-----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, LUiuGUIQ+5+TGUBLht17OCDcEW0OKqfzaap4VbGnT6PFCQ//NV05MryiXc8VBUdv KF9M3jPm1PV1m7X4bmGxeQ== 0000850427-00-000021.txt : 20000223 0000850427-00-000021.hdr.sgml : 20000223 ACCESSION NUMBER: 0000850427-00-000021 CONFORMED SUBMISSION TYPE: 10-K405 PUBLIC DOCUMENT COUNT: 13 CONFORMED PERIOD OF REPORT: 19991231 FILED AS OF DATE: 20000222 FILER: COMPANY DATA: COMPANY CONFORMED NAME: GEODYNE INSTITUTIONAL PENSION ENERGY INCOME P-1 LTD PTNSHIP CENTRAL INDEX KEY: 0000850427 STANDARD INDUSTRIAL CLASSIFICATION: CRUDE PETROLEUM & NATURAL GAS [1311] IRS NUMBER: 731330245 STATE OF INCORPORATION: TX FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-K405 SEC ACT: SEC FILE NUMBER: 000-17800 FILM NUMBER: 550294 BUSINESS ADDRESS: STREET 1: TWO W SECOND ST CITY: TULSA STATE: OK ZIP: 74103 BUSINESS PHONE: 9185831791 MAIL ADDRESS: STREET 1: TWO W SECOND ST CITY: TULSA STATE: OK ZIP: 74103-3708 FORMER COMPANY: FORMER CONFORMED NAME: PAINEWEBBER GEODYNE INSTITUTIONAL PENSION ENERGY INC P-1 LP DATE OF NAME CHANGE: 19910401 FILER: COMPANY DATA: COMPANY CONFORMED NAME: GEODYNE INSTITUTIONAL PENSION ENERGY INCOME P-2 LTD PTNSHIP CENTRAL INDEX KEY: 0000850428 STANDARD INDUSTRIAL CLASSIFICATION: CRUDE PETROLEUM & NATURAL GAS [1311] IRS NUMBER: 731330625 STATE OF INCORPORATION: TX FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-K405 SEC ACT: SEC FILE NUMBER: 000-17801 FILM NUMBER: 550295 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: TWO W SECOND STREET STREET 2: SAMSON PLAZA CITY: TULSA STATE: OK ZIP: 74103 FILER: COMPANY DATA: COMPANY CONFORMED NAME: GEODYNE INSTITUTIONAL PENSION ENERGY INC LTD PARTNERSHIP P-3 CENTRAL INDEX KEY: 0000854066 STANDARD INDUSTRIAL CLASSIFICATION: CRUDE PETROLEUM & NATURAL GAS [1311] IRS NUMBER: 731336573 STATE OF INCORPORATION: OK FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-K405 SEC ACT: SEC FILE NUMBER: 000-18306 FILM NUMBER: 550296 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: TWO W SECOND STREET STREET 2: SAMSON PLAZA CITY: TULSA STATE: OK ZIP: 74103 FORMER COMPANY: FORMER CONFORMED NAME: PAINEWEBBER GEODYNE INSTITUTIONAL PENSION ENERGY INC L P P-3 DATE OF NAME CHANGE: 19920703 FILER: COMPANY DATA: COMPANY CONFORMED NAME: GEODYNE INSTITUTIONAL PENSION ENERGY INCOME LTD PTNSHIP P-4 CENTRAL INDEX KEY: 0000860744 STANDARD INDUSTRIAL CLASSIFICATION: CRUDE PETROLEUM & NATURAL GAS [1311] IRS NUMBER: 731341929 STATE OF INCORPORATION: OK FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-K405 SEC ACT: SEC FILE NUMBER: 000-18308 FILM NUMBER: 550297 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: TWO W SECOND STREET STREET 2: SAMSON PLAZA CITY: TULSA STATE: OK ZIP: 74103-3708 FILER: COMPANY DATA: COMPANY CONFORMED NAME: GEODYNE INSTITUTIONAL PENSION ENERGY INCOME LP P-5 CENTRAL INDEX KEY: 0000863832 STANDARD INDUSTRIAL CLASSIFICATION: CRUDE PETROLEUM & NATURAL GAS [1311] IRS NUMBER: 731353774 STATE OF INCORPORATION: OK FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-K405 SEC ACT: SEC FILE NUMBER: 000-18637 FILM NUMBER: 550298 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: TWO W SECOND STREET STREET 2: SAMSON PLAZA CITY: TULSA STATE: OK ZIP: 74103 FORMER COMPANY: FORMER CONFORMED NAME: PAINEWEBBER GEODYNE INSTITUTIONAL PENSION ENERGY INC L P P-5 DATE OF NAME CHANGE: 19930328 FILER: COMPANY DATA: COMPANY CONFORMED NAME: GEODYNE INSTITUTIONAL PENSION ENERGY INCOME LTD PART P-6 CENTRAL INDEX KEY: 0000869801 STANDARD INDUSTRIAL CLASSIFICATION: CRUDE PETROLEUM & NATURAL GAS [1311] IRS NUMBER: 731357375 STATE OF INCORPORATION: OK FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-K405 SEC ACT: SEC FILE NUMBER: 000-18937 FILM NUMBER: 550299 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: TWO W SECOND STREET STREET 2: SAMSON PLAZA CITY: TULSA STATE: OK ZIP: 74103 10-K405 1 ANNUAL REPORT 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, 1999 Commission File Number: P-1: 0-17800; P-2: 0-17801; P-3: 0-18306; P-4: 0-18308; P-5: 0-18637; P-6: 0-18937 GEODYNE INSTITUTIONAL/PENSION ENERGY INCOME P-1 LIMITED PARTNERSHIP GEODYNE INSTITUTIONAL/PENSION ENERGY INCOME P-2 LIMITED PARTNERSHIP GEODYNE INSTITUTIONAL/PENSION ENERGY INCOME LIMITED PARTNERSHIP P-3 GEODYNE INSTITUTIONAL/PENSION ENERGY INCOME LIMITED PARTNERSHIP P-4 GEODYNE INSTITUTIONAL/PENSION ENERGY INCOME LIMITED PARTNERSHIP P-5 GEODYNE INSTITUTIONAL/PENSION ENERGY INCOME LIMITED PARTNERSHIP P-6 ------------------------------------------------------------------- (Exact name of Registrant as specified in its Articles) P-1: 73-1330245 P-2: 73-1330625 P-1 and P-2: P-3: 73-1336573 Texas P-4: 73-1341929 P-3 through P-6: P-5: 73-1353774 Oklahoma P-6: 73-1357375 - --------------------------------- ---------------------- (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 (Sec. 229.405 of this chapter) 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-K or any amendment to this Form 10-K. -1- Disclosure is not contained herein ----- X 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 -2- FORM 10-K405 TABLE OF CONTENTS PART I.......................................................................4 ITEM 1. BUSINESS...................................................4 ITEM 2. PROPERTIES................................................10 ITEM 3. LEGAL PROCEEDINGS.........................................22 ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF LIMITED PARTNERS.......22 PART II.....................................................................22 ITEM 5. MARKET FOR UNITS AND RELATED LIMITED PARTNER MATTERS......22 ITEM 6. SELECTED FINANCIAL DATA...................................25 ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.......................32 ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK........................................ 50 ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA...............50 ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.......................50 PART III....................................................................50 ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE GENERAL PARTNER...50 ITEM 11. EXECUTIVE COMPENSATION....................................52 ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT................................................59 ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS............61 PART IV.....................................................................63 ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K...............................................63 SIGNATURES..............................................................68 -3- PART I. ITEM 1. BUSINESS General The Geodyne Institutional/Pension Energy Income P-1 Limited Partnership (the "P-1 Partnership") and Geodyne Institutional/Pension Energy Income P-2 Limited Partnership (the "P-2 Partnership") are limited partnerships formed under the Texas Revised Limited Partnership Act and the Geodyne Institutional/Pension Energy Income Limited Partnership P-3 (the "P-3 Partnership"), Geodyne Institutional/Pension Energy Income Limited Partnership P-4 (the "P-4 Partnership"), Geodyne Institutional/Pension Energy Income Limited Partnership P-5 (the "P-5 Partnership"), and Geodyne Institutional/Pension Energy Income Limited Partnership P-6 (the "P-6 Partnership") are limited partnerships formed under the Oklahoma Revised Uniform Limited Partnership Act (collectively, the "Partnerships"). Each Partnership is composed of Geodyne Resources, Inc. ("Geodyne"), a Delaware corporation, as the general partner, Geodyne Institutional Depository 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 ----------- ----------------- P-1 October 25, 1988 P-2 February 9, 1989 P-3 May 10, 1989 P-4 November 21, 1989 P-5 February 27, 1990 P-6 September 5, 1990 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 ("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 Partnerships, and as the managing partner of the related general partnerships. The General Partner currently serves as general partner of 26 limited partnerships, including the Partnerships. The General Partner is a wholly-owned subsidiary of Samson Investment -4- Company. Samson Investment Company and its various corporate subsidiaries, including the General Partner (collectively "Samson"), 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, 1999, Samson owned interests in approximately 14,000 oil and gas wells located in 17 states of the United States and the countries of Canada, Venezuela, and Russia. At December 31, 1999, Samson operated approximately 3,400 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 net profits and royalty interests in oil and gas properties located in the continental United States. Most of the net profits interests acquired by the Partnerships have been carved out of working interests in producing properties ("Working Interests") which were acquired by affiliated oil and gas investment programs (the "Affiliated Programs"). Net profits interests entitle the Partnerships to a share of net revenues from producing properties measured by a specific percentage of the net profits realized by such Affiliated Programs. Except where otherwise noted, references to certain operational activities of the Partnerships are actually the activities of the Affiliated Programs. As the holder of a net profits interest, a Partnership is not liable to pay any amount by which oil and gas operating costs and expenses exceed revenues for any period, although any deficit, together with interest, is applied to reduce the amounts payable to the Partnership in subsequent periods. As used throughout this Annual Report, the Partnerships' net profits and royalty interests in oil and gas sales will be referred to as "Net Profits" and the Partnerships' net profits and royalty interests in oil and gas properties will be collectively referred to as "Net Profits Interests." In order to prudently manage the properties which are burdened by the Partnerships' Net Profits Interests, it may be appropriate for drilling operations to be conducted on such properties. Since the Partnerships' Net Profits are calculated after considering such costs, the Partnerships also indirectly engage in development drilling. 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 15, 2000, Samson employed approximately 920 persons. No employees are covered by collective bargaining agreements, and management believes that Samson provides 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." -5- 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 (888) 436-3963 [(888) GEODYNE]. Funding Although the partnership agreement for each Partnership (the "Partnership Agreement") permits each Partnership to incur borrowings, operations and expenses are currently funded out of revenues from each Partnership's Net Profits Interests. 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 holding of certain Net Profits Interests. 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 not possible. Concerning past trends, average yearly wellhead gas prices in the United States have been volatile for many years. Over the past ten years such -6- average prices have generally been in the $1.40 to $2.40 per Mcf range. Gas prices are currently in the upper end of this range. 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 increased from approximately $2.03 per Mcf at December 31, 1998 to approximately $2.24 per Mcf at December 31, 1999. 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, but have been extremely volatile over the past two years. Due to global consumption and supply trends as well as a slowdown in Asian energy demand, oil prices in late 1997 and early 1998 reached historically low levels, dropping to as low as approximately $9.25 per barrel. However, production curtailment agreements among major oil producing nations have caused recent oil prices to climb to over $24.00 per barrel in some markets. It is not known whether this trend will continue. Prices for the Partnerships' oil increased from approximately $9.50 per barrel at December 31, 1998 to approximately $22.75 per barrel at December 31, 1999. Future prices for both oil and gas will likely be different from the prices in effect on December 31, 1999. 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 oil and gas sales attributable to the Partnerships' Net Profits Interests during the year ended December 31, 1999: -7- Partnership Customer Percentage ----------- ------------------------ ---------- P-1 El Paso Energy Marketing Company ("El Paso") 24.4% Chevron U.S.A., Inc. ("Chevron") 12.0% P-2 El Paso 23.6% Chevron 10.3% Texaco Exploration and Production, Inc. ("Texaco") 10.1% P-3 El Paso 23.4% Texaco 10.1% Chevron 10.1% P-4 El Paso 28.7% Valero Industrial Gas LP 25.4% Phibro Energy, Inc. 21.3% P-5 El Paso 77.8% P-6 El Paso 36.6% HPL Resources Company 15.4% Tejas Gas Marketing Company 13.0% 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 pipeline transporters, the Partnerships may encounter difficulty in marketing 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 in which the Partnerships own Net Profits Interests. In the event pipeline facilities are not conveniently available to production areas, crude oil is usually trucked by purchasers to storage facilities. -8- 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 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. Although virtually all of the natural gas production affecting the Partnerships 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' Net Profits and projections of future Net Profits. 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 - Oil and gas 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 decrease the Partnerships' Net Profits. Management anticipates that various local, state, and federal environmental control agencies will have an increasing impact on oil and gas operations. Insurance Coverage Exploration for and production of oil and gas are subject to many inherent risks, including blowouts, pollution, fires, and other casualties. The Partnerships maintain insurance coverage as is customary for entities of a similar size engaged in similar operations, 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 condition -9- and results of operations in that it could negatively impact the cash flow received from the Net Profits Interests. ITEM 2. PROPERTIES Well Statistics The following table sets forth the number of productive wells in which the Partnerships had a Net Profits Interest as of December 31, 1999. P/ship Number of Wells(1) ------ ----------------------------- Total Oil Gas ----- ----- ----- P-1 953 758 195 P-2 996 781 215 P-3 996 749 247 P-4 190 100 90 P-5 74 23 51 P-6 119 34 85 - --------------- (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. Drilling Activities During 1999 the P-1, P-2, P-3, and P-4 Partnerships indirectly participated (through their Net Profits Interests) in the developmental drilling activities described below. Revenue P/ship Well Name County St. Interest Type Status - ------ --------- ------ ---- -------- ---- ------ P-1 Joe No. 1-25 Caddo OK .00183 Gas Unknown Daberry No. 5-1 Wheeler TX Unknown Gas In Progress Coltharp No. 3-51 Wheeler TX .00048 Gas Producing Blankenship No. 2 Wheeler TX .01486 Gas Producing Wolfe No. 5 Winkler TX .00372 Gas Producing P-2 Joe No. 1-25 Caddo OK .00199 Gas Unknown Daberry No. 5-1 Wheeler TX Unknown Gas In Progress Coltharp No. 3-51 Wheeler TX .00032 Gas Producing Blankenship No. 2 Wheeler TX .01014 Gas Producing Wolfe No. 5 Winkler TX .00254 Gas Producing -10- Revenue P/ship Well Name County St. Interest Type Status - ------ --------- ------ ---- -------- ---- ------ P-3 Joe No. 1-25 Caddo OK .00376 Gas Unknown Daberry No. 5-1 Wheeler TX Unknown Gas In Progress Coltharp No. 3-51 Wheeler TX .00060 Gas Producing Blankenship No. 2 Wheeler TX .01872 Gas Producing Wolfe No. 5 Winkler TX .00468 Gas Producing P-4 Joe No. 1-25 Caddo OK .00333 Gas Unknown BMT No. 13 Webb TX .00233 Gas Producing Hachar No. 35 Webb TX .00350 Gas Producing The P-5 and P-6 Partnerships did not participate in any drilling activities during 1999. Oil and Gas Production, Revenue, and Price History The following tables set forth certain historical information concerning the oil (including condensates) and gas production attributable to the Partnerships' Net Profits Interests, revenues attributable to such production, and certain price information. -11- Net Production Data P-1 Partnership --------------- Year Ended December 31, ---------------------------------------- 1999 1998 1997 ---------- ---------- ---------- Production: Oil (Bbls) 24,737 26,676 32,044 Gas (Mcf) 357,439 321,426 357,516 Oil and gas sales(1): Oil $ 412,946 $ 357,439 $ 598,856 Gas 665,565 585,775 813,010 --------- --------- --------- Total $1,078,511 $ 943,214 $1,411,866 ========= ========= ========= Average sales price: Per barrel of oil $16.69 $13.40 $18.69 Per Mcf of gas 1.86 1.82 2.27 - ---------- (1) These amounts differ from the Net Profits included in the P-1 Partnership's financial statements because they do not reflect the offset of $275,972, $248,295, and $347,761, respectively, of production expenses incurred by the Affiliated Programs. -12- Net Production Data P-2 Partnership --------------- Year Ended December 31, ---------------------------------------- 1999 1998 1997 ---------- ---------- ---------- Production: Oil (Bbls) 17,583 18,652 22,873 Gas (Mcf) 289,443 266,232 301,132 Oil and gas sales(1): Oil $293,110 $249,655 $ 428,036 Gas 556,043 492,065 697,928 -------- -------- --------- Total $849,153 $741,720 $1,125,964 ======== ======== ========= Average sales price: Per barrel of oil $16.67 $13.38 $18.71 Per Mcf of gas 1.92 1.85 2.32 - ---------- (1) These amounts differ from the Net Profits included in the P-2 Partnership's financial statements because they do not reflect the offset of $230,263, $203,535, and $289,470, respectively, of production expenses incurred by the Affiliated Programs. -13- Net Production Data P-3 Partnership --------------- Year Ended December 31, ---------------------------------------- 1999 1998 1997 ---------- ---------- ---------- Production: Oil (Bbls) 32,552 34,533 42,259 Gas (Mcf) 543,312 496,649 565,052 Oil and gas sales(1): Oil $ 542,233 $ 462,244 $ 791,047 Gas 1,044,195 919,875 1,312,229 --------- --------- --------- Total $1,586,428 $1,382,119 $2,103,276 ========= ========= ========= Average sales price: Per barrel of oil $16.66 $13.39 $18.72 Per Mcf of gas 1.92 1.85 2.32 - ---------- (1) These amounts differ from the Net Profits included in the P-3 Partnership's financial statements because they do not reflect the offset of $430,614, $384,655, and $543,301, respectively, of production expenses incurred by the Affiliated Programs. -14- Net Production Data P-4 Partnership --------------- Year Ended December 31, ---------------------------------------- 1999 1998 1997 ---------- ---------- ---------- Production: Oil (Bbls) 17,505 16,783 19,686 Gas (Mcf) 338,882 370,975 513,815 Oil and gas sales(1): Oil $ 295,745 $ 210,592 $ 387,375 Gas 746,206 797,041 1,267,510 --------- --------- --------- Total $1,041,951 $1,007,633 $1,654,885 ========= ========= ========= Average sales price: Per barrel of oil $16.89 $12.55 $19.68 Per Mcf of gas 2.20 2.15 2.47 - ---------- (1) These amounts differ from the Net Profits included in the P-4 Partnership's financial statements because they do not reflect the offset of $295,097, $273,107, and $364,105, respectively, of production expenses incurred by the Affiliated Programs. -15- Net Production Data P-5 Partnership --------------- Year Ended December 31, ---------------------------------------- 1999 1998 1997 ---------- ---------- ---------- Production: Oil (Bbls) 6,858 6,315 7,972 Gas (Mcf) 464,917 552,109 516,756 Oil and gas sales(1): Oil $ 117,808 $ 88,408 $ 158,471 Gas 922,397 1,030,105 1,148,588 --------- --------- --------- Total $1,040,205 $1,118,513 $1,307,059 ========= ========= ========= Average sales price: Per barrel of oil $17.18 $14.00 $19.88 Per Mcf of gas 1.98 1.87 2.22 - ---------- (1) These amounts differ from the Net Profits included in the P-5 Partnership's financial statements because they do not reflect the offset of $183,763, $291,437, and $306,934, respectively, of production expenses incurred by the Affiliated Programs. -16- Net Production Data P-6 Partnership --------------- Year Ended December 31, ---------------------------------------- 1999 1998 1997 ---------- ---------- ---------- Production: Oil (Bbls) 17,227 19,139 18,461 Gas (Mcf) 909,561 948,078 984,971 Oil and gas sales(1): Oil $ 280,628 $ 280,141 $ 354,536 Gas 1,765,886 1,737,876 2,231,611 --------- --------- --------- Total $2,046,514 $2,018,017 $2,586,147 ========= ========= ========= Average sales price: Per barrel of oil $16.29 $14.64 $19.20 Per Mcf of gas 1.94 1.83 2.27 - ---------- (1) These amounts differ from the Net Profits included in the P-6 Partnership's financial statements because they do not reflect the offset of $705,730, $777,917, and $792,462, respectively, of production expenses incurred by the Affiliated Programs. -17- 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, 1999 which were attributable to the Partnerships' Net Profits Interests. 