683 PARTNERS' CAPITAL (DEFICIT): General Partner ($ 387,587) ($ 342,481) Limited Partners, issued and outstanding, 484,283 Units 7,350,261 8,937,891 --------- --------- Total Partners' capital $6,962,674 $8,595,410 --------- --------- $7,495,013 $9,068,387 ========= ========= The accompanying notes are an integral part of these combined financial statements. F-2 GEODYNE ENERGY INCOME LIMITED PARTNERSHIP II-A GEODYNE ENERGY INCOME PRODUCTION PARTNERSHIP II-A Combined Statements of Operations For the Years Ended December 31, 1997, 1996, and 1995 1997 1996 1995 ---------- ---------- ---------- REVENUES: Oil and gas sales, including $825,515 of sales to related parties in 1995 $5,431,745 $5,832,874 $4,671,555 Interest income 33,085 28,323 20,126 Gain on sale of oil and gas properties 176,789 96,827 12,179 Other income 20,975 - - --------- --------- --------- $5,662,594 $5,958,024 $4,703,860 COSTS AND EXPENSES: Lease operating $1,538,814 $1,601,063 $1,564,012 Production tax 349,607 339,977 282,252 Depreciation, depletion, and amortization of oil and gas properties 780,241 1,196,600 1,841,159 Impairment provision 684,276 - 994,919 General and administrative 591,256 620,562 655,449 --------- --------- --------- $3,944,194 $3,758,202 $5,337,791 --------- --------- --------- NET INCOME (LOSS) $1,718,400 $2,199,822 ($ 633,931) ========= ========= ========= GENERAL PARTNER - NET INCOME $ 141,030 $ 156,483 $ 81,747 ========= ========= ========= LIMITED PARTNERS - NET INCOME (LOSS) $1,577,370 $2,043,339 ($ 715,678) ========= ========= ========= NET INCOME (LOSS) per Unit $ 3.26 $ 4.22 ($ 1.48) ========= ========= ========= UNITS OUTSTANDING 484,283 484,283 484,283 ======== ========= ========= The accompanying notes are an integral part of these combined financial statements. F-3 GEODYNE ENERGY INCOME LIMITED PARTNERSHIP II-A GEODYNE ENERGY INCOME PRODUCTION PARTNERSHIP II-A Combined Statements of Changes in Partners' Capital (Deficit) For the Years Ended December 31, 1997, 1996, and 1995 Limited General Partners Partner Total ------------- ---------- ------------- Balance, Dec. 31, 1994 $12,065,230 ($297,741) $11,767,489 Net income (loss) ( 715,678) 81,747 ( 633,931) Cash Distributions ( 1,855,000) ( 96,000) ( 1,951,000) ---------- ------- ---------- Balance, Dec. 31, 1995 $ 9,494,552 ($311,994) $ 9,182,558 Net income 2,043,339 156,483 2,199,822 Cash distributions ( 2,600,000) ( 186,970) ( 2,786,970) ---------- ------- ---------- Balance, Dec. 31, 1996 $ 8,937,891 ($342,481) $ 8,595,410 Net income 1,577,370 141,030 1,718,400 Cash distributions ( 3,165,000) ( 186,136) ( 3,351,136) ---------- ------- ---------- Balance, Dec. 31, 1997 $ 7,350,261 ($387,587) $ 6,962,674 ========== ======= ========== The accompanying notes are an integral part of these combined financial statements. F-4 GEODYNE ENERGY INCOME LIMITED PARTNERSHIP II-A GEODYNE ENERGY INCOME PRODUCTION PARTNERSHIP II-A Combined Statements of Cash Flows For the Years Ended December 31, 1997, 1996, and 1995 1997 1996 1995 ------------ ------------ ------------ CASH FLOWS FROM OPERATING ACTIVITIES: Net income (loss) $1,718,400 $2,199,822 ($ 633,931) Adjustments to reconcile net income (loss) to net cash provided by operating activities: Depreciation, depletion, and amortization of oil and gas properties 780,241 1,196,600 1,841,159 Impairment provision 684,276 - 994,919 Gain on sale of oil and gas properties ( 176,789) ( 96,827) ( 12,179) (Increase) decrease in accounts receivable- oil and gas sales 235,899 ( 308,384) 63,981 Increase in accounts receivable - other ( 20,975) - - (Increase) decrease in deferred charge 37,176 221,060 ( 188,505) Increase (decrease) in accounts payable 20,445 ( 325) ( 76,265) Increase (decrease) in gas imbalance payable 40,550 ( 63,344) ( 53,112) Decrease in accrued liability ( 1,633) ( 113,984) ( 126,002) --------- --------- --------- Net cash provided by operating activities $3,317,590 $3,034,618 $1,810,065 --------- --------- --------- CASH FLOWS FROM INVESTING ACTIVITIES: Capital expenditures ($ 237,163) ($ 98,540) ($ 168,118) Proceeds from sale of oil and gas properties 225,375 218,786 23,383 --------- --------- --------- Net cash provided (used) by investing activities ($ 11,788) $ 120,246 ($ 144,735) --------- --------- --------- F-5 CASH FLOWS FROM FINANCING ACTIVITIES: Cash distributions ($3,351,136) ($2,786,970) ($1,951,000) --------- --------- --------- Net cash used by financing activities ($3,351,136) ($2,786,970) ($1,951,000) --------- --------- --------- NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS ($ 45,334) $ 367,894 ($ 285,670) CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 875,918 508,024 793,694 --------- --------- --------- CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 830,584 $ 875,918 $ 508,024 ========= ========= ========= The accompanying notes are an integral part of these combined financial statements. F-6 REPORT OF INDEPENDENT ACCOUNTANTS TO THE PARTNERS GEODYNE ENERGY INCOME LIMITED PARTNERSHIP II-B GEODYNE PRODUCTION PARTNERSHIP II-B We have audited the combined balance sheets of the Geodyne Energy Income Limited Partnership II-B, an Oklahoma limited partnership, and Geodyne Production Partnership II-B, an Oklahoma general partnership, as of December 31, 1997 and 1996 and the related combined statements of operations, changes in partners' capital (deficit), and cash flows for the years ended December 31, 1997, 1996, and 1995. These financial statements are the responsibility of the Partnerships' management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the combined financial statements referred to above present fairly, in all material respects, the combined financial position of the Geodyne Energy Income Limited Partnership II-B and Geodyne Production Partnership II-B at December 31, 1997 and 1996 and the combined results of their operations and cash flows for the years ended December 31, 1997, 1996, and 1995 in conformity with generally accepted accounting principles. //s// Coopers & Lybrand L.L.P. COOPERS & LYBRAND L.L.P. Tulsa, Oklahoma January 30, 1998 F-7 GEODYNE ENERGY INCOME LIMITED PARTNERSHIP II-B GEODYNE ENERGY INCOME PRODUCTION PARTNERSHIP II-B Combined Balance Sheets December 31, 1997 and 1996 ASSETS ------ 1997 1996 ----------- ------------ CURRENT ASSETS: Cash and cash equivalents $ 644,574 $ 569,257 Accounts receivable: Oil and gas sales 565,152 710,208 --------- --------- Total current assets $1,209,726 $1,279,465 NET OIL AND GAS PROPERTIES, utilizing the successful efforts method 3,035,158 4,140,409 DEFERRED CHARGE 169,811 160,103 --------- --------- $4,414,695 $5,579,977 ========= ========= LIABILITIES AND PARTNERS' CAPITAL (DEFICIT) ------------------------------------------- CURRENT LIABILITIES: Accounts payable $ 141,754 $ 189,245 Gas imbalance payable 24,671 17,055 --------- --------- Total current liabilities $ 166,425 $ 206,300 ACCRUED LIABILITY $ 88,519 $ 86,198 PARTNERS' CAPITAL (DEFICIT): General Partner ($ 305,223) ($ 265,183) Limited Partners, issued and outstanding, 361,719 Units 4,464,974 5,552,662 --------- --------- Total Partners' capital $4,159,751 $5,287,479 --------- --------- $4,414,695 $5,579,977 ========= ========= The accompanying notes are an integral part of these combined financial statements. F-8 GEODYNE ENERGY INCOME LIMITED PARTNERSHIP II-B GEODYNE ENERGY INCOME PRODUCTION PARTNERSHIP II-B Combined Statements of Operations For the Years Ended December 31, 1997, 1996, and 1995 1997 1996 1995 ---------- ----------- ---------- REVENUES: Oil and gas sales, including $374,717 of sales to related parties in 1995 $3,816,269 $4,179,527 $3,204,794 Interest income 19,644 16,689 9,960 Gain (loss) on sale of oil and gas properties 203,247 ( 28,890) 10,869 --------- --------- --------- $4,039,160 $4,167,326 $3,225,623 COSTS AND EXPENSES: Lease operating $1,062,972 $ 912,347 $1,315,780 Production tax 251,478 252,366 208,998 Depreciation, depletion, and amortization of oil and gas properties 546,957 1,062,233 1,436,788 Impairment provision 530,988 - 450,601 General and administrative 451,569 496,791 574,552 --------- --------- --------- $2,843,964 $2,723,737 $3,986,719 --------- --------- --------- NET INCOME (LOSS) $1,195,196 $1,443,589 ($ 761,096) ========= ========= ========= GENERAL PARTNER - NET INCOME $ 99,884 $ 113,834 $ 37,441 ========= ========= ========= LIMITED PARTNERS - NET INCOME (LOSS) $1,095,312 $1,329,755 ($ 798,537) ========= ========= ========= NET INCOME (LOSS) per Unit $ 3.03 $ 3.68 ($ 2.21) ========= ========= ========= UNITS OUTSTANDING 361,719 361,719 361,719 ========= ========= ========= The accompanying notes are an integral part of these combined financial statements. F-9 GEODYNE ENERGY INCOME LIMITED PARTNERSHIP II-B GEODYNE ENERGY INCOME PRODUCTION PARTNERSHIP II-B Combined Statements of Changes in Partners' Capital (Deficit) For the Years Ended December 31, 1997, 1996, and 1995 Limited General Partners Partner Total ------------- ---------- ------------ Balance, Dec. 31, 1994 $ 7,914,444 ($222,879) $7,691,565 Net income (loss) ( 798,537) 37,441 ( 761,096) Cash distributions ( 1,160,000) ( 61,000) ( 1,221,000) ---------- ------- --------- Balance, Dec. 31, 1995 $ 5,955,907 ($246,438) $5,709,469 Net income 1,329,755 113,834 1,443,589 Cash distributions ( 1,733,000) ( 132,579) ( 1,865,579) ---------- ------- --------- Balance, Dec. 31, 1996 $5,552,662 ($265,183) $5,287,479 Net income 1,095,312 99,884 1,195,196 Cash distributions ( 2,183,000) ( 139,924) ( 2,322,924) --------- ------- --------- Balance, Dec. 31, 1997 $4,464,974 ($305,223) $4,159,751 ========= ======= ========= The accompanying notes are an integral part of these combined financial statements. F-10 GEODYNE ENERGY INCOME LIMITED PARTNERSHIP II-B GEODYNE ENERGY INCOME PRODUCTION PARTNERSHIP II-B Combined Statements of Cash Flows For the Years Ended December 31, 1997, 1996, and 1995 1997 1996 1995 ----------- ------------ ------------ CASH FLOWS FROM OPERATING ACTIVITIES: Net income (loss) $1,195,196 $1,443,589 ($ 761,096) Adjustments to reconcile net income (loss) to net cash provided by operating activities: Depreciation, depletion, and amortization of oil and gas properties 546,957 1,062,233 1,436,788 Impairment provision 530,988 - 450,601 (Gain) loss on sale of oil and gas properties ( 203,247) 28,890 ( 10,869) (Increase) decrease in accounts receivable 145,056 ( 126,075) ( 11,586) (Increase) decrease in deferred charge ( 9,708) 66,200 ( 53,003) Decrease in accounts payable ( 47,491) ( 21,981) ( 11,178) Increase (decrease) in gas imbalance payable 7,616 2,007 ( 3,745) Increase (decrease) in accrued liability 2,321 ( 215,486) ( 67,612) --------- --------- --------- Net cash provided by operating activities $2,167,688 $2,239,377 $ 968,300 --------- --------- --------- CASH FLOWS FROM INVESTING ACTIVITIES: Capital expenditures ($ 20,782) ($ 89,173) ($ 217,765) Proceeds from sale of oil and gas properties 251,335 116,393 15,254 --------- --------- --------- Net cash provided (used) by investing activities $ 230,553 $ 27,220 ($ 202,511) --------- --------- --------- CASH FLOWS FROM FINANCING ACTIVITIES: Cash distributions ($2,322,924) ($1,865,579) ($1,221,000) --------- --------- --------- Net cash used by financing activities ($2,322,924) ($1,865,579) ($1,221,000) --------- --------- --------- F-11 NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS $ 75,317 $ 401,018 ($ 455,211) CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 569,257 168,239 623,450 --------- --------- --------- CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 644,574 $ 569,257 $ 168,239 ========= ========= ========= The accompanying notes are an integral part of these combined financial statements. F-12 REPORT OF INDEPENDENT ACCOUNTANTS TO THE PARTNERS GEODYNE ENERGY INCOME LIMITED PARTNERSHIP II-C GEODYNE PRODUCTION PARTNERSHIP II-C We have audited the combined balance sheets of the Geodyne Energy Income Limited Partnership II-C, an Oklahoma limited partnership, and Geodyne Production Partnership II-C, an Oklahoma general partnership, as of December 31, 1997 and 1996 and the related combined statements of operations, changes in partners' capital (deficit), and cash flows for the years ended December 31, 1997, 1996, and 1995. These financial statements are the responsibility of the Partnerships' management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the combined financial statements referred to above present fairly, in all material respects, the combined financial position of the Geodyne Energy Income Limited Partnership II-C and Geodyne Production Partnership II-C at December 31, 1997 and 1996 and the combined results of their operations and cash flows for the years ended December 31, 1997, 1996, and 1995, in conformity with generally accepted accounting principles. //s// Coopers & Lybrand L.L.P. COOPERS & LYBRAND L.L.P. Tulsa, Oklahoma January 