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, L.P. ("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. 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, 1999. Such prices were not escalated except in certain circumstances where escalations were fixed and readily determinable in accordance with applicable contract provisions. The relatively high oil prices at December 31, 1999 have caused the estimates of remaining economically recoverable oil reserves as well as the value placed on said reserves to be higher than in the past several years, particularly considering the impact of depletion from production over the years. Any decrease in these high oil prices would result in a corresponding reduction in the estimate of remaining oil reserves. 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, 1999. There can be no assurance that the prices used in calculating the net present value of the Partnerships' proved reserves at December 31, 1999 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 -18- 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. Proved Reserves and Net Present Values From Proved Reserves As of December 31, 1999(1) P-1 Partnership: - --------------- Estimated proved reserves: Gas (Mcf) 1,856,427 Oil and liquids (Bbls) 199,519 Net present value (discounted at 10% per annum) $3,735,374 P-2 Partnership: - --------------- Estimated proved reserves: Gas (Mcf) 1,668,174 Oil and liquids (Bbls) 146,807 Net present value (discounted at 10% per annum) $2,980,207 P-3 Partnership: - --------------- Estimated proved reserves: Gas (Mcf) 3,134,280 Oil and liquids (Bbls) 271,998 Net present value (discounted at 10% per annum) $5,554,525 P-4 Partnership: - --------------- Estimated proved reserves: Gas (Mcf) 2,108,230 Oil and liquids (Bbls) 60,023 Net present value (discounted at 10% per annum) $3,086,172 P-5 Partnership: - --------------- Estimated proved reserves: Gas (Mcf) 2,335,679 Oil and liquids (Bbls) 39,773 Net present value (discounted at 10% per annum) $2,787,088 -19- P-6 Partnership: - --------------- Estimated proved reserves: Gas (Mcf) 3,879,762 Oil and liquids (Bbls) 102,745 Net present value (discounted at 10% per annum) $4,976,533 - --------- (1) Includes certain gas balancing adjustments which cause the gas volumes and net present values to differ from the reserve reports which were 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 Partnership's proved reserves is contained in Note 4 to the Partnerships' financial statements, included in Item 8 of this Annual Report. Significant Properties The following table sets forth certain well and reserve information for the basins in which the Partnerships own a significant amount of Net Profits Interests. The table contains the following information for each significant basin: (i) the number of wells in which a Net Profits Interest is owned, (ii) the number and percentage of wells operated by the Partnership's affiliates, (iii) estimated proved oil reserves, (iv) estimated proved gas reserves, and (v) 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 Gulf Coast Basin is located in southern Louisiana and southeast Texas. The Southern Oklahoma Folded Belt Basin is located in southern Oklahoma, while the Permian Basin is located in west Texas and southeast New Mexico. -20- Significant Properties as of December 31, 1999 ---------------------------------------------- Wells Operated by Affiliates Oil Gas Total ----------- Reserves Reserves Present Basin Wells Number % (Bbl) (Mcf) Value - ----------- ----- ------ --- -------- -------- ------- P-1 P/ship: Permian 829 3 - 183,099 860,563 $2,594,217 Anadarko 60 17 23% 3,566 923,863 980,536 P-2 P/ship: Permian 829 3 - 125,161 593,981 $1,780,377 Anadarko 60 17 23% 3,386 736,890 782,006 P-3 P/ship: Permian 829 3 - 230,741 1,095,777 $3,282,724 Anadarko 60 17 23% 6,352 1,370,397 1,454,175 South. Ok. Folded Belt 24 21 81% 16,225 496,680 528,791 P-4 P/ship: Gulf Coast 42 11 14% 46,251 999,430 $1,841,827 Anadarko 52 9 15% 5,136 739,281 803,639 P-5 P/ship: Anadarko 31 29 33% 6,693 1,571,507 $1,802,409 South. Ok. Folded Belt 13 - - 22,065 413,884 587,797 Permian 29 27 42% 10,694 318,012 314,662 P-6 P/ship: Anadarko 31 29 33% 4,014 1,366,765 $1,538,246 South. Ok. Folded Belt 26 13 15% 74,326 331,167 1,207,307 East Texas 3 2 67% 3,119 926,481 959,476 Gulf Coast 12 1 8% 3,819 527,067 626,546 Title to Oil and Gas Properties Management believes that the Partnerships have satisfactory title to their Net Profits Interests. Record title to all of the properties subject to the Partnerships' Net Profits Interests is held by either the Partnerships or Geodyne Nominee Corporation, an affiliate of the General Partner. Title to the Partnerships' Net Profits Interests 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, -21- and to other encumbrances. Management believes that such burdens do not materially detract from the value of such properties or from the Partnerships' Net Profits Interests therein or materially interfere with their use in the operation of the Partnerships' business. ITEM 3. LEGAL PROCEEDINGS 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 1999. PART II. ITEM 5. MARKET FOR UNITS AND RELATED LIMITED PARTNER MATTERS As of February 1, 2000, the number of Units outstanding and the approximate number of Limited Partners of record in the Partnerships were as follows: Number of Limited Partnership Units Partners ----------- --------- -------- P-1 108,074 818 P-2 90,094 605 P-3 169,637 1,383 P-4 126,306 933 P-5 118,449 1,020 P-6 143,041 769 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 -22- 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 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 a Partnership. Repurchase Offer Prices ----------------------- 1998 1999 2000 ------------------------- ------------------------ ---- 1st 2nd 3rd 4th 1st 2nd 3rd 4th 1st P/ship Qtr. Qtr. Qtr. Qtr. Qtr. Qtr. Qtr. Qtr. Qtr. - ------ ---- ---- ---- ---- ---- ---- ---- ---- ---- P-1 $16 $25 $19 $18 $17 $16 $20 $19 $17 P-2 16 24 20 19 18 17 20 19 17 P-3 16 24 20 19 18 17 20 19 17 P-4 9 17 16 15 14 14 14 13 12 P-5 11 16 14 12 11 10 13 11 10 P-6 14 24 22 20 18 17 20 18 15 In addition to this repurchase offer, some of the Partnerships have been subject to "4.9% tender offers" from several third parties since 1997. The General Partner does not know the terms of these offers or the prices received by the Limited Partners who accepted these offers. -23- Cash Distributions Cash distributions are primarily dependent upon a Partnership's cash receipts from its Net Profits Interests 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 1998 and 1998 and the first quarter of 2000: Cash Distributions ------------------ 1998 ------------------------------------------------- 1st 2nd 3rd 4th P/ship Quarter(1) Quarter(1) Quarter(1) Quarter(1) ------ --------- --------- --------- --------- P-1 $4.52 $2.50 $5.44 $1.13 P-2 3.95 2.30 4.51 1.02 P-3 3.90 2.28 4.41 1.01 P-4 1.75 2.12 1.20 1.12 P-5 1.74 2.83 2.94 1.53 P-6 2.49 2.94 2.13 1.73 1999 2000 ---------------------------------------------- ------- 1st 2nd 3rd 4th 1st P/ship Quarter Quarter Quarter Quarter Quarter ------ ------- ------- ------- ------- ------- P-1 $0.92 $0.97 $1.05 $1.38 $1.67 P-2 0.87 0.91 1.07 1.39 1.51 P-3 0.85 0.90 1.06 1.36 1.51 P-4 0.69 0.74 0.87 1.24 1.09 P-5 1.23 0.97 1.06 1.40 1.53 P-6 2.08 1.35 1.52 2.15 2.34 - ----------------------- (1) Amount of cash distribution includes proceeds from the sale of certain Net Profits Interests. -24- 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." -25-
Selected Financial Data P-1 Partnership --------------- 1999 1998 1997 1996 1995 ---------- ---------- ---------- ---------- ---------- Net Profits $ 802,539 $ 694,919 $1,064,105 $1,191,311 $ 935,026 Net Income: Limited Partners 443,201 760,585 106,676 773,173 6,098 General Partner 65,862 60,539 54,016 53,849 33,359 Total 509,063 821,124 160,692 827,022 39,457 Limited Partners' Net Income per Unit 4.10 7.04 .99 7.15 .06 Limited Partners' Cash Distributions per Unit 4.32 13.59 11.43 9.41 6.99 Total Assets 1,354,470 1,372,787 2,076,686 3,230,759 3,488,930 Partners' Capital (Deficit) Limited Partners 1,431,887 1,455,686 2,164,101 3,293,425 3,537,252 General Partner ( 77,417) ( 82,899) ( 87,415) ( 62,666) ( 48,322) Number of Units Outstanding 108,074 108,074 108,074 108,074 108,074
-26-
Selected Financial Data P-2 Partnership --------------- 1999 1998 1997 1996 1995 ---------- ---------- ---------- ---------- ---------- Net Profits $ 618,890 $ 538,185 $ 836,494 $ 911,429 $ 715,608 Net Income (Loss): Limited Partners 333,537 545,193 45,213 551,248 ( 182,851) General Partner 31,057 36,137 41,244 40,232 23,562 Total 364,594 581,330 86,457 591,480 ( 159,289) Limited Partners' Net Income (Loss) per Unit 3.70 6.05 .50 6.12 ( 2.03) Limited Partners' Cash Distributions per Unit 4.24 11.78 10.86 8.42 6.04 Total Assets 1,139,335 1,172,679 1,686,752 2,635,549 2,854,539 Partners' Capital (Deficit) Limited Partners 1,195,920 1,243,383 1,759,190 2,692,977 2,900,729 General Partner ( 56,585) ( 70,704) ( 72,438) ( 57,428) ( 46,190) Number of Units Outstanding 90,094 90,094 90,094 90,094 90,094
-27-
Selected Financial Data P-3 Partnership --------------- 1999 1998 1997 1996 1995 ---------- ---------- ---------- ---------- ---------- Net Profits $1,155,814 $ 997,464 $1,559,975 $1,706,259 $1,327,052 Net Income (Loss): Limited Partners 635,523 1,009,546 30,632 1,024,694 ( 413,819) General Partner 45,011 66,787 76,414 75,192 42,468 Total 680,534 1,076,333 107,046 1,099,886 ( 371,351) Limited Partners' Net Income (Loss) per Unit 3.75 5.95 .18 6.04 ( 2.44) Limited Partners' Cash Distributions per Unit 4.17 11.60 10.81 8.21 6.21 Total Assets 2,131,160 2,183,351 3,136,542 4,968,083 5,355,843 Partners' Capital (Deficit) Limited Partners 2,244,869 2,316,346 3,273,800 5,075,168 5,442,474 General Partner ( 113,709) ( 132,995) ( 137,258) (107,085) ( 86,631) Number of Units Outstanding 169,637 169,637 169,637 169,637 169,637
-28-
Selected Financial Data P-4 Partnership --------------- 1999 1998 1997 1996 1995 ---------- ---------- ---------- ---------- ---------- Net Profits $ 746,854 $ 734,526 $1,290,780 $1,373,635 $1,251,153 Net Income (Loss): Limited Partners 367,583 357,206 52,241 584,825 ( 496,777) General Partner 36,289 27,697 49,097 52,931 40,039 Total 403,872 384,903 101,338 637,756 ( 456,738) Limited Partners' Net Income (Loss) per Unit 2.91 2.83 .41 4.63 3.93) Limited Partners' Cash Distributions per Unit 3.54 6.19 11.84 9.62 8.36 Total Assets 1,337,559 1,403,444 1,827,292 3,283,477 3,940,479 Partners' Capital (Deficit) Limited Partners 1,417,880 1,497,297 1,922,091 3,364,850 3,995,025 General Partner ( 80,321) ( 93,853) ( 94,799) ( 81,373) ( 54,546) Number of Units Outstanding 126,306 126,306 126,306 126,306 126,306
-29-
Selected Financial Data P-5 Partnership --------------- 1999 1998 1997 1996 1995 ---------- ---------- ---------- ---------- ---------- Net Profits $ 856,442 $ 827,076 $1,000,125 $1,112,631 $ 938,957 Net Income (Loss): Limited Partners 519,222 710,547 ( 355,086) 593,334 ( 201,341) General Partner 34,149 48,790 34,199 46,364 30,697 Total 553,371 759,337 ( 320,887) 639,698 ( 170,644) Limited Partners' Net Income (Loss) per Unit 4.38 6.00 ( 3.00) 5.01 ( 1.70) Limited Partners' Cash Distributions per Unit 4.66 9.04 8.45 6.87 5.79 Total Assets 1,235,321 1,257,489 1,621,507 2,993,188 3,225,517 Partners' Capital (Deficit) Limited Partners 1,303,959 1,336,737 1,696,190 3,053,276 3,273,942 General Partner ( 68,638) ( 79,248) ( 74,683) (60,088) ( 48,425) Number of Units Outstanding 118,449 118,449 118,449 118,449 118,449
-30-
Selected Financial Data P-6 Partnership --------------- 1999 1998 1997 1996 1995 ---------- ---------- ---------- ---------- ---------- Net Profits $1,340,784 $1,240,100 $1,793,685 $2,002,957 $1,284,185 Net Income (Loss): Limited Partners 796,190 739,792 97,934 996,385 ( 907,347) General Partner 55,301 56,121 67,889 84,925 36,393 Total 851,491 795,913 165,823 1,081,310 ( 870,954) Limited Partners' Net Income (Loss) per Unit 5.57 5.17 .68 6.97 ( 6.34) Limited Partners' Cash Distributions per Unit 7.10 9.29 11.62 10.07 5.73 Total Assets 2,314,214 2,511,782 3,112,118 4,714,677 5,170,032 Partners' Capital (Deficit) Limited Partners 2,400,614 2,618,424 3,208,632 4,773,698 5,217,313 General Partner ( 86,400) ( 106,642) ( 96,514) ( 59,021) ( 47,281) Number of Units Outstanding 143,041 143,041 143,041 143,041 143,041
-31- 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 not possible. Concerning past trends, average yearly wellhead gas prices in the United States have been volatile for many years. Over the past ten years such average prices have generally been in the $1.40 to $2.40 per Mcf range. Gas prices are currently in the upper end of this range. 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 -32- by pipelines. Spot prices for the Partnerships' gas increased from approximately $2.03 per Mcf at December 31, 1998 to approximately $2.24 per Mcf at December 31, 1999. 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, but have been extremely volatile over the past two years. Due to global consumption and supply trends as well as a slowdown in Asian energy demand, oil prices in late 1997 and early 1998 reached historically low levels, dropping to as low as approximately $9.25 per barrel. However, production curtailment agreements among major oil producing nations have caused recent oil prices to climb to over $24.00 per barrel in some markets. It is not known whether this trend will continue. Prices for the Partnerships' oil increased from approximately $9.50 per barrel at December 31, 1998 to approximately $22.75 per barrel at December 31, 1999. Future prices for both oil and gas will likely be different from the prices in effect on December 31, 1999. 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 Net Profits Interests, and the existing Net Profits Interests are not experiencing significant additional production through drilling or other capital projects. Therefore, volumes of oil and gas produced from the properties underlying the Partnerships' Net Profits Interests 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. 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 -33- 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 Net Profits Interests owned by the Partnerships, these factors are generally not material as compared to the normal decline in production experienced on all remaining wells in which a Net Profits Interest is owned. 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 Proceeds and Units of Production." Following is a discussion of each Partnerships results of operations for the year ended December 31, 1999 as compared to the year ended December 31, 1998 and for the year ended December 31, 1998 as compared to the year ended December 31, 1997. P-1 Partnership --------------- Year Ended December 31, 1999 Compared to Year Ended December 31, 1998 -------------------------------------- Total Net Profits increased $107,620 (15.5%) in 1999 as compared to 1998. Of this increase, approximately $81,000 and $14,000, respectively, were related to increases in the average prices of oil and gas sold and approximately $66,000 was related to an increase in volumes of gas sold. These increases were partially offset by decreases of (i) approximately $26,000 related to a decrease in volumes of oil sold and (ii) approximately $28,000 related to an increase in production expenses incurred by the owners of the Working Interests. Volumes of oil sold decreased 1,939 barrels while volumes of gas sold increased 36,013 Mcf in 1999 as compared to 1998. The increase in volumes of gas sold was primarily due to (i) a positive prior period volume adjustment made by the operator during 1999 due to the payout of one significant well and (ii) the successful recompletion of a well during the fourth quarter of 1998. The increase in production expenses was primarily due to (i) workover expenses incurred on two significant wells during 1999 in order to improve the recovery of reserves and (ii) a positive prior period lease operating expense adjustment on one significant well made during 1999. Average oil and gas prices increased to $16.69 per barrel and $1.86 per Mcf, respectively, in 1999 from $13.40 per barrel and $1.82 per Mcf, respectively, in 1998. -34- The P-1 Partnership sold certain Net Profits Interests during 1999 and recognized a gain of $698 on such sales. Sales of Net Profits Interests during 1998 resulted in the P-1 Partnership recognizing similar gains totaling $476,752. Depletion of Net Profits Interests decreased $63,745 (27.1%) in 1999 as compared to 1998. This decrease was primarily due to several wells being fully depleted in 1998 due to the lack of economically recoverable reserves. As a percentage of Net Profits, this expense decreased to 21.3% in 1999 from 33.8% in 1998. This percentage decrease was primarily due to (i) the dollar decrease in Depletion of Net Profits Interests and (ii) the increases in the average prices of oil and gas sold. General and administrative expenses remained relatively constant in 1999 as compared to 1998. As a percentage of Net Profits, these expenses decreased to 15.9% in 1999 from 18.3% in 1998. This percentage decrease was primarily due to the increase in Net Profits. Cumulative cash distributions to the Limited Partners through December 31, 1999 were $11,949,558 or 110.57% of the Limited Partners' capital contributions. Year Ended December 31, 1998 Compared to Year Ended December 31, 1997 -------------------------------------- Total Net Profits decreased $369,186 (34.7%) in 1998 as compared to 1997. Of this decrease, approximately $100,000 and $82,000, respectively, were related to decreases in volumes of oil and gas sold and approximately $141,000 and $145,000, respectively, were related to decreases in the average prices of oil and gas sold. The decrease in Net Profits related to decreased oil and gas sales was partially offset by an approximate $99,000 decrease in production expenses incurred by the owners of the Working Interests. Volumes of oil and gas sold decreased 5,368 barrels and 36,090 Mcf, respectively, in 1998 as compared to 1997. The decreases in volumes of oil and gas sold resulted primarily from the sale of several wells during 1997 and 1998. The decrease in production expenses resulted primarily from (i) a decrease in lease operating expenses associated with the decreases in volumes of oil and gas sold and (ii) a decrease in production taxes associated with the decrease in oil and gas sales. Average oil and gas prices decreased to $13.40 per barrel and $1.82 per Mcf, respectively, in 1998 from $18.69 per barrel and $2.27 per Mcf, respectively, in 1997. -35- As discussed in "Liquidity and Capital Resources" below, the P-1 Partnership sold certain Net Profits Interests during 1998 and recognized a gain of $476,752 on such sales. Sales of Net Profits Interests during 1997 resulted in the P-1 Partnership recognizing similar gains totaling $380,408. Depletion of Net Profits Interests decreased $28,620 (10.9%) in 1998 as compared to 1997. This decrease resulted primarily from the decreases in volumes of oil and gas sold. As a percentage of Net Profits, this expense increased to 33.8% in 1998 from 24.8% in 1997. This percentage increase was primarily due to the decrease in Net Profits. The P-1 Partnership recognized a non-cash charge against earnings of $902,042 in the first quarter of 1997. Of this amount, $113,945 was related to the decline in oil and gas prices used to determine future cash flows from the P-1 Partnership's Net Profits Interests in proved oil and gas reserves at March 31, 1997 and $788,097 was related to the writing-off of Net Profits Interests in unproved properties. The unproved properties were written off based on the General Partner's determination that it was unlikely that the unproved properties would be developed due to low oil and gas prices and Partnership Agreement provisions which limit the P-1 Partnership's level of permissible indirect drilling activity through its Affiliated Programs. No similar charges were necessary during 1998. General and administrative expenses decreased $1,998 (1.5%) in 1998 as compared to 1997. As a percentage of Net Profits, these expenses increased to 18.3% in 1998 from 12.1% in 1997. This percentage increase was primarily due to the decrease in Net Profits. The P-1 Partnership achieved payout during the third quarter of 1998. After payout, operations and revenues for the P-1 Partnership have been and will be allocated using the after payout percentages included in the P-1 Partnership's Partnership Agreement. Unless and until the Limited Partners receive cash distributions resulting in the recognition of a 12% annualized return on Limited Partners' subscriptions, after payout percentages will allocate operating income and expenses 10% to the General Partner and 90% to the Limited Partners. Before payout, operating income and expenses were allocated 5% to the General Partner and 95% to the Limited Partners. -36- P-2 Partnership --------------- Year Ended December 31, 1999 Compared to Year Ended December 31, 1998 -------------------------------------- Total Net Profits increased $80,705 (15.0%) in 1999 as compared to 1998. Of this increase, approximately $58,000 and $21,000, respectively, were related to increases in the average prices of oil and gas sold and approximately $43,000 was related to an increase in volumes of gas sold. These increases were partially offset by decreases of (i) approximately $14,000 related to a decrease in volumes of oil sold and (ii) approximately $27,000 related to an increase in production expenses incurred by the owners of the Working Interests. Volumes of oil sold decreased 1,069 barrels while volumes of gas sold increased 23,211 Mcf in 1999 as compared to 1998. The increase in production expenses was primarily due to (i) workover expenses incurred on two significant wells during 1999 in order to improve the recovery of reserves and (ii) a positive prior period lease operating expense adjustment made on one significant well during 1999. Average oil and gas prices increased to $16.67 per barrel and $1.92 per Mcf, respectively, in 1999 from $13.38 per barrel and $1.85 per Mcf, respectively, in 1998. The P-2 Partnership sold certain Net Profits Interests during 1999 and recognized a gain of $472 on such sales. Sales of Net Profits Interests during 1998 resulted in the P-2 Partnership recognizing similar gains totaling $328,122. Depletion of Net Profits Interests decreased $35,288 (18.8%) in 1999 as compared to 1998. This decrease was primarily due to several wells being fully depleted in 1998 due to the lack of economically recoverable reserves. As a percentage of Net Profits, this expense decreased to 24.6% in 1999 from 34.8% in 1998. This percentage decrease was primarily due to (i) the dollar decrease in Depletion of Net Profits Interests and (ii) the increase in Net Profits. General and administrative expenses remained relatively constant in 1999 as compared to 1998. As a percentage of Net Profits, these expenses decreased to 17.2% in 1999 from 19.7% in 1998. This percentage decrease was primarily due to the increase in Net Profits. The P-2 Partnership achieved payout during the fourth quarter of 1999. After payout, operations and revenues for the P-2 Partnership have been and will be allocated using the after payout percentages included in the P-2 Partnership's Partnership Agreement. Unless and until the Limited Partners receive cash distributions resulting in the recognition of a 12% annualized return on Limited Partners' subscriptions, after payout -37- percentages will allocate operating income and expenses 10% to the General Partner and 90% to the Limited Partners. Before payout, operating income and expenses were allocated 5% to the General Partner and 95% to the Limited Partners. Cumulative cash distributions to the Limited Partners through December 31, 1999 were $9,104,561 or 101.06% of the Limited Partners' capital contributions. Year Ended December 31, 1998 Compared to Year Ended December 31, 1997 -------------------------------------- Total Net Profits decreased $298,309 (35.7%) in 1998 as compared to 1997. Of this decrease, approximately $79,000 and $81,000, respectively, were related to decreases in volumes of oil and gas sold and approximately $99,000 and $125,000, respectively, were related to decreases in the average prices of oil and gas sold. The decrease in Net Profits related to decreased oil and gas sales was partially offset by an approximate $86,000 decrease in production expenses incurred by the owners of the Working Interests. Volumes of oil and gas sold decreased 4,221 barrels and 34,900 Mcf, respectively, in 1998 as compared to 1997. The decreases in volumes of oil and gas sold resulted primarily from the sale of several wells during 1997 and 1998. The decrease in production expenses resulted primarily from (i) a decrease in lease operating expenses associated with the decreases in volumes of oil and gas sold and (ii) a decrease in production taxes associated with the decrease in oil and gas sales. Average oil and gas prices decreased to $13.38 per barrel and $1.85 per Mcf, respectively, in 1998 from $18.71 per barrel and $2.32 per Mcf, respectively, in 1997. As discussed in "Liquidity and Capital Resources" below, the P-2 Partnership sold certain Net Profits Interests during 1998 and recognized a gain of $328,122 on such sales. Sales of Net Profits Interests during 1997 resulted in the P-2 Partnership recognizing similar gains totaling $284,247. Depletion of Net Profits Interests decreased $19,889 (9.6%) in 1998 as compared to 1997. As a percentage of Net Profits, this expense increased to 34.8% in 1998 from 24.8% in 1997. This percentage increase was primarily due to the decrease in Net Profits. The P-2 Partnership recognized a non-cash charge against earnings of $727,893 in 1997. Of this amount, $113,005 was related to the decline in oil and gas prices used to determine future cash flows from the P-2 Partnership's Net Profits Interests in proved oil and gas reserves at March 31, 1997 and $614,888 was related to the writing-off of Net Profits Interests in unproved properties. These unproved properties were written off based on the General Partner's determination that it was -38- unlikely that the unproved properties would be developed due to low oil and gas prices and Partnership Agreement provisions which limit the P-2 Partnership's level of permissible indirect drilling activity through its Affiliated Programs. No similar charges were necessary during 1998. General and administrative expenses decreased $1,480 (1.4%) in 1998 as compared to 1997. As a percentage of Net Profits, these expenses increased to 19.7% in 1998 from 12.9% in 1997. This percentage increase was primarily due to the decrease in Net Profits. P-3 Partnership --------------- Year Ended December 31, 1999 Compared to Year Ended December 31, 1998 -------------------------------------- Total Net Profits increased $158,350 (15.9%) in 1999 as compared to 1998. Of this increase, approximately $107,000 and $38,000, respectively, were related to increases in the average prices of oil and gas sold and approximately $86,000 was related to an increase in volumes of gas sold. These increases were partially offset by decreases of (i) approximately $27,000 related to a decrease in volumes of oil sold and (ii) approximately $46,000 related to an increase in production expenses incurred by the owners of the Working Interests. Volumes of oil sold decreased 1,981 barrels while volumes of gas sold increased 46,663 Mcf in 1999 as compared to 1998. The increase in production expenses was primarily due to (i) workover expenses incurred on two significant wells during 1999 in order to improve the recovery of reserves and (ii) a positive prior period lease operating expense adjustment made on one significant well during 1999. Average oil and gas prices increased to $16.66 per barrel and $1.92 per Mcf, respectively, in 1999 from $13.39 per barrel and $1.85 per Mcf, respectively, in 1998. The P-3 Partnership sold certain Net Profits Interests during 1999 and recognized a gain of $968 on such sales. Sales of Net Profits Interests during 1998 resulted in the P-3 Partnership recognizing similar gains totaling $606,887. Depletion of Net Profits Interests decreased $60,859 (17.7%) in 1999 as compared to 1998. This decrease was primarily due to several wells being fully depleted in 1998 due to the lack of economically recoverable reserves. As a percentage of Net Profits, this expense decreased to 24.6% in 1999 from 34.6% in 1998. This percentage decrease was primarily due to (i) the dollar decrease in Depletion of Net Profits Interests and (ii) the increase in Net Profits. -39- General and administrative expenses remained relatively constant in 1999 as compared to 1998. As a percentage of Net Profits, these expenses decreased to 17.3% in 1999 from 20.0% in 1998. This percentage decrease was primarily due to the increase in Net Profits. Cumulative cash distributions to the Limited Partners through December 31, 1999 were $16,466,401 or 97.07% of the Limited Partners' capital contributions. Year Ended December 31, 1998 Compared to Year Ended December 31, 1997 -------------------------------------- Total Net Profits decreased $562,511 (36.1%) in 1998 as compared to 1997. Of this decrease, approximately $145,000 and $159,000, respectively, were related to decreases in volumes of oil and gas sold and approximately $184,000 and $234,000, respectively, were related to decreases in the average prices of oil and gas sold. The decrease in Net Profits related to decreased oil and gas sales was partially offset by an approximate $159,000 decrease in production expenses incurred by the owners of the Working Interests. Volumes of oil and gas sold decreased 7,726 barrels and 68,403 Mcf, respectively, in 1998 as compared to 1997. The decreases in volumes of oil and gas sold resulted primarily from the sale of several wells during 1997 and 1998. The decrease in production expenses resulted primarily from (i) a decrease in lease operating expenses associated with the decreases in volumes of oil and gas sold and (ii) a decrease in production taxes associated with the decrease in oil and gas sales. Average oil and gas prices decreased to $13.39 per barrel and $1.85 per Mcf, respectively, in 1998 from $18.72 per barrel and $2.32 per Mcf, respectively, in 1997. As discussed in "Liquidity and Capital Resources" below, the P-3 Partnership sold certain Net Profits Interests during 1998 and recognized a gain of $606,887 on such sales. Sales of Net Profits Interests during 1997 resulted in the P-3 Partnership recognizing similar gains totaling $532,904. Depletion of Net Profits Interests decreased $41,240 (10.7%) in 1998 as compared to 1997. This decrease resulted primarily from the decrease in volumes of oil and gas sold. As a percentage of Net Profits, this expense increased to 34.6% in 1998 from 24.7% in 1997. This percentage increase was primarily due to the decrease in Net Profits. The P-3 Partnership recognized a non-cash charge against earnings of $1,413,917 in the first quarter of 1997. Of this amount, $220,449 was related to the decline in oil and gas prices used to determine future cash flows from the P-3 Partnership's Net Profits Interests in proved oil and gas reserves at March 31, -40- 1997 and $1,193,468 was related to the writing-off of Net Profits Interests in unproved properties. The unproved properties were written off based on the General Partner's determination that it was unlikely that the unproved properties would be developed due to low oil and gas prices and Partnership Agreement provisions which limit the P-3 Partnership's level of permissible indirect drilling activity through its Affiliated Programs. No similar charges were necessary during 1998. General and administrative expenses decreased $2,629 (1.3%) in 1998 as compared to 1997. As a percentage of Net Profits, these expenses increased to 20.0% in 1998 from 13.0% in 1997. This percentage increase was primarily due to the decrease in Net Profits. P-4 Partnership --------------- Year Ended December 31, 1999 Compared to Year Ended December 31, 1998 -------------------------------------- Total Net Profits increased $12,328 (1.7%) in 1999 as compared to 1998. Of this increase, approximately $76,000 and $18,000, respectively, were related to increases in the average prices of oil and gas sold and approximately $9,000 was related to an increase in volumes of oil sold. These increases were partially offset by decreases of (i) approximately $69,000 related to a decrease in volumes of gas sold and (ii) approximately $22,000 related to an increase in production expenses incurred by the owners of the Working Interests. Volumes of oil sold increased 722 barrels while volumes of gas sold decreased 32,093 Mcf in 1999 as compared to 1998. The increase in production expenses was primarily due to (i) workover expenses incurred on one significant well during 1999 in order to improve the recovery of reserves and (ii) repair and maintenance expenses incurred on another significant well during 1999. Average oil and gas prices increased to $16.89 per barrel and $2.20 per Mcf, respectively, in 1999 from $12.55 per barrel and $2.15 per Mcf, respectively, in 1998. Depletion of Net Profits Interests decreased $21,578 (9.7%) in 1999 as compared to 1998. As a percentage of Net Profits, this expense decreased to 26.8% in 1999 from 30.2% in 1998. This percentage decrease was primarily due to the increase in Net Profits. General and administrative expenses remained relatively constant in 1999 as compared to 1998. As a percentage of Net Profits, these expenses decreased to 19.9% in 1999 from 20.2% in 1998. The P-4 Partnership achieved payout during the fourth quarter of 1999. After payout, operations and revenues for the -41- P-4 Partnership have been and will be allocated using the after payout percentages included in the P-4 Partnership's Partnership Agreement. Unless and until the Limited Partners receive cash distributions resulting in the recognition of a 12% annualized return on Limited Partners' subscriptions, after payout percentages will allocate operating income and expenses 10% to the General Partner and 90% to the Limited Partners. Before payout, operating income and expenses were allocated 5% to the General Partner and 95% to the Limited Partners. Cumulative cash distributions to the Limited Partners through December 31, 1999 were $12,634,945 or 100.03% of the Limited Partners' capital contributions. Year Ended December 31, 1998 Compared to Year Ended December 31, 1997 -------------------------------------- Total Net Profits decreased $556,254 (43.1%) in 1998 as compared to 1997. Of this decrease, approximately $120,000 and $118,000, respectively, were related to decreases in the average prices of oil and gas sold and approximately $57,000 and $352,000, respectively, were related to decreases in volumes of oil and gas sold. The decrease in Net Profits related to decreased oil and gas sales was partially offset by an approximate $91,000 decrease in production expenses incurred by the owners of the Working Interests. Volumes of oil and gas sold decreased 2,903 barrels and 142,840 Mcf, respectively, in 1998 as compared to 1997. The decrease in volumes of oil sold resulted primarily from normal declines in production. The decrease in volumes of gas sold resulted primarily from (i) normal declines in production and (ii) the sale of several wells in 1997 and 1998. The decrease in production expenses resulted primarily from (i) a decrease in lease operating expenses associated with the decreases in volumes of oil and gas sold and (ii) a decrease in production taxes associated with the decrease in oil and gas sales. Average oil and gas prices decreased to $12.55 per barrel and $2.15 per Mcf, respectively, in 1998 from $19.68 per barrel and $2.47 per Mcf, respectively, in 1997. As discussed in "Liquidity and Capital Resources" below, the P-4 Partnership sold certain Net Profits Interests during 1998 and recognized a gain of $12,332 on such sales. Sales of Net Profits Interests during 1997 resulted in the P-4 Partnership recognizing similar gains totaling $63,002. Depletion of Net Profits Interests decreased $143,151 (39.3%) in 1998 as compared to 1997. This decrease resulted primarily from (i) the decreases in volumes of oil and gas sold and (ii) upward revisions in the estimates of remaining oil and gas reserves at December 31, 1998. As a percentage of Net Profits, this expense increased to 30.2% in 1998 from 28.3% in 1997. This percentage increase was primarily due to the decrease in Net Profits. -42- The P-4 Partnership recognized a non-cash charge against earnings of $752,388 in the first quarter of 1997. Of this amount, $84,059 was related to the decline in oil and gas prices used to determine future cash flows from the P-4 Partnership's Net Profits Interests in proved oil and gas reserves at March 31, 1997 and $668,329 was related to the writing-off of Net Profits Interests in unproved properties. These unproved properties were written off based on the General Partner's determination that it was unlikely that the unproved properties would be developed due to low oil and gas prices and Partnership Agreement provisions which limit the P-4 Partnership's level of permissible indirect drilling activity through its Affiliated Programs. No similar charges were necessary during 1998. General and administrative expenses remained relatively constant in 1998 as compared to 1997. As a percentage of Net Profits, these expenses increased to 20.2% in 1998 from 11.5% in 1997. This percentage increase was primarily due to the decrease in Net Profits. P-5 Partnership --------------- Year Ended December 31, 1999 Compared to Year Ended December 31, 1998 -------------------------------------- Total Net Profits increased $29,366 (3.6%) in 1999 as compared to 1998. Of this increase, (i) approximately $108,000 was related to a decrease in production expenses incurred by the owners of the Working Interests, (ii) approximately $22,000 and $55,000, respectively, were related to increases in the average prices of oil and gas sold, and (iii) approximately $8,000 was related to an increase in volumes of oil sold. These increases were partially offset by a decrease of approximately $163,000 related to a decrease in volumes of gas sold. Volumes of oil sold increased 543 barrels while volumes of gas sold decreased 87,192 Mcf in 1999 as compared to 1998. The decrease in volumes of gas sold was primarily due to (i) normal declines in production, (ii) positive prior period volume adjustments made by the purchasers on two significant wells during 1998, and (iii) a negative prior period volume adjustment made by the purchaser on one significant well during 1999. The decrease in production expenses was primarily due to a negative prior period lease operating expense adjustment made by the operator on one significant well during 1999. Average oil and gas prices increased to $17.18 per barrel and $1.98 per Mcf, respectively, in 1999 from $14.00 per barrel and $1.87 per Mcf, respectively, in 1998. -43- The P-5 Partnership sold certain Net Profits Interests during 1998 and recognized a gain of $344,575 on such sales. No such gains were recognized on sales of Net Profits Interests during 1999. Depletion of Net Profits Interests decreased $113,337 (40.0%) in 1999 as compared to 1998. This decrease was primarily due to (i) one significant well being fully depleted in 1998 due to the lack of remaining economically recoverable reserves, (ii) the decrease in volumes of gas sold, and (iii) upward revisions in the estimates of remaining oil and gas reserves at December 31, 1999. As a percentage of Net Profits, this expense decreased to 19.8% in 1999 from 34.2% in 1998. This percentage decrease was primarily due to the dollar decrease in Depletion of Net Profits Interests. General and administrative expenses remained relatively constant in 1999 as compared to 1998. As a percentage of Net Profits, these expenses decreased to 16.3% in 1999 from 16.8% in 1998. Cumulative cash distributions to the Limited Partners through December 31, 1999 were $7,977,759 or 67.35% of the Limited Partners' capital contributions. Year Ended December 31, 1998 Compared to Year Ended December 31, 1997 -------------------------------------- Total Net Profits decreased $173,049 (17.3%) in 1998 as compared to 1997. Of this decrease, approximately $37,000 and $197,000, respectively, were related to decreases in the average prices of oil and gas sold and approximately $33,000 was related to a decrease in volumes of oil sold. The decrease in Net Profits was partially offset by an increase of approximately $79,000 related to an increase in volumes of gas sold and a decrease of approximately $15,000 in production expenses incurred by the owners of the Working Interests. Volumes of oil sold decreased 1,657 barrels while volumes of gas sold increased 35,353 Mcf in 1998 as compared to 1997. The decrease in volumes of oil sold resulted primarily from (i) the normal decline in production and (ii) the sale of several wells during 1997 and 1998. Average