30, 1998 F-13 GEODYNE ENERGY INCOME LIMITED PARTNERSHIP II-C GEODYNE ENERGY INCOME PRODUCTION PARTNERSHIP II-C Combined Balance Sheets December 31, 1997 and 1996 ASSETS ------ 1997 1996 ------------ ------------ CURRENT ASSETS: Cash and cash equivalents $ 358,095 $ 387,334 Accounts receivable: Oil and gas sales 273,399 340,182 Other 1,931 - --------- --------- Total current assets $ 633,425 $ 727,516 NET OIL AND GAS PROPERTIES, utilizing the successful efforts method 1,667,269 2,048,879 DEFERRED CHARGE 139,621 164,953 --------- --------- $2,440,315 $2,941,348 ========= ========= LIABILITIES AND PARTNERS' CAPITAL (DEFICIT) ------------------------------------------- CURRENT LIABILITIES: Accounts payable $ 33,293 $ 69,727 Gas imbalance payable 22,563 10,386 --------- --------- Total current liabilities $ 55,856 $ 80,113 ACCRUED LIABILITY $ 49,647 $ 69,148 PARTNERS' CAPITAL (DEFICIT): General Partner ($ 123,277) ($ 115,619) Limited Partners, issued and outstanding, 154,621 Units 2,458,089 2,907,706 --------- --------- Total Partners' capital $2,334,812 $2,792,087 --------- --------- $2,440,315 $2,941,348 ========= ========= The accompanying notes are an integral part of these combined financial statements. F-14 GEODYNE ENERGY INCOME LIMITED PARTNERSHIP II-C GEODYNE ENERGY INCOME PRODUCTION PARTNERSHIP II-C Combined Statements of Operations For the Years Ended December 31, 1997, 1996, and 1995 1997 1996 1995 ---------- ---------- ------------ REVENUES: Oil and gas sales, including $225,948 of sales to related parties in 1995 $1,796,657 $1,925,940 $1,519,937 Interest income 11,360 8,460 6,475 Gain on sale of oil and gas properties 156,919 42,354 13,807 Other income 1,931 - - --------- --------- --------- $1,966,867 $1,976,754 $1,540,219 COSTS AND EXPENSES: Lease operating $ 397,402 $ 477,750 $ 594,932 Production tax 130,419 125,174 103,713 Depreciation, depletion, and amortization of oil and gas properties 268,219 397,849 664,376 Impairment provision 66,617 - 245,324 General and administrative 193,799 214,421 248,883 --------- --------- --------- $1,056,456 $1,215,194 $1,857,228 --------- --------- --------- NET INCOME (LOSS) $ 910,411 $ 761,560 ($ 317,009) ========= ========= ========= GENERAL PARTNER - NET INCOME $ 57,028 $ 53,569 $ 20,538 ========= ========= ========= LIMITED PARTNERS - NET INCOME (LOSS) $ 853,383 $ 707,991 ($ 337,547) ========= ========= ========= NET INCOME (LOSS) per Unit $ 5.52 $ 4.58 ($ 2.18) ========= ========= ========= UNITS OUTSTANDING 154,621 154,621 154,621 ========= ========= ========= The accompanying notes are an integral part of these combined financial statements. F-15 GEODYNE ENERGY INCOME LIMITED PARTNERSHIP II-C GEODYNE ENERGY INCOME PRODUCTION PARTNERSHIP II-C Combined Statements of Changes in Partners' Capital (Deficit) For the Years Ended December 31, 1997, 1996, and 1995 Limited General Partners Partner Total ------------ ---------- ------------ Balance, Dec. 31, 1994 $4,092,262 ($ 84,153) $4,008,109 Net income (loss) ( 337,547) 20,538 ( 317,009) Cash distributions ( 715,000) ( 36,000) ( 751,000) --------- ------- --------- Balance, Dec. 31, 1995 $3,039,715 ($ 99,615) $2,940,100 Net income 707,991 53,569 761,560 Cash distributions ( 840,000) ( 69,573) ( 909,573) --------- ------- --------- Balance, Dec. 31, 1996 $2,907,706 ($115,619) $2,792,087 Net income 853,383 57,028 910,411 Cash distributions ( 1,303,000) ( 64,686) ( 1,367,686) --------- ------- --------- Balance, Dec. 31, 1997 $2,458,089 ($123,277) $2,334,812 ========= ======= ========= The accompanying notes are an integral part of these combined financial statements. F-16 GEODYNE ENERGY INCOME LIMITED PARTNERSHIP II-C GEODYNE ENERGY INCOME PRODUCTION PARTNERSHIP II-C Combined Statements of Cash Flows For the Years Ended December 31, 1997, 1996, and 1995 1997 1996 1995 ------------ ------------ ---------- CASH FLOWS FROM OPERATING ACTIVITIES: Net income (loss) $ 910,411 $ 761,560 ($317,009) Adjustments to reconcile net income (loss) to net cash provided by operating activities: Depreciation, depletion, and amortization of oil and gas properties 268,219 397,849 664,376 Impairment provision 66,617 - 245,324 Gain on sale of oil and gas properties ( 156,919) ( 42,354) ( 13,807) (Increase) decrease in accounts receivable - oil and gas sales 66,783 ( 48,817) ( 3,127) Increase in accounts receivable - other ( 1,931) - - (Increase) decrease in deferred charge 25,332 94,988 ( 49,148) Increase (decrease) in accounts payable ( 36,434) 2,434 10,952 Increase (decrease) in gas imbalance payable 12,177 ( 49,506) ( 45,047) Increase (decrease) in accrued liability ( 19,501) ( 69,510) 16,127 --------- --------- ------- Net cash provided by operating activities $1,134,754 $1,046,644 $508,641 --------- --------- ------- CASH FLOWS FROM INVESTING ACTIVITIES: Capital expenditures ($ 5,112) ($ 5,076) ($ 77,297) Proceeds from sale of oil and gas properties 208,805 172,986 21,108 --------- --------- ------- Net cash provided (used) by investing activities $ 203,693 $ 167,910 ($ 56,189) --------- --------- ------- F-17 CASH FLOWS FROM FINANCING ACTIVITIES: Cash distributions ($1,367,686) ($ 909,573) ($751,000) --------- --------- ------- Net cash used by financing activities ($1,367,686) ($ 909,573) ($751,000) --------- --------- ------- NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS ($ 29,239) $ 304,981 ($298,548) CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 387,334 82,353 380,901 --------- --------- ------- CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 358,095 $ 387,334 $ 82,353 ========= ========= ======= The accompanying notes are an integral part of these combined financial statements. F-18 REPORT OF INDEPENDENT ACCOUNTANTS TO THE PARTNERS GEODYNE ENERGY INCOME LIMITED PARTNERSHIP II-D GEODYNE PRODUCTION PARTNERSHIP II-D We have audited the combined balance sheets of the Geodyne Energy Income Limited Partnership II-D, an Oklahoma limited partnership, and Geodyne Production Partnership II-D, an Oklahoma general partnership, as of December 31, 1997 and 1996 and the related combined statements of operations, changes in partners' capital (deficit), and cash flows for the years ended December 31, 1997, 1996, and 1995. These financial statements are the responsibility of the Partnerships' management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the combined financial statements referred to above present fairly, in all material respects, the combined financial position of the Geodyne Energy Income Limited Partnership II-D and Geodyne Production Partnership II-D at December 31, 1997 and 1996 and the combined results of their operations and cash flows for the years ended December 31, 1997, 1996, and 1995, in conformity with generally accepted accounting principles. //s// Coopers & Lybrand L.L.P. COOPERS & LYBRAND L.L.P. Tulsa, Oklahoma January 30, 1998 F-19 GEODYNE ENERGY INCOME LIMITED PARTNERSHIP II-D GEODYNE ENERGY INCOME PRODUCTION PARTNERSHIP II-D Combined Balance Sheets December 31, 1997 and 1996 ASSETS ------ 1997 1996 ------------ ------------ CURRENT ASSETS: Cash and cash equivalents $1,151,142 $ 906,737 Accounts receivable: Oil and gas sales 646,750 793,183 Other 20,267 - --------- --------- Total current assets $1,818,159 $1,699,920 NET OIL AND GAS PROPERTIES, utilizing the successful efforts method 3,417,760 4,390,791 DEFERRED CHARGE 544,345 863,139 --------- --------- $5,780,264 $6,953,850 ========= ========= LIABILITIES AND PARTNERS' CAPITAL (DEFICIT) ------------------------------------------- CURRENT LIABILITIES: Accounts payable $ 86,058 $ 159,967 Gas imbalance payable 107,004 118,313 --------- --------- Total current liabilities $ 193,062 $ 278,280 ACCRUED LIABILITY $ 239,083 $ 266,782 PARTNERS' CAPITAL (DEFICIT): General Partner ($ 224,003) ($ 218,956) Limited Partners, issued and outstanding, 314,878 Units 5,572,122 6,627,744 --------- --------- Total Partners' capital $5,348,119 $6,408,788 --------- --------- $5,780,264 $6,953,850 ========= ========= The accompanying notes are an integral part of these combined financial statements. F-20 GEODYNE ENERGY INCOME LIMITED PARTNERSHIP II-D GEODYNE ENERGY INCOME PRODUCTION PARTNERSHIP II-D Combined Statements of Operations For the Years Ended December 31, 1997, 1996, and 1995 1997 1996 1995 ------------ ------------ ------------ REVENUES: Oil and gas sales, including $682,346 in sales to related parties in 1995 $4,314,154 $4,329,102 $3,901,516 Interest income 28,919 16,083 14,424 Gain on sale of oil and gas properties 447,981 80,630 27,963 Other 20,267 - - --------- --------- --------- $4,811,321 $4,425,815 $3,943,903 COSTS AND EXPENSES: Lease operating $1,331,185 $1,492,375 $1,854,632 Production tax 325,902 308,524 281,612 Depreciation, depletion, and amortization of oil and gas properties 689,112 800,433 1,548,167 Impairment provision 143,957 - 370,172 General and administrative 397,583 453,882 542,896 --------- --------- --------- $2,887,739 $3,055,214 $4,597,479 --------- --------- --------- NET INCOME (LOSS) $1,923,582 $1,370,601 ($ 653,576) ========= ========= ========= GENERAL PARTNER - NET INCOME $ 127,204 $ 99,743 $ 44,055 ========= ========= ========= LIMITED PARTNERS - NET INCOME (LOSS) $1,796,378 $1,270,858 ($ 697,631) ========= ========= ========= NET INCOME (LOSS) per Unit $ 5.70 $ 4.04 ($ 2.22) ========= ========= ========= UNITS OUTSTANDING 314,878 314,878 314,878 ========= ========= ========= The accompanying notes are an integral part of these combined financial statements. F-21 GEODYNE ENERGY INCOME LIMITED PARTNERSHIP II-D GEODYNE ENERGY INCOME PRODUCTION PARTNERSHIP II-D Combined Statements of Changes in Partners' Capital (Deficit) For the Years Ended December 31, 1997, 1996, and 1995 Limited General Partners Partner Total ------------ ---------- ------------ Balance, Dec. 31, 1994 $9,057,517 ($111,528) $8,945,989 Net income (loss) ( 697,631) 44,055 ( 653,576) Cash distributions ( 1,475,000) ( 76,000) ( 1,551,000) --------- ------- --------- Balance, Dec. 31, 1995 $6,884,886 ($143,473) $6,741,413 Net income 1,270,858 99,743 1,370,601 Cash distributions ( 1,528,000) ( 175,226) ( 1,703,226) --------- ------- --------- Balance, Dec. 31, 1996 $6,627,744 ($218,956) $6,408,788 Net income 1,796,378 127,204 1,923,582 Cash distributions ( 2,852,000) ( 132,251) ( 2,984,251) --------- ------- --------- Balance, Dec. 31, 1997 $5,572,122 ($224,003) $5,348,119 ========= ======= ========= The accompanying notes are an integral part of these combined financial statements. F-22 GEODYNE ENERGY INCOME LIMITED PARTNERSHIP II-D GEODYNE ENERGY INCOME PRODUCTION PARTNERSHIP II-D Combined Statements of Cash Flows For the Years Ended December 31, 1997, 1996, and 1995 1997 1996 1995 ------------ ------------ ------------ CASH FLOWS FROM OPERATING ACTIVITIES: Net income (loss) $1,923,582 $1,370,601 ($ 653,576) Adjustments to reconcile net income (loss) to net cash provided by operating activities: Depreciation, depletion, and amortization of oil and gas properties 689,112 800,433 1,548,167 Impairment provision 143,957 - 370,172 Gain on sale of oil and gas properties ( 447,981) ( 80,630) ( 27,963) (Increase) decrease in accounts receivable - oil and gas sales 146,433 ( 162,813) 66,975 Increase in accounts receivable - other ( 20,267) - - Decrease in deferred charge 318,794 86,088 99,720 Increase (decrease) in accounts payable ( 73,909) 13,159 ( 48,428) Increase (decrease) in gas imbalance payable ( 11,309) 790 ( 90,500) Increase (decrease) in accrued liability ( 27,699) ( 18,638) 62,785 --------- --------- --------- Net cash provided by operating activities $2,640,713 $2,008,990 $1,327,352 --------- --------- --------- CASH FLOWS FROM INVESTING ACTIVITIES: Capital expenditures ($ 41,889) ($ 22,210) ($ 58,694) Proceeds from sale of oil and gas properties 629,832 305,815 36,097 --------- --------- --------- Net cash provided (used) by investing activities $ 587,943 $ 283,605 ($ 22,597) --------- --------- --------- F-23 CASH FLOWS FROM FINANCING ACTIVITIES: Cash distributions ($2,984,251) ($1,703,226) ($1,551,000) --------- --------- --------- Net cash used by financing activities ($2,984,251) ($1,703,226) ($1,551,000) --------- --------- --------- NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS $ 244,405 $ 589,369 ($ 246,245) CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 906,737 317,368 563,613 --------- --------- --------- CASH AND CASH EQUIVALENTS AT END OF PERIOD $1,151,142 $ 906,737 $ 317,368 ========= ========= ========= The accompanying notes are an integral part of these combined financial statements. F-24 REPORT OF INDEPENDENT ACCOUNTANTS TO THE PARTNERS GEODYNE ENERGY INCOME LIMITED PARTNERSHIP II-E GEODYNE PRODUCTION PARTNERSHIP II-E We have audited the combined balance sheets of the Geodyne Energy Income Limited Partnership II-E, an Oklahoma limited partnership, and Geodyne Production Partnership II-E, an