oil and gas prices decreased to $14.00 per barrel and $1.87 per Mcf, respectively, in 1998 from $19.88 per barrel and $2.22 per Mcf, respectively, in 1997. As discussed in "Liquidity and Capital Resources" below, the P-5 Partnership sold certain Net Profits Interests during 1998 and recognized a gain of $344,575 on such sales. Sales of Net Profits Interests during 1997 resulted in the P-5 Partnership recognizing similar gains totaling $79,182. -44- Depletion of Net Profits Interests increased $34,016 (13.7%) in 1998 as compared to 1997. This increase resulted primarily from a downward revision in the estimate of remaining oil and gas reserves at December 31, 1998 on one significant well. As a percentage of Net Profits, this expense increased to 34.2% in 1998 from 24.9% in 1997. This percentage increase was primarily due to the decrease in Net Profits. The P-5 Partnership recognized a non-cash charge against earnings of $1,018,068 in the first quarter of 1997. Of this amount, $122,458 was related to the decline in oil and gas prices used to determine future cash flows from the P-5 Partnership's Net Profits Interests in proved oil and gas reserves at March 31, 1997 and $895,610 was related to the writing-off of Net Profits Interests in unproved properties. The unproved properties were written off based on the General Partner's determination that it was unlikely that the unproved properties would be developed due to low oil and gas prices and Partnership Agreement provisions which limit the P-5 Partnership's level of permissible indirect drilling activity through its Affiliated Programs. No similar charges were necessary during 1998. General and administrative expenses decreased $2,677 (1.9%) in 1998 as compared to 1997. As a percentage of Net Profits, these expenses increased to 16.8% in 1998 from 14.2% in 1997. This percentage increase was primarily due to the decrease in Net Profits. P-6 Partnership --------------- Year Ended December 31, 1999 Compared to Year Ended December 31, 1998 -------------------------------------- Total Net Profits increased $100,684 (8.1%) in 1999 as compared to 1998. Of this increase, approximately $28,000 and $99,000, respectively, were related to increases in the average prices of oil and gas sold and approximately $72,000 was related to a decrease in production expenses incurred by the owners of the Working Interests. These increases were partially offset by decreases of approximately $28,000 and $70,000, respectively, related to decreases in volumes of oil and gas sold. Volumes of oil and gas sold decreased 1,912 barrels and 38,517 Mcf, respectively, during 1999 as compared to 1998. The decrease in volumes of oil sold was primarily due to positive prior period volume adjustments made by the operator on one significant well during 1998. The decrease in production expenses was primarily due to a decrease in repair and maintenance expenses on several wells during 1999 as compared to 1998. Average oil and gas prices increased to $16.29 per barrel and $1.94 per Mcf, respectively, in 1999 from $14.64 per barrel and $1.83 per Mcf, respectively, in 1998. -45- The P-6 Partnership sold certain Net Profits Interests during 1998 and recognized a $135,752 gain on such sales. No such gains were recognized on sales of Net Profits Interest during 1999. Depletion of Net Profits Interests decreased $94,855 (22.3%) in 1999 as compared to 1998. This decrease was primarily due to (i) the decreases in volumes of oil and gas sold and (ii) upward revisions in the estimates of remaining oil and gas reserves at December 31, 1999. As a percentage of Net Profits, this expense decreased to 24.6% in 1999 from 34.3% in 1998. This percentage decrease was primarily due to (i) the dollar decrease in Depletion of Net Profits Interests and (ii) the increase in Net Profits. General and administrative expenses remained relatively constant in 1999 as compared to 1998. As a percentage of Net Profits, these expenses decreased to 12.6% in 1999 from 13.6% in 1998. Cumulative cash distributions to the Limited Partners through December 31, 1999 were $10,792,248 or 75.45% of the Limited Partners' capital contributions. Year Ended December 31, 1998 Compared to Year Ended December 31, 1997 -------------------------------------- Total Net Profits decreased $553,585 (30.9%) in 1998 as compared to 1997. Of this decrease, approximately $87,000 and $410,000, respectively, were related to decreases in the average prices of oil and gas sold and approximately $84,000 was related to a decrease in the volumes of gas sold. The decrease in Net Profits was partially offset by an approximate $13,000 increase in the volumes of oil sold and an approximate $14,000 decrease in production expenses incurred by the owners of the Working Interests. Volumes of oil sold increased 678 barrels while volumes of gas sold decreased 36,893 Mcf during 1998 as compared to 1997. Average oil and gas prices decreased to $14.64 per barrel and $1.83 per Mcf, respectively, in 1998 from $19.20 per barrel and $2.27 per Mcf, respectively, in 1997. As discussed in "Liquidity and Capital Resources" below, the P-6 Partnership sold certain Net Profits Interests during 1998 and recognized a gain of $135,752 on such sales. Sales of Net Profits Interests during 1997 resulted in the P-6 Partnership recognizing similar gains totaling $37,698. Depletion of Net Profits Interests decreased $185,621 (30.4%) in 1998 as compared to 1997. This decrease resulted primarily from several significant wells being fully depleted in 1997 due to the lack of remaining reserves. As a percentage of -46- Net Profits, this expense remained relatively constant at 34.3% in 1998 and 34.0% in 1997. Any percentage increase primarily due to the decrease in Net Profits was substantially offset by the dollar decrease in depletion of Net Profits Interests. The P-6 Partnership recognized a non-cash charge against earnings of $898,584 in the first quarter of 1997. Of this amount, $444,990 was related to the decline in oil and gas prices used to determine future cash flows from the P-6 Partnership's Net Profits Interests in proved oil and gas reserves at March 31, 1997 and $453,594 was related to the writing-off of Net Profits Interests in unproved properties. These unproved properties were written off based on the General Partner's determination that it was unlikely that the unproved properties would be developed due to low oil and gas prices and Partnership Agreement provisions which limit the P-6 Partnership's level of permissible indirect drilling activity through its Affiliated Programs. No similar charges were necessary during 1998. General and administrative expenses decreased $3,320 (1.9%) in 1998 as compared to 1997. As a percentage of Net Profits, these expenses increased to 13.6% in 1998 from 9.6% in 1997. This percentage increase was primarily due to the decrease in Net Profits. Average Proceeds and Units of Production The following tables are comparisons of the annual equivalent units of production (one barrel of oil or six Mcf of gas) and the average proceeds received per equivalent unit of production for the oil and gas sales attributable to the Partnerships' Net Profits for the years ended December 31, 1999, 1998, and 1997. 1999 Compared to 1998 --------------------- Equivalent Units Average Proceeds of Production per Equivalent Unit ----------------------------- -------------------------- P/ship 1999 1998 % Change 1999 1998 % Change ------ ------- ------- -------- ----- ----- -------- P-1 84,310 80,247 5% $ 9.52 $8.66 10% P-2 65,824 63,024 4% 9.40 8.54 10% P-3 123,104 117,308 5% 9.39 8.50 10% P-4 73,985 78,612 ( 6%) 10.09 9.34 8% P-5 84,344 98,333 (14%) 10.15 8.41 21% P-6 168,821 177,152 ( 5%) 7.94 7.00 13% -47- 1998 Compared to 1997 --------------------- Equivalent Units Average Proceeds of Production per Equivalent Unit ----------------------------- -------------------------- P/ship 1998 1997 % Change 1998 1997 % Change ------ ------- ------- -------- ----- ----- -------- P-1 80,247 91,630 (12%) $8.66 $11.61 (25%) P-2 63,024 73,062 (14%) 8.54 11.45 (25%) P-3 117,308 136,434 (14%) 8.50 11.43 (26%) P-4 78,612 105,322 (25%) 9.34 12.26 (24%) P-5 98,333 94,098 5% 8.41 10.63 (21%) P-6 177,152 182,623 ( 3%) 7.00 9.82 (29%) 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 the Net Profits Interests are not reinvested in productive assets. Assuming 1999 production levels for future years, the Partnerships' proved reserve quantities at December 31, 1999 would have the following remaining lives: Partnership Gas-Years Oil-Years ----------- --------- --------- P-1 5.2 8.1 P-2 5.8 8.3 P-3 5.8 8.4 P-4 6.2 3.4 P-5 5.0 5.8 P-6 4.3 6.0 These life of reserves estimates are based on the current estimates of remaining oil and gas reserves. See "Item 2. Properties" for a discussion of these reserve estimates. In particular, the relatively high oil prices at December 31, 1999 have caused an increase in the estimates of remaining oil reserves which therefore have increased the estimated life of said reserves. The Partnerships' available capital from the Limited Partners' subscriptions has been spent on Net Profits Interests and there should be no further material capital resource commitments in the future. The Partnerships have no debt commitments. -48- The Partnerships sold certain Net Profits Interests during 1999, 1998, and 1997. These sales were made by the General Partner after giving due consideration to both the offer price and the General Partner's estimate of the underlying property's remaining proved reserves and future operating costs. Net proceeds from the sales 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 Net Profits Interest during 1999, 1998, and 1997 were as follows: Partnership 1999 1998 1997 ----------- --------- --------- --------- P-1 $ 3,456 $519,832 $507,599 P-2 3,994 360,686 402,870 P-3 7,398 666,253 759,639 P-4 6,453 16,018 266,265 P-5 - 368,485 91,840 P-6 - 147,747 43,605 The General Partner believes that the sale of these Net Profits Interests 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' Net Profits Interests, 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. The Partnerships' quantity of proved reserves has been reduced by the sale of Net Profits Interests; therefore, it is possible that the Partnerships' future cash distributions will decline as a result of a reduction of the Partnerships' reserve base. 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 -49- Partnerships in 1999. 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 The year 2000 issue refers to the inability of computer and other information technology systems to properly process date and time information, stemming from the earlier programming practice of using two digits rather than four to represent the year in a date. To the knowledge of the General Partner, the Partnerships have not experienced any material effects from the year 2000 issue. Costs incurred by the Partnerships in order to ensure year 2000 compatibility were not material to the Partnerships. ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK. The Partnerships do not hold any market risk sensitive instruments. 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. Name Age Position with General Partner ---------------- --- -------------------------------- Dennis R. Neill 47 President and Director Judy K. Fox 48 Secretary -50- The director will hold office until the next annual meeting of shareholders of Geodyne or 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 Samson 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 Samson, 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, Snyder Exploration Company, and Compression, Inc. Judy K. Fox joined Samson in 1990 and was named Secretary of Geodyne and its subsidiaries on June 30, 1996. Prior to joining Samson, 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, Snyder Exploration Company, and Samson Properties Incorporated. Section 16(a) Beneficial Ownership Reporting Compliance On October 27, 1999 the Masco Master Investment Account ("Masco") conveyed 10,600 (11.8%) of the Units of the P-2 partnership to Samson Resources Company. As of the date of this Annual Report, the General Partner has received no Report under Section 16 of the Securities and Exchange Act of 1934 (the "Act") from Masco disclosing the sale of these Units. Samson Resources Company timely reported their purchase of these Units to the SEC. To the best knowledge of the Partnerships and the General Partner, there were no other officers, directors, or ten percent owners who were delinquent filers during 1999 of reports required under Section 16 of the Securities Exchange Act of 1934. -51- 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. 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 amount of general and administrative expense allocated to the General Partner and its affiliates and charged to each Partnership during 1999, 1998, and 1997 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 1999 1998 1997 ----------- -------- -------- -------- P-1 $113,760 $113,760 $113,760 P-2 94,836 94,836 94,836 P-3 178,560 178,560 178,560 P-4 132,960 132,960 132,960 P-5 124,680 124,680 124,680 P-6 150,564 150,564 150,564 None of the officers or directors of the General Partner receive compensation directly from the Partnerships. The Partnerships reimburse the General Partner or its affiliates for that portion of such officers' and directors' salaries and expenses attributable to time devoted by such individuals to the Partnerships' activities based on the allocation method described above. The following tables indicate the approximate amount of general and administrative expense reimbursement attributable to the salaries of the directors, officers, and employees of the General Partner and its affiliates during 1999, 1998, and 1997: -52- Salary Reimbursements P-1 Partnership ---------------
Long Term Compensation --------------------------------- Annual Compensation Awards Payouts ----------------------------- ----------------------- ------- Securi- Other ties All Name Annual Restricted Under- Other and Compen- Stock lying LTIP Compen- Principal Salary Bonus sation Award(s) Options/ Payouts sation Position Year ($) ($) ($) ($) SARs(#) ($) ($) - --------------- ---- ------- ------- ------- ---------- -------- ------- ------- Dennis R. Neill, President(1)(2) 1997 - - - - - - - 1998 - - - - - - - 1999 - - - - - - - All Executive Officers, Directors, and Employees as a group(2) 1997 $67,960 - - - - - - 1998 $67,323 - - - - - - 1999 $69,485 - - - - - -
- ---------- (1) The general and administrative expenses paid by the P-1 Partnership and attributable to salary reimbursements do not include any salary or other compensation attributable to Mr. Tholen or Mr. Neill. (2) No officer or director of Geodyne or its affiliates provides full-time services to the P-1 Partnership and no individual's salary or other compensation reimbursement from the P-1 Partnership equals or exceeds $100,000 per annum. -53-
Salary Reimbursements P-2 Partnership --------------- Long Term Compensation --------------------------------- Annual Compensation Awards Payouts ----------------------------- ----------------------- ------- Securi- Other ties All Name Annual Restricted Under- Other and Compen- Stock lying LTIP Compen- Principal Salary Bonus sation Award(s) Options/ Payouts sation Position Year ($) ($) ($) ($) SARs(#) ($) ($) - --------------- ---- ------- ------- ------- ---------- -------- ------- ------- Dennis R. Neill, President(1)(2) 1997 - - - - - - - 1998 - - - - - - - 1999 - - - - - - - All Executive Officers, Directors, and Employees as a group(2) 1997 $56,655 - - - - - - 1998 $56,124 - - - - - - 1999 $57,926 - - - - - - - ---------- (1) The general and administrative expenses paid by the P-2 Partnership and attributable to salary reimbursements do not include any salary or other compensation attributable to Mr. Tholen or Mr. Neill. (2) No officer or director of Geodyne or its affiliates provides full-time services to the P-2 Partnership and no individual's salary or other compensation reimbursement from the P-2 Partnership equals or exceeds $100,000 per annum.
-54-
Salary Reimbursements P-3 Partnership --------------- Long Term Compensation --------------------------------- Annual Compensation Awards Payouts ----------------------------- ----------------------- ------- Securi- Other ties All Name Annual Restricted Under- Other and Compen- Stock lying LTIP Compen- Principal Salary Bonus sation Award(s) Options/ Payouts sation Position Year ($) ($) ($) ($) SARs(#) ($) ($) - --------------- ---- ------- ------- ------- ---------- -------- ------- ------- Dennis R. Neill, President(1)(2) 1997 - - - - - - - 1998 - - - - - - - 1999 - - - - - - - All Executive Officers, Directors, and Employees as a group(2) 1997 $106,672 - - - - - - 1998 $105,672 - - - - - - 1999 $109,064 - - - - - - - ---------- (1) The general and administrative expenses paid by the P-3 Partnership and attributable to salary reimbursements do not include any salary or other compensation attributable to Mr. Tholen or Mr. Neill. (2) No officer or director of Geodyne or its affiliates provides full-time services to the P-3 Partnership and no individual's salary or other compensation reimbursement from the P-3 Partnership equals or exceeds $100,000 per annum.
-55-
Salary Reimbursements P-4 Partnership --------------- Long Term Compensation --------------------------------- Annual Compensation Awards Payouts ----------------------------- ----------------------- ------- Securi- Other ties All Name Annual Restricted Under- Other and Compen- Stock lying LTIP Compen- Principal Salary Bonus sation Award(s) Options/ Payouts sation Position Year ($) ($) ($) ($) SARs(#) ($) ($) - --------------- ---- ------- ------- ------- ---------- -------- ------- ------- Dennis R. Neill, President(1)(2) 1997 - - - - - - - 1998 - - - - - - - 1999 - - - - - - - All Executive Officers, Directors, and Employees as a group(2) 1997 $79,430 - - - - - - 1998 $78,686 - - - - - - 1999 $81,212 - - - - - - - ---------- (1) The general and administrative expenses paid by the P-4 Partnership and attributable to salary reimbursements do not include any salary or other compensation attributable to Mr. Tholen or Mr. Neill. (2) No officer or director of Geodyne or its affiliates provides full-time services to the P-4 Partnership and no individual's salary or other compensation reimbursement from the P-4 Partnership equals or exceeds $100,000 per annum.
-56-
Salary Reimbursements P-5 Partnership --------------- Long Term Compensation --------------------------------- Annual Compensation Awards Payouts ----------------------------- ----------------------- ------- Securi- Other ties All Name Annual Restricted Under- Other and Compen- Stock lying LTIP Compen- Principal Salary Bonus sation Award(s) Options/ Payouts sation Position Year ($) ($) ($) ($) SARs(#) ($) ($) - --------------- ---- ------- ------- ------- ---------- -------- ------- ------- Dennis R. Neill, President(1)(2) 1997 - - - - - - - 1998 - - - - - - - 1999 - - - - - - - All Executive Officers, Directors, and Employees as a group(2) 1997 $74,484 - - - - - - 1998 $73,786 - - - - - - 1999 $76,155 - - - - - - - ---------- (1) The general and administrative expenses paid by the P-5 Partnership and attributable to salary reimbursements do not include any salary or other compensation attributable to Mr. Tholen or Mr. Neill. (2) No officer or director of Geodyne or its affiliates provides full-time services to the P-5 Partnership and no individual's salary or other compensation reimbursement from the P-5 Partnership equals or exceeds $100,000 per annum.
-57-
Salary Reimbursements P-6 Partnership --------------- Long Term Compensation --------------------------------- Annual Compensation Awards Payouts ----------------------------- ----------------------- ------- Securi- Other ties All Name Annual Restricted Under- Other and Compen- Stock lying LTIP Compen- Principal Salary Bonus sation Award(s) Options/ Payouts sation Position Year ($) ($) ($) ($) SARs(#) ($) ($) - --------------- ---- ------- ------- ------- ---------- -------- ------- ------- Dennis R. Neill, President(1)(2) 1997 - - - - - - - 1998 - - - - - - - 1999 - - - - - - - All Executive Officers, Directors, and Employees as a group(2) 1997 $89,947 - - - - - - 1998 $89,104 - - - - - - 1999 $91,964 - - - - - - - ---------- (1) The general and administrative expenses paid by the P-6 Partnership and attributable to salary reimbursements do not include any salary or other compensation attributable to Mr. Tholen or Mr. Neill. (2) No officer or director of Geodyne or its affiliates provides full-time services to the P-6 Partnership and no individual's salary or other compensation reimbursement from the P-6 Partnership equals or exceeds $100,000 per annum.
-58- Affiliates of the Partnerships serve as operator of some of the wells in which the Partnerships own a Net Profits Interest. The owners of the working interests in these wells contract 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 which burdens the Partnerships' Net Profits Interests is impossible to quantify as of the date of this Annual Report. Samson maintains necessary inventories of new and used field equipment. Samson may have provided some of this equipment for wells in which the Partnerships have a Net Profits Interest. This equipment was 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. 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 February 1, 2000 by (i) each beneficial owner of more than five percent of the issued and outstanding Units, (ii) the director and officers of the General Partner, and (iii) the General Partner and its affiliates. The address of the General Partner, its officers and director, and Samson Resources Company is Samson Plaza, Two West Second Street, Tulsa, Oklahoma 74103. Number of Units Beneficially Owned (Percent Beneficial Owner of Outstanding) - -------------------------------------------- --------------- P-1 Partnership: - --------------- Samson Resources Company 18,835 (17.4%) All affiliates, directors, and officers of the General Partner as a group and the General Partner (4 persons) 18,835 (17.4%) -59- P-2 Partnership: - --------------- Samson Resources Company 22,662 (25.2%) Loma Linda University Medical Center P. O. Box 2000 Loma Linda, CA 92354 5,000 ( 5.5%) All affiliates, directors, and officers of the General Partner as a group and the General Partner (4 persons) 22,662 (25.2%) P-3 Partnership: - --------------- Samson Resources Company 45,958 (27.1%) Merced County Retirement Association Pension Trust 2222 M. Street Merced, CA 95340 10,000 ( 5.9%) All affiliates, directors, and officers of the General Partner as a group and the General Partner (4 persons) 45,958 (27.1%) P-4 Partnership: - --------------- Samson Resources Company 26,044 (20.6%) All affiliates, directors, and officers of the General Partner as a group and the General Partner (4 persons) 26,044 (20.6%) P-5 Partnership: - --------------- Samson Resources Company 19,778 (16.7%) All affiliates, directors, and officers of the General Partner as a group and the General Partner (4 persons) 19,778 (16.7%) -60- P-6 Partnership: - --------------- Samson Resources Company 13,818 ( 9.7%) ATL, Inc. 1200 Harbor Boulevard, 5th Floor Weehawken, NJ 07087 54,887 (38.4%) All affiliates, directors, and officers of the General Partner as a group and the General Partner (4 persons) 13,818 ( 9.7%) 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 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. In order to attempt to assure limited liability for the 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' 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 Samson. The Partnerships thus compete with Samson (including other oil and gas partnerships) for the time and resources of such personnel. Samson devotes 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. -61- Affiliates of the Partnerships operate certain wells in which the Partnerships have a net profits interest and are compensated for such services at rates comparable to charges of unaffiliated third parties for services in the same geographic area. These costs are charged to the owners of the working interest of such wells and are considered when calculating the Net Profits payable to the Partnerships. These costs are thus indirectly borne by the Partnership. Affiliates of the Partnerships are solely responsible for the negotiation, administration, and enforcement of oil and gas sales agreements covering the leasehold interests in which the Partnerships hold Net Profits Interests. Because affiliates of the Partnerships who provide services to the owners of the Working Interests have fiduciary or other duties to other members of Samson, contract amendments and negotiating positions taken by them in their effort to enforce contracts with purchasers may not necessarily represent the positions that the owners of such Working Interests would take if they were to administer their own contracts without involvement with other members of Samson. On the other hand, management believes that the negotiating strength and contractual positions of the owners of such Working Interests have been enhanced by virtue of their affiliation with Samson. -62- 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 Institutional/Pension Energy Income P-1 Limited Partnership Geodyne Institutional/Pension Energy Income P-2 Limited Partnership Geodyne Institutional/Pension Energy Income Limited Partnership P-3 Geodyne Institutional/Pension Energy Income Limited Partnership P-4 Geodyne Institutional/Pension Energy Income Limited Partnership P-5 Geodyne Institutional/Pension Energy Income Limited Partnership P-6 as of December 31, 1999 and 1998 and for each of the three years in the period ended December 31, 1999 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. (3) Exhibits: 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. -63- Partnership Filing Date File No. ----------- ----------- -------- P-1 June 5, 1989 0-17800 P-2 June 5, 1989 0-17800 P-3 February 20, 1990 0-18306 P-4 February 20, 1990 0-18306 P-5 November 13, 1990 0-18637 P-6 November 30, 1990 0-18937 4.2 The Agreements of Partnership for the following NPI 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. Form 8-A Partnership Filing Date ----------- ----------------- P-1 June 5, 1989 P-2 June 5, 1989 P-3 February 20, 1990 P-4 February 20, 1990 P-5 June 11, 1990 P-6 December 10, 1990 4.3 Second Amendment to Agreement of Limited Partnership of Geodyne Institutional/Pension Energy Income P-1 Limited Partnership, filed as Exhibit 4.1 to Registrants' Current Report on Form 8-K dated August 2, 1993 filed with the SEC on August 10, 1993 and is hereby incorporated by reference. 4.4 Second Amendment to Agreement of Limited Partnership of Geodyne Institutional/Pension Energy Income P-2 Limited Partnership, filed as Exhibit 4.2 to Registrants' 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 Agreement of Limited Partnership of Geodyne Institutional/Pension Energy Income Limited Partnership P-3, filed as Exhibit 4.3 to Registrants' Current Report on Form 8-K dated August 2, 1993 filed with the SEC on August 10, 1993 and is hereby incorporated by reference. -64- 4.6 Second Amendment to Agreement of Limited Partnership of Geodyne Institutional/Pension Energy Income Limited Partnership P-4, filed as Exhibit 4.4 to Registrants' 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 Agreement of Limited Partnership of Geodyne Institutional/Pension Energy Income Limited Partnership P-5, filed as Exhibit 4.5 to Registrants' 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 Agreement of Limited Partnership of Geodyne Institutional/Pension Energy Income Limited Partnership P-6, filed as Exhibit 4.6 to Registrants' 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 Third Amendment to Agreement of Limited Partnership of Geodyne Institutional/Pension Energy Income P-1 Limited Partnership, filed as Exhibit 4.10 to Registrant's Annual Report on Form 10-K for the year ended December 31, 1995 filed with the SEC April 1, 1996 and is hereby incorporated by reference. 4.10 Third Amendment to Agreement of Limited Partnership of Geodyne Institutional/Pension Energy Income P-2 Limited Partnership, filed as Exhibit 4.11 to Registrant's Annual Report on Form 10-K for the year ended December 31, 1995 filed with the SEC on April 1, 1996 and is hereby incorporated by reference. 4.11 Third Amendment to Agreement of Limited Partnership of Geodyne Institutional/Pension Energy Income Limited Partnership P-3, filed as Exhibit 4.12 to Registrant's Annual Report on Form 10-K for the year ended December 31, 1995 filed with the SEC on April 1, 1996 and is hereby incorporated by reference. -65- 4.12 Third Amendment to Agreement of Limited Partnership of Geodyne Institutional/Pension Energy Income Limited Partnership P-4, filed as Exhibit 4.13 to Registrant's Annual Report on Form 10-K for the year ended December 31, 1995 filed with the SEC on April 1, 1996 and is hereby incorporated by reference. 4.13 Third Amendment to Agreement of Limited Partnership of Geodyne Institutional/Pension Energy Income Limited Partnership P-5, filed as Exhibit 4.14 to Registrant's Annual Report on Form 10-K for the year ended December 31, 1995 filed with the SEC on April 1, 1996 and is hereby incorporated by reference. 4.14 Third Amendment to Agreement of Limited Partnership of Geodyne Institutional/Pension Energy Income Limited Partnership P-6, filed as Exhibit 4.15 to Registrant's Annual Report on Form 10-K for the year ended December 31, 1995 filed with the SEC on April 1, 1996 and is hereby incorporated by reference. * 23.1 Consent of Ryder Scott Company, L.P. for the Geodyne Institutional/Pension Energy Income P-1 Limited Partnership. * 23.2 Consent of Ryder Scott Company, L.P. for the Geodyne Institutional/Pension Energy Income P-2 Limited Partnership. * 23.3 Consent of Ryder Scott Company, L.P. for the Geodyne Institutional/Pension Energy Income Limited Partnership P-3. * 23.4 Consent of Ryder Scott Company, L.P. for the Geodyne Institutional/Pension Energy Income Limited Partnership P-4. * 23.5 Consent of Ryder Scott Company, L.P. for the Geodyne Institutional/Pension Energy Income Limited Partnership P-5. * 23.6 Consent of Ryder Scott Company, L.P. for the Geodyne Institutional/Pension Energy Income Limited Partnership P-6. -66- * 27.1 Financial Data Schedule containing summary financial information extracted from the Geodyne Institutional/Pension Energy Income P-1 Limited Partnership's financial statements as of December 31, 1999 and for the year ended December 31, 1999. * 27.2 Financial Data Schedule containing summary financial information extracted from the Geodyne Institutional/Pension Energy Income P-2 Limited Partnership's financial statements as of December 31, 1999 and for the year ended December 31, 1999. * 27.3 Financial Data Schedule containing summary financial information extracted from the Geodyne Institutional/Pension Energy Income Limited Partnership P-3's financial statements as of December 31, 1999 and for the year ended December 31, 1999. * 27.4 Financial Data Schedule containing summary financial information extracted from the Geodyne Institutional/Pension Energy Income Limited Partnership P-4's financial statements as of December 31, 1999 and for the year ended December 31, 1999. * 27.5 Financial Data Schedule containing summary financial information extracted from the Geodyne Institutional/Pension Energy Income Limited Partnership P-5's financial statements as of December 31, 1999 and for the year ended December 31, 1999. * 27.6 Financial Data Schedule containing summary financial information extracted from the Geodyne Institutional/Pension Energy Income Limited Partnership P-6's financial statements as of December 31, 1999 and for the year ended December 31, 1999. All other Exhibits are omitted as inapplicable. ---------- *Filed herewith. (b) Reports on Form 8-K filed during the fourth quarter of 1999. None. -67- 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 INSTITUTIONAL/PENSION ENERGY INCOME P-1 LIMITED PARTNERSHIP GEODYNE INSTITUTIONAL/PENSION ENERGY INCOME P-2 LIMITED PARTNERSHIP GEODYNE INSTITUTIONAL/PENSION ENERGY INCOME LIMITED PARTNERSHIP P-3 GEODYNE INSTITUTIONAL/PENSION ENERGY INCOME LIMITED PARTNERSHIP P-4 GEODYNE INSTITUTIONAL/PENSION ENERGY INCOME LIMITED PARTNERSHIP P-5 GEODYNE INSTITUTIONAL/PENSION ENERGY INCOME LIMITED PARTNERSHIP P-6 By: GEODYNE RESOURCES, INC. General Partner February 21, 2000 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 21, 2000 ------------------- Director (Principal Dennis R. Neill Executive Officer) /s/Patrick M. Hall (Principal February 21, 2000 ------------------- Financial and Patrick M. Hall Accounting Officer) /s/Judy K. Fox Secretary February 21, 2000 ------------------- Judy K. Fox -68- ITEM 8: FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA REPORT OF INDEPENDENT ACCOUNTANTS TO THE PARTNERS GEODYNE INSTITUTIONAL/PENSION ENERGY INCOME P-1 LIMITED PARTNERSHIP AND GEODYNE NPI PARTNERSHIP P-1 In our opinion, the accompanying combined balance sheets and the related combined statements of operations, changes in partners' capital (deficit) and cash flows present fairly, in all material respects, the combined financial position of the Geodyne Institutional/Pension Energy Income P-1 Limited Partnership, a Texas limited partnership, and Geodyne NPI Partnership P-1, an Oklahoma general partnership, at December 31, 1999 and 1998, and the combined results of their operations and their cash flows for each of the three years in the period ended December 31, 1999, in conformity with accounting principles generally accepted in the United States. 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 of these financial statements in accordance with auditing standards generally accepted in the United States, which 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, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for the opinion expressed above. PricewaterhouseCoopers LLP Tulsa, Oklahoma February 15, 2000 F-1 GEODYNE INSTITUTIONAL/PENSION ENERGY INCOME P-1 LIMITED PARTNERSHIP GEODYNE NPI PARTNERSHIP P-1 Combined Balance Sheets December 31, 1999 and 1998 ASSETS ------ 1999 1998 ------------ ------------ CURRENT ASSETS: Cash and cash equivalents $ 182,743 $ 99,454 Accounts receivable: Net Profits 167,901 108,440 --------- --------- Total current assets $ 350,644 $ 207,894 NET PROFITS INTERESTS, net, utilizing the successful efforts method 1,003,826 1,164,893 --------- --------- $1,354,470 $1,372,787 ========= ========= PARTNERS' CAPITAL (DEFICIT) --------------------------- PARTNERS' CAPITAL (DEFICIT): General Partner ($ 77,417) ($ 82,899) Limited Partners, issued and outstanding, 108,074 Units 1,431,887 1,455,686 --------- --------- Total Partners' capital $1,354,470 $1,372,787 ========= ========= The accompanying notes are an integral part of these combined financial statements. F-2 GEODYNE INSTITUTIONAL/PENSION ENERGY INCOME P-1 LIMITED PARTNERSHIP GEODYNE NPI PARTNERSHIP P-1 Combined Statements of Operations For the Years Ended December 31, 1999, 1998, and 1997 1999 1998 1997 ------------ ------------ ---------- REVENUES: Net Profits $802,539 $ 694,919 $1,064,105 Interest income 4,639 11,731 11,117 Gain on sale of Net Profits Interests 698 476,752 380,408 ------- --------- --------- $807,876 $1,183,402 $1,455,630 COSTS AND EXPENSES: Depletion of Net Profits Interests $171,326 $ 235,071 $ 263,691 Impairment provision - - 902,042 General and Administrative 127,487 127,207 129,205 ------- --------- --------- $298,813 $ 362,278 $1,294,938 ------- --------- --------- NET INCOME $509,063 $ 821,124 $ 160,692 ======= ========= ========= GENERAL PARTNER - NET INCOME $ 65,862 $ 60,539 $ 54,016 ======= ========= ========= LIMITED PARTNERS - NET INCOME $443,201 $ 760,585 $ 106,676 ======= ========= ========= NET INCOME per Unit $ 4.10 $ 7.04 $ .99 ======= ========= ========= UNITS OUTSTANDING 108,074 108,074 108,074 ======= ========= ========= The accompanying notes are an integral part of these combined financial statements. F-3 GEODYNE INSTITUTIONAL/PENSION ENERGY INCOME P-1 LIMITED PARTNERSHIP GEODYNE NPI PARTNERSHIP P-1 Combined Statements of Changes in Partners' Capital (Deficit) For the Years Ended December 31, 1999, 1998, and 1997 Limited General Partners Partner Combined ------------ --------- ------------ Balance, Dec. 31, 1996 $3,293,425 ($62,666) $3,230,759 Net income 106,676 54,016 160,692 Cash distributions ( 1,236,000) ( 78,765) ( 1,314,765) --------- ------ --------- Balance, Dec. 31, 1997 $2,164,101 ($87,415) $2,076,686 Net income 760,585 60,539 821,124 Cash distributions ( 1,469,000) ( 56,023) ( 1,525,023) --------- ------ --------- Balance, Dec. 31, 1998 $1,455,686 ($82,899) $1,372,787 Net income 443,201 65,862 509,063 Cash distributions ( 467,000) ( 60,380) ( 527,380) --------- ------ --------- Balance, Dec. 31, 1999 $1,431,887 ($77,417) $1,354,470 ========= ====== ========= The accompanying notes are an integral part of these combined financial statements. F-4 GEODYNE INSTITUTIONAL/PENSION ENERGY INCOME P-1 LIMITED PARTNERSHIP GEODYNE NPI PARTNERSHIP P-1 Combined Statements of Cash Flows For the Years Ended December 31, 1999, 1998, and 1997 1999 1998 1997 ------------ ------------ ---------- CASH FLOWS FROM OPERATING ACTIVITIES: Net income $509,063 $ 821,124 $ 160,692 Adjustments to reconcile net income to net cash provided by operating activities: Depletion of Net Profits Interests 171,326 235,071 263,691 Impairment provision - - 902,042 Gain on sale of Net Profits Interests ( 698) ( 476,752) ( 380,408) (Increase)decrease in accounts receivable - Net Profits ( 59,461) 56,204 92,814 ------- --------- --------- Net cash provided by operating activities $620,230 $ 635,647 $1,038,831 ------- --------- --------- CASH FLOWS FROM INVESTING ACTIVITIES: Capital expenditures ($ 13,017) ($ 34,624) ($ 21,339) Proceeds from sale of Net Profits Interests 3,456 519,832 507,599 ------- --------- --------- Net cash provided (used) by investing activities ($ 9,561) $ 485,208 $ 486,260 ------- --------- --------- CASH FLOWS FROM FINANCING ACTIVITIES: Cash distributions ($527,380) ($1,525,023) ($1,314,765) ------- --------- --------- Net cash used by financing Activities ($527,380) ($1,525,023) ($1,314,765) ------- --------- --------- NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS $ 83,289 ($ 404,168) $ 210,326 CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 99,454 503,622 293,296 ------- --------- --------- CASH AND CASH EQUIVALENTS AT END OF PERIOD $182,743 $ 99,454 $ 503,622 ======= ========= ========= The accompanying notes are an integral part of these combined financial statements. F-5 REPORT OF INDEPENDENT ACCOUNTANTS TO THE PARTNERS GEODYNE INSTITUTIONAL/PENSION ENERGY INCOME P-2 LIMITED PARTNERSHIP AND GEODYNE NPI PARTNERSHIP P-2 In our opinion, the accompanying combined balance sheets and the related combined statements of operations, changes in partners' capital (deficit) and cash flows present fairly, in all material respects, the combined financial position of the Geodyne Institutional/Pension Energy Income P-2 Limited Partnership, a Texas limited partnership, and Geodyne NPI Partnership P-2, an Oklahoma general partnership, at December 31, 1999 and 1998, and the combined results of their operations and their cash flows for each of the three years in the period ended December 31, 1999, in conformity with accounting principles generally accepted in the United States. 