Oklahoma general partnership, as of December 31, 1997 and 1996 and the related combined statements of operations, changes in partners' capital (deficit), and cash flows for the years ended December 31, 1997, 1996, and 1995. These financial statements are the responsibility of the Partnerships' management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the combined financial statements referred to above present fairly, in all material respects, the combined financial position of the Geodyne Energy Income Limited Partnership II-E and Geodyne Production Partnership II-E at December 31, 1997 and 1996 and the combined results of their operations and cash flows for the years ended December 31, 1997, 1996, and 1995, in conformity with generally accepted accounting principles. //s// Coopers & Lybrand L.L.P. COOPERS & LYBRAND L.L.P. Tulsa, Oklahoma January 30, 1998 F-25 GEODYNE ENERGY INCOME LIMITED PARTNERSHIP II-E GEODYNE ENERGY INCOME PRODUCTION PARTNERSHIP II-E Combined Balance Sheets December 31, 1997 and 1996 ASSETS ------ 1997 1996 ------------ ------------ CURRENT ASSETS: Cash and cash equivalents $ 670,777 $ 528,765 Accounts receivable: Oil and gas sales 415,377 512,573 Other 110 - --------- --------- Total current assets $1,086,264 $1,041,338 NET OIL AND GAS PROPERTIES, utilizing the successful efforts method 2,841,080 4,579,160 DEFERRED CHARGE 330,531 355,647 --------- --------- $4,257,875 $5,976,145 ========= ========= LIABILITIES AND PARTNERS' CAPITAL (DEFICIT) ------------------------------------------- CURRENT LIABILITIES: Accounts payable $ 100,603 $ 133,181 Gas imbalance payable 171,089 161,181 --------- --------- Total current liabilities $ 271,692 $ 294,362 ACCRUED LIABILITY $ 63,625 $ 59,234 PARTNERS' CAPITAL (DEFICIT): General Partner ($ 172,017) ($ 147,595) Limited Partners, issued and outstanding, 228,821 Units 4,094,575 5,770,144 --------- --------- Total Partners' capital $3,922,558 $5,622,549 --------- --------- $4,257,875 $5,976,145 ========= ========= The accompanying notes are an integral part of these combined financial statements. F-26 GEODYNE ENERGY INCOME LIMITED PARTNERSHIP II-E GEODYNE ENERGY INCOME PRODUCTION PARTNERSHIP II-E Combined Statements of Operations For the Years Ended December 31, 1997, 1996, and 1995 1997 1996 1995 ------------ ------------ ------------ REVENUES: Oil and gas sales, including $593,218 sales to related parties in 1995 $2,616,003 $2,693,317 $2,297,409 Interest income 21,722 10,863 5,942 Gain on sale of oil and gas properties 272,654 117,078 15,120 --------- --------- --------- $2,910,379 $2,821,258 $2,318,471 COSTS AND EXPENSES: Lease operating $ 700,409 $ 710,012 $ 965,824 Production tax 208,912 203,065 182,683 Depreciation, depletion, and amortization of oil and gas properties 626,965 728,518 1,358,410 Impairment provision 992,851 - 465,045 General and administrative 314,835 417,205 616,305 --------- --------- --------- $2,843,972 $2,058,800 $3,588,267 --------- --------- --------- NET INCOME (LOSS) $ 66,407 $ 762,458 ($1,269,796) ========= ========= ========= GENERAL PARTNER - NET INCOME $ 66,976 $ 66,720 $ 9,448 ========= ========= ========= LIMITED PARTNERS - NET INCOME (LOSS) ($ 569) $ 695,738 ($1,279,244) ========= ========= ========= NET INCOME (LOSS) per Unit $ .00 $ 3.04 ($ 5.59) ========= ========= ========= UNITS OUTSTANDING 228,821 228,821 228,821 ========= ========= ========= The accompanying notes are an integral part of these combined financial statements. F-27 GEODYNE ENERGY INCOME LIMITED PARTNERSHIP II-E GEODYNE ENERGY INCOME PRODUCTION PARTNERSHIP II-E Combined Statements of Changes in Partners' Capital (Deficit) For the Years Ended December 31, 1997, 1996, and 1995 Limited General Partners Partner Total ------------- ---------- ------------- Balance, Dec. 31, 1994 $7,902,650 ($104,398) $7,798,252 Net income (loss) ( 1,279,244) 9,448 ( 1,269,796) Cash distributions ( 530,000) ( 28,000) ( 558,000) --------- ------- --------- Balance, Dec. 31, 1995 $6,093,406 ($122,950) $5,970,456 Net income 695,738 66,720 762,458 Cash distributions ( 1,019,000) ( 91,365) ( 1,110,365) --------- ------- --------- Balance, Dec. 31, 1996 $5,770,144 ($147,595) $5,622,549 Net income ( 569) 66,976 66,407 Cash distributions ( 1,675,000) ( 91,398) ( 1,766,398) --------- ------- --------- Balance, Dec. 31, 1997 $4,094,575 ($172,017) $3,922,558 ========= ======= ========= The accompanying notes are an integral part of these combined financial statements. F-28 GEODYNE ENERGY INCOME LIMITED PARTNERSHIP II-E GEODYNE ENERGY INCOME PRODUCTION PARTNERSHIP II-E Combined Statements of Cash Flows For the Years Ended December 31, 1997, 1996, and 1995 1997 1996 1995 ------------ ------------ ------------ CASH FLOWS FROM OPERATING ACTIVITIES: Net income (loss) $ 66,407 $ 762,458 ($1,269,796) Adjustments to reconcile net income (loss) to net cash provided by operating activities: Depreciation, depletion, and amortization of oil and gas properties 626,965 728,518 1,358,410 Impairment provision 992,851 - 465,045 Gain on sale of oil and gas properties ( 272,654) ( 117,078) ( 15,120) (Increase) decrease in accounts receivable - oil and gas sales 97,196 ( 102,943) ( 54,265) Increase in accounts receivable - other ( 110) - - Decrease in deferred charge 25,116 19,098 64,136 Increase (decrease) in accounts payable ( 32,578) 42,789 ( 6,685) Increase in gas imbalance payable 9,908 76,916 42,485 Increase (decrease) in accrued liability 4,391 ( 75,049) ( 45,814) --------- --------- --------- Net cash provided by operating activities $1,517,492 $1,334,709 $ 538,396 --------- --------- --------- CASH FLOWS FROM INVESTING ACTIVITIES: Capital expenditures ($ 40,623) ($ 70,806) ($ 82,764) Proceeds from sale of oil and gas properties 431,541 174,185 43,062 --------- --------- --------- Net cash provided (used) by investing activities $ 390,918 $ 103,379 ($ 39,702) --------- --------- --------- F-29 CASH FLOWS FROM FINANCING ACTIVITIES: Cash distributions ($1,766,398) ($1,110,365) ($ 558,000) --------- --------- --------- Net cash used by financing activities ($1,766,398) ($1,110,365) ($ 558,000) --------- --------- --------- NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS $ 142,012 $ 327,723 ($ 59,306) CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 528,765 201,042 260,348 --------- --------- --------- CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 670,777 $ 528,765 $ 201,042 ========= ========= ========= The accompanying notes are an integral part of these combined financial statements. F-30 REPORT OF INDEPENDENT ACCOUNTANTS TO THE PARTNERS GEODYNE ENERGY INCOME LIMITED PARTNERSHIP II-F GEODYNE PRODUCTION PARTNERSHIP II-F We have audited the combined balance sheets of the Geodyne Energy Income Limited Partnership II-F, an Oklahoma limited partnership, and Geodyne Production Partnership II-F, an Oklahoma general partnership, as of December 31, 1997 and 1996 and the related combined statements of operations, changes in partners' capital (deficit), and cash flows for the years ended December 31, 1997, 1996, and 1995. These financial statements are the responsibility of the Partnerships' management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the combined financial statements referred to above present fairly, in all material respects, the combined financial position of the Geodyne Energy Income Limited Partnership II-F and Geodyne Production Partnership II-F at December 31, 1997 and 1996 and the combined results of their operations and cash flows for the years ended December 31, 1997, 1996, and 1995, in conformity with generally accepted accounting principles. //s// Coopers & Lybrand L.L.P. COOPERS & LYBRAND L.L.P. Tulsa, Oklahoma January 30, 1998 F-31 GEODYNE ENERGY INCOME LIMITED PARTNERSHIP II-F GEODYNE ENERGY INCOME PRODUCTION PARTNERSHIP II-F Combined Balance Sheets December 31, 1997 and 1996 ASSETS ------ 1997 1996 ------------ ------------ CURRENT ASSETS: Cash and cash equivalents $ 741,852 $ 441,903 Accounts receivable: Oil and gas sales 334,094 429,839 General Partner - 15,285 Other 43 - --------- --------- Total current assets $1,075,989 $ 887,027 NET OIL AND GAS PROPERTIES, utilizing the successful efforts method 2,432,033 4,353,347 DEFERRED CHARGE 56,867 71,703 --------- --------- $3,564,889 $5,312,077 ========= ========= LIABILITIES AND PARTNERS' CAPITAL (DEFICIT) ------------------------------------------- CURRENT LIABILITIES: Accounts payable $ 64,348 $ 42,918 Gas imbalance payable 25,184 31,577 --------- --------- Total current liabilities $ 89,532 $ 74,495 ACCRUED LIABILITY $ 27,907 $ 28,322 PARTNERS' CAPITAL (DEFICIT): General Partner ($ 143,355) ($ 105,914) Limited Partners, issued and outstanding, 171,400 Units 3,590,805 5,315,174 --------- --------- Total Partners' capital $3,447,450 $5,209,260 --------- --------- $3,564,889 $5,312,077 ========= ========= The accompanying notes are an integral part of these combined financial statements. F-32 GEODYNE ENERGY INCOME LIMITED PARTNERSHIP II-F GEODYNE ENERGY INCOME PRODUCTION PARTNERSHIP II-F Combined Statements of Operations For the Years Ended December 31, 1997, 1996, and 1995 1997 1996 1995 ------------ ---------- ----------- REVENUES: Oil and gas sales, including $367,527 of sales to related parties in 1995 $2,191,389 $2,433,313 $2,028,592 Interest income 17,447 14,218 9,818 Gain on sale of oil and gas properties 557,746 122,579 27,433 --------- --------- --------- $2,766,582 $2,570,110 $2,065,843 COSTS AND EXPENSES: Lease operating $ 396,093 $ 485,892 $ 522,525 Production tax 150,372 158,092 139,134 Depreciation, depletion, and amortization of oil and gas properties 409,001 531,040 1,036,058 Impairment provision 1,377,160 - 312,270 General and administrative 204,398 206,749 200,801 --------- --------- --------- $2,537,024 $1,381,773 $2,210,788 --------- --------- --------- NET INCOME (LOSS) $ 229,558 $1,188,337 ($ 144,945) ========= ========= ========= GENERAL PARTNER - NET INCOME $ 81,927 $ 79,948 $ 46,686 ========= ========= ========= LIMITED PARTNERS - NET INCOME (LOSS) $ 147,631 $1,108,389 ($ 191,631) ========= ========= ========= NET INCOME (LOSS) per Unit $ .86 $ 6.47 ($ 1.12) ========= ========= ========= UNITS OUTSTANDING 171,400 171,400 171,400 ========= ========= ========= The accompanying notes are an integral part of these combined financial statements. F-33 GEODYNE ENERGY INCOME LIMITED PARTNERSHIP II-F GEODYNE ENERGY INCOME PRODUCTION PARTNERSHIP II-F Combined Statements of Changes in Partners' Capital (Deficit) For the Years Ended December 31, 1997, 1996, and 1995 Limited General Partners Partner Total ------------ --------- ------------ Balance, Dec. 31, 1994 $6,898,416 ($ 80,063) $6,818,353 Net income (loss) ( 191,631) 46,686 ( 144,945) Cash distributions ( 1,015,000) ( 51,000) ( 1,066,000) --------- ------- --------- Balance, Dec. 31, 1995 $5,691,785 ($ 84,377) $5,607,408 Net income 1,108,389 79,948 1,188,337 Cash distributions ( 1,485,000) ( 101,485) ( 1,586,485) --------- ------- --------- Balance, Dec. 31, 1996 $5,315,174 ($105,914) $5,209,260 Net income 147,631 81,927 229,558 Cash distributions ( 1,872,000) ( 119,368) ( 1,991,368) --------- ------- --------- Balance, Dec. 31, 1997 $3,590,805 ($143,355) $3,447,450 ========= ======= ========= The accompanying notes are an integral part of these combined financial statements. F-34 GEODYNE ENERGY INCOME LIMITED PARTNERSHIP II-F GEODYNE ENERGY INCOME PRODUCTION PARTNERSHIP II-F Combined Statements of Cash Flows For the Years Ended December 31, 1997, 1996, and 1995 1997 1996 1995 ------------ ------------ ------------ CASH FLOWS FROM OPERATING ACTIVITIES: Net income (loss) $ 229,558 $1,188,337 ($ 144,945) Adjustments to reconcile net income (loss) to net cash provided by operating activities: Depreciation, depletion, and amortization of oil and gas properties 409,001 531,040 1,036,058 Impairment provision 1,377,160 - 312,270 Gain on sale of oil and gas properties ( 557,746) ( 122,579) ( 27,433) (Increase) decrease in accounts receivable - oil and gas sales 95,745 ( 77,366) ( 30,509) (Increase) decrease in accounts receivable - general partner 15,285 ( 15,285) - Increase in accounts receivable - other ( 43) - - (Increase) decrease in deferred charge 14,836 47,412 ( 20,864) Increase (decrease) in accounts payable 21,430 ( 36,430) 13,954 Increase (decrease) in gas imbalance payable ( 6,393) 8,204 ( 20,210) Increase (decrease) in accrued liability ( 415) 4,992 ( 16,772) --------- --------- --------- Net cash provided by operating activities $1,598,418 $1,528,325 $1,101,549 --------- --------- --------- CASH FLOWS FROM INVESTING ACTIVITIES: Capital expenditures ($ 65,635) ($ 11,332) ($ 18,171) Proceeds from sale of oil and gas properties 758,534 185,579 71,041 --------- --------- --------- Net cash provided by investing activities $ 692,899 $ 174,247 $ 52,870 --------- --------- --------- F-35 CASH FLOWS FROM