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 of these financial statements in accordance with auditing standards generally accepted in the United States, which 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, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for the opinion expressed above. PricewaterhouseCoopers LLP Tulsa, Oklahoma February 15, 2000 F-6 GEODYNE INSTITUTIONAL/PENSION ENERGY INCOME P-2 LIMITED PARTNERSHIP GEODYNE NPI PARTNERSHIP P-2 Combined Balance Sheets December 31, 1999 and 1998 ASSETS ------ 1999 1998 ------------ ------------ CURRENT ASSETS: Cash and cash equivalents $ 148,106 $ 78,435 Accounts receivable: Net Profits 135,136 92,746 --------- --------- Total current assets $ 283,242 $ 171,181 NET PROFITS INTERESTS, net, utilizing the successful efforts method 856,093 1,001,498 --------- --------- $1,139,335 $1,172,679 ========= ========= PARTNERS' CAPITAL (DEFICIT) --------------------------- PARTNERS' CAPITAL (DEFICIT): General Partner ($ 56,585) ($ 70,704) Limited Partners, issued and outstanding, 90,094 Units 1,195,920 1,243,383 --------- --------- Total Partners' capital $1,139,335 $1,172,679 ========= ========= The accompanying notes are an integral part of these combined financial statements. F-7 GEODYNE INSTITUTIONAL/PENSION ENERGY INCOME P-2 LIMITED PARTNERSHIP GEODYNE NPI PARTNERSHIP P-2 Combined Statements of Operations For the Years Ended December 31, 1999, 1998, and 1997 1999 1998 1997 ---------- -------- ---------- REVENUES: Net Profits $618,890 $538,185 $ 836,494 Interest income 3,769 8,577 8,532 Gain on sale of Net Profits Interests 472 328,122 284,247 ------- --------- ---------- $623,131 $874,884 $1,129,273 COSTS AND EXPENSES: Depletion of Net Profits Interests $152,202 $187,490 $ 207,379 Impairment provision - - 727,893 General and Administrative 106,335 106,064 107,544 ------- ------- ---------- $258,537 $293,554 $1,042,816 ------- ------- ---------- NET INCOME $364,594 $581,330 $ 86,457 ======= ======= ========== GENERAL PARTNER - NET INCOME $ 31,057 $ 36,137 $ 41,244 ======= ======= ========== LIMITED PARTNERS - NET INCOME $333,537 $545,193 $ 45,213 ======= ======= ========== NET INCOME per Unit $ 3.70 $ 6.05 $ .50 ======= ======== ========== UNITS OUTSTANDING 90,094 90,094 90,094 ======= ======== ========== The accompanying notes are an integral part of these combined financial statements. F-8 GEODYNE INSTITUTIONAL/PENSION ENERGY INCOME P-2 LIMITED PARTNERSHIP GEODYNE NPI PARTNERSHIP P-2 Combined Statements of Changes in Partners' Capital (Deficit) For the Years Ended December 31, 1999, 1998, and 1997 Limited General Partners Partner Combined ------------ --------- ------------ Balance, Dec. 31, 1996 $2,692,977 ($57,428) $2,635,549 Net income 45,213 41,244 86,457 Cash distributions ( 979,000) ( 56,254) ( 1,035,254) --------- ------ --------- Balance, Dec. 31, 1997 $1,759,190 ($72,438) $1,686,752 Net income 545,193 36,137 581,330 Cash distributions ( 1,061,000) ( 34,403) ( 1,095,403) --------- ------ --------- Balance, Dec. 31, 1998 $1,243,383 ($70,704) $1,172,679 Net income 333,537 31,057 364,594 Cash distributions ( 381,000) ( 16,938) ( 397,938) --------- ------ --------- Balance, Dec. 31, 1999 $1,195,920 ($56,585) $1,139,335 ========= ====== ========= The accompanying notes are an integral part of these combined financial statements. F-9 GEODYNE INSTITUTIONAL/PENSION ENERGY INCOME P-2 LIMITED PARTNERSHIP GEODYNE NPI PARTNERSHIP P-2 Combined Statements of Cash Flows For the Years Ended December 31, 1999, 1998, and 1997 1999 1998 1997 ------------ ------------ ------------ CASH FLOWS FROM OPERATING ACTIVITIES: Net income $364,594 $ 581,330 $ 86,457 Adjustments to reconcile net income to net cash provided by operating activities: Depletion of Net Profits Interests 152,202 187,490 207,379 Impairment provision - - 727,893 Gain on sale of Net Profits Interests ( 472) ( 328,122) ( 284,247) (Increase) decrease in accounts receivable - Net Profits ( 42,390) 42,585 67,956 Decrease in accounts receivable - General Partner - - 8,376 ------- --------- ---------- Net cash provided by operating activities $473,934 $ 483,283 $ 813,814 ------- --------- ---------- CASH FLOWS FROM INVESTING ACTIVITIES: Capital expenditures ($ 10,319) ($ 39,322) ($ 34,745) Proceeds from sale of Net Profits Interests 3,994 360,686 402,870 ------- --------- ---------- Net cash provided (used) by investing activities ($ 6,325) $ 321,364 $ 368,125 ------- --------- ---------- CASH FLOWS FROM FINANCING ACTIVITIES: Cash distributions ($397,938) ($1,095,403) ($1,035,254) ------- --------- ---------- Net cash used by financing Activities ($397,938) ($1,095,403) ($1,035,254) ------- --------- ---------- NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS $ 69,671 ($ 290,756) $ 146,685 F-10 CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 78,435 369,191 222,506 ------- --------- ---------- CASH AND CASH EQUIVALENTS AT END OF PERIOD $148,106 $ 78,435 $ 369,191 ======= ========= ========== The accompanying notes are an integral part of these combined financial statements. F-11 REPORT OF INDEPENDENT ACCOUNTANTS TO THE PARTNERS GEODYNE INSTITUTIONAL/PENSION ENERGY INCOME LIMITED PARTNERSHIP P-3 AND GEODYNE NPI PARTNERSHIP P-3 In our opinion, the accompanying combined balance sheets and the related combined statements of operations, changes in partners' capital (deficit) and cash flows present fairly, in all material respects, the combined financial position of the Geodyne Institutional/Pension Energy Income Limited Partnership P-3, an Oklahoma limited partnership, and Geodyne NPI Partnership P-3, an Oklahoma general partnership, at December 31, 1999 and 1998, and the combined results of their operations and their cash flows for each of the three years in the period ended December 31, 1999, in conformity with accounting principles generally accepted in the United States. 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 of these financial statements in accordance with auditing standards generally accepted in the United States, which 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, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for the opinion expressed above. PricewaterhouseCoopers LLP Tulsa, Oklahoma February 15, 2000 F-12 GEODYNE INSTITUTIONAL/PENSION ENERGY INCOME LIMITED PARTNERSHIP P-3 GEODYNE NPI PARTNERSHIP P-3 Combined Balance Sheets December 31, 1999 and 1998 ASSETS ------ 1999 1998 ------------ ------------ CURRENT ASSETS: Cash and cash equivalents $ 284,040 $ 146,246 Accounts receivable: Net Profits 251,484 170,389 --------- --------- Total current assets $ 535,524 $ 316,635 NET PROFITS INTERESTS, net, utilizing the successful efforts method 1,595,636 1,866,716 --------- --------- $2,131,160 $2,183,351 ========= ========= PARTNERS' CAPITAL (DEFICIT) --------------------------- PARTNERS' CAPITAL (DEFICIT): General Partner ($ 113,709) ($ 132,995) Limited Partners, issued and outstanding, 169,637 Units 2,244,869 2,316,346 --------- --------- Total Partners' capital $2,131,160 $2,183,351 ========= ========= The accompanying notes are an integral part of these combined financial statements. F-13 GEODYNE INSTITUTIONAL/PENSION ENERGY INCOME LIMITED PARTNERSHIP P-3 GEODYNE NPI PARTNERSHIP P-3 Combined Statements of Operations For the Years Ended December 31, 1999, 1998, and 1997 1999 1998 1997 ------------ ------------ ------------ REVENUES: Net Profits $1,155,814 $ 997,464 $1,559,975 Interest income 7,380 16,358 16,329 Gain on sale of Net Profits Interests 968 606,887 532,904 --------- --------- --------- $1,164,162 $1,620,709 $2,109,208 COSTS AND EXPENSES: Depletion of Net Profits Interests $ 283,838 $ 344,697 $ 385,937 Impairment provision - - 1,413,917 General and Administrative 199,790 199,679 202,308 --------- --------- --------- $ 483,628 $ 544,376 $2,002,162 --------- --------- --------- NET INCOME $ 680,534 $1,076,333 $ 107,046 ========= ========= ========= GENERAL PARTNER - NET INCOME $ 45,011 $ 66,787 $ 76,414 ========= ========= ========= LIMITED PARTNERS - NET INCOME $ 635,523 $1,009,546 $ 30,632 ========= ========= ========= NET INCOME per Unit $ 3.75 $ 5.95 $ .18 ========= ========= ========= UNITS OUTSTANDING 169,637 169,637 169,637 ========= ========= ========= The accompanying notes are an integral part of these combined financial statements. F-14 GEODYNE INSTITUTIONAL/PENSION ENERGY INCOME LIMITED PARTNERSHIP P-3 GEODYNE NPI PARTNERSHIP P-3 Combined Statements of Changes in Partners' Capital (Deficit) For the Years Ended December 31, 1999, 1998, and 1997 Limited General Partners Partner Combined ------------- ---------- ------------ Balance, Dec. 31, 1996 $5,075,168 ($107,085) $4,968,083 Net income 30,632 76,414 107,046 Cash distributions ( 1,832,000) ( 106,587) ( 1,938,587) --------- ------- --------- Balance, Dec. 31, 1997 $3,273,800 ($137,258) $3,136,542 Net income 1,009,546 66,787 1,076,333 Cash distributions ( 1,967,000) ( 62,524) ( 2,029,524) --------- ------- --------- Balance, Dec. 31, 1998 $2,316,346 ($132,995) $2,183,351 Net income 635,523 45,011 680,534 Cash distributions ( 707,000) ( 25,725) ( 732,725) --------- ------- --------- Balance, Dec. 31, 1999 $2,244,869 ($113,709) $2,131,160 ========= ======= ========= The accompanying notes are an integral part of these combined financial statements. F-15 GEODYNE INSTITUTIONAL/PENSION ENERGY INCOME LIMITED PARTNERSHIP P-3 GEODYNE NPI PARTNERSHIP P-3 Combined Statements of Cash Flows For the Years Ended December 31, 1999, 1998, and 1997 1999 1998 1997 ------------ ------------ ------------ CASH FLOWS FROM OPERATING ACTIVITIES: Net income $680,534 $1,076,333 $ 107,046 Adjustments to reconcile net income to net cash provided by operating activities: Depletion of Net Profits Interests 283,838 344,697 385,937 Impairment provision - - 1,413,917 Gain on sale of Net Profits Interests ( 968) ( 606,887) ( 532,904) (Increase) decrease in accounts receivable - Net Profits ( 81,095) 84,081 125,255 Decrease in accounts receivable - General Partner - - 16,473 ------- --------- --------- Net cash provided by operating activities $882,309 $ 898,224 $1,515,724 ------- --------- --------- CASH FLOWS FROM INVESTING ACTIVITIES: Capital expenditures ($ 19,188) ($ 74,335) ($ 66,502) Proceeds from sale of Net Profits Interests 7,398 666,253 759,639 ------- --------- --------- Net cash provided (used) by investing activities ($ 11,790) $ 591,918 $ 693,137 ------- --------- --------- CASH FLOWS FROM FINANCING ACTIVITIES: Cash distributions ($732,725) ($2,029,524) ($1,938,587) ------- --------- --------- Net cash used by financing Activities ($732,725) ($2,029,524) ($1,938,587) ------- --------- --------- NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS $137,794 ($ 539,382) $ 270,274 F-16 CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 146,246 685,628 415,354 ------- --------- --------- CASH AND CASH EQUIVALENTS AT END OF PERIOD $284,040 $ 146,246 $ 685,628 ======= ========= ========= The accompanying notes are an integral part of these combined financial statements. F-17 REPORT OF INDEPENDENT ACCOUNTANTS TO THE PARTNERS GEODYNE INSTITUTIONAL/PENSION ENERGY INCOME LIMITED PARTNERSHIP P-4 AND GEODYNE NPI PARTNERSHIP P-4 In our opinion, the accompanying combined balance sheets and the related combined statements of operations, changes in partners' capital (deficit) and cash flows present fairly, in all material respects, the combined financial position of the Geodyne Institutional/Pension Energy Income Limited Partnership P-4, an Oklahoma limited partnership, and Geodyne NPI Partnership P-4, an Oklahoma general partnership, at December 31, 1999 and 1998, and the combined results of their operations and their cash flows for each of the three years in the period ended December 31, 1999, in conformity with accounting principles generally accepted in the United States. 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 of these financial statements in accordance with auditing standards generally accepted in the United States, which 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, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for the opinion expressed above. PricewaterhouseCoopers LLP Tulsa, Oklahoma February 15, 2000 F-18 GEODYNE INSTITUTIONAL/PENSION ENERGY INCOME LIMITED PARTNERSHIP P-4 GEODYNE NPI PARTNERSHIP P-4 Combined Balance Sheets December 31, 1999 and 1998 ASSETS ------ 1999 1998 ------------ ------------ CURRENT ASSETS: Cash and cash equivalents $ 188,928 $ 101,652 Accounts receivable: Net Profits 255,972 209,218 --------- --------- Total current assets $ 444,900 $ 310,870 NET PROFITS INTERESTS, net, utilizing the successful efforts method 892,659 1,092,574 --------- --------- $1,337,559 $1,403,444 ========= ========= PARTNERS' CAPITAL (DEFICIT) --------------------------- PARTNERS' CAPITAL (DEFICIT): General Partner ($ 80,321) ($ 93,853) Limited Partners, issued and outstanding, 126,306 Units 1,417,880 1,497,297 --------- --------- Total Partners' capital $1,337,559 $1,403,444 ========= ========= The accompanying notes are an integral part of these combined financial statements. F-19 GEODYNE INSTITUTIONAL/PENSION ENERGY INCOME LIMITED PARTNERSHIP P-4 GEODYNE NPI PARTNERSHIP P-4 Combined Statements of Operations For the Years Ended December 31, 1999, 1998, and 1997 1999 1998 1997 ------------ ------------ ------------ REVENUES: Net Profits $746,854 $734,526 $1,290,780 Interest income 4,983 8,219 13,072 Gain on sale of Net Profits Interests 410 12,332 63,002 ------- ------- --------- $752,247 $755,077 $1,366,854 COSTS AND EXPENSES: Depletion of Net Profits Interests $199,980 221,558 $ 364,709 Impairment provision - - 752,388 General and Administrative 148,395 148,616 148,419 ------- ------- --------- $348,375 $370,174 $1,265,516 ------- ------- --------- NET INCOME $403,872 $384,903 $ 101,338 ======= ======= ========= GENERAL PARTNER - NET INCOME $ 36,289 $ 27,697 $ 49,097 ======= ======= ========= LIMITED PARTNERS - NET INCOME $367,583 $357,206 $ 52,241 ======= ======= ========= NET INCOME per Unit $ 2.91 $ 2.83 $ .41 ======= ======= ========= UNITS OUTSTANDING 126,306 126,306 126,306 ======= ======= ========= The accompanying notes are an integral part of these combined financial statements. F-20 GEODYNE INSTITUTIONAL/PENSION ENERGY INCOME LIMITED PARTNERSHIP P-4 GEODYNE NPI PARTNERSHIP P-4 Combined Statements of Changes in Partners' Capital (Deficit) For the Years Ended December 31, 1999, 1998, and 1997 Limited General Partners Partner Combined ------------ ---------- ------------ Balance, Dec. 31, 1996 $3,364,850 ($ 81,373) $3,283,477 Net income 52,241 49,097 101,338 Cash distributions ( 1,495,000) ( 62,523) ( 1,557,523) --------- ------- --------- Balance, Dec. 31, 1997 $1,922,091 ($ 94,799) $1,827,292 Net income 357,206 27,697 384,903 Cash distributions ( 782,000) ( 26,751) ( 808,751) --------- ------- --------- Balance, Dec. 31, 1998 $1,497,297 ($ 93,853) $1,403,444 Net income 367,583 36,289 403,872 Cash distributions ( 447,000) ( 22,757) ( 469,757) --------- ------- --------- Balance, Dec. 31, 1999 $1,417,880 ($ 80,321) $1,337,559 ========= ======= ========= The accompanying notes are an integral part of these combined financial statements. F-21 GEODYNE INSTITUTIONAL/PENSION ENERGY INCOME LIMITED PARTNERSHIP P-4 GEODYNE NPI PARTNERSHIP P-4 Combined Statements of Cash Flows For the Years Ended December 31, 1999, 1998, and 1997 1999 1998 1997 ------------ ---------- ---------- CASH FLOWS FROM OPERATING ACTIVITIES: Net income $403,872 $384,903 $ 101,338 Adjustments to reconcile net income to net cash provided by operating activities: Depletion of Net Profits Interests 199,980 221,558 364,709 Impairment provision - - 752,388 Gain on sale of Net Profits Interests ( 410) ( 12,332) ( 63,002) (Increase) decrease in accounts receivable - Net Profits ( 46,754) 91,842 68,880 -------- ------- -------- Net cash provided by operating activities $556,688 $685,971 $1,224,313 ------- ------- --------- CASH FLOWS FROM INVESTING ACTIVITIES: Capital expenditures ($ 6,108) ($ 35,489) ($ 35,028) Proceeds from sale of Net Profits Interests 6,453 16,018 266,265 ------- ------- --------- Net cash provided (used) by investing activities $ 345 ($ 19,471) $ 231,237 ------- ------- --------- CASH FLOWS FROM FINANCING ACTIVITIES: Cash distributions ($469,757) ($808,751) ($1,557,523) ------- ------- --------- Net cash used by financing Activities ($469,757) ($808,751) ($1,557,523) ------- ------- --------- NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS $ 87,276 ($142,251) ($ 101,973) CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 101,652 243,903 345,876 ------- ------- --------- CASH AND CASH EQUIVALENTS AT END OF PERIOD $188,928 $101,652 $ 243,903 ======= ======= ========= The accompanying notes are an integral part of these combined financial statements. F-22 REPORT OF INDEPENDENT ACCOUNTANTS TO THE PARTNERS GEODYNE INSTITUTIONAL/PENSION ENERGY INCOME LIMITED PARTNERSHIP P-5 AND GEODYNE NPI PARTNERSHIP P-5 In our opinion, the accompanying combined balance sheets and the related combined statements of operations, changes in partners' capital (deficit) and cash flows present fairly, in all material respects, the combined financial position of the Geodyne Institutional/Pension Energy Income Limited Partnership P-5, an Oklahoma limited partnership, and Geodyne NPI Partnership P-5, an Oklahoma general partnership, at December 31, 1999 and 1998, and the combined results of their operations and their cash flows for each of the three years in the period ended December 31, 1999, in conformity with accounting principles generally accepted in the United States. 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 of these financial statements in accordance with auditing standards generally accepted in the United States, which 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, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for the opinion expressed above. PricewaterhouseCoopers LLP Tulsa, Oklahoma February 15, 2000 F-23 GEODYNE INSTITUTIONAL/PENSION ENERGY INCOME LIMITED PARTNERSHIP P-5 GEODYNE NPI PARTNERSHIP P-5 Combined Balance Sheets December 31, 1999 and 1998 ASSETS ------ 1999 1998 ------------ ------------ CURRENT ASSETS: Cash and cash equivalents $ 217,441 $ 166,487 Accounts receivable: Net Profits 180,909 99,823 --------- --------- Total current assets $ 398,350 $ 266,310 NET PROFITS INTERESTS, net, utilizing the successful efforts method 836,971 991,179 --------- --------- $1,235,321 $1,257,489 ========= ========= PARTNERS' CAPITAL (DEFICIT) --------------------------- PARTNERS' CAPITAL (DEFICIT): General Partner ($ 68,638) ($ 79,248) Limited Partners, issued and outstanding, 118,449 Units 1,303,959 1,336,737 --------- --------- Total Partners' capital $1,235,321 $1,257,489 ========= ========= The accompanying notes are an integral part of these combined financial statements. F-24 GEODYNE INSTITUTIONAL/PENSION ENERGY INCOME LIMITED PARTNERSHIP P-5 GEODYNE NPI PARTNERSHIP P-5 Combined Statements of Operations For the Years Ended December 31, 1999, 1998, and 1997 1999 1998 1997 ------------ ------------ ------------ REVENUES: Net Profits $856,442 $ 827,076 $1,000,125 Interest income 6,181 9,987 8,836 Gain (loss)on sale of Net Profits Interests ( 92) 344,575 79,182 ------- --------- --------- $862,531 $1,181,638 $1,088,143 COSTS AND EXPENSES: Depletion of Net Profits Interests $169,734 $ 283,071 $ 249,055 Impairment provision - - 1,018,068 General and Administrative 139,426 139,230 141,907 ------- --------- --------- $309,160 $ 422,301 $1,409,030 ------- --------- --------- NET INCOME (LOSS) $553,371 $ 759,337 ($ 320,887) ======= ========= ========= GENERAL PARTNER - NET INCOME $ 34,149 $ 48,790 $ 34,199 ======= ========= ========= LIMITED PARTNERS - NET INCOME (LOSS) $519,222 $ 710,547 ($ 355,086) ======= ========= ========= NET INCOME (LOSS) per Unit $ 4.38 $ 6.00 ($ 3.00) ======= ========= ========= UNITS OUTSTANDING 118,449 118,449 118,449 ======= ========= ========= The accompanying notes are an integral part of these combined financial statements. F-25 GEODYNE INSTITUTIONAL/PENSION ENERGY INCOME LIMITED PARTNERSHIP P-5 GEODYNE NPI PARTNERSHIP P-5 Combined Statements of Changes in Partners' Capital (Deficit) For the Years Ended December 31, 1999, 1998, and 1997 Limited General Partners Partner Combined ------------ ---------- ------------ Balance, Dec. 31, 1996 $3,053,276 ($60,088) $2,993,188 Net income (loss) ( 355,086) 34,199 ( 320,887) Cash distributions ( 1,002,000) ( 48,794) ( 1,050,794) --------- ------ --------- Balance, Dec. 31, 1997 $1,696,190 ($74,683) $1,621,507 Net income 710,547 48,790 759,337 Cash distributions ( 1,070,000) ( 53,355) ( 1,123,355) --------- ------ --------- Balance, Dec. 31, 1998 $1,336,737 ($79,248) $1,257,489 Net income 519,222 34,149 553,371 Cash distributions ( 552,000) ( 23,539) ( 575,539) --------- ------ --------- Balance, Dec. 31, 1999 $1,303,959 ($68,638) $1,235,321 ========= ====== ========= The accompanying notes are an integral part of these combined financial statements. F-26 GEODYNE INSTITUTIONAL/PENSION ENERGY INCOME LIMITED PARTNERSHIP P-5 GEODYNE NPI PARTNERSHIP P-5 Combined Statements of Cash Flows For the Years Ended December 31, 1999, 1998, and 1997 1999 1998 1997 ------------ ------------ ------------ CASH FLOWS FROM OPERATING ACTIVITIES: Net income (loss) $553,371 $ 759,337 ($ 320,887) Adjustments to reconcile net income (loss) to net cash provided by operating activities: Depletion of Net Profits Interests 169,734 283,071 249,055 Impairment provision - - 1,018,068 (Gain) loss on sale of Net Profits Interests 92 ( 344,575) ( 79,182) (Increase) decrease in accounts receivable - Net Profits ( 81,086) 35,145 74,090 ------- --------- --------- Net cash provided by operating activities $642,111 $ 732,978 $ 941,144 ------- --------- --------- CASH FLOWS FROM INVESTING ACTIVITIES: Capital expenditures ($ 15,618) ($ 40,371) ($ 980) Proceeds from sale of Net Profits Interests - 368,485 91,840 ------- --------- --------- Net cash provided (used) by investing activities ($ 15,618) $ 328,114 $ 90,860 ------- --------- --------- CASH FLOWS FROM FINANCING ACTIVITIES: Cash distributions ($575,539) ($1,123,355) ($1,050,794) ------- --------- --------- Net cash used by financing Activities ($575,539) ($1,123,355) ($1,050,794) ------- --------- --------- NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS $ 50,954 ($ 62,263) ($ 18,790) CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 166,487 228,750 247,540 ------- --------- --------- CASH AND CASH EQUIVALENTS AT END OF PERIOD $217,441 $ 166,487 $ 228,750 ======= ========= ========= The accompanying notes are an integral part of these combined financial statements. F-27 REPORT OF INDEPENDENT ACCOUNTANTS TO THE PARTNERS GEODYNE INSTITUTIONAL/PENSION ENERGY INCOME LIMITED PARTNERSHIP P-6 AND GEODYNE NPI PARTNERSHIP P-6 In our opinion, the accompanying combined balance sheets and the related combined statements of operations, changes in partners' capital (deficit) and cash flows present fairly, in all material respects, the combined financial position of the Geodyne Institutional/Pension Energy Income Limited Partnership P-6, an Oklahoma limited partnership, and Geodyne NPI Partnership P-6, an Oklahoma general partnership, at December 31, 1999 and 1998, and the combined results of their operations and their cash flows for each of the three years in the period ended December 31, 1999, in conformity with accounting principles generally accepted in the United States. 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 of these financial statements in accordance with auditing standards generally accepted in the United States, which 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, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for the opinion expressed above. PricewaterhouseCoopers LLP Tulsa, Oklahoma February 15, 2000 F-28 GEODYNE INSTITUTIONAL/PENSION ENERGY INCOME LIMITED PARTNERSHIP P-6 GEODYNE NPI PARTNERSHIP P-6 Combined Balance Sheets December 31, 1999 and 1998 ASSETS ------ 1999 1998 ------------ ------------ CURRENT ASSETS: Cash and cash equivalents $ 339,386 $ 300,324 Accounts receivable: Net Profits 177,661 145,612 --------- --------- Total current assets $ 517,047 $ 445,936 NET PROFITS INTERESTS, net, utilizing the successful efforts method 1,797,167 2,065,846 --------- --------- $2,314,214 $2,511,782 ========= ========= PARTNERS' CAPITAL (DEFICIT) --------------------------- PARTNERS' CAPITAL (DEFICIT): General Partner ($ 86,400) ($ 106,642) Limited Partners, issued and outstanding, 143,041 Units 2,400,614 2,618,424 --------- --------- Total Partners' capital $2,314,214 $2,511,782 ========= ========= The accompanying notes are an integral part of these combined financial statements. F-29 GEODYNE INSTITUTIONAL/PENSION ENERGY INCOME LIMITED PARTNERSHIP P-6 GEODYNE NPI PARTNERSHIP P-6 Combined Statements of Operations For the Years Ended December 31, 1999, 1998, and 1997 1999 1998 1997 ---------- ------------ ---------- REVENUES: Net Profits $1,340,784 $1,240,100 $1,793,685 Interest income 9,614 13,521 15,425 Gain (loss) on sale - Net Profits Interests ( 32) 135,752 37,698 --------- -------- --------- $1,350,366 $1,389,373 $1,846,808 COSTS AND EXPENSES: Depletion of Net Profits Interests $ 330,171 $ 425,026 $ 610,647 Impairment provision - - 898,584 General and Administrative 168,704 168,434 171,754 --------- --------- --------- $ 498,875 $ 593,460 $1,680,985 --------- --------- --------- NET INCOME $ 851,491 $ 795,913 $ 165,823 ========= ========= ========= GENERAL PARTNER - NET INCOME $ 55,301 $ 56,121 $ 67,889 ========= ========= ========= LIMITED PARTNERS - NET INCOME $ 796,190 $ 739,792 $ 97,934 ========= ========= ========= NET INCOME per unit $ 5.57 $ 5.17 $ .68 ========= ========= ========= UNITS OUTSTANDING 143,041 143,041 143,041 ========= ========= ========= The accompanying notes are an integral part of these combined financial statements. F-30 GEODYNE INSTITUTIONAL/PENSION ENERGY INCOME LIMITED PARTNERSHIP P-6 GEODYNE NPI PARTNERSHIP P-6 Combined Statements of Changes in Partners' Capital (Deficit) For the Years Ended December 31, 1999, 1998 and 1997 Limited General Partners Partner Combined ------------ ---------- ----------- Balance, Dec. 31, 1996 $4,773,698 ($ 59,021) $4,714,677 Net income 97,934 67,889 165,823 Cash distributions ( 1,663,000) ( 105,382) ( 1,768,382) --------- ------- --------- Balance, Dec. 31, 1997 $3,208,632 ($ 96,514) $3,112,118 Net income 739,792 56,121 795,913 Cash distributions ( 1,330,000) ( 66,249) ( 1,396,249) --------- ------- --------- Balance, Dec. 31, 1998 $2,618,424 ($106,642) $2,511,782 Net income 796,190 55,301 851,491 Cash distributions ( 1,014,000) ( 35,059) ( 1,049,059) --------- ------- --------- Balance, Dec. 31, 1999 $2,400,614 ($ 86,400) $2,314,214 ========= ======= ========= The accompanying notes are an integral part of these combined financial statements. F-31 GEODYNE INSTITUTIONAL/PENSION ENERGY INCOME LIMITED PARTNERSHIP P-6 GEODYNE NPI PARTNERSHIP P-6 Combined Statements of Cash Flows For the Years Ended December 31, 1999, 1998, and 1997 1999 1998 1997 ------------ ------------ ----------- CASH FLOWS FROM OPERATING ACTIVITIES: Net income $ 851,491 $ 795,913 $ 165,823 Adjustments to reconcile net income to net cash provided by operating activities: Depletion of Net Profits Interests 330,171 425,026 610,647 Impairment provision - - 898,584 (Gain) loss on sale of Net Profits Interests 32 ( 135,752) ( 37,698) (Increase) decrease in accounts receivable - Net Profits ( 32,049) 145,740 136,720 --------- --------- --------- Net cash provided by operating activities $1,149,645 $1,230,927 $1,774,076 --------- --------- --------- CASH FLOWS FROM INVESTING ACTIVITIES: Capital expenditures ($ 61,524) ($ 45,058) ($ 6,041) Proceeds from sale of Net Profits Interests - 147,747 43,605 --------- --------- --------- Net cash provided (used) by investing activities ($ 61,524) $ 102,689 $ 37,564 --------- --------- --------- CASH FLOWS FROM FINANCING ACTIVITIES: Cash distributions ($1,049,059) ($1,396,249) ($1,768,382) --------- --------- --------- Net cash used by financing Activities ($1,049,059) ($1,396,249) ($1,768,382) --------- --------- --------- F-32 NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS $ 39,062 ($ 62,633) $ 43,258 CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 300,324 362,957 319,699 --------- --------- --------- CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 339,386 $ 300,324 $ 362,957 ========= ========= ========= The accompanying notes are an integral part of these combined financial statements. F-33 GEODYNE INSTITUTIONAL/PENSION PROGRAM Notes to the Combined Financial Statements For the Periods Ended December 31, 1999, 1998, and 1997 1. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Organization and Nature of Operations The Geodyne Institutional/Pension 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. ("Geodyne") is the general partner of each of the Partnerships. Each Partnership is a general partner in the related Geodyne NPI Partnership (the "NPI Partnerships") in which Geodyne serves as the managing partner. Limited Partners' capital contributions were contributed to the related NPI Partnerships for investment in net profits interests, royalty interests, and other nonoperating interests in producing oil and gas properties. Most of the net profits interests acquired by the Partnerships have been carved out of working interests in producing properties, located in the continental United States, which were acquired by affiliated oil and gas investment programs (the "Affiliated Programs"). Net profits interests entitle the Partnerships to a share of net revenues from producing properties measured by a specific percentage of the net profits realized by such Affiliated Programs as owners of the working interests in the producing properties. Except where otherwise noted, references to certain operational activities of the Partnerships are actually the activities of the Affiliated Programs. As the holder of a net profits interest, a Partnership is not liable to pay any amount by which oil and gas operating costs and expenses exceed revenues for any period, although any deficit, together with interest, is applied to reduce the amounts payable to the Partnership in subsequent periods. As used in these financial statements, the Partnerships' net profits and royalty interests in oil and gas sales are referred to as "Net Profits" and the Partnerships' net profits and royalty interests in oil and gas properties are referred to as "Net Profits Interests." The Partnerships do not directly bear capital costs. However, the Partnerships indirectly bear certain capital costs incurred by the Affiliated Programs to the extent such capital costs are charged against the applicable oil and gas revenues in calculating the net profits payable to the Partnerships. For financial reporting purposes only, such capital costs are reported as capital expenditures in the Partnerships' Statements of Cash Flows. The Partnerships were activated on the following dates with the following Limited Partner capital contributions: F-34 Limited Partner Date of Capital Partnership Activation Contributions ----------- ----------------- --------------- P-1 October 25, 1988 $10,807,400 P-2 February 9, 1989 9,009,400 P-3 May 10, 1989 16,963,700 P-4 November 21, 1989 12,630,600 P-5 February 27, 1990 11,844,900 P-6 September 5, 1990 14,304,100 For purposes of these financial statements, the Partnerships and NPI 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, 1999: Percent of Number of Outstanding Partnership Units Owned Units ----------- ----------- ----------- P-1 18,835 17.4% P-2 22,610 25.1% P-3 45,938 27.1% P-4 26,044 20.6% P-5 19,778 16.7% P-6 13,818 9.7% The Partnerships' sole business is owning Net Profits Interests. Substantially all of the gas reserves attributable to the Partnerships' Net Profits Interests 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. The Partnerships' oil is sold at or near the Partnerships' wells under short-term purchase contracts at prevailing arrangements which are customary in the oil industry. The prices received for the Partnerships' oil and gas are subject to influences such as global consumption and supply trends. F-35 Allocation of Costs and Revenues The combination of the allocation provisions in each Partnerships' limited partnership agreement and NPI Partnerships' 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, payment for organization and offering costs and acquisition fee 1% 99% - - Property Acquisition Costs 1% 99% 1% 99% General and administrative costs and direct administrative costs(3) 5% 95% 15% 85% 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 Net Profits Interests(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, direct administrative costs of the NPI Partnership are allocated 95.9596% to the 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. F-36 (3) If, at payout, the total distributions received by the Limited Partners from the commencement of the property investment period have averaged on an annualized basis an amount that is less than 12% of the Limited Partners' subscriptions, the percentage of income, and costs which are shared in the same proportions as income, allocated to the General Partner will increase to only 10% and the Limited Partners will be allocated 90% thereof until such time, if ever, that the distributions to the Limited Partners from the commencement of the property investment period reaches a yearly average equal to at least 12% of the Limited Partners' subscriptions. Thereafter, income, and costs shared in the same proportions as income, will be allocated 15% to the General Partner and 85% to the Limited Partners. The P-1 Partnership achieved payout during the third quarter of 1998 and the P-2 and P-4 Partnerships achieved payout during the fourth quarter of 1999. After payout, operations and revenues for the P-1, P-2, and P-4 Partnerships have been and will be allocated using the 10%/90% after payout percentages set forth in Footnote 3 to the table above. 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. Credit Risk Accrued oil and gas sales, which are included in the Partnerships' Accounts Receivable - Net Profits, are due from a variety of oil and gas purchasers and, therefore, indirectly subject the Partnerships to a concentration of credit risk. Some of these purchasers are discussed in Note 3 - Major Customers. Net Profits Interests The Partnerships follow the successful efforts method of accounting for their Net Profits Interests. Under the successful efforts method, the Partnerships capitalize all acquisition costs. Such acquisition costs include costs incurred by the Partnerships or the General Partner to acquire a Net Profits Interest, including related title insurance or examination costs, commissions, engineering, legal and accounting fees, and similar F-37 costs directly related to the acquisitions plus an allocated portion of the General Partner's property screening costs. The net acquisition cost to the Partnerships of the Net Profits Interests in properties acquired by the General Partner consists of the cost of acquiring the underlying properties, adjusted for the net cash results of operations, including interest incurred to finance the net acquisition, for the period of time the properties are held by the General Partner. Impairment of Net Profits Interests in unproved oil and gas properties is recognized based upon an individual property assessment. Upon discovery of commercial reserves, Net Profits Interests in unproved properties are transferred to producing properties. Depletion of the cost of Net Profits Interests is computed on the units-of-production method. The Partnerships' calculation of depletion of its Net Profits Interests includes estimated dismantlement and abandonment costs, net of estimated salvage values. The depletion rate per equivalent barrel of oil produced during the years ended December 31, 1999, 1998, and 1997 were as follows: Partnership 1999 1998 1997 ----------- ---- ---- ---- P-1 $2.03 $2.93 $2.88 P-2 2.31 2.97 2.84 P-3 2.31 2.94 2.83 P-4 2.70 2.82 3.46 P-5 2.01 2.88 2.65 P-6 1.96 2.40 3.34 The Partnerships evaluate the recoverability of the carrying costs of their Net Profits Interests in proved oil and gas properties at the field level. If the unamortized costs of a Net Profits Interest within a field exceed the expected undiscounted future cash flows from such Net Profits Interest, the cost of the Net Profits Interest is written down to fair value, which is determined by using the discounted future cash flows from the Net Profits Interest. During 1999, 1998, and 1997, the Partnerships recorded the following non-cash charges against earnings (impairment provisions): Partnership 1999 1998 1997 ----------- ---- ---- ---- P-1 $ - $ - $ 113,945 P-2 - - 113,005 P-3 - - 220,449 P-4 - - 84,059 P-5 - - 122,458 P-6 - - 444,990 The risk that the Partnerships will be required to record similar impairment provisions in the future increases as oil and gas prices decrease. F-38 In addition, during 1997 the General Partner determined that the Partnerships' Net Profits Interests in 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 was unlikely that these unproved properties would be developed due to low oil and gas prices and limitations on the level of permissible indirect drilling activity through its Affiliated Programs. As a result, the Partnerships recorded the following non-cash charges against earnings at March 31, 1997 in order to reflect the writing-off of the Partnerships' Net Profits Interests in unproved properties: Partnership Amount ----------- ----------- P-1 $ 788,097 P-2 614,888 P-3 1,193,468 P-4 668,329 P-5 895,610 P-6 453,594 Accounts Receivable (Accounts Payable) - Net Profits Revenues from a Net Profits Interest consist of a share of the oil and gas sales of the property, less operating and production expenses. The Partnerships accrue for oil and gas revenues less expenses from its Net Profits Interests. Sales of gas applicable to the Net Profits Interests are recorded as revenue when the gas is metered and title transferred pursuant to the gas sales contracts. During such times as sales of gas exceed a Partnership's pro rata Net Profits Interest in a well, such sales are recorded as revenue unless total sales from the well have exceeded the Partnership's share of estimated total gas reserves attributable to the underlying property, at which time such excess is recorded as a liability. The rates per Mcf used to calculate the liability are based on the average gas price received for the volumes at the time the overproduction occurred. This also approximates the price for which the Partnerships are currently settling this liability. This liability is recorded as a reduction of accounts receivable. Also included in accounts receivable (accounts payable) - Net Profits are amounts which represent costs deferred or accrued for Net Profits relating to lease operating expenses incurred in connection with the net underproduced or overproduced gas imbalance positions. The rate used in calculating the deferred charge or accrued liability is the average of the annual production costs per Mcf. F-39 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, accounts receivable (payable) - Net Profits includes accrued liabilities, accrued lease operating expenses, and deferred lease operating expenses related to gas balancing which involve estimates that 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. 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 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 Agreement. 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, 1999, 1998, and 1997: F-40 Partnership 1999 1998 1997 ----------- -------- -------- -------- P-1 $113,760 $113,760 $113,760 P-2 94,836 94,836 94,836 P-3 178,560 178,560 178,560 P-4 132,960 132,960 132,960 P-5 124,680 124,680 124,680 P-6 150,564 150,564 150,564 Affiliates of the Partnerships operate certain of the properties in which the Partnerships own a Net Profits Interest and their policy is to bill the owners of the working interests of such properties 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. 