FINANCING ACTIVITIES: Cash distributions ($1,991,368) ($1,586,485) ($1,066,000) --------- --------- --------- Net cash used by financing activities ($1,991,368) ($1,586,485) ($1,066,000) --------- --------- --------- NET INCREASE IN CASH AND CASH EQUIVALENTS $ 299,949 $ 116,087 $ 88,419 CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 441,903 325,816 237,397 --------- --------- --------- CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 741,852 $ 441,903 $ 325,816 ========= ========= ========= The accompanying notes are an integral part of these combined financial statements. F-36 REPORT OF INDEPENDENT ACCOUNTANTS TO THE PARTNERS GEODYNE ENERGY INCOME LIMITED PARTNERSHIP II-G GEODYNE PRODUCTION PARTNERSHIP II-G We have audited the combined balance sheets of the Geodyne Energy Income Limited Partnership II-G, an Oklahoma limited partnership, and Geodyne Production Partnership II-G, an Oklahoma general partnership, as of December 31, 1997 and 1996 and the related combined statements of operations, changes in partners' capital (deficit), and cash flows for the years ended December 31, 1997, 1996, and 1995. These financial statements are the responsibility of the Partnerships' management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the combined financial statements referred to above present fairly, in all material respects, the combined financial position of the Geodyne Energy Income Limited Partnership II-G and Geodyne Production Partnership II-G at December 31, 1997 and 1996 and the combined results of their operations and cash flows for the years ended December 31, 1997, 1996, and 1995, in conformity with generally accepted accounting principles. //s// Coopers & Lybrand L.L.P. COOPERS & LYBRAND L.L.P. Tulsa, Oklahoma January 30, 1998 F-37 GEODYNE ENERGY INCOME LIMITED PARTNERSHIP II-G GEODYNE ENERGY INCOME PRODUCTION PARTNERSHIP II-G Combined Balance Sheets December 31, 1997 and 1996 ASSETS ------ 1997 1996 ------------ ------------- CURRENT ASSETS: Cash and cash equivalents $1,564,325 $ 932,165 Accounts receivable: Oil and gas sales 710,336 911,439 General Partner - 34,620 --------- ---------- Total current assets $2,274,661 $ 1,878,224 NET OIL AND GAS PROPERTIES, utilizing the successful efforts method 5,237,082 9,542,790 DEFERRED CHARGE 123,977 155,718 --------- ---------- $7,635,720 $11,576,732 ========= ========== LIABILITIES AND PARTNERS' CAPITAL (DEFICIT) ------------------------------------------- CURRENT LIABILITIES: Accounts payable $ 135,761 $ 93,647 Gas imbalance payable 57,250 71,995 --------- ---------- Total current liabilities $ 193,011 $ 165,642 ACCRUED LIABILITY $ 64,109 $ 56,912 PARTNERS' CAPITAL (DEFICIT): General Partner ($ 312,392) ($ 244,312) Limited Partners, issued and outstanding, 372,189 Units 7,690,992 11,598,490 --------- ---------- Total Partners' capital $7,378,600 $11,354,178 --------- ---------- $7,635,720 $11,576,732 ========= ========== The accompanying notes are an integral part of these combined financial statements. F-38 GEODYNE ENERGY INCOME LIMITED PARTNERSHIP II-G GEODYNE ENERGY INCOME PRODUCTION PARTNERSHIP II-G Combined Statements of Operations For the Years Ended December 31, 1997, 1996, and 1995 1997 1996 1995 ---------- ---------- ---------- REVENUES: Oil and gas sales, including $776,211 of sales to related parties 1995 $4,670,245 $5,158,799 $4,348,087 Interest income 37,746 29,659 20,378 Gain on sale of oil and gas properties 1,226,822 225,341 51,339 --------- --------- ---------- $5,934,813 $5,413,799 $4,419,804 COSTS AND EXPENSES: Lease operating $ 859,059 $1,048,439 $1,152,908 Production tax 326,663 337,815 302,449 Depreciation, depletion, and amortization of oil and gas properties 916,396 1,163,236 2,306,915 Impairment provision 3,101,656 - 839,228 General and administrative 443,590 448,345 437,613 --------- --------- --------- $5,647,364 $2,997,835 $5,039,113 --------- --------- --------- NET INCOME (LOSS) $ 287,449 $2,415,964 ($ 619,309) ========= ========= ========= GENERAL PARTNER - NET INCOME $ 172,947 $ 165,845 $ 94,880 ========= ========= ========= LIMITED PARTNERS - NET INCOME (LOSS) $ 114,502 $2,250,119 ($ 714,189) ========= ========= ========= NET INCOME (LOSS) per Unit $ .31 $ 6.05 ($ 1.92) ========= ========= ========= UNITS OUTSTANDING 372,189 372,189 372,189 ========= ========= ========= The accompanying notes are an integral part of these combined financial statements. F-39 GEODYNE ENERGY INCOME LIMITED PARTNERSHIP II-G GEODYNE ENERGY INCOME PRODUCTION PARTNERSHIP II-G Combined Statements of Changes in Partners' Capital (Deficit) For the Years Ended December 31, 1997, 1996, and 1995 Limited General Partners Partner Total ------------ ---------- ------------- Balance, Dec. 31, 1994 $15,313,560 ($181,500) $15,132,060 Net income (loss) ( 714,189) 94,880 ( 619,309) Cash distributions ( 2,160,000) ( 111,000) ( 2,271,000) ---------- ------- ---------- Balance, Dec. 31, 1995 $12,439,371 ($197,620) $12,241,751 Net income 2,250,119 165,845 2,415,964 Cash distributions ( 3,091,000) ( 212,537) ( 3,303,537) ---------- ------- ---------- Balance, Dec. 31, 1996 $11,598,490 ($244,312) $11,354,178 Net income 114,502 172,947 287,449 Cash distributions ( 4,022,000) ( 241,027) ( 4,263,027) ---------- ------- ---------- Balance, Dec. 31, 1997 $ 7,690,992 ($312,392) $ 7,378,600 ========== ======= ========== The accompanying notes are an integral part of these combined financial statements. F-40 GEODYNE ENERGY INCOME LIMITED PARTNERSHIP II-G GEODYNE ENERGY INCOME PRODUCTION PARTNERSHIP II-G Combined Statements of Cash Flows For the Years Ended December 31, 1997, 1996, and 1995 1997 1996 1995 ------------ ------------ ------------ CASH FLOWS FROM OPERATING ACTIVITIES: Net income (loss) $ 287,449 $2,415,964 ($ 619,309) Adjustments to reconcile net income (loss) to net cash provided by operating activities: Depreciation, depletion, and amortization of oil and gas properties 916,396 1,163,236 2,306,915 Impairment provision 3,101,656 - 839,228 Gain on sale of oil and gas properties ( 1,226,822) ( 225,341) ( 51,339) (Increase) decrease in accounts receivable - general partner 34,620 ( 34,620) - (Increase) decrease in accounts receivable - oil and gas sales 201,103 ( 162,982) ( 60,518) (Increase) decrease in deferred charge 31,741 101,656 ( 38,296) Increase (decrease) in accounts payable 42,114 ( 82,448) 36,125 Increase (decrease) in gas imbalance payable ( 14,745) 21,494 ( 43,913) Increase (decrease) in accrued liability 7,197 6,110 ( 39,539) --------- --------- --------- Net cash provided by operating activities $3,380,709 $3,203,069 $2,329,354 --------- --------- --------- CASH FLOWS FROM INVESTING ACTIVITIES: Capital expenditures ($ 143,657) ($ 27,441) ($ 40,899) Proceeds from sale of oil and gas properties 1,658,135 398,153 152,349 --------- --------- --------- Net cash provided by investing activities $1,514,478 $ 370,712 $ 111,450 --------- --------- --------- F-41 CASH FLOWS FROM FINANCING ACTIVITIES: Cash distributions ($4,263,027) ($3,303,537) ($2,271,000) --------- --------- --------- Net cash used by financing activities ($4,263,027) ($3,303,537) ($2,271,000) --------- --------- --------- NET INCREASE IN CASH AND CASH EQUIVALENTS $ 632,160 $ 270,244 $ 169,804 CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 932,165 661,921 492,117 --------- --------- --------- CASH AND CASH EQUIVALENTS AT END OF PERIOD $1,564,325 $ 932,165 $ 661,921 ========= ========= ========= The accompanying notes are an integral part of these combined financial statements. F-42 REPORT OF INDEPENDENT ACCOUNTANTS TO THE PARTNERS GEODYNE ENERGY INCOME LIMITED PARTNERSHIP II-H GEODYNE PRODUCTION PARTNERSHIP II-H We have audited the combined balance sheets of the Geodyne Energy Income Limited Partnership II-H, an Oklahoma limited partnership, and Geodyne Production Partnership II-H, an Oklahoma general partnership, as of December 31, 1997 and 1996 and the related combined statements of operations, changes in partners' capital (deficit), and cash flows for the years ended December 31, 1997, 1996, and 1995. These financial statements are the responsibility of the Partnerships' management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the combined financial statements referred to above present fairly, in all material respects, the combined financial position of the Geodyne Energy Income Limited Partnership II-H and Geodyne Production Partnership II-H at December 31, 1997 and 1996 and the combined results of their operations and cash flows for the years ended December 31, 1997, 1996, and 1995, in conformity with generally accepted accounting principles. //s// Coopers & Lybrand L.L.P. COOPERS & LYBRAND L.L.P. Tulsa, Oklahoma January 30, 1998 F-43 GEODYNE ENERGY INCOME LIMITED PARTNERSHIP II-H GEODYNE ENERGY INCOME PRODUCTION PARTNERSHIP II-H Combined Balance Sheets December 31, 1997 and 1996 ASSETS ------ 1997 1996 ------------ ------------ CURRENT ASSETS: Cash and cash equivalents $ 364,502 $ 221,484 Accounts receivable: Oil and gas sales 168,833 216,574 General Partner - 9,151 --------- --------- Total current assets $ 533,335 $ 447,209 NET OIL AND GAS PROPERTIES, utilizing the successful efforts method $1,225,295 2,304,814 DEFERRED CHARGE 29,519 38,222 --------- --------- $1,788,149 $2,790,245 ========= ========= LIABILITIES AND PARTNERS' CAPITAL (DEFICIT) ------------------------------------------- CURRENT LIABILITIES: Accounts payable $ 31,925 $ 23,354 Gas imbalance payable 13,149 16,547 --------- --------- Total current liabilities $ 45,074 $ 39,901 ACCRUED LIABILITY $ 14,648 $ 14,139 PARTNERS' CAPITAL (DEFICIT): General Partner ($ 78,796) ($ 58,835) Limited Partners, issued and outstanding, 91,711 Units 1,807,223 2,795,040 --------- --------- Total Partners' capital $1,728,427 $2,736,205 --------- --------- $1,788,149 $2,790,245 ========= ========= The accompanying notes are an integral part of these combined financial statements. F-44 GEODYNE ENERGY INCOME LIMITED PARTNERSHIP II-H GEODYNE ENERGY INCOME PRODUCTION PARTNERSHIP II-H Combined Statements of Operations For the Years Ended December 31, 1997, 1996, and 1995 1997 1996 1995 ---------- ------------ ------------ REVENUES: Oil and gas sales, including $182,878 of sales to related parties in 1995 $1,119,734 $1,230,222 $1,042,735 Interest income 8,764 6,728 4,721 Gain on sale of oil and gas properties 286,788 51,909 11,436 --------- --------- --------- $1,415,286 $1,288,859 $1,058,892 COSTS AND EXPENSES: Lease operating $ 209,123 $ 257,850 $ 284,635 Production tax 80,919 81,540 74,349 Depreciation, depletion, and amortization of oil and gas properties 202,115 280,796 550,384 Impairment provision 785,220 - 259,808 General and administrative 109,301 110,738 107,236 --------- --------- --------- $1,386,678 $ 730,924 $1,276,412 --------- --------- --------- NET INCOME (LOSS) $ 28,608 $ 557,935 ($ 217,520) ========= ========= ========= GENERAL PARTNER - NET INCOME $ 40,425 $ 38,792 $ 21,532 ========= ========= ========= LIMITED PARTNERS - NET INCOME (LOSS) ($ 11,817) $ 519,143 ($ 239,052) ========= ========= ========= NET INCOME (LOSS) per Unit ($ .13) $ 5.66 ($ 2.61) ========= ========= ========= UNITS OUTSTANDING 91,711 91,711 91,711 ========= ========= ========= The accompanying notes are an integral part of these combined financial statements. F-45 GEODYNE ENERGY INCOME LIMITED PARTNERSHIP II-H GEODYNE ENERGY INCOME PRODUCTION PARTNERSHIP II-H Combined Statements of Changes in Partners' Capital (Deficit) For the Years Ended December 31, 1997, 1996, and 1995 Limited General Partners Partner Total ------------ --------- ------------ Balance, Dec. 31, 1994 $3,756,949 ($42,167) $3,714,782 Net income (loss) ( 239,052) $21,532 ( 217,520) Cash distributions ( 515,000) ( 27,000) ( 542,000) --------- ------ --------- Balance, Dec. 31, 1995 $3,002,897 ($47,635) $2,955,262 Net income 519,143 38,792 557,935 Cash distributions ( 727,000) ( 49,992) ( 776,992) --------- ------ --------- Balance, Dec. 31, 1996 $2,795,040 ($58,835) $2,736,205 Net income (loss) ( 11,817) 40,425 28,608 Cash distributions ( 976,000) ( 60,386) ( 1,036,386) --------- ------ --------- Balance, Dec. 31, 1997 $1,807,223 ($78,796) $1,728,427 ========= ====== ========= The accompanying notes are an integral part of these combined financial statements. F-46 GEODYNE ENERGY INCOME LIMITED PARTNERSHIP II-H GEODYNE ENERGY INCOME PRODUCTION PARTNERSHIP II-H Combined Statements of Cash Flows For the Years Ended December 31, 1997, 1996, and 1995 1997 1996 1995 ------------ ---------- ---------- CASH FLOWS FROM OPERATING ACTIVITIES: Net income (loss) $ 28,608 $557,935 ($217,520) Adjustments to reconcile net income (loss) to net cash provided by operating activities: Depreciation, depletion, and amortization of oil and gas properties 202,115 280,796 550,384 Impairment provision 785,220 - 259,808 Gain on sale of oil and gas properties ( 286,788) ( 51,909) ( 11,436) (Increase) decrease in accounts receivable - oil and gas sales 47,741 ( 37,069) ( 12,671) (Increase) decrease in accounts receivable - general partner 9,151 ( 9,151) - (Increase) decrease in deferred charge 8,703 23,840 ( 12,223) Increase (decrease) in accounts payable 8,571 ( 22,050) 11,408 Increase (decrease) in gas imbalance payable ( 3,398) 5,336 ( 7,479) Increase (decrease) in accrued liability 509 1,360 ( 9,902) --------- ------- ------- Net cash provided by operating activities $ 800,432 $749,088 $550,369 --------- ------- ------- CASH FLOWS FROM INVESTING ACTIVITIES: Capital expenditures ($ 35,978) ($ 6,306) ($ 10,563) Proceeds from sale of oil and gas properties 414,950 96,882 36,904 --------- ------- ------- Net cash provided by investing activities $ 378,972 $ 90,576 $ 26,341 --------- ------- ------- F-47 CASH FLOWS FROM FINANCING ACTIVITIES: Cash distributions ($1,036,386) ($776,992) ($542,000) --------- ------- ------- Net cash used by financing activities ($1,036,386) ($776,992) ($542,000) --------- ------- ------- NET INCREASE IN CASH AND CASH EQUIVALENTS $ 143,018 $ 62,672 $ 34,710 CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD $ 221,484 158,812 124,102 --------- ------- ------- CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 364,502 $221,484 $158,812 ========= ======= ======= The accompanying notes are an integral part of these combined financial statements. F-48 GEODYNE ENERGY INCOME PROGRAM II Notes to Combined Financial Statements For the Years Ended December 31, 1997, 1996, and 1995 1. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Organization and Nature of Operations The Geodyne Energy Income Limited Partnerships (the "Partnerships") were formed pursuant to a public offering of depositary units ("Units"). Upon formation, investors became limited partners (the "Limited Partners") and held Units issued by each Partnership. Geodyne Resources, Inc. is the general partner of each Partnership. Each Partnership is a general partner in the related Geodyne Production Partnership (the "Production Partnership") in which Geodyne Resources, Inc. serves as the managing partner. Limited Partner capital contributions were contributed to the related Production Partnerships for investment in producing oil and gas properties. The Partnerships were activated on the following dates with the following Limited Partner capital contributions. Limited Date of Partner Capital Partnership Activation Contributions ----------- ------------------ --------------- II-A July 22, 1987 $48,428,300 II-B October 14,1987 36,171,900 II-C January 14, 1988 15,462,100 II-D May 10, 1988 31,487,800 II-E September 27, 1988 22,882,100 II-F January 5, 1989 17,140,000 II-G April 10, 1989 37,218,900 II-H May 17, 1989 9,171,100 The Partnerships will terminate on December 31, 2001 in accordance with the partnership agreements for the Partnerships. However, such partnership agreements provide that the General Partner may extend the term of each Partnership for up to five periods of two years each. As of the date of these financial statements, the General Partner has not determined whether to extend the term of any Partnership. For purposes of these financial statements, the Partnerships and Production Partnerships are collectively referred to as the "Partnerships" and the general partner and managing partner are collectively referred to as the "General Partner". An affiliate of the General Partner owned the following Units at December 31, 1997: F-49 Number of Percent of Partnership Units Owned Outstanding Units ----------- ----------- ----------------- II-A 61,201 12.6% II-B 52,156 14.4% II-C 28,773 18.6% II-D 37,396 11.9% II-E 31,344 13.7% II-F 22,820 13.3% II-G 37,751 10.1% II-H 12,428 13.6% The Partnerships' sole business is the development and production of oil and gas. Substantially all of the Partnerships' gas reserves are being sold regionally on the "spot market." Due to the highly competitive nature of the spot market, prices on the spot market are subject to wide seasonal and regional pricing fluctuations. In addition, such spot market sales are generally short-term in nature and are dependent upon the obtaining of transportation services provided by pipelines. Allocation of Costs and Revenues The combination of the allocation provisions in each Partnership's limited partnership agreement and each Production Partnership's partnership agreement (collectively, the "Partnership Agreement") results in allocations of costs and income between the Limited Partners and General Partner as follows: Before Payout(1) After Payout(1) ------------------ ------------------ General Limited General Limited Partner Partners Partner Partners -------- -------- -------- -------- Costs(2) - ------------------------ Sales commissions, pay- ment for organization and offering costs and management fee 1% 99% - - Property acquisition costs 1% 99% 1% 99% Identified development drilling 1% 99% 1% 99% Development drilling(3) 5% 95% 15% 85% General and administra- tive costs, direct administrative costs and operating costs(3) 5% 95% 15% 85% F-50 Income(2) - ----------------------- Temporary investments of Limited Partners' subscriptions 1% 99% 1% 99% Income from oil and gas production(3) 5% 95% 15% 85% Gain on sale of produc- ing properties(3) 5% 95% 15% 85% All other income(3) 5% 95% 15% 85% - ---------- (1) Payout occurs when total distributions to Limited Partners equal total original Limited Partner subscriptions. (2) The allocations in the table result generally from the combined effect of the allocation provisions in the Partnership Agreements. For example, the costs incurred in development drilling are allocated 95.9596% to the limited partnership and 4.0404% to the managing partner. The 95.9596% portion of these costs allocated to the limited partnership, when passed through the limited partnership, is further allocated 99% to the limited partners and 1% to the general partner. In this manner the Limited Partners are allocated 95% of such costs and the General Partner is allocated 5% of such costs. (3) If at payout, the Limited Partners have received distributions at an annual rate less than 12% of their subscriptions, the percentage of income and costs allocated to the general partner and managing partner will increase to only 10% and the Limited Partners will decrease to only 90%. Thereafter, if the distribution to Limited Partners reaches an average annual rate of 12% the allocation will change to 15% to the general partner and managing partner and 85% to the Limited Partners. Basis of Presentation These financial statements reflect the combined accounts of each Partnership after the elimination of all inter-partnership transactions and balances. Cash and Cash Equivalents The Partnerships consider all highly liquid investments with a maturity of three months or less when purchased to be cash equivalents. Cash equivalents are not insured, which cause the Partnerships to be subject to risk. F-51 Credit Risks Accrued oil and gas sales which are due from a variety of oil and gas purchasers subject the Partnerships to a concentration of credit risk. Some of these purchasers are discussed in Note 3 - Major Customers. Receivable from General Partner The receivable from the General Partner at December 31, 1996 for the II-F, II-G, and II-H Partnerships represents proceeds due to such Partnerships for the sale of oil and gas properties. Subsequent to December 31, 1996 such receivable was paid to the II-F, II-G, and II-H Partnerships. Oil and Gas Properties The Partnerships follow the successful efforts method of accounting for their oil and gas properties. Under the successful efforts method, the Partnerships capitalize all property acquisition costs and development costs incurred in connection with the further development of oil and gas reserves. Property acquisition costs include costs incurred by the Partnerships or the General Partner to acquire producing properties, including related title insurance or examination costs, commissions, engineering, legal and accounting fees, and similar costs directly related to the acquisitions, plus an allocated portion of the General Partners' property screening costs. The acquisition cost to the Partnership of properties acquired by the General Partner is adjusted to reflect the net cash results of operations, including interest incurred to finance the acquisition, for the period of time the properties are held by the General Partner. Leasehold impairment for unproved properties is based upon an individual property assessment and exploratory experience. Upon discovery of commercial reserves, leasehold costs are transferred to producing properties. Depletion of the cost of producing oil and gas properties, amortization of related intangible drilling and development costs, and depreciation of tangible lease and well equipment are computed on the units-of-production method. The Partnerships' calculation of depreciation, depletion, and amortization includes estimated dismantlement and abandonment costs, net of estimated salvage values. The depreciation, depletion, and amortization rates per equivalent barrel of oil produced during the years ended December 31, 1997, 1996, and 1995 were as follows: F-52 Partnership 1997 1996 1995 ----------- ----- ----- ----- II-A $2.19 $3.05 $4.44 II-B 2.26 3.82 5.09 II-C 2.24 2.86 4.45 II-D 2.29 2.36 3.81 II-E 3.62 3.69 6.18 II-F 2.87 3.05 5.29 II-G 3.01 3.14 5.48 II-H 2.78 3.14 5.40 When complete units of depreciable property are retired or sold, the asset cost and related accumulated depreciation are eliminated with any gain or loss reflected in income. When less than complete units of depreciable property are retired or sold, the difference between asset cost and salvage value is charged or credited to accumulated depreciation. The Partnerships follow the provisions of Statement of Financial Accounting Standards ("SFAS") No. 121, "Accounting for the Impairment of Long Lived Assets and Assets Held for Disposal," which is intended to establish more consistent accounting standards for measuring the recoverability of long-lived assets. SFAS No. 121 requires successful efforts companies, like the Partnerships, to evaluate the recoverability of the carrying costs of their proved oil and gas properties at the lowest level for which there are identifiable cash flows that are largely independent of the cash flows of other groups of oil and gas properties. With respect to the Partnerships' oil and gas properties, this evaluation was performed for each field. SFAS No. 121 provides that if the unamortized costs of oil and gas properties exceed the expected undiscounted future cash flows from such properties, the cost of the properties is written down to fair value, which is determined by using the discounted future cash flows from the properties. During 1997, 1996, and 1995, the Partnerships recorded the following non-cash charges against earnings (impairment provisions) pursuant to SFAS No. 121: Partnership 1997 1996 1995 ----------- -------- -------- -------- II-A $223,943 $ - $994,919 II-B 134,003 - 450,601 II-C 36,163 - 245,324 II-D 143,957 - 370,172 II-E 317,979 - 465,045 II-F 208,255 - 312,270 II-G 489,672 - 839,228 II-H 125,223 - 259,808 F-53 In addition, during 1997 the General Partner determined that the Partnerships' unproved properties would be uneconomic to develop and, therefore, of little or no value. This determination was based on an evaluation by the General Partner that it is unlikely that these unproved properties would be developed due to the low oil and gas prices received over the last several years and provisions in the Partnership Agreements which limit the level of permissible drilling activity. As a result of this determination, the Partnerships recorded the following non-cash charges against earnings at March 31, 1997 in order to reflect the writing-off of the Partnerships' unproved properties: Partnership Amount ----------- ---------- II-A $ 460,333 II-B 396,985 II-C 30,454 II-D - II-E 674,872 II-F 1,168,905 II-G 2,611,984 II-H 659,997 Deferred Charge The Deferred Charge represents costs deferred for lease operating expenses incurred in connection with the Partnerships' underproduced gas imbalance positions. The rate used in calculating the deferred charge is the average of the annual production costs per Mcf. At December 31, 1997 and 1996, cumulative total gas sales volumes for underproduced wells were less than the Partnerships' pro-rata share of total gas production from these wells by the following amounts: 1997 1996 ------------------- -------------------- Partnership Mcf Amount Mcf Amount ----------- -------- -------- --------- --------- II-A 980,457 $911,041 1,102,450 $948,217 II-B 174,919 169,811 183,942 160,103 II-C 207,801 139,621 249,967 164,953 II-D 783,455 544,345 987,573 863,139 II-E 393,724 