3. MAJOR CUSTOMERS The following table sets forth purchasers who individually accounted for ten percent or more of combined oil and gas sales attributable to each of the Partnership's Net Profits Interest during the years ended December 31, 1999, 1998, and 1997: Percentage ------------------------- Partnership Purchaser 1999 1998 1997 - ----------- ------------------------ ----- ----- ----- P-1 El Paso Energy Marketing Company ("El Paso") 24.4% 31.7% 25.2% Chevron U.S.A., Inc. ("Chevron") 12.0% 14.9% 10.8% Texaco Exploration and Production, Inc. ("Texaco") - 11.2% - % P-2 El Paso 23.6% 30.7% 24.4% Chevron 10.3% 13.0% - % Texaco 10.1% 12.8% 11.1% P-3 El Paso 23.4% 30.5% 24.2% Texaco 10.1% 12.9% 11.2% Chevron 10.1% 12.9% - % F-41 P-4 El Paso 28.7% 36.7% 49.1% Valero Industrial Gas LP 25.4% 29.1% 13.6% Phibro Energy, Inc. 21.3% 16.1% 10.7% P-5 El Paso 77.8% 73.1% 65.0% P-6 El Paso 36.6% 32.5% 28.2% HPL Resources Company 15.4% 16.8% 19.9% Tejas Gas Marketing Company 13.0% 14.0% 14.1% 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 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 Net Profits Interest activities of the Partnerships is presented pursuant to the disclosure requirements promulgated by the SEC. Capitalized Costs Capitalized costs and accumulated depletion at December 31, 1999 and 1998 were as follows: P-1 Partnership --------------- 1999 1998 ------------ ------------ Net Profits Interests in proved oil and gas properties $6,888,884 $7,011,292 Less accumulated depletion and valuation allowance ( 5,885,058) ( 5,846,399) --------- --------- Net Profits Interests, net $1,003,826 $1,164,893 ========= ========= F-42 P-2 Partnership --------------- 1999 1998 ----------- ---------- Net Profits Interests in proved oil and gas properties $ 5,557,749 $5,651,821 Less accumulated depletion and valuation allowance ( 4,701,656) ( 4,650,323) ---------- --------- Net Profits Interests, net $ 856,093 $1,001,498 ========== ========= P-3 Partnership --------------- 1999 1998 ------------- ------------- Net Profits Interests in proved oil and gas properties $10,492,182 $10,640,125 Less accumulated depletion and valuation allowance ( 8,896,546) ( 8,773,409) ---------- ---------- Net Profits Interests, net $ 1,595,636 $ 1,866,716 ========== ========== P-4 Partnership --------------- 1999 1998 ----------- ----------- Net Profits Interests in proved oil and gas properties $ 8,193,436 $8,198,995 Less accumulated depletion and valuation allowance ( 7,300,777) ( 7,106,421) ---------- --------- Net Profits Interests, net $ 892,659 $1,092,574 ========== ========= F-43 P-5 Partnership --------------- 1999 1998 ---------- ----------- Net Profits Interests in proved oil and gas properties $9,855,735 $9,840,394 Less accumulated depletion and valuation allowance ( 9,018,764) ( 8,849,215) ---------- --------- Net Profits Interest, net $ 836,971 $ 991,179 ========== ========= P-6 Partnership --------------- 1999 1998 ------------- ------------- Net Profits Interests in proved oil and gas properties $12,024,877 $11,963,385 Less accumulated depletion and valuation allowance ( 10,227,710) ( 9,897,539) ----------- ---------- Net Profits Interests, net $ 1,797,167 $ 2,065,846 ========== ========== Costs Incurred The P-4 Partnership incurred $16,495 in property acquisition costs during 1997. No other property acquisition costs were incurred by the Partnerships during the three years ended December 31, 1999. The following table sets forth the development costs related to the working interests which are burdened by the Partnerships' Net Profits Interests during the years ended December 31, 1999, 1998, and 1997. Since these acquisition and development costs were charged against the Net Profits payable to the Partnerships, such costs were indirectly borne by the Partnerships. No exploration costs were incurred during the same periods. Partnership 1999 1998 1997 ----------- ------- ------- ------- P-1 $13,017 $34,624 $21,339 P-2 10,319 39,322 34,745 P-3 19,188 74,335 66,502 P-4 6,108 35,489 18,533 P-5 15,618 40,371 980 P-6 61,524 45,058 6,041 F-44 Quantities of Proved Oil and Gas Reserves - Unaudited The following tables summarize changes in net quantities of proved reserves attributable to the Partnerships' Net Profits Interests, all of which are located in the United States, for the periods indicated. The proved reserves were estimated by petroleum engineers employed by affiliates of the Partnerships. Certain reserve information was reviewed by Ryder Scott Company, L.P., 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. P-1 Partnership --------------- Crude Natural Oil Gas (Barrels) (Mcf) --------- ----------- Proved reserves, December 31, 1996 251,262 2,701,360 Production (32,044) ( 357,516) Sales of minerals in place (22,747) ( 234,580) Extensions and discoveries 2,126 55,362 Revisions of previous estimates 18,069 118,867 --------- --------- Proved reserves, December 31, 1997 216,666 2,283,493 Production (26,676) ( 321,426) Sales of minerals in place (22,750) ( 140,306) Extensions and discoveries 10,161 112,162 Revisions of previous estimates (14,628) 130,731 --------- --------- Proved reserves, December 31, 1998 162,773 2,064,654 Production (24,737) ( 357,439) Revisions of previous estimates 61,483 149,212 -------- --------- Proved reserves, December 31, 1999 199,519 1,856,427 ======== ========= PROVED DEVELOPED RESERVES: December 31, 1997 214,498 2,256,381 ======== ========= December 31, 1998 162,773 2,064,654 ======== ========= December 31, 1999 199,519 1,856,427 ======== ========= F-45 P-2 Partnership --------------- Crude Natural Oil Gas (Barrels) (Mcf) --------- ----------- Proved reserves, December 31, 1996 185,693 2,448,132 Production ( 22,873) ( 301,132) Sales of minerals in place ( 16,062) ( 231,921) Extensions and discoveries 1,549 37,807 Revisions of previous estimates 12,015 89,714 ------- --------- Proved reserves, December 31, 1997 160,322 2,042,600 Production ( 18,652) ( 266,232) Sales of minerals in place ( 15,519) ( 100,039) Extensions and discoveries 8,088 106,181 Revisions of previous estimates ( 11,455) 93,581 ------- --------- Proved reserves, December 31, 1998 122,784 1,876,091 Production ( 17,583) ( 289,443) Sales of minerals in place ( 100) ( 848) Revisions of previous estimates 41,706 82,374 ------- --------- Proved reserves, December 31, 1999 146,807 1,668,174 ======= ========= PROVED DEVELOPED RESERVES: December 31, 1997 157,947 2,012,912 ======= ========= December 31, 1998 122,784 1,876,091 ======= ========= December 31, 1999 146,807 1,668,174 ======= ========= F-46 P-3 Partnership --------------- Crude Natural Oil Gas (Barrels) (Mcf) --------- ----------- Proved reserves, December 31, 1996 344,453 4,622,201 Production ( 42,259) ( 565,052) Sales of minerals in place ( 30,066) ( 457,133) Extensions and discoveries 2,854 69,751 Revisions of previous estimates 22,274 169,087 ------- --------- Proved reserves, December 31, 1997 297,256 3,838,854 Production ( 34,533) ( 496,649) Sales of minerals in place ( 28,675) ( 186,034) Extensions and discoveries 15,045 199,007 Revisions of previous estimates ( 21,424) 164,074 ------- --------- Proved reserves, December 31, 1998 227,669 3,519,252 Production ( 32,552) ( 543,312) Sales of minerals in place ( 198) ( 1,664) Revisions of previous estimates 77,079 160,004 ------- --------- Proved reserves, December 31, 1999 271,998 3,134,280 ======= ========= PROVED DEVELOPED RESERVES: December 31, 1997 292,782 3,782,929 ======= ========= December 31, 1998 227,669 3,519,252 ======= ========= December 31, 1999 271,998 3,134,280 ======= ========= F-47 P-4 Partnership --------------- Crude Natural Oil Gas (Barrels) (Mcf) --------- ----------- Proved reserves, December 31, 1996 75,797 3,123,119 Production ( 19,686) ( 513,815) Sales of minerals in place ( 2,175) ( 315,220) Revisions of previous estimates 1,898 365,764 ------- --------- Proved reserves, December 31, 1997 55,834 2,659,848 Production ( 16,783) ( 370,975) Sales of minerals in place ( 93) ( 20,206) Extensions and discoveries 5,038 119,211 Revisions of previous estimates 2,412 48,487 ------- --------- Proved reserves, December 31, 1998 46,408 2,436,365 Production ( 17,505) ( 338,882) Revisions of previous estimates 31,120 10,747 ------- --------- Proved reserves, December 31, 1999 60,023 2,108,230 ======= ========= PROVED DEVELOPED RESERVES: December 31, 1997 49,163 2,549,052 ======= ========= December 31, 1998 43,638 2,377,892 ======= ========= December 31, 1999 57,546 2,079,090 ======= ========= F-48 P-5 Partnership --------------- Crude Natural Oil Gas (Barrels) (Mcf) --------- ----------- Proved reserves, December 31, 1996 51,531 3,261,422 Production ( 7,972) ( 516,756) Sales of minerals in place ( 3,066) ( 61,493) Revisions of previous estimates 10,735 346,293 ------ --------- Proved reserves, December 31, 1997 51,228 3,029,466 Production ( 6,315) ( 552,109) Sales of minerals in place ( 4,850) ( 225,944) Extensions and discoveries 232 226,515 Revisions of previous estimates ( 7,152) ( 151,902) ------ --------- Proved reserves, December 31, 1998 33,143 2,326,026 Production ( 6,858) ( 464,917) Revisions of previous estimates 13,488 474,570 ------ --------- Proved reserves, December 31, 1999 39,773 2,335,679 ====== ========= PROVED DEVELOPED RESERVES: December 31, 1997 51,175 3,024,146 ====== ========= December 31, 1998 33,143 2,326,026 ====== ========= December 31, 1999 39,773 2,335,679 ====== ========= F-49 P-6 Partnership --------------- Crude Natural Oil Gas (Barrels) (Mcf) --------- ------------ Proved reserves, December 31, 1996 140,380 5,483,120 Production ( 18,461) ( 984,971) Sales of minerals in place ( 2,459) ( 75,335) Extensions and discoveries 189 235 Revisions of previous estimates 4,088 540,454 ------- --------- Proved reserves, December 31, 1997 123,737 4,963,503 Production ( 19,139) ( 948,078) Sales of minerals in place ( 3,749) ( 87,565) Extensions and discoveries 251 244,230 Revisions of previous estimates ( 4,665) ( 100,354) ------- --------- Proved reserves, December 31, 1998 96,435 4,071,736 Production ( 17,227) ( 909,561) Extensions and discoveries 5,142 37,719 Revisions of previous estimates 18,395 679,868 ------- --------- Proved reserves, December 31, 1999 102,745 3,879,762 ======= ========= PROVED DEVELOPED RESERVES: December 31, 1997 123,718 4,961,677 ======= ========= December 31, 1998 96,435 4,071,736 ======= ========= December 31, 1999 102,745 3,879,762 ======= ========= F-50 Standardized Measure of Discounted Future Net Cash Flows of Proved Oil and Gas Reserves - Unaudited The following tables set forth the estimated future net cash flows as of December 31, 1999 relating to the Partnerships' proved reserves attributable to the Partnerships' Net Profits Interests based on the standardized measure as prescribed in SFAS No. 69: Partnership ----------------------------------------------- P-1 P-2 P-3 ------------ ------------ ------------ Future cash inflows $8,600,031 $7,062,789 $13,190,111 Future production and development costs ( 2,123,132) ( 1,864,402) ( 3,500,361) --------- --------- ---------- Future net cash flows $6,476,899 $5,198,387 $ 9,689,750 10% discount to reflect timing of cash flows ( 2,741,525) ( 2,218,180) ( 4,135,225) --------- --------- ---------- Standardized measure of discounted future net cash flows $3,735,374 $2,980,207 $ 5,554,525 ========= ========= ========== Partnership ------------------------------------------------ P-4 P-5 P-6 ------------ ------------ ------------- Future cash inflows $6,317,459 $5,834,094 $10,966,611 Future production and development costs ( 1,837,908) ( 1,803,068) ( 4,017,120) --------- --------- ---------- Future net cash flows $4,479,551 $4,031,026 $ 6,949,491 10% discount to reflect timing of cash flows ( 1,393,379) ( 1,243,938) ( 1,972,958) --------- --------- ---------- Standardized measure of discounted future net cash flows $3,086,172 $2,787,088 $ 4,976,533 ========= ========= ========== F-51 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, 1999 using oil and gas prices of approximately $22.75 per barrel and $2.24 per Mcf, respectively. F-52 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. ----------- ----------------- -------- P-1 June 5, 1989 0-17800 P-2 June 5, 1989 0-17800 P-3 February 20, 1990 0-18306 P-4 February 20, 1990 0-18306 P-5 November 13, 1990 0-18637 P-6 November 30, 1990 0-18937 4.2 The Agreements of Partnership for the following NPI Partnerships have been previously filed with the SEC as Exhibit 2.2 to Form 8A filed by the related Partnerships on the dates shown below and are hereby incorporated by reference. Form 8-A Partnership Filing Date ----------- ----------------- P-1 June 5, 1989 P-2 June 5, 1989 P-3 February 20, 1990 P-4 February 20, 1990 P-5 June 11, 1990 P-6 December 10, 1990 4.3 Second Amendment to Agreement of Limited Partnership of Geodyne Institutional/Pension Energy Income P-1 Limited Partnership, filed as Exhibit 4.1 to Registrants' 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-53 4.4 Second Amendment to Agreement of Limited Partnership of Geodyne Institutional/Pension Energy Income P-2 Limited Partnership, filed as Exhibit 4.2 to Registrants' 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 Agreement of Limited Partnership of Geodyne Institutional/Pension Energy Income Limited Partnership P-3, filed as Exhibit 4.3 to Registrants' 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 Agreement of Limited Partnership of Geodyne Institutional/Pension Energy Income Limited Partnership P-4, filed as Exhibit 4.4 to Registrants' 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 Agreement of Limited Partnership of Geodyne Institutional/Pension Energy Income Limited Partnership P-5, filed as Exhibit 4.5 to Registrants' 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 Agreement of Limited Partnership of Geodyne Institutional/Pension Energy Income Limited Partnership P-6, filed as Exhibit 4.6 to Registrants' 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 Third Amendment to Agreement of Limited Partnership of Geodyne Institutional/Pension Energy Income P-1 Limited Partnership, filed as Exhibit 4.10 to Registrant's Annual Report on Form 10-K for the year ended December 31, 1995 filed with the SEC on April 1, 1996 and is hereby incorporated by reference. 4.10 Third Amendment to Agreement of Limited Partnership of Geodyne Institutional/Pension Energy Income P-2 Limited Partnership, filed as Exhibit 4.11 to Registrant's Annual Report on Form 10-K for the year ended December 31, 1995 filed with the SEC on April 1, 1996 and is hereby incorporated by reference. F-54 4.11 Third Amendment to Agreement of Limited Partnership of Geodyne Institutional/Pension Energy Income Limited Partnership P-3, filed as Exhibit 4.12 to Registrant's Annual Report on Form 10-K for the year ended December 31, 1995 filed with the SEC on April 1, 1996 and is hereby incorporated by reference. 4.12 Third Amendment to Agreement of Limited Partnership of Geodyne Institutional/Pension Energy Income Limited Partnership P-4, filed as Exhibit 4.13 to Registrant's Annual Report on Form 10-K for the year ended December 31, 1995 filed with the SEC on April 1, 1996 and is hereby incorporated by reference. 4.13 Third Amendment to Agreement of Limited Partnership of Geodyne Institutional/Pension Energy Income Limited Partnership P-5, filed as Exhibit 4.14 to Registrant's Annual Report on Form 10-K for the year ended December 31, 1995 filed with the SEC on April 1, 1996 and is hereby incorporated by reference. 4.14 Third Amendment to Agreement of Limited Partnership of Geodyne Institutional/Pension Energy Income Limited Partnership P-6, filed as Exhibit 4.15 to Registrant's Annual Report on Form 10-K for the year ended December 31, 1995 filed with the SEC on April 1, 1996 and is hereby incorporated by reference. *23.1 Consent of Ryder Scott Company, Petroleum Engineers for the Geodyne Institutional/Pension Energy Income P-1 Limited Partnership. *23.2 Consent of Ryder Scott Company, Petroleum Engineers for the Geodyne Institutional/Pension Energy Income P-2 Limited Partnership. *23.3 Consent of Ryder Scott Company, Petroleum Engineers for the Geodyne Institutional/Pension Energy Income Limited Partnership P-3. *23.4 Consent of Ryder Scott Company, Petroleum Engineers for the Geodyne Institutional/Pension Energy Income Limited Partnership P-4. *23.5 Consent of Ryder Scott Company, Petroleum Engineers for the Geodyne Institutional/Pension Energy Income Limited Partnership P-5. *23.6 Consent of Ryder Scott Company, Petroleum Engineers for the Geodyne Institutional/Pension Energy Income Limited Partnership P-6. F-55 *27.1 Financial Data Schedule containing summary financial information extracted from the Geodyne Institutional/Pension Energy Income P-1 Limited Partnership's financial statements as of December 31, 1999 and for the year ended December 31, 1999. *27.2 Financial Data Schedule containing summary financial information extracted from the Geodyne Institutional/Pension Energy Income P-2 Limited Partnership's financial statements as of December 31, 1999 and for the year ended December 31, 1999. *27.3 Financial Data Schedule containing summary financial information extracted from the Geodyne Institutional/Pension Energy Income Limited Partnership P-3's financial statements as of December 31, 1999 and for the year ended December 31, 1999. *27.4 Financial Data Schedule containing summary financial information extracted from the Geodyne Institutional/Pension Energy Income Limited Partnership P-4's financial statements as of December 31, 1999 and for the year ended December 31, 1999. *27.5 Financial Data Schedule containing summary financial information extracted from the Geodyne Institutional/Pension Energy Income Limited Partnership P-5's financial statements as of December 31, 1999 and for the year ended December 31, 1999. *27.6 Financial Data Schedule containing summary financial information extracted from the Geodyne Institutional/Pension Energy Income Limited Partnership P-6's financial statements as of December 31, 1999 and for the year ended December 31, 1999. All other Exhibits are omitted as inapplicable. ---------- * Filed herewith. F-56 EX-23.1 2 RYDER SCOTT CONSENT RYDER SCOTT COMPANY PETROLEUM CONSULTANTS Fax (713) 651-0849 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, 1999 for Geodyne Institutional/Pension Energy Income P-1 Limited Partnership. RYDER SCOTT COMPANY, L.P. Houston, Texas February 4, 2000 EX-23.2 3 RYDER SCOTT CONSENT RYDER SCOTT COMPANY PETROLEUM CONSULTANTS Fax (713) 651-0849 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, 1999 for Geodyne Institutional/Pension Energy Income P-2 Limited Partnership. RYDER SCOTT COMPANY, L.P. Houston, Texas February 4, 2000 EX-23.3 4 RYDER SCOTT CONSENT RYDER SCOTT COMPANY PETROLEUM CONSULTANTS Fax (713) 651-0849 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, 1999 for Geodyne Institutional/Pension Energy Income Limited Partnership P-3. RYDER SCOTT COMPANY, L.P. Houston, Texas February 4, 2000 EX-23.4 5 RYDER SCOTT CONSENT RYDER SCOTT COMPANY PETROLEUM CONSULTANTS Fax (713) 651-0849 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, 1999 for Geodyne Institutional/Pension Energy Income Limited Partnership P-4. RYDER SCOTT COMPANY, L.P. Houston, Texas February 4, 2000 EX-23.5 6 RYDER SCOTT CONSENT RYDER SCOTT COMPANY PETROLEUM CONSULTANTS Fax (713) 651-0849 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, 1999 for Geodyne Institutional/Pension Energy Income Limited Partnership P-5. RYDER SCOTT COMPANY, L.P. Houston, Texas February 4, 2000 EX-23.6 7 RYDER SCOTT CONSENT RYDER SCOTT COMPANY PETROLEUM CONSULTANTS Fax (713) 651-0849 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, 1999 for Geodyne Institutional/Pension Energy Income Limited Partnership P-6. RYDER SCOTT COMPANY, L.P. Houston, Texas February 4, 2000 EX-27.1 8 FDS --
5 0000850427 GEODYNE INST/PENS ENERGY INCOME P-1 LTD PSHP 12-MOS DEC-31-1999 JAN-01-1999 DEC-31-1999 182,743 0 167,901 0 0 350,644 6,888,884 5,885,058 1,354,470 0 0 0 0 0 1,354,470 1,354,470 802,539 807,876 0 298,813 0 0 0 509,063 0 509,063 0 0 0 509,063 4.10 0
EX-27.2 9 FDS --
5 0000850428 GEODYNE INST/PENS ENERGY INCOME P-2 LTD PSHP 12-MOS DEC-31-1999 JAN-01-1999 DEC-31-1999 148,106 0 135,136 0 0 283,242 5,557,749 4,701,656 1,139,335 0 0 0 0 0 1,139,335 1,139,335 618,890 623,131 0 258,537 0 0 0 364,594 0 364,594 0 0 0 364,594 3.70 0
EX-27.3 10 FDS --
5 0000854066 GEODYNE INST/PENS ENERGY INCOME LTD PSHP P-3 12-MOS DEC-31-1999 JAN-01-1999 DEC-31-1999 284,040 0 251,484 0 0 535,524 10,492,182 8,896,546 2,131,160 0 0 0 0 0 2,131,160 2,131,160 1,155,814 1,164,162 0 483,628 0 0 0 680,534 0 680,534 0 0 0 680,534 3.75 0
EX-27.4 11 FDS --
5 0000860744 GEODYNE INST/PENS ENERGY INCOME LTD PSHP P-4 12-MOS DEC-31-1999 JAN-01-1999 DEC-31-1999 188,928 0 255,972 0 0 444,900 8,193,436 7,300,777 1,337,559 0 0 0 0 0 1,337,559 1,337,559 746,854 752,247 0 348,375 0 0 0 403,872 0 403,872 0 0 0 403,872 2.91 0
EX-27.5 12 FDS --
5 0000863832 GEODYNE INST/PENS ENERGY INCOME LTD PSHP P-5 12-MOS DEC-31-1999 JAN-01-1999 DEC-31-1999 217,441 0 180,909 0 0 398,350 9,855,735 9,018,764 1,235,321 0 0 0 0 0 1,235,321 1,235,321 856,442 862,531 0 309,160 0 0 0 553,371 0 553,371 0 0 0 553,371 4.38 0
EX-27.6 13 FDS --
5 0000869801 GEODYNE INST/PENS ENERGY INCOME LTD PSHP P-6 12-MOS DEC-31-1999 JAN-01-1999 DEC-31-1999 339,386 0 177,661 0 0 517,047 12,024,877 10,227,710 2,314,214 0 0 0 0 0 2,314,214 2,314,214 1,340,784 1,350,366 0 498,875 0 0 0 851,491 0 851,491 0 0 0 851,491 5.57 0
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