330,531 393,284 355,647 II-F 97,126 56,867 125,994 71,703 II-G 210,451 123,977 269,269 155,718 II-H 49,537 29,519 65,248 38,222 F-54 Accrued Liability The Accrued Liability represents charges accrued for lease operating expenses incurred in connection with the Partnerships' overproduced gas imbalance positions. The rate used in calculating the accrued liability is the average of the annual production costs per Mcf. At December 31, 1997 and 1996, cumulative total gas sales volumes for overproduced wells exceeded the Partnerships' pro-rata share of total gas production from these wells by the following amounts: 1997 1996 -------------------- ------------------- Partnership Mcf Amount Mcf Amount ----------- ------- -------- ------- -------- II-A 169,016 $157,050 184,494 $158,683 II-B 91,182 88,519 99,033 86,198 II-C 73,891 49,647 104,786 69,148 II-D 344,104 239,083 305,243 266,782 II-E 75,789 63,625 65,503 59,234 II-F 47,663 27,907 49,767 28,322 II-G 108,825 64,109 98,412 56,912 II-H 24,581 14,648 24,136 14,139 Oil and Gas Sales and Gas Imbalance Payable The Partnerships' oil and condensate production is sold, title passed, and revenue recognized at or near the Partnerships' wells under short-term purchase contracts at prevailing prices in accordance with arrangements which are customary in the oil industry. Sales of gas applicable to the Partnerships' interest in producing oil and gas leases are recorded as revenue when the gas is metered and title transferred pursuant to the gas sales contracts covering the Partnerships' interest in gas reserves. During such times as a Partnership's sales of gas exceed its pro rata ownership in a well, such sales are recorded as revenues unless total sales from the well have exceeded the Partnership's share of estimated total gas reserves underlying the property, at which time such excess is recorded as a liability. The rates per Mcf used to calculate this liability are based on the average gas prices received for the volumes at the time the overproduction occurred. This also reflects the price for which the Partnerships are currently settling this liability. At December 31, 1997 and 1996 total sales exceeded the Partnerships' share of estimated total gas reserves as follows: F-55 1997 1996 ------------------- ------------------- Partnership Mcf Amount Mcf Amount ----------- ------- -------- ------- --------- II-A 94,694 $142,043 67,662 $101,493 II-B 16,447 24,671 11,370 17,055 II-C 15,042 22,563 6,924 10,386 II-D 71,336 107,004 78,875 118,313 II-E 114,059 171,089 107,454 161,181 II-F 16,789 25,184 21,051 31,577 II-G 38,167 57,250 47,997 71,995 II-H 8,766 13,149 11,031 16,547 These amounts were recorded as gas imbalance payables in accordance with the sales method. These gas imbalance payables will be settled by either gas production by the underproduced party in excess of current estimates of total gas reserves for the well or by a negotiated or contractual payment to the underproduced party. General and Administrative Overhead The General Partner and its affiliates are reimbursed for actual general and administrative costs incurred and attributable to the conduct of the business affairs and operations of the Partnerships. Use of Estimates in Financial Statements The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Further, the deferred charge, the gas imbalance payable, and the accrued liability all involve estimates which could materially differ from the actual amounts ultimately realized or incurred in the near term. Oil and gas reserves (see Note 4) also involve significant estimates which could materially differ from the actual amounts ultimately realized. Income Taxes Income or loss for income tax purposes is includable in the income tax returns of the partners. Accordingly, no recognition has been given to income taxes in these financial statements. F-56 2. TRANSACTIONS WITH RELATED PARTIES The Partnerships reimburse the General Partner for the general and administrative overhead applicable to the Partnerships, based on an allocation of actual costs incurred by the General Partner. When actual costs incurred benefit other Partnerships and affiliates, the allocation of costs is based on the relationship of the Partnerships' reserves to the total reserves owned by all Partnerships and affiliates. The General Partner believes this allocation method is reasonable. Although the actual costs incurred by the General Partner and its affiliates have fluctuated during the three years presented, the amounts charged to the Partnerships have not fluctuated due to expense limitations imposed by the Partnership Agreements. The following is a summary of payments made to the General Partner or its affiliates by the Partnerships for general and administrative overhead costs for the years ended December 31, 1997, 1996, and 1995: Partnership 1997 1996 1995 ----------- -------- -------- -------- II-A $509,772 $509,772 $509,772 II-B 380,760 380,760 380,760 II-C 162,756 162,756 162,756 II-D 331,452 331,452 331,452 II-E 240,864 240,864 240,864 II-F 180,420 180,420 180,420 II-G 391,776 391,776 391,776 II-H 96,540 96,540 96,540 Affiliates of the Partnerships operate certain of the Partnerships' properties and their policy is to bill the Partnerships for all customary charges and cost reimbursements associated with these activities, together with any compressor rentals, consulting, or other services provided. Such charges are comparable to third party charges in the area where the wells are located and are the same as charged to other working interest owners in the wells. During 1995 the Partnerships sold gas at market prices to El Paso Energy Marketing Company, formerly known as Premier Gas Company ("El Paso"). El Paso, like other similar gas marketing firms, then resold such gas to third parties at market prices. El Paso was an affiliate of the Partnerships until December 6, 1995. The following table summarizes the total amount of the Partnerships' sales to El Paso during 1995: F-57 Partnership 1995 ----------- -------- II-A $825,515 II-B 374,717 II-C 225,948 II-D 682,346 II-E 593,218 II-F 367,527 II-G 776,211 II-H 182,878 There were no sales made by the Partnerships to affiliates or related parties during 1997 or 1996. 3. MAJOR CUSTOMERS The following table sets forth purchasers who individually accounted for ten percent or more of the Partnerships' combined oil and gas sales for the years ended December 31, 1997, 1996, and 1995: Partnership Purchaser Percentage - ----------- ------------------------ --------------------- 1997 1996 1995 ----- ----- ----- II-A El Paso 29.7% 23.5% 17.7% Amoco Production Company ("Amoco") 14.8% 14.7% 14.3% Hallwood Petroleum, Inc. ("Hallwood') 12.1% 13.9% 15.5% J-O'B Operating ("J-O'B") - 10.6% - II-B El Paso 31.8% 22.5% 11.7% Hallwood 16.3% 18.1% 21.0% Amoco - 11.0% - J-O'B - 11.0% - II-C El Paso 29.3% 24.5% 14.9% Amoco - 10.5% - II-D El Paso 22.8% 19.1% 17.5% II-E El Paso 41.3% 30.8% 25.8% II-F El Paso 24.5% 22.4% 18.1% Texaco Exploration and Production, Inc. ("Texaco") 11.1% 12.5% 14.1% F-58 II-G El Paso 24.3% 22.4% 17.9% Texaco 11.1% 12.6% 13.9% II-H El Paso 23.9% 22.1% 17.5% Texaco 11.1% 12.7% 13.7% In the event of interruption of purchases by one or more of these significant customers or the cessation or material change in availability of open access transportation by the Partnerships' pipeline transporters, the Partnerships may encounter difficulty in marketing their gas and in maintaining historic sales levels. Alternative purchasers or transporters may not be readily available. 4. SUPPLEMENTAL OIL AND GAS INFORMATION The following supplemental information regarding the oil and gas activities of the Partnerships is presented pursuant to the disclosure requirements promulgated by the SEC. Capitalized Costs The capitalized costs and accumulated depreciation, depletion, amortization, and valuation allowance at December 31, 1997 and 1996 were as follows: F-59 II-A Partnership --------------- 1997 1996 ------------- ------------- Proved properties $31,785,611 $31,896,851 Unproved properties, not subject to depreciation, depletion, and amortization - 461,419 ---------- ---------- $31,785,611 $32,358,270 Less accumulated depreciation, depletion, amorti- zation, and valua- tion allowance ( 26,890,758) ( 26,187,477) ---------- ---------- Net oil and gas properties $ 4,894,853 $ 6,170,793 ========== ========== F-60 II-B Partnership --------------- 1997 1996 ------------- ------------- Proved properties $21,746,216 $21,846,398 Unproved properties, not subject to depreciation, depletion, and amortization - 396,985 ---------- ---------- $21,746,216 $22,243,383 Less accumulated depreciation, depletion, amorti- zation, and valua- tion allowance ( 18,711,058) ( 18,102,974) ---------- ---------- Net oil and gas properties $ 3,035,158 $ 4,140,409 ========== ========== II-C Partnership ---------------- 1997 1996 ------------- ------------- Proved properties $9,809,210 $10,268,834 Unproved properties, not subject to depreciation, depletion, and amortization - 30,441 --------- ---------- $9,809,210 $10,299,275 Less accumulated depreciation, depletion, amorti- zation, and valua- tion allowance ( 8,141,941) ( 8,250,396) --------- ---------- Net oil and gas properties $1,667,269 $ 2,048,879 ========= ========== F-61 II-D Partnership ---------------- 1997 1996 ------------- ------------- Proved properties $18,171,159 $20,297,277 Unproved properties, not subject to depreciation, depletion, and amortization - 16 ---------- ---------- $18,171,159 $20,297,293 Less accumulated depreciation, depletion, amorti- zation, and valua- tion allowance ( 14,753,399) ( 15,906,502) ---------- ---------- Net oil and gas properties $ 3,417,760 $ 4,390,791 ========== ========== II-E Partnership ---------------- 1997 1996 ------------- ------------- Proved properties $15,543,068 $16,396,307 Unproved properties, not subject to depreciation, depletion, and amortization - 680,978 ---------- ---------- $15,543,068 $17,077,285 Less accumulated depreciation, depletion, amorti- zation, and valua- tion allowance ( 12,701,988) ( 12,498,125) ---------- ---------- Net oil and gas properties $ 2,841,080 $ 4,579,160 ========== ========== F-62 II-F Partnership ---------------- 1997 1996 ------------- ------------- Proved properties $11,773,778 $11,884,071 Unproved properties, not subject to depreciation, depletion, and amortization - 1,168,905 ---------- ---------- $11,773,778 $13,052,976 Less accumulated depreciation, depletion, amorti- zation, and valua- tion allowance ( 9,341,745) ( 8,699,629) ---------- ---------- Net oil and gas properties $ 2,432,033 $ 4,353,347 ========== ========== II-G Partnership ---------------- 1997 1996 ------------- ------------- Proved properties $25,132,939 $25,536,919 Unproved properties, not subject to depreciation, depletion, and amortization - 2,612,125 ---------- ---------- $25,132,939 $28,149,044 Less accumulated depreciation, depletion, amorti- zation, and valua- tion allowance ( 19,895,857) ( 18,606,254) ---------- ---------- Net oil and gas properties $ 5,237,082 $ 9,542,790 ========== ========== F-63 II-H Partnership ---------------- 1997 1996 ------------- ------------- Proved properties $6,025,649 $6,239,240 Unproved properties, not subject to depreciation, depletion, and amortization - 660,832 --------- --------- $6,025,649 $6,900,072 Less accumulated depreciation, depletion, amorti- zation, and valua- tion allowance ( 4,800,354) ( 4,595,258) --------- --------- Net oil and gas properties $1,225,295 $2,304,814 ========= ========= Costs Incurred The Partnerships incurred no costs in connection with oil and gas acquisition or exploration activities during 1997, 1996, or 1995. Costs incurred by the Partnerships in connection with oil and gas property development activities during 1997, 1996, and 1995 were as follows: Partnership 1997 1996 1995 ----------- -------- -------- -------- II-A $237,163 $98,540 $168,118 II-B 20,782 89,173 217,765 II-C 5,112 5,076 77,297 II-D 41,889 22,210 58,694 II-E 40,623 70,806 82,764 II-F 65,635 11,332 18,171 II-G 143,657 27,441 40,899 II-H 35,978 6,306 10,563 F-64 Quantities of Proved Oil and Gas Reserves - Unaudited The following tables summarize changes in net quantities of the Partnerships' proved reserves, all of which are located in the United States, for the periods indicated. The proved reserves at December 31, 1997, 1996, and 1995 were estimated by petroleum engineers employed by affiliates of the Partnerships. Certain reserve information was reviewed by Ryder Scott Company Petroleum Engineers, an independent petroleum engineering firm. The following information includes certain gas balancing adjustments which cause the gas volumes to differ from the reserve reports prepared by the General Partner and reviewed by Ryder Scott. F-65 II-A Partnership ---------------- Crude Natural Oil Gas (Barrels) (Mcf) --------- ------------ Proved reserves, Dec. 31, 1994 675,987 9,986,963 Production (120,420) (1,768,316) Sales of minerals in place ( 422) ( 19,550) Extensions and discoveries 11,099 42,427 Revisions of previous estimates 134,010 1,361,551 ------- --------- Proved reserves, Dec. 31, 1995 700,254 9,603,075 Production (103,230) (1,737,090) Sales of minerals in place ( 21,601) ( 122,449) Extensions and discoveries - 40,117 Revision of previous estimates 119,967 1,471,676 ------- --------- Proved reserves, Dec. 31, 1996 695,390 9,255,329 Production (105,866) (1,505,818) Sales of minerals in place ( 34,321) ( 45,413) Extensions and discoveries 34,300 52,013 Revision of previous estimates ( 50,160) 600,326 ------- --------- Proved reserves, Dec. 31, 1997 539,343 8,356,437 ======= ========= PROVED DEVELOPED RESERVES: December 31, 1995 700,254 9,603,075 ======= ========= December 31, 1996 694,531 9,208,297 ======= ========= December 31, 1997 539,105 8,330,114 ======= ========= F-66 II-B Partnership ---------------- Crude Natural Oil Gas (Barrels) (Mcf) --------- ------------ Proved reserves, Dec. 31, 1994 485,076 6,117,024 Production ( 81,304) (1,205,296) Sales of minerals in place ( 756) ( 61,925) Extensions and discoveries 13,810 18,726 Revisions of previous estimates 78,699 860,574 ------- --------- Proved reserves, Dec. 31, 1995 495,525 5,729,103 Production ( 74,434) (1,219,775) Sales of minerals in place ( 14,484) ( 77,335) Revision of previous estimates 96,787 1,157,710 ------- --------- Proved reserves, Dec. 31, 1996 503,394 5,589,703 Production ( 67,591) (1,047,458) Sales of minerals in place ( 21,955) ( 29,512) Extensions and discoveries 418 50,003 Revision of previous estimates ( 26,401) 666,361 ------- --------- Proved reserves, Dec. 31, 1997 387,865 5,229,097 ======= ========= PROVED DEVELOPED RESERVES: December 31, 1995 495,525 5,729,103 ======= ========= December 31, 1996 503,394 5,589,703 ======= ========= December 31, 1997 387,865 5,229,097 ======= ========= F-67 II-C Partnership ---------------- Crude Natural Oil Gas (Barrels) (Mcf) --------- ------------ Proved reserves, Dec. 31, 1994 220,257 4,035,228 Production ( 26,383) ( 737,277) Sales of minerals in place ( 1,141) ( 5,265) Extensions and discoveries 2,810 9,289 Revisions of previous estimates 10,126 681,340 ------- --------- Proved reserves, Dec. 31, 1995 205,669 3,983,315 Production ( 25,093) ( 685,344) Sales of minerals in place ( 5,591) ( 221,501) Revision of previous estimates 28,924 1,182,174 ------- --------- Proved reserves, Dec. 31, 1996 203,909 4,258,644 Production ( 22,753) ( 582,748) Sales of minerals in place ( 10,618) ( 149,343) Extensions and discoveries 179 21,431 Revision of previous estimates ( 8,570) 341,899 ------- --------- Proved reserves, Dec. 31, 1997 162,147 3,889,883 ======= ========= PROVED DEVELOPED RESERVES: December 31, 1995 205,669 3,983,315 ======= ========= December 31, 1996 203,909 4,258,644 ======= ========= December 31, 1997 162,147 3,889,883 ======= ========= F-68 II-D Partnership ---------------- Crude Natural Oil Gas (Barrels) (Mcf) --------- ------------ Proved reserves, Dec. 31, 1994 440,077 11,526,710 Production ( 88,913) ( 1,906,303) Sales of minerals in place ( 1,286) ( 13,896) Extensions and discoveries 292 28,447 Revisions of previous estimates 203,408 1,275,502 ------- ---------- Proved reserves, Dec. 31, 1995 553,578 10,910,460 Production ( 66,517) ( 1,637,645) Sales of minerals in place ( 60,464) ( 270,629) Extensions and discoveries 232 30,340 Revision of previous estimates 68,250 1,979,648 ------- ---------- Proved reserves, Dec. 31, 1996 495,079 11,012,174 Production ( 50,413) ( 1,501,911) Sales of minerals in place ( 42,059) ( 517,136) Revision of previous estimates ( 19,568) 262,802 ------- ---------- Proved reserves, Dec. 31, 1997 383,039 9,255,929 ======= ========== PROVED DEVELOPED RESERVES: December 31, 1995 553,578 10,910,460 ======= ========== December 31, 1996 495,079 11,012,174 ======= ========== December 31, 1997 383,039 9,225,929 ======= ========== F-69 II-E Partnership ---------------- Crude Natural Oil Gas (Barrels) (Mcf) --------- ------------ Proved reserves, Dec. 31, 1994 243,656 5,869,044 Production ( 63,680) ( 937,469) Sales of minerals in place ( 1,574) ( 23,318) Extensions and discoveries 10,194 48,960 Revisions of previous estimates 109,338 1,444,042 ------- --------- Proved reserves, Dec. 31, 1995 297,934 6,401,259 Production ( 53,804) ( 861,464) Sales of minerals in place ( 16,347) ( 109,007) Extensions and discoveries 1,327 31,347 Revision of previous estimates 74,262 234,339 ------- --------- Proved reserves, Dec. 31, 1996 303,372 5,696,474 Production ( 42,668) ( 783,379) Sales of minerals in place ( 14,134) ( 349,468) Extensions and discoveries 2,502 30,709 Revision of previous estimates ( 11,878) 479,666 ------- --------- Proved reserves, Dec. 31, 1997 237,194 5,074,002 ======= ========= PROVED DEVELOPED RESERVES: December 31, 1995 297,934 6,401,259 ======= ========= December 31, 1996 303,372 5,696,474 ======= ========= December 31, 1997 237,194 5,074,002 ======= ========= F-70 II-F Partnership ---------------- Crude Natural Oil Gas (Barrels) (Mcf) --------- ------------ Proved reserves, Dec. 31, 1994 352,541 4,688,712 Production ( 54,773) ( 845,804) Sales of minerals in place ( 4,031) ( 28,284) Extensions and discoveries 829 108,943 Revisions of previous estimates 60,441 815,149 ------- --------- Proved reserves, Dec. 31, 1995 355,007 4,738,716 Production ( 47,395) ( 761,702) Sales of minerals in place ( 7,620) ( 149,077) Extensions and discoveries 13,192 250,188 Revision of previous estimates 51,954 593,360 ------- --------- Proved reserves, Dec. 31, 1996 365,138 4,671,485 Production ( 45,014) ( 586,444) Sales of minerals in place ( 31,639) ( 403,487) Extensions and discoveries 3,045 75,566 Revision of previous estimates 24,289 186,939 ------- --------- Proved reserves, Dec. 31, 1997 315,819 3,944,059 ======= ========= PROVED DEVELOPED RESERVES: December 31, 1995 355,007 4,738,716 ======= ========= December 31, 1996 360,605 4,614,831 ======= ========= December 31, 1997 311,286 3,887,405 ======= ========= F-71 II-G Partnership ---------------- Crude Natural Oil Gas (Barrels) (Mcf) ----------- ------------ Proved reserves, Dec. 31, 1994 741,997 10,259,098 Production (115,206) ( 1,832,915) Sales of minerals in place ( 8,413) ( 66,454) Extensions and discoveries 1,737 227,933 Revisions of previous estimates 126,364 1,715,621 ------- ---------- Proved reserves, Dec. 31, 1995 746,479 10,303,283 Production ( 99,593) ( 1,626,530) Sales of minerals in place ( 16,084) ( 335,696) Revision of previous estimates 138,340 1,781,501 ------- ---------- Proved reserves, Dec. 31, 1996 769,142 10,122,558 Production ( 94,553) ( 1,256,464) Sales of minerals in place ( 66,947) ( 957,722) Extensions and discoveries 6,399 158,060 Revision of previous estimates 50,299 382,356 ------- ---------- Proved reserves, Dec. 31, 1997 664,340 8,448,788 ======= ========== PROVED DEVELOPED RESERVES: December 31, 1995 746,479 10,303,283 ======= ========== December 31, 1996 759,316 9,999,722 ======= ========== December 31, 1997 654,514 8,325,952 ======= ========== F-72 II-H Partnership ---------------- Crude Natural Oil Gas (Barrels) (Mcf) --------- ------------ Proved reserves, Dec. 31, 1994 173,882 2,567,951 Production ( 26,870) ( 449,854) Sales of minerals in place ( 2,006) ( 18,719) Extensions and discoveries 401 52,767 Revisions of previous estimates 28,114 401,519 ------- --------- Proved reserves, Dec. 31, 1995 173,521 2,553,664 Production ( 23,172) ( 397,146) Sales of minerals in place ( 3,802) ( 90,433) Extensions and discoveries 6,428 193,480 Revision of previous estimates 27,027 233,675 ------- --------- Proved reserves, Dec. 31, 1996 180,002 2,493,240 Production ( 21,998) ( 304,593) Sales of minerals in place ( 15,766) ( 267,732) Extensions and discoveries 1,500 36,590 Revision of previous estimates 11,702 87,477 ------- --------- Proved reserves, Dec. 31, 1997 155,440 2,044,982 ======= ========= PROVED DEVELOPED RESERVES: December 31, 1995 173,521 2,553,664 ======= ========= December 31, 1996 177,577 2,462,919 ======= ========= December 31, 1997 153,015 2,014,661 ======= ========= F-73 Standardized Measure of Discounted Future Net Cash Flows of Proved Oil and Gas Reserves - Unaudited The following tables set forth each of the Partnerships' estimated future net cash flows as of December 31, 1997 relating to proved oil and gas reserves based on the standardized measure as prescribed in SFAS No. 69: Partnership ------------------------------ II-A II-B ------------- ------------- Future cash inflows $28,382,274 $18,427,376 Future production and development costs ( 10,082,705) ( 6,451,368) ---------- ---------- Future net cash flows $18,299,569 $11,976,008 10% discount to reflect timing of cash flows ( 5,892,214) ( 3,904,877) ---------- ---------- Standardized measure of discounted future net cash flows $12,407,355 $ 8,071,131 ========== ========== F-74 Partnership ------------------------------ II-C II-D ------------- ------------- Future cash inflows $11,656,673 $26,730,851 Future production and development costs ( 3,698,079) ( 9,519,380) ---------- ---------- Future net cash flows $ 7,958,594 $17,211,471 10% discount to reflect timing of cash flows ( 2,691,079) ( 6,126,402) ---------- ---------- Standardized measure of discounted future net cash flows $ 5,267,515 $11,085,069 ========== ========== Partnership ------------------------------ II-E II-F ------------- ------------- Future cash inflows $15,492,214 $14,642,714 Future production and development costs ( 4,345,574) ( 3,463,900) ---------- ---------- Future net cash flows $11,146,640 $11,178,814 10% discount to reflect timing of cash flows ( 4,323,286) ( 4,490,325) ---------- ---------- Standardized measure of discounted future net cash flows $ 6,823,354 $ 6,688,489 ========== ========== F-75 Partnership ------------------------------ II-G II-H ------------- ------------- Future cash inflows $31,180,595 $7,465,357 Future production and development costs ( 7,445,141) ( 1,809,112) ---------- --------- Future net cash flows $23,735,454 $5,656,245 10% discount to reflect timing of cash flows ( 9,538,150) ( 2,276,145) ---------- --------- Standardized measure of discounted future net cash flows $14,197,304 $3,380,100 ========== ========= The process of estimating oil and gas reserves is complex, requiring significant subjective decisions in the evaluation of available geological, engineering, and economic data for each reservoir. The data for a given reservoir may change substantially over time as a result of, among other things, additional development activity, production history, and viability of production under varying economic conditions; consequently, it is reasonably possible that material revisions to existing reserve estimates may occur in the near future. Although every reasonable effort has been made to ensure that the reserve estimates reported herein represent the most accurate assessment possible, the significance of the subjective decisions required and variances in available data for various reservoirs make these estimates generally less precise than other estimates presented in connection with financial statement disclosures. The Partnerships' reserves were determined at December 31, 1997 using oil and gas prices of approximately $16.25 per barrel and $3.23 per Mcf, respectively. F-76 INDEX TO EXHIBITS ----------------- Number Description - ------ ----------- 4.1 The Certificate and Agreements of Limited Partnership for the following Partnerships have been previously filed with the SEC as Exhibit 2.1 to Form 8-A filed by each Partnership on the dates shown below and are hereby incorporated by reference. Partnership Filing Date File No. ----------- ------------ -------- II-A November 18, 1987 0-16388 II-B November 19, 1987 0-16405 II-C August 5, 1988 0-16981 II-D August 5, 1988 0-16980 II-E November 17, 1988 0-17320 II-F June 5, 1989 0-17799 II-G June 5, 1989 0-17802 II-H February 20, 1990 0-18305 4.2 The Agreements of Partnership for the following Production Partnerships have been previously filed with the SEC as Exhibit 2.2 to Form 8-A filed by the related Partnerships on the dates shown below and are hereby incorporated by reference. Partnership Filing Date ----------- ----------- II-A November 18, 1987 II-B November 19, 1987 II-C August 5, 1988 II-D August 5, 1988 II-E November 17, 1988 II-F June 5, 1989 II-G June 5, 1989 II-H February 20, 1990 4.3 Advisory Agreement dated as of November 24, 1992 between Samson, PaineWebber, Geodyne Resources, Geodyne Properties, Inc., Geodyne Production Company, and Geodyne Energy Company filed as Exhibit 28.3 to Registrant's Current Report on Form 8-K on December 24, 1992 and is hereby incorporated by reference. F-77 4.4 Second Amendment to Amended and Restated Agreement and Certificate of Limited Partnership of Geodyne Energy Income Limited Partnership II-A, filed as Exhibit 4.1 to Registrant's Current Report on Form 8-K dated August 2, 1993 filed with the SEC on August 10, 1993 and is hereby incorporated by reference. 4.5 Second Amendment to Amended and Restated Agreement and Certificate of Limited Partnership of Geodyne Energy Income Limited Partnership II-B, filed as Exhibit 4.2 to Registrant's Current Report on Form 8-K dated August 2, 1993 filed with the SEC on August 10, 1993 and is hereby incorporated by reference. 4.6 Second Amendment to Amended and Restated Agreement and Certificate of Limited Partnership of Geodyne Energy Income Limited Partnership II-C, filed as Exhibit 4.3 to Registrant's Current Report on Form 8-K dated August 2, 1993 filed with the SEC on August 10, 1993 and is hereby incorporated by reference. 4.7 Second Amendment to Amended and Restated Agreement and Certificate of Limited Partnership of Geodyne Energy Income Limited Partnership II-D, filed as Exhibit 4.4 to Registrant's Current Report on Form 8-K dated August 2, 1993 filed with the SEC on August 10, 1993 and is hereby incorporated by reference. 4.8 Second Amendment to Amended and Restated Agreement and Certificate of Limited Partnership of Geodyne Energy Income Limited Partnership II-E, filed as Exhibit 4.5 to Registrant's Current Report on Form 8-K dated August 2, 1993 filed with the SEC on August 10, 1993 and is hereby incorporated by reference. 4.9 Second Amendment to Amended and Restated Agreement and Certificate of Limited Partnership of Geodyne Energy Income Limited Partnership II-F, filed as Exhibit 4.6 to Registrant's Current Report on Form 8-K dated August 2, 1993 filed with the SEC on August 10, 1993 and is hereby incorporated by reference. 4.10 Second Amendment to Amended and Restated Agreement and Certificate of Limited Partnership of Geodyne Energy Income Limited Partnership II-G, filed as Exhibit 4.7 to Registrant's Current Report on Form 8-K dated August 2, 1993 filed with the SEC on August 10, 1993 and is hereby incorporated by reference. 4.11 Second Amendment to Amended and Restated Agreement and Certificate of Limited Partnership of Geodyne Energy Income Limited Partnership II-H, filed as Exhibit 4.8 to Registrant's Current Report on Form 8-K dated August 2, 1993 filed with the SEC on August 10, 1993 and is hereby incorporated by reference. F-78 4.12 Third Amendment to Agreement and Certificate of Limited Partnership of Geodyne Energy Income Limited Partnership II-E, filed as Exhibit 4.12 to the Registrant's Annual Report on Form 10-K for the year ended December 31, 1995 filed with the SEC on April 4, 1996 and is hereby incorporated by reference. 4.13 Third Amendment to Agreement and Certificate of Limited Partnership of Geodyne Energy Income Limited Partnership II-F, filed as Exhibit 4.13 to the Registrant's Annual Report on Form 10-K for the year ended December 31, 1995 filed with the SEC on April 4, 1996 and is hereby incorporated by reference. 4.14 Third Amendment to Agreement and Certificate of Limited Partnership of Geodyne Energy Income Limited Partnership II-G, filed as Exhibit 4.14 to the Registrant's Annual Report on Form 10-K for the year ended December 31, 1995 filed with the SEC on April 4, 1996 and is hereby incorporated by reference. 4.15 Third Amendment to Agreement and Certificate of Limited Partnership of Geodyne Energy Income Limited Partnership II-H, filed as Exhibit 4.15 to the Registrant's Annual Report on Form 10-K for the year ended December 31, 1995 filed with the SEC on April 4, 1996 and is hereby incorporated by reference. *23.1 Consent of Ryder Scott Company Petroleum Engineers for Geodyne Energy Income Limited Partnership II-A. *23.2 Consent of Ryder Scott Company Petroleum Engineers for Geodyne Energy Income Limited Partnership II-B. *23.3 Consent of Ryder Scott Company Petroleum Engineers for Geodyne Energy Income Limited Partnership II-C. *23.4 Consent of Ryder Scott Company Petroleum Engineers for Geodyne Energy Income Limited Partnership II-D. *23.5 Consent of Ryder Scott Company Petroleum Engineers for Geodyne Energy Income Limited Partnership II-E. *23.6 Consent of Ryder Scott Company Petroleum Engineers for Geodyne Energy Income Limited Partnership II-F. *23.7 Consent of Ryder Scott Company Petroleum Engineers for Geodyne Energy Income Limited Partnership II-G. *23.8 Consent of Ryder Scott Company Petroleum Engineers for Geodyne Energy Income Limited Partnership II-H. F-79 *27.1 Financial Data Schedule containing summary financial information extracted from the Geodyne Energy Income Limited Partnership II-A's financial statements as of December 31, 1997 and for the year ended December 31, 1997. *27.2 Financial Data Schedule containing summary financial information extracted from the Geodyne Energy Income Limited Partnership II-B's financial statements as of December 31, 1997 and for the year ended December 31, 1997. *27.3 Financial Data Schedule containing summary financial information extracted from the Geodyne Energy Income Limited Partnership II-C's financial statements as of December 31, 1997 and for the year ended December 31, 1997. *27.4 Financial Data Schedule containing summary financial information extracted from the Geodyne Energy Income Limited Partnership II-D's financial statements as of December 31, 1997 and for the year ended December 31, 1997. *27.5 Financial Data Schedule containing summary financial information extracted from the Geodyne Energy Income Limited Partnership II-E's financial statements as of December 31, 1997 and for the year ended December 31, 1997. *27.6 Financial Data Schedule containing summary financial information extracted from the Geodyne Energy Income Limited Partnership II-F's financial statements as of December 31, 1997 and for the year ended December 31, 1997. *27.7 Financial Data Schedule containing summary financial information extracted from the Geodyne Energy Income Limited Partnership II-G's financial statements as of December 31, 1997 and for the year ended December 31, 1997. *27.8 Financial Data Schedule containing summary financial information extracted from the Geodyne Energy Income Limited Partnership II-H's financial statements as of December 31, 1997 and for the year ended December 31, 1997. All other Exhibits are omitted as inapplicable. ---------- * Filed herewith. F-80 EX-23.1 2 RIDER SCOTT CONSENT FOR GEODYNE II-A RYDER SCOTT COMPANY Fax (713) 651-0849 PETROLEUM ENGINEERS 1100 Louisiana Suite 3800 Houston, Texas 77002-5218 Telephone (713) 651-9191 CONSENT OF PETROLEUM ENGINEERING FIRM We consent to the reference to our name included in this Annual Report on Form 10-K for the year ended December 31, 1997 for Geodyne Energy Income Limited Partnership II-A. //s// Ryder Scott Company Petroleum Engineers RYDER SCOTT COMPANY PETROLEUM ENGINEERS Houston, Texas January 13, 1998 EX-23.2 3 RIDER SCOTT CONSENT FOR GEODYNE II-B RYDER SCOTT COMPANY Fax (713) 651-0849 PETROLEUM ENGINEERS 1100 Louisiana Suite 3800 Houston, Texas 77002-5218 Telephone (713) 651-9191 CONSENT OF PETROLEUM ENGINEERING FIRM We consent to the reference to our name included in this Annual Report on Form 10-K for the year ended December 31, 1997 for Geodyne Energy Income Limited Partnership II-B. //s// Ryder Scott Company Petroleum Engineers RYDER SCOTT COMPANY PETROLEUM ENGINEERS Houston, Texas January 13, 1998 EX-23.3 4 RIDER SCOTT CONSENT FOR GEODYNE II-C RYDER SCOTT COMPANY Fax (713) 651-0849 PETROLEUM ENGINEERS 1100 Louisiana Suite 3800 Houston, Texas 77002-5218 Telephone (713) 651-9191 CONSENT OF PETROLEUM ENGINEERING FIRM We consent to the reference to our name included in this Annual Report on Form 10-K for the year ended December 31, 1997 for Geodyne Energy Income Limited Partnership II-C. //s// Ryder Scott Company Petroleum Engineers RYDER SCOTT COMPANY PETROLEUM ENGINEERS Houston, Texas January 13, 1998 EX-23.4 5 RIDER SCOTT CONSENT FOR GEODYNE II-D RYDER SCOTT COMPANY Fax (713) 651-0849 PETROLEUM ENGINEERS 1100 Louisiana Suite 3800 Houston, Texas 77002-5218 Telephone (713) 651-9191 CONSENT OF PETROLEUM ENGINEERING FIRM We consent to the reference to our name included in this Annual Report on Form 10-K for the year ended December 31, 1997 for Geodyne Energy Income Limited Partnership II-D. //s// Ryder Scott Company Petroleum Engineers RYDER SCOTT COMPANY PETROLEUM ENGINEERS Houston, Texas January 13, 1998 EX-23.5 6 RIDER SCOTT CONSENT FOR GEODYNE II-E RYDER SCOTT COMPANY Fax (713) 651-0849 PETROLEUM ENGINEERS 1100 Louisiana Suite 3800 Houston, Texas 77002-5218 Telephone (713) 651-9191 CONSENT OF PETROLEUM ENGINEERING FIRM We consent to the reference to our name included in this Annual Report on Form 10-K for the year ended December 31, 1997 for Geodyne Energy Income Limited Partnership II-E. //s// Ryder Scott Company Petroleum Engineers RYDER SCOTT COMPANY PETROLEUM ENGINEERS Houston, Texas January 13, 1998 EX-23.6 7 RIDER SCOTT CONSENT FOR GEODYNE II-F RYDER SCOTT COMPANY Fax (713) 651-0849 PETROLEUM ENGINEERS 1100 Louisiana Suite 3800 Houston, Texas 77002-5218 Telephone (713) 651-9191 CONSENT OF PETROLEUM ENGINEERING FIRM We consent to the reference to our name included in this Annual Report on Form 10-K for the year ended December 31, 1997 for Geodyne Energy Income Limited Partnership II-F. //s// Ryder Scott Company Petroleum Engineers RYDER SCOTT COMPANY PETROLEUM ENGINEERS Houston, Texas January 13, 1998 EX-23.7 8 RIDER SCOTT CONSENT FOR GEODYNE II-G RYDER SCOTT COMPANY Fax (713) 651-0849 PETROLEUM ENGINEERS 1100 Louisiana Suite 3800 Houston, Texas 77002-5218 Telephone (713) 651-9191 CONSENT OF PETROLEUM ENGINEERING FIRM We consent to the reference to our name included in this Annual Report on Form 10-K for the year ended December 31, 1997 for Geodyne Energy Income Limited Partnership II-G. //s// Ryder Scott Company Petroleum Engineers RYDER SCOTT COMPANY PETROLEUM ENGINEERS Houston, Texas January 13, 1998 EX-23.8 9 RIDER SCOTT CONSENT FOR GEODYNE II-H RYDER SCOTT COMPANY Fax (713) 651-0849 PETROLEUM ENGINEERS 1100 Louisiana Suite 3800 Houston, Texas 77002-5218 Telephone (713) 651-9191 CONSENT OF PETROLEUM ENGINEERING FIRM We consent to the reference to our name included in this Annual Report on Form 10-K for the year ended December 31, 1997 for Geodyne Energy Income Limited Partnership II-H. //s// Ryder Scott Company Petroleum Engineers RYDER SCOTT COMPANY PETROLEUM ENGINEERS Houston, Texas January 13, 1998 EX-27.1 10 FDS --
5 0000824894 GEODYNE ENERGY INCOME LTD PARTNERSHIP II-A 12-MOS DEC-31-1997 JAN-01-1997 DEC-31-1997 830,584 0 858,535 0 0 1,689,119 31,785,611 26,890,758 7,495,013 375,289 0 0 0 0 6,962,674 7,495,013 5,431,745 5,662,594 0 3,944,194 0 0 0 1,718,400 0 1,718,400 0 0 0 1,718,400 3.26 0
EX-27.2 11 FDS --
5 0000826345 GEODYNE ENERGY INCOME LTD PARTNERSHIP II-B 12-MOS DEC-31-1997 JAN-01-1997 DEC-31-1997 644,574 0 565,152 0 0 1,209,726 21,746,216 18,711,058 4,414,695 166,425 0 0 0 0 4,159,751 4,414,695 3,816,269 4,039,160 0 2,843,964 0 0 0 1,195,196 0 1,195,196 0 0 0 1,195,196 3.03 0
EX-27.3 12 FDS --
5 0000833054 GEODYNE ENERGY INCOME LTD PARTNERSHIP II-C 12-MOS DEC-31-1997 JAN-01-1997 DEC-31-1997 358,095 0 275,330 0 0 633,425 9,809,210 8,141,941 2,440,315 55,856 0 0 0 0 2,334,812 2,440,315 1,796,657 1,966,867 0 1,056,456 0 0 0 910,411 0 910,411 0 0 0 910,411 5.52 0.00
EX-27.4 13 FDS --
5 0000833526 GEODYNE ENERGY INCOME LTD PARTNERSHIP II-D 12-MOS DEC-31-1997 JAN-01-1997 DEC-31-1997 1,151,142 0 667,017 0 0 1,818,159 18,171,159 14,753,399 5,780,264 193,062 0 0 0 0 5,348,119 5,780,264 4,314,154 4,811,321 0 2,887,739 0 0 0 1,923,582 0 1,923,582 0 0 0 1,923,582 5.70 0.00
EX-27.5 14 FDS --
5 0000842881 GEODYNE ENERGY INCOME LTD PARTNERSHIP II-E 12-MOS DEC-31-1997 JAN-01-1997 DEC-31-1997 670,777 0 415,487 0 0 1,086,264 15,543,068 12,701,988 4,257,875 271,692 0 0 0 0 3,922,558 4,257,875 2,616,003 2,910,379 0 2,843,972 0 0 0 66,407 0 66,407 0 0 0 66,407 0.00 0
EX-27.6 15 FDS --
5 0000850506 GEODYNE ENERGY INCOME LTD PARTNERSHIP II-F 12-MOS DEC-31-1997 JAN-01-1997 DEC-31-1997 741,852 0 334,137 0 0 1,075,989 11,773,778 9,341,745 3,564,889 89,532 0 0 0 0 3,447,450 3,564,889 2,191,389 2,766,582 0 2,537,024 0 0 0 229,558 0 229,558 0 0 0 229,558 0.86 0
EX-27.7 16 FDS --
5 0000851724 GEODYNE ENERGY INCOME LTD PARTNERSHIP II-G 12-MOS DEC-31-1997 JAN-01-1997 DEC-31-1997 1,564,325 0 710,336 0 0 2,274,661 25,132,939 19,895,857 7,635,720 193,011 0 0 0 0 7,378,600 7,635,720 4,670,245 5,934,813 0 5,647,364 0 0 0 287,449 0 287,449 0 0 0 287,449 0.31 0
EX-27.8 17 FDS --
5 0000854062 GEODYNE ENERGY INCOME LTD PARTNERSHIP II-H 12-MOS DEC-31-1997 JAN-01-1997 DEC-31-1997 364,502 0 168,833 0 0 533,335 6,025,649 4,800,354 1,788,149 45,074 0 0 0 0 1,728,427 1,788,149 1,119,734 1,415,286 0 1,386,678 0 0 0 28,608 0 28,608 0 0 0 28,608 (